Further, the company's ability to compete nationally is severely hampered by its lack of execution on distribution strategies, specifically the penetration of the highly profitable Southern states and the move into adjoining Mid-Atlantic States. There seems to be too much of a complacenc6y to be in the Northeastern markets only. The mainstream sausage market is mostly flat, with modest growth compared to the high growth area of specialty sausages, including chicken sausages. With the broader U.S. sausage market being $2.4B in 2004, the chicken sausage market is a niche at $75M, yet has the most attractive market growth rate of any product segment of the market. Further, the only entrenched competitor is Aidell with a marketing budget comparable to the proposed $185,000 budget that Kayem will be investing in the Al Fresco Chicken Sausage line. In summary, Kayem is in a unique position to grow a product into the highest growth market for sausages today.

Decision

Matt Monkiewicz needs to realize that the voice-of-the-customer successes he has found in the buzz marketing campaign need to continue, despite the objections of the retailers and distributors. He needs to balance this strategy with one that focuses targeted industry advertising that highlights actual customer testimonials to make the voice-of-the-customer come alive in their media efforts. Having advertising campaigns that showcase actual customer testimonials to retailers and distributors is critical to build on the investments the company has made in the highly successful buzz marketing programs. Despite what retailers and distributors are saying, the results in pull-through sales necessitate using this approach to continue growth of the brand.

Spending $75,000 for the buzz marketing campaign would leave $110,000 for traditional media. With these remaining funds, $80,000 needs to be invested in trade advertisements that would feature the voice of the new customers for the Al Fresco Chicken Sausage line, specifically showing everyday customers talking about its unique taste, showing their enthusiasm for the products. Te remaining $30,000 needs to be invested in detailing and in-store product sample programs to drive up initial trial of the brands in selected retailers. The key to Kayem continually being successful is the featuring of the voice of actual customers enjoying their products, while investing heavily in strategies that drive word-of-mouth advertising.

Appendices

Appendix 1: Competitive Advertising Analysis

Competitor

Annual Spending

market was $2.4B in 2004 (60% dinner sausage; 33% breakfast sausage)
Specialty Sausage

Chicken Sausage segment

20% of overall market volume including many flavors;

this category also included low fat/lean sausage which accounted for 19% of all sausage sold

75M market; primary market are 25- to 34-year-old health conscious women (Market share leader is Aidell with 30% revenue market share)

References

Kayem Foods Case Study (2007) - Buzz Marketing: Kayem Foods Inc., Al Fresco Chicken Sausage. Case Research Journal.

Ohmae, Kenichi (1991) - the Mind of the Strategist: The Art of Japanese Business. McGraw-Hill Book Company. New York, NY. Published August 1, 1991. Pages 89-136. Excerpts available from the Economist Magazine accessed from the Internet on September 13, 2007 from location:

http://www.economist.com/media/globalexecutive/books/mind_of_the_strategist_e_03.pdf