Saxonville Case Study Background- Saxonville Sausage Company

Saxonville Case Study

Background- Saxonville Sausage Company is over 70 years old, a privately held family business, and boasted revenues of almost $1.5 billion in 2005. Predominantly, the company produces fresh pork sausages that consist of a number of branded products: bratwurst, breakfast sausage, and a specialized Italian recipe sausage called Vivio. These sausages account for 95% of the company's revenue (bratwurst 70%, breakfast sausage 20%, and Vivio 5%), with the remaining 5% of store branded ancillary products. The core of the business, bratwurst and breakfast sausage, are sold in the U.S. through national and regional brokers and distributors, but with very little market penetration in the Northeastern region. Sales have been flat in the major products, but Vivio has shown dramatic growth since 2004, despite it being available in just 16% of the nation's larger supermarket chains in just a few states.

Challenges for Saxonville -- Clearly, Saxonville has proven to be successful and has a long-term track record. However, the markets of the past are not the markets of the 21st century. They have several challenges, however all seem both reasonable and doable given their product line and expertise. First, they must expand market share and distribution outlets. This will have the dual effect of increasing brand awareness while, at the same time, increasing the likelihood of brand expansion and top of mind purchasing of Vivio. Second, while Vivio currently holds a relatively small overall percentage of the total product share, its growth sends a signal to the company that this is the brand needing investment.. Thus, they have a multifaceted strategic need: increase customer awareness, increase customer and distributor base, increase Vivio sales, improve flat line of breakfast sausage and bratwurst, and investigate new potential submarkets or international distribution.

Managerial Issues- Essentially, management has been competent but not aggressive, relying instead upon past sales and growth, along with the revenues of the company, to maintain but not grow or innovate. By hiring Anne Banks, and experienced product manager, the company hopes to uncover some of the issues that seem to be stalling growth and make recommendations for additional ways to improve branding. Banks is so concerned about the direction of the company, she formed a team called "Project Score," which included 10 colleagues from research, packaging, graphics, marketing and sales.

Technological Issues- Research, particularly focus group studies, revealed that it is likely that there will be some technological changes needed to pursue brand growth and market expansion. For instance, flavors, new machinery that might infuse cheese or other flavors into the sausage, different forms of delivered product, container shape, etc. However, what is most clear is the need for continual and more robust research and tracking data -- not just competitive, but concurrent. Additionally, brand expansion means reinventing packaging and distribution since the items will need to be shipped frozen.

Behavioral/Psychological Issues- Typically, branding for this niche has been done in two ways: emphasizing the authentic Italian recipe and heritage or the freshness and local production. Saxonville has been reluctant to push the issue past local/local branding for fear of losing the idea of fresh, not frozen, production.

Alternative Solutions and Analysis- Based on the research, several solutions are viable, but all hinge on one basic locus concept: decide and reinvent the positioning message of the brand. What is it that Saxonville wants the consumer to believe about all their products?

Strategy/Tactic

Pro

Con

Considerations

Push Viviano

Rising product line supports revenue push

May cannibalize other brands

Need decision on strategic goals

Push/Pull in Certain Markets

Could concentrate revenue in high potential markets

Might reduce opportunities for national growth

Needs to be part of grander strategy

Reprice

Initial capital inlay

Long-Term effects unknown

Reprice to what? Competition? Demand? Costs?

Invest in National Sales Team

Could dramatically increase sales and market share

Can company support distribution and spiked sales?

Do this one national branding strategy is solidified

Robust Increase in Distribution

Yes, but what is the rollout plan?

Without cogent plan, would be guessing and lack economies of scale

For which product, or all?

Investigation multinational suppliers, markets

Might increase bottom line, especially exports to Asia and Oceana

Probably best to have national market solid first.

May cannibalize resources

Recommended Solution -- Step 1 -- Reinvent the product line focusing on Italian recipe and ingredients (use only the finest ingredients Mama would be proud of); Step 2 -- Repackage to focus on a more Buon Feste! And Italian meal; family oriented, friendly, BUT healthy; Step 3 -- Hire National Sales Manager and 3-4 regional managers. The three core marketing strategies would realign the product, allow the entire company to have a clear vision of what they were selling, and establish a tactical roll out plan. Implied in this, of course, is the idea of market research follow up and realigning of strategies and tactics.

Implementation Plan- Use of core team members who will break off into sub-groups to provide deliverables for new plans:

Step

Focal Contacts

Deliverable

Time Frame

Considerations

1 -- Reinvention

Marketing, Core SCORE Team

New Image, tag line, mission statement and product features

90 days

Development costs, timing for seasonality, back stock

2- Repackage

Marketing Communication, vendor management

New packaging and collateral, coupons, advertising image, campaign, etc. PUSH health gourmet idea.

90-120 days

Could begin getting bids, sketches, etc. To limit downtime; work with product management of touting recipes and ingredients

3- Sales and Distribution

Executive Management hire, work with Anne, new sales leaders

Develop national rollout plan; distributor contacts, consumer events, national contests, etc.

1-2 years total, being by establishing core regional areas and working outward from there.

Process will require continual monitoring and benchmarking.

While not completely reinventing the company, the recommended process will have a significant impact on each process in the company. Because of the complex nature of such a project, we would recommend a Six-Sigma approach, initially spearheaded by Anne

. This would accomplish several things that would likely engender greater success for the new strategies: 1) key involvement and buy in; 2) shared scope and direction; 3) increase pride and work towards customer satisfaction, and 4) allow management and Board to participate in product and financial tracking.