rb case study franks redhot sauce

8/10/2019 Rb Case Study Franks Redhot Sauce

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FRANKS REDHOT Cayenne Pepper Sauce

The Franks RedHot team was in its fth hour o its strategic initiatives

meeting. Mike Power, who had recentl !oined Reckitt "enckiser as the #ategor

Marketing $irector on the %auces and &ew 'roduct $evelo'ment (usiness

scratched his head and said, )*ka team, weve (een at this or a while, lets

take a fteen minute (reak and re+grou'. The s'irited de(ate continued insmaller grou's as the team headed out into the hallwa.

This was an es'eciall im'ortant meeting as the team was tring to decide

on a wa orward with the Franks RedHot (rand. The team knew all too well

that or the Food $ivision to make its num(ers or the ear, it was essential or

Franks to grow its market share. -hile the (rand had (een growing in ste' with

the categor, the team knew that to reall win in the categor Franks growth

had to out'ace the hot sauce categor. %o ar, the team had de(ated three

'ossi(le strategies which could deliver the desired results. The were

/. Focus on a s'ecifc region o the countr and com'ete aggressivel tosteal share0. 1ttract new users ( driving hot sauce categor 'enetration2. 3nnovation to attract users in the Me4ican stle segment o the

categor

The (rand had enough resources to 'ursue onl one growth strateg. -hich

a''roach would create the (est chance to grow5

Background

The frst (ottle o Franks RedHot sauce emerged rom 6stillettes 'ickling'lant 78 ears ago in /90:. 3n /9;


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is cooked and s'ecial s'ices are added to give ood a surge o Davor. Franks

RedHot *riginal contains all natural ingredients and no gums or thickeners, a

claim that not all hot sauces can make.

#onsumers use Franks RedHot 'roducts with a wide variet o oods (oth as

an ingredient and as a ood to''er. FrankEs comes in our Davors

*riginal ?used in /9;< in the frst "u=alo wings ever served in "u=alo,

&ew >ork@

#hile & ime

Gtra Hot

"u=alo -ing %auce

The (rands most loal consumers s'eak 'assionatel a(out using FRH as

their condiment o choice to energie their ood. The seem to view their heav use

as a (adge o courage and a testament to their unwillingness to tolerate (oredom inan orm. The will tr it on !ust a(out anthing and never hesitate to recommend

Franks to a riend.

Bufalo A Key Trend

"u=alo Davor is a hot trend that doesnt seem to (e cooling down. 1t a

growth rate o IA


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seek (old and e4citing Davors ?see 64hi(it A or #ategor Penetration and "u Rate

( "rand@. "rand choice is driven ( consumers 'reerence or the o'timal (lend o

Davor and heat, a non+over'owering taste, Jualit and (rand aKnit.

#ategor re!ection is minimal C onl /:B o consumers re!ect the categor

outright and e4'ress no interest in 'urchasing. 3t is e4'ected that categor growth

will thereore come rom non re!ecters o the categor. %'ecifcall, turning )la'sedusers into )active users and increasing the reJuencLoccasions among )active

users. #ategor users are signifcantl more likel to (e male and reside in the

%outh.

#onsumers are divided into light, medium and heav users. Heav users use

Hot, Ta(asco, or -ing ?HT-@ sauce ever da, medium users use HT- once a week

and light users can (e defned as using HT- less oten. Heav users are

signifcantl more likel to (e 1rican 1merican His'anics and reside in the south.

ight users are #aucasian and are more likel to reside in the &ortheast. Heav

users, ( defnition, are everda users and light users are signifcantl more likel

to have used HT- sauce with an )ethnic meal. %ee 64hi(its ;+7 or Nser$emogra'hics.

The main (arriers or non+users tring HT- is the 'erce'tion that HT- is )Too

hot, )Too s'ic, and )Too over'owering. 1dditionall, the desire or )something

sweeter is the main reason or no longer using HT- sauce. *ther non+users in the

household also 'la a role in wh HT- has not (een used in the 'ast twelve

months. %ome o the 'rimar (arriers as to wh la'sed users are not more active

can (e overcome. The ke (arriers are due to limited use, i.e. )3 use it more

s'aringl, )3 onl use it or certain reci'es, others in the household i.e. )*thers in

HH dont likeLuse it, )M 'artnerLamil doesnt like it and Davor)3 want more

Davor, )3 want something sweeter, )Too hot, )Too s'ic, )Too over'owering.

a'sed users ma not (e as e4'erimental and ma need guidance as to di=erent

was to use HT- sauce.

For man users, HT- sauce is a amil tradition. Famil mem(ers and riends

tend to serve it as the introduction to HT- sauces,


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man (rands. 3n act, over a Juarter do not make a decision until the are in the

store. The decisions at 'oint o 'urchase do not a''ear to (e 'rice driven, however,

those who *&> use Ta(asco are more loal and generall alwas (u the same

(rand.

Key Player%

Ta&a%co

3n /7;7, 6dmund Mcllhenn, created a fer condiment rom a mi4ture o

aged ri'e red 'e''ers, 'remium vinegar and 1ver 3sland salt. He called it

T1"1%#* "rand Pe''er %auce. *ne hundred and ort ears later Ta(asco is

made in much the same wa it was (ack then e4ce't now the aging 'rocess or the

mash is longer C u' to three ears in white oak (arrels. 3t is still made on 1ver

3sland, ouisiana, and the Mcllhenn #om'an is one o the N%s (iggest makers o

hot sauce 'roducing as man as 80:,::: two+ounce (ottles o Ta(asco sauce each

da.

Te'a% Pe!e

Te4as Pete is manuactured ( the T- Oarner Food #om'an in -inston+

%alem, &orth #arolina. The (rand is (est known or its 2.: o (ottles with their

(right red sauce, shaker to', and white and ellow la(el eaturing the name in red

and Te4as Pete, a red silhouette cow(o.

The caenne 'e''ers used in Te4as Pete are aged or two ears to soten

their skins, and the com'an claims this also enhances the 'roducts heat 'rofle.

The 'e''ers are then com(ined with vinegar, salt, 4anthan gum and sodium

(enoate. *ne o the issues surrounding the sauce is the inclusion o 4anthan gum,

a thickener that allows or less overall 'e''er 'ul' in the reci'e to achieve the

desired te4ture, which some hot sauce ans fnd distasteul. Te4as Pete is not as hot

as Ta(asco which the com'an acknowledges through its tagline )Te4as

Pete%auces are all a(out F1Q*R not "NR&

(ou#%#ana

ouisiana The *riginal Hot %auce is a caenne 'e''er sauce 'roduced ("ruce Foods, a #a!un and Me4ican ood com'an, ounded in /907 in &ew 3(eria,ouisiana. 3t is made rom aged 'e''ers, vinegar, and salt and is (right red andthin with a moderate heat level. ouisiana is not as hot as Ta(asco sauce and thecom'an uses the milder heat as a selling 'oint, calling the sauce &ot too hot, nottoo mild. ouisiana The *riginal is most common in ; o. shaker (ottles and isknown or its ellow, (lue and red la(el and ellow 'lastic saet seal adorned withthe *riginal logo.
http://en.wikipedia.org/w/index.php?title=Bruce_Foods&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bruce_Foods&action=edit&redlink=1


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Ta(asco is seen ( consumers as a high Jualit, heritage (rand, Franks is

seen as modern and milder while Te4as Pete is o'erating in the value segment ?see

64hi(it /: or the #ategor Perce'tual #a'sule@. Franks user 'rofle is slightl

ounger ?ages u' to 29 ears old@ com'ared to the Ta(asco user 'rofle ?see 64hi(it

// or age 'rofles o (rand trialists@.

%ee 64hi(it < or siing and 'ricing ( (rand.

Sale% and S)are

FRH shares is the volume market leader with /AB share (ut is S0 in the

categor in terms o value share. %ee 64hi(it / or national share data and 64hi(it 0

or regional shares.

Reg#onal#!y

The Hot %auce categor has some 'ronounced regional dnamics, as ethnicgrou's and regional cuisines strongl inDuence usage and Davor 'rofle 'reerence.

Oenerall, the categor is strongest in the southeast and the west. Hot sauces

?e4cluding Ta(asco@ are strongest in the -est and -ing sauces are strongest in the

&ortheast and %outheast regions. %ome (rands are clearl regional 'laers, and

'erormance ( region varies signifcantl even or national (rands like Ta(asco and

Franks Red Hot. %ee 64hi(it 0 or Regional "rand Perormance and 64hi(it 2 or

categor develo'ment ( region.

Key *ea%ure% &y Brand

1mongst consumers Ta(ascos total (rand awareness remains nearl

universal while Franks s'ontaneous awareness has (ounced (ack ater a 'eriod o

decline ?see 64hi(it /0 or #ategor 1wareness ( "rand@. Franks RedHot *riginal

is the most well+known variet with AAB awareness, ollowed ( -ing %auce which

has 27B awareness. The Gtra Hot and #hile n ime variants are less well known

with 2:B and 0/B awareness res'ectivel.

Franks is neither strong in converting awareness into trial nor in converting

trial into loalt, relative to Ta(asco and ouisiana. However, maintaining loalists

is a (rand strength. %ee 64hi(it

Franks a''ears to (e re(ounding on several ke glo(al (rand attri(utes such

as high Jualit, value or mone and is a (rand or me as well as on some o its core

categor attri(utes, including not too hot, wont over'ower and (etter tasting. ?%ee

64hi(its /2, /< and /A or "rand 3mage Trends@. However, ver little di=erentiation

e4ists in the categor. Franks minor 'oints o di=erentiation include (eing not too

hot, alive, delicious, and modern.


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S!ra!eg#c Op!#on%

Having considered all the data and trends, the team has identifed three

'otential 'aths to share growth. 6ach has its 'ros and cons and the team must

choose a single o'tion to move orward.

Op!#on +, Reg#onal %)are con-ue%!

Oiven the (arriers to use that kee' non+users out o the categor, it ma (e

easiest to target consumers who are alread using other (rands. Franks Red Hot

would stand to gain signifcant sales and share i it can close the 'erormance ga'

(etween its &ortheastern stronghold and the other regions o the countr. This task

is made diKcult, however, ( the act that most consumers are ha'' with their

current sauces and eel no 'ressing need to change (rands. %outheastern

consumers use hot sauce heavil as a condiment, and while the generall (u

sauces with the same (asic Davor 'rofle as Franks the also show an aKnit or

less e4'ensive (rands. -estern consumers use more hot sauce than the rest o the

countr, (ut a heav His'anic 'o'ulation and atin cuisine drive a strong 'reerence

or Me4ican+stle sauce (rands.

Op!#on ., Dr#"e ca!egory pene!ra!#on

1s the categor volume leader, FRH has more to gain than other (rands i it

can drive increases in categor 'enetration. The team eels confdent that Franks

eJuit is )cool enough to create as'irational a''eal among 0:+something

consumers who en!o s'ic ood (ut dont (u hot sauce. *ne team mem(er hasdescri(ed this target as )loal Franks users who !ust havent met us et. 1s the

(rand that started the "u=alo crae, Franks could also ta' into a huge 'o'ulation o

'eo'le who en!o wings and are thereore amiliar with the FRH Davor 'rofle. The

team worries, however, that non+users ear o )too hot and )thatll hurt will (e

diKcult to overcome. 1dditionall, while wings are ver 'o'ular at restaurants,

ring them u' at home is a mess hassle. 6ven the most devoted wing eaters are

generall content to (u them rather than tackle the 'rocess at home, thus

'otentiall limiting the volume o''ortunit o this 'ath.

Op!#on /, Co0pe!e 0ore d#rec!ly $#!) !)e 1a%!2gro$#ng *e'#can2%!yle

&rand%

The team has defnitel taken note o the high growth+rates shown ( Ta'atio

and #holula C (oth Me4ican+stle sauce (rands. -hile several o the 1merican+stle

sauces have lost ground, the Me4ican (rands as a grou' are clearl winning.

Partici'ating in this segment is certainl an o'tion C the team could launch a green

!ala'eno+(ased sauce or a chi'otle+Davored e4tension that would (e a much


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stronger ft with Me4ican cuisine than the current FRH (ased caenne and vinegar

Davor 'rofle. This would reJuire a signifcant launch investment and would (e a

de'arture rom the (rands "u=alo roots. #onsumers have also indicated that

authenticit is an im'ortant actor in their choice o hot sauce, and the Franks team

is worried that the (rand would (e viewed as an )im'oster i it tried to 'la directl

in the Me4ican+stle s'ace.

The team has (een wrestling with this choice or some time, and its time to take

a decision on which 'ath 'rovides the (est chance or growth.


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E')#! +

N#el%en S)are and Sale% Da!a Ho! Sauce Ca!egory

E')#! .


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2007 Brand $ Shares by Region

National Northeast Southeast Central West

Category 100.0 100.0 100.0 100.0 100.0

Frank's Red Hot 16.7 33.0 8.9 19.9 9.4

Crystal 3.7 3.5 7.5 1.6 3.2

Valentina 4.5 0.7 1.6 8.4 7.2

Col!la 5.4 4.3 3.6 5.1 8.6

"a#atio 8.3 0.9 1.4 3.0 24.0

"a$as%o 19.4 18.6 17.0 19.3 22.0

"e&as ete 7.5 9.9 17.0 0.9 0.4

(o!isiana 6.3 2.2 10.4 11.3 2.6

ri)ate (a$el 3.4 3.8 5.6 3.6 0.8

Regional Brand $ Share Chg vs 2006


Category 100.0 100.0 100.0 100.0 100.0

Frank's Red Hot *0.0+ 0.7 , *0.5+ ,

Crystal 0.8 , 2.2 0.5 0.6

Valentina 0.0 *0.2+ 0.1 *0.3+ 0.2

Col!la 0.3 0.4 *0.1+ 0.5 0.1

"a#atio 0.7 , , 0.5 1.1

"a$as%o *0.8+ *0.5+ *1.1+ *0.5+ *1.2+

"e&as ete *0.2+ *0.2+ , 0.1 0.1

(o!isiana *0.5+ *0.1+ *1.3+ *0.9+ 0.1

ri)ate (a$el 0.3 0.7 0.6 0.2 0.1

Brand Development BD!"CD!#


Category

Frank's Red Hot 162 54 114 78

Crystal 77 202 41 119Valentina 11 36 180 222

Col!la 64 66 90 221

"a#atio 8 17 35 402

"a$as%o 78 88 96 158

"e&as ete 108 227 12 8

(o!isiana 29 167 173 58

ri)ate (a$el 91 164 99 112


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E')#! /

Category Development !nde CD!#

"otal CategoryHot -a!%es*e& "a$as%o+ ing -a!%es

/ational 100 100 100

/orteast 82 75 123

-o!teast 101 94 153Central 96 100 78

est 139 150 55

E')#! 3

Pr#0ary HT4 %auce &rand %e!


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E')#! 5

Ca!egory Pene!ra!#on and Buy Ra!e &y Brand

% && 'enetration Buy Rate

2006 2007 2006 2007

Hot -a!%eing Category 28.

426.

826.

126.

1

Frank's Red Hot 5.

75.

628.

029.

9

"a$as%o 8.

37.

57.

47.

8

(o!isiana 4.

23.

819.

520.

7

"e&as ete

3.

2

2.

8

25.

3

21.

0

Crystal 1.

41.

619.

623.

6

Col!la 1.

31.

08.

09.

2

"a#atio 2.

11.

919.

121.

5

ri)ate (a$el 3.

33.

321.

020.

3


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E')#! 6

Ca!egory 7%er De0ograp)#c%

E')#! 8

7%age Fre-uency &y 7%er

E')#! 9


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Hea"y 7%er De0ograp)#c%

E')#! :

First Become A User of Either Hot, Wing, or Tabasco Sauces

E')#! +;


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Corre%pondence *ap Ho! Sauce Ca!egory

E')#! ++

Brand Tr#al#%!% Age Pro


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E')#! +/

Brand =0age Trend% Brand >ener#c%

E')#! +3


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Brand =0age Trend% Core Ca!egory A!!r#&u!e%

E')#! +5

Brand =0age Trend% O!)er Ca!egory A!!r#&u!e%

E')#! +6

Frank% Con"er%#on Ra!#o%


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E')#! +8


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rb case study franks redhot sauce

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