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...
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…
