6/4/2018

Situational Analysis and Marketing

Recommendations

Dave Foster, Matthew Brodnik,

Brendan Amesbury, Derrick Nguyen,

and Michael Sunderland CHARLES H. LUNDQUIST COLLEGE OF BUSINESS

UNIVERSITY OF OREGON

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Pretzel Crisp Final Marketing Recommendations

1. Situation Analysis Summary

2. Objectives

3. S-T-P

3.1 Target Market and Strategy

3.2 Positioning

4. Marketing Mix

4.1 Product

4.2 Price

4.3 Place

4.4 Promotion

5. Timeline/Budget

6. Appendices

6.1 Citations/Sources

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1. Situation Analysis Summary

Pretzel Crisps by Snack Factory was founded in 2004. 7 years later they were acquired by Snyder’s-Lance, a huge snack company with a wide variety of products in virtually every snack category. Snack Factory sells primarily tortilla chips, pita chips, and Pretzel Crisps. Pretzel Crisps owns the manufacturing, distribution, marketing and sales departments for their products and they sell them to retailers and other distributors, so their customers can purchase them from supermarkets and convenience stores. The company’s free manufacturing capacity offers a potential source of revenue from third-party contracts, albeit largely toward lowering costs. Snyder’s-Lance vertical integration strategy allows them to have self-sufficiency and security when selling to their buyers.

In 2015, 70% of net revenue was generated by products distributed through their DSD network, and 30% was generated by products distributed through their direct-distribution network. Since they merged with a competitor in the snack food industry, Diamond, Snyder’s-Lance predicts more growth involving their direct-distribution network. Snyder’s-Lance brands, including Pretzel Crisps have experienced market share gains due to increased distribution of product. Pretzel Crisps experienced growth in both revenue and market share in 2015 in the deli snacks category, and Snyder’s-Lance has expanded production in Arizona specifically for Pretzel Crisps to accommodate increasing demand. Pretzel Crisps represents approximately 70% of net revenue. Partner brands represented approximately 20% of revenue, and lastly other products represented 10% of net revenue. Acquisition of Diamond will result in additional revenue primarily within the Branded product category. A snack size 1.5 oz. bag of Pretzel Crisps are priced at $1.48, where a normal 14 oz. sized bag costs $4.99. Prices are competitive with the competition and are affordable for healthy snacks in hopes of attracting lower-income buyers. Pretzel Crisps consumer base consists mainly of upper-middle age Caucasians with very high incomes who are health conscious consumers.

While over 99% of American households purchase snacks, the age of the consumer is often correlated with their snack-purchasing behavior. Younger consumers, ages 18-34, tend to consume snack foods much more frequently than other age groups. The fastest growing, age-based segment in the snack industry is the 55+ segment. Unlike the younger consumers, the 55+ age group is highly receptive to health-related marketing tactics, especially for products containing ingredients conducive to improved joint and heart health. Another factor is gender, though they purchase less snacks on average than men, purchases made by women compose 78% healthy snack options. Race also is a factor or snack purchasing habits. Non-Hispanic white consumers purchase the greatest number of salty snacks per-capita of all measured racial groups.

One half of all Americans agree that “treating themselves” serves as the biggest reason they snack and over one quarter say they prioritize taste rather than health when selecting a snack. On top of this, 38% of consumers said that a new flavor launch was a significant factor in their decision to buy a snack. Bold flavors such as vinegar, onion, and spicy flavors are now dominating the savory snack industry, with spicy flavors influencing the purchases of 30% of consumers. Pretzel Crisps and Snack Factory use television, radio, print, mobile, and social media advertisements to promote their product. Their promotions aim to attract first-time users, increase sales quantity, as well as promoting the brand as a premium and differentiated product that competes in a highly competitive market. Primarily through the use of Twitter, Snack

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Factory has raised brand awareness with 4.2 million media impressions between July of 2010 and May of 2011. Their Facebook page, which has a following in the tens-of-thousands, offers exposure with recipes, product pairing suggestions, and coupons. But above all the main draw of the company is brand personality accompanied with humor and flare. Pretzel Crisps aims to be a differentiated snack that promotes healthy eating for the whole family to enjoy.

2. Objectives

As an essential extension of Snack Factory’s business plan, the following situational analysis

will identify the internal and external factors that influence the business environment for our new

products, Pretzel Plates and Pretzel Platters. We will identify market sectors targeted for our

product and offer an implementable strategic initiative to further the sales goals and widespread

acclaim for our new products. We will layout the details of our product strategy including

relevant product descriptions and financial information, our price, marketing, advertising and

distribution methods, and lastly the predicted effects of our methods upon the targeted segments.

We will offer a chronological set of goals for achieving the aims of our product and for the

maximal penetration in a competitive industry of healthy snack foods.

3. STP

We base our first segmentation on demographics based upon life cycle stage, specifically in three

sections: consumers aged under 18, aged 18-36 and aged 36 and over (see appendix

Segmentation Variable 1: Age). We then segment based on family status with or without

children (see appendix Segmentation Variable 2: Family Status). Our third segmentation further

subdivides based upon the purpose of each purchase, whether for school lunches or social

gatherings with catering (see appendix Segmentation Variable 3: Event Usage). Finally, the

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fourth segmentation deals with the health orientation of consumers, specifically whether or not

they have a preference for the nutritional value of their food as opposed to only its taste, texture,

price and ease of accessibility (see appendix Segmentation Variable 4: Health level).

3.1 Target Market & Strategy

Since young college students living at home behave differently than those in transition to their

own financial independence or who head their own households with children (Factors), our target

market will specifically focus on health conscious parents aged 18-36, who buy snacks for their

kids’ lunches. Necessarily, we will focus on mom’s who do the most shopping and have the

traditional gender role of food preparation for their family.

Millennials aged 23-38 buy snacks more frequently than any other age group at around four

snacks daily (Factors). Over the past several years, younger Millennials aged 23-28, particularly

women cook more often and snack significantly less, but they still snack without committing to

regular meals, described as a “‘snack throughout the day’ lifestyle’” (Factors). Our target market

will specifically be Millennial women with children, particularly those currently married and

with shopping habits orientated toward healthier choices.

3.2 STP Positioning

Millennial moms tend to be more health conscious and cook at home, following their own

preferences for healthy foods when purchasing for their children (Johnson). From this, we infer

that those with a preference toward balanced meals will feel drawn to our product, as it offers a

complete nutritional profile in a snack form. Millennial moms will have similar desires for their

children, and they will subsequently buy Pretzel Plates and Pretzel Platters for their family,

particularly for their kids’ lunches. Pretzel Plates and Pretzel Platters stands out from other snack

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options as a uniquely healthy and nutritious snack food, and we hope to appeal to previously

untapped buyers, specifically Millennial moms who will transition to buying more snacks than

previously when presented with our product.

Millennials also have little distinction between meals and snacks, which allows us to seamlessly

introduce our product in place of a balanced meal. Pretzel Plates and Pretzel Platters will cater to

Millennial needs by offering balanced meals with all the convenience and accessibility of a snack

food. Whereas Pretzel Crisps faces high competition alongside other snack products, Pretzel

Plates and Pretzel Platters differentiate in a signature way.

The high elasticity of demand for our product makes it sensitive to price changes, but we foresee

minimal competition between similar products due to our ingenious product differentiation. On

store shelves, we have a distinct advantage, as we can occupy a space shared by relatively

homogenous snack products, but we can offer nutritional and taste superiority alongside our

competitors. For these reasons, consumers will choose Snack Factory’s Pretzel Plates and Pretzel

Platters over competing products for their novel and signature attributes, which places these

products as further evidence in support of our other recognizable and acclaimed signature brands.

Adoption

Snack Factory has a wide range of products in different categories of snack foods, and the

addition of a healthy choice option of Pretzel Crisps (as Pretzel Plates) will further diversify our

product mix and strengthen our brand as mentioned, all while catering to the diverse needs of

consumers. In addition to strengthening the recognizability and visibility of our brand in the

healthy choice portions of the snack market, we can leverage our Pretzel Crisps brand to promote

ready adoption of our product line.

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We will choose a “more for same” strategy for Pretzel Plates and Pretzel Platters because of the

premium associated with our Pretzel Crisps brand. If we drop our price significantly for our new

product line, consumers would perceive Pretzel Plates and Pretzel Platters to be inferior to the

premium Pretzel Crisps brand. Additionally, by not increasing the already relatively high price of

Pretzel Crisps, customers will feel that the release of the new product offers a premium benefit

over the original Pretzel Crisps product. Lastly, we predict that acclaim for our new product line

will introduce new consumers to our brand and will have a backfilling effect, where they seek to

try our other products, such as Pretzel Crisps.

Regarding novelty, our decision to combine on-the-go snacking with a complete nutritional

profile, as in Pretzel Plates and Pretzel Platters appeals to consumers who have never had such

an option in the past, and the generated interest following the introduction of our delicious new

product will have a chain reaction by word-of-mouth, where new consumers will try our product,

and any further ensuing exposure will garner attention in the media, including social media. All

aspects of our positioning strategy will garner maximal awareness for our product and

differentiate our brand in the minds of our customers, leading to widespread adoption by a wide

breadth of different customers.

4.1 Product

With a substantial rise in obesity in the United States, we believe that introducing a flavorful,

healthy snacking option for American consumers will be an effective endeavor. Pretzel Crisps as

a company has already made significant strides in promoting healthy snacking as a way to

combat obesity. One of their strategies has been to print recipes that incorporate Pretzel Crisps

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on the back of their packages and also publish them on their website. Unfortunately, a fair

portion of the ingredients required by these recipes (e.g. fig preserves, brie, fresh thyme, french

onion dip, etc). are not usually found in the average American household. We believe that

introducing a product with pre-measured quantities of these slightly unusual ingredients would

be a great product to complement Pretzel Crisps’ current offerings.

The new product line that we have designed for Pretzel Crisps is called Pretzel Platters. Pretzel

Platters are sealed containers with the pre-measured, pre-packaged ingredients necessary for

making the Pretzel Crisps recipes available on our website. Each of the selected recipes will have

to meet the following criteria for a healthy snack: 150-250 calories, approximately 3 grams of

fiber, 5 or more grams of protein, and under 12 grams of total fat.

Though our product is intended to be used as a snack, we wish for our product to be nutritionally

viable as a meal replacement. Though other healthy snacks are available to consumers (fruit

leather, cheese sticks, apple slices, etc)., if an individual were to rely on only eating one of those

types of snacks they would be malnourished. Pretzel Platters aims to be a guilt-free snack that

consumers can feel confident eating and will provide them with the sustenance that they need for

their daily tasks.

Furthermore, though our product is designed to be paired with Pretzel Crisps, each platter’s

recipes can be used with other similar products such as Wheat Thins or Triscuits. We believe that

this ease of accessibility to the product and not forcing consumers to try two new products, will

encourage more consumers to try the new Pretzel Platters, and may end up creating new

consumers for Pretzel Crisps in the process.

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We believe that, and intend for, the Pretzel Platters product will be classified as a convenience

product, as it is will serve as a supplement to many types of savory snacks that are already

convenience products. Hence, the price point of the Pretzel Platter will be competitive with other

similar snack products to encourage impulse buys and to communicate to consumers that eating a

healthy snack isn’t just easy, but is also an affordable option too.

Sizing and Packaging

The Pretzel Platters line will have two available product sizes: Pretzel Plates and Pretzel

Platters. A Pretzel Plate will contain enough ingredients to prepare a large snack or small meal-

sized serving and is designed to be paired with the 7.2 ounce bag of Pretzel Crisps. The Pretzel

Platter will be the equivalent of four personal platters and is designed to be paired with the 28

ounce bag of Pretzel Crisps.

Each package will display the steps for assembling the specific recipe on the bottom of the

package as well as a list of recommended Pretzel Crisps’ flavors to combine with that particular

platter.

The Pretzel Plate option will be packaged in a short, wide cylindrical container approximately 7

inches in diameter and 2.5 inches high with a removal top that reveals a salad plate-sized plastic

bottom containing the ingredients when removed. Inside the package, the individual ingredients

will be separated by ridges in the platter that form concentric circles. The top will be resealable

for consumer’s convenience if they choose not to use the entire package in one sitting. While the

personal platter will certainly be available at grocery stores and superstores, its smaller shelf

footprint makes it a superior candidate for convenience stores to stock when compared with the

full platter.

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The larger Pretzel Platter size will also be cylindrical, but will be approximately 14 inches in

diameter and 3 inches tall. Instead of one single removal top, the full platter will be separated

into four equal quadrants each with its own removable, resealable lid. The dividing lines between

the four quadrants will also be perforated so that consumers may split up the larger platter into

four smaller platters. This modular packaging element provides three distinct benefits to the

consumer. Firstly, it allows consumers to split up the large platter easily among multiple

individuals. This will provide a benefit to families who want to send some of the platter to school

with children, take a part of the product to work with them for a snack, or simply need to divide

snack into equal portions. Secondly, the fact that the product can still be utilized without dividing

the quadrants means that Pretzel Platters still provide significant value in social environments

where communal eating is acceptable and encouraged. Thirdly, it allows for a single individual

to buy multiple days worth of snacks in bulk and also enables easy portion control as opposed to

single, large packages.

Varieties and Branding

With over twenty varieties of Pretzel Crisps currently available, we consider our breadth of

available varieties to be a significant competitive advantage associated with the Pretzel Crisps

brand. For this reason, we believe that the introduction of a wide variety of flavors and recipes

would be the optimal way to create this product line. The three initial categories of Pretzel

Platters that we recommend are the Savory line, the Indulgences line, and the Fresh! Line.

The Savory line will consist of non-perishable ingredients that can be stocked in the snack aisle

of a grocery store without fear of expiration. Of the currently available Pretzel Crisps recipes,

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“Holy Frijoles”, “Farmer’s Fiesta” and “Hummus Loves Us” would all be varieties that would fit

within the Savory line.

The Indulgences line will stray slightly from the healthy eating standards that regulate the other

lines and will instead aim to provide a sweet, dessert-like snacking experience. Current Pretzel

Crisps recipes in this category would include “Apple Pie Nachos”, “Crunchy Coconut Nibbles”

and “Unicorn S’more Tacos.”

The Fresh! Line, unlike the other two lines, will require refrigeration as the ingredients included

will be fresher and of higher quality. Consequently, the Fresh! Line will also be slightly more

expensive than the other two lines. Pretzel Crisp recipes included in this line are “Strawberry

Bruschetta”, “Pom-Feta Bites” and “Chopped Greek Salad Bites.”

In order to best facilitate the introduction of our three lines, we will aim to co-brand with other

Snyder’s-Lance and Campbell’s Soup subsidiary companies and brands. We believe that by co-

branding with other companies within the same holding company family, we can capitalize on

the value those brands hold in consumers’ minds. Some possible co-branding opportunities

include Pace® for salsa’s and spicy ingredients, Bolthouse Farms™ for salad dressings, and

V8® for vegetables and fresh ingredients. Since many of these brands are already in many

consumers’ evoked sets for their respective products, we believe that co-branding with these

brands will help us establish brand equity.

4.2. Price:

With all factors going into consideration, Pretzel Plates would have a price point of $5.50, while

Pretzel Platters would have a price point of $20.00. We have decided to implement our prices by

recognizing an emphasis on sales orientation, with pricing that is more for the same. The

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decision to focus on sales orientation rather than profit orientation is due to our decision of

wanting to increase market share and sales maximization. By prioritizing sales over profit, we

hope to increase the company’s market share and potentially attract investors; which can expand

upon Pretzel Crisps’ customer base and increase awareness of its’ products within the market.

Because of the difficulty to determine exact costs for one unit of product, we estimate that our

products’ variable costs will be similar to the variable costs of its competitors; which should

already be factored into their final price point. Variable costs that would be similar would

include items such as raw materials to create our product, office supplies for the factories that

create our products and labor wages; while fixed costs such as rent, executive salaries, and

insurance would be aggregated together, and then divided amongst our sales forecast to create a

sustainable price. We estimate consumer demand to have a high elastic demand due to a higher

number of substitutes within the healthier snack food market, and due to our product’s

classification as a more luxurious good within our target market; but due to our decision to use

competitive pricing, these demand forecasts are ignored. In a monopolistic environment, the

decision to decide to price more for the same comes from our group’s proposal to use

competition- based pricing, where we set our prices based on our competitors’ costs and prices.

We want our target market to see that our product is superior in both nutritional and economic

value when compared to our competitors. This is why in determining our price, we decided to

find the prices of competitors’ products, scale the products’ prices to their serving sizes, and then

find an average between them to determine a price that shows we have more to offer for roughly

the same price. (1) For determining the price of the Pretzel Platter, we simply took the average

price for the Pretzel Plate, and multiplied it by four to reflect how it is four times as large as the

Pretzel Plate.

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From these prices, we adjusted them to adhere to our idea of pricing more for the same price

through the usage of odd-even pricing. By adjusting the prices to $5.50 and $20.00 respectively,

we communicate to our consumers that our product is quality. We will also try to encourage

discounts for larger bulks of products being bought in order to encourage more products being

bought for both end consumers, and any indirect marketing channel intermediaries.

4.3 Place:

To allow for access to our products, we will provide our new product line to retailers,

particularly supermarkets such as Safeway, Walmart, Costco and so on. We will prioritize access

to locations where families shop.

Millennials value convenience and accessibility (Factors), and younger Millennials prefer

convenience stores or campus cafeterias rather than supermarkets, so establishing connections

with these venues will allow us to sell more to our target age-group (Factors). Corner stores such

as 7-11 will be valuable partners. With our differentiated products, we hope to offer a superior

alternative to buyers on-the-go when presented with homogenous alternatives on the shelves of

convenience stores.

Additionally, we should utilize vending machines and related decentralized distribution channels

that magnify the convenience of our product, Sampling with certain supermarket chains, such as

Market of Choice will allow us to generate exposure for our new product line. Similarly, pairing

our product as a “healthier side” for eating establishments such as Subway will have a similar

benefit to awareness.

As mentioned in our segment on product positioning, our healthy options appeal to health

conscious individuals, and our new product line will provide a comprehensive nutritional profile

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to snackers, which will synergize nicely with health food stores, such as Whole Foods. We will

also further our partnership with Amazon and their PrimePantry orders, who recently acquired

Whole Foods, and we will organize a mutually beneficial relationship that will allow for greater

accessibility and also further the quality of product selection at Whole Foods.

Whole Foods allows us to target a particular niche consumer base otherwise absent from regular

supermarket stores. Although Pretzel Plates and Pretzel Platters allow us to out-compete more

standard products in regular grocery stores, we lose a potential source of revenue if we neglect a

more competitive space in health food stores such as Whole Foods. Since Millennials do most of

their shopping online and engage in online shopping more than any other age group

(Kestenbaum), and also since they happen to be the most health conscious generation

(Gustafson), our relationship with Amazon and Whole Foods will capitalize on our target

market.

When competing alongside normal competitor products, our product line will compete based on

quality, whereas when we sell in health food stores, we can implement our more for the same

strategy. Our goal: to have customers experience our product at these venues and conclude a

superior taste equivalent to the more processed snack foods, but with none of the typical

drawbacks of premium health foods, such as an unreasonable price.

4.4 Promotion:

The primary goal of our promotional campaign is to provide a multi-pronged approach to

incentivize our target market to try our new product. Our promotional campaign will include

coupons, both attached to specially marked products as well as newspaper, an amazon same day

delivery promotion, and an advertising campaign focused around T.V. and Hulu commercials

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that highlight our specially marked packages and a brief message at the end about our coupon

and amazon prime same day promotion.

Coupons

As a part of our integrated marketing campaign we will use both traditionally distributed

coupons, and coupons stuck to specially marked packages of our new product. The specially

marked packs will serve two purposes. The first purpose will be as an incentive for consumers

of convenience products to choose our product over others within their evoked set during in store

decisions. The second purpose of the coupon will be to encourage incentive and action to seek

and purchase our product because of our commercial advertising campaign.

amazon prime: same day delivery:

Amazon Same Day Delivery

Partnering with amazon for a same day delivery promotion will help our product reach

consumers that would not have been interested otherwise. Same day delivery will attract

consumers who do not necessarily have pretzel crisps in their evoked set, and promoting our new

product in this manner will encourage consumers who were not interested in already released

pretzel crisps to at least consider our new product. A partnership with Amazon will also be

beneficial to help promote Pretzel Plates and Platters because it is app/website based shopping

which appeals to our intended millennial target audience. This form of promotion also adds a

novelty aspect to encourage consumers to try our product as a part of a delivery service that is

not typically offered.

General Advertisement and Television Advertising

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Our advertisements must reach our intended target audience to be effective. Because Pretzel

Crisps are a convenience product it is important for our products to be a part of our target

markets evoked set when they are purchased. Our advertisement campaign will synergize with

our coupons that are attached to the bag when consumers are making purchasing decisions.

Between our already established brand awareness and loyalty, development of new

advertisements for our product, and temporary coupon offering to encourage consumers to

purchase our new product we believe that there will be a substantial incentive to purchase and

consume our product.

Our target market of millenial, middle to high income women with children enables us to target

our chosen demographic easily based on common family patterns and habits. Our overarching

message to our parent target market is that pretzel crisps are a premium product that is a healthy,

convenient alternative to other similar snacks. Our advertising campaign will be attempting to

reach our specific target market, and convey the premium nature of the product. The budget for

our product will follow an objective and task method. 30% of the overall budget will be

dedicated to promotions.

(look at and judge the effectiveness of the commercial): The primary objective of our television

advertisements will be to highlight the premium nature and convenience of our new product

within a family environment. Our creative concept will highlight this by portraying a series of

scenes all focused around family. The first scene will open with a mother calling to her child

that they are late to school as the mother enters the pantry to put the final touch on their packed

lunch. As the mother enters the pantry the camera pans to our new savory Pretzel Plate

packaging surrounded by dull, unhealthy snacks. The mother then chooses ours as the healthier,

more convenient, premium product. The next scene will show the mother pulling out a Pretzel

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Plate fresh package after the gym as she receives a message from her daughter saying that she

needs to be picked up from a friends house soon, on the way to her car to highlight our product

as being convenient and healthy once again. The final scene will be the father and son sneaking

into the pantry at night to get an arm full of sweet Pretzel Plates. As they exit the pantry the

mother will catch them and say “There’s no need to hide eating Pretzel Plates.” The commercial

will close out with a picture of our product on a complementary background with a voiceover

highlighting our coupon deal, the fact that it’s a new series of products in varying sizes, and the

option for Amazon Prime same-day delivery in select locations.

Our use of television ads will be delivered on channels such as Nickelodeon, The Disney

Channel, Freeform, as well as TLC. Our advertisements will run between 6 a.m. and 5 p.m. to

help target moms. The second primary aspect of our television advertisement delivery will be

through the streaming service Hulu on similar family friendly shows without the same time

restraints because of the subscription based nature. Hulu is an important channel for our

advertisement because it allows us to target a more premium subscription based demographic

that is statistically younger than traditional television viewers.

Social Media Advertising

Because of our target market of millennial mothers, targeted ads delivered through social media

platforms such as Instagram, Facebook and Twitter will be used to reach exclusively our

intended audience. Our social media post will be a single instagram post sized ad highlighting

both our Pretzel Plate and Platter in their varying flavors. The ad will also highlight the “new”

nature of our products, as well as contain a link to our website to find locations to purchase the

products, print coupons that can be used in store, and explore our line of Pretzel Crisp products.

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The advertisements displayed through our Social Media platforms will target 22-36 year old

married women with children across all platforms. Our belief is that because of the younger age

range and technologically adept habits of millennials, social media advertising will provide us

with a way to engage a large and otherwise hard to reach audience.

Promotional Displays

As a part of our integrated marketing promotional campaign we will rent space within stores to

display our savory and sweet products at the ends of isles. We will not be able to promote our

fresh options through these displays because they require refrigeration. These promotional

displays will be positioned everywhere that our products are sold as space and our retail

distributors allow. The promotional display will consist of an overgrown version of our product

held by a hand. Within the product part of the display, the two various compartments will hold

our sweet and savory products of both Plate and Platter size, seperated into the two separate

chambers that normally divide pretzels and dip on our actual product. The backboard of the

display will have the Pretzel Crisp logo on a bright blue background to encourage brand

recognition and association with the original Pretzel Crisp line. The purpose of these displays is

to break through potential consumers selective attention barrier and prompt sales where they may

otherwise be missed.

Public Relations

Conducting a PR audit will allow us to ensure that there are no immediately foreseeable threats

to our brand image and company reputation. If our promotional efforts are to be successful it is

vital to ensure that we have as limited negative press and exposure for our products and

companies as possible. The first area of focus for our PR audit will be to ensure cleanliness of

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facilities where Pretzel Crisp products are stored, manufactured, and transported. Next our audit

will take a special look at our newly created advertisement campaign for both our T.V.

commercial, and social media advertisements to ensure that they are received as intended before

their public release. Finally our PR audit will also include sessions to ensure that employee

training sessions are occuring on a regular basis, and also an audit to ensure that they are

effective to avoid future litigation and damaged reputation from employees.

5. Budget/Timeline:

Idea Generation and Idea Screening

Idea generation and idea screening have already been completed and can be seen in this

marketing report. We will allocate five percent of our budget towards both idea generation and

idea screening.

Concept Testing

Our plan is to randomly select a group of mothers all with different economic situations, family

dynamics, as well as different ages. In order to form a focus group to receive feedback about all

of our product decisions. We also plan to create sample stations in our retailers, for example

Costco, to give people an opportunity to try Pretzel Platters and provide their insights about

them. This is a crucial part of our process, so we can make adjustments to our product before its

release. This process should take about a month and approximately 10% of our budget as we will

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have to find subjects and hold the focus groups as well as pay employees and retailers for

allowing our product to be tested in their stores.

Marketing Strategy Development

Our target market are millennials (aged 18-36), who identify within the middle to higher social

class, with children, and who are health conscious. Our product will be a snack that can also be

seen as a meal replacement that will provide a healthier alternative to other competitors’

snacking options such as apple slices or cheese sticks. We aim to increase product exposure and

company market share by seven percent after the first year.

Our new product will be offered in two differing sizes that include a serving size of pretzels as

well as ingredients for the accompanying side. The differing sizes will be priced at $5.50 for the

smaller portion, and $20.00 for the larger portion. We will distribute to retailers with a

specialized focus on stores that are more health conscious such as Whole Foods.

Our overall goal will be to increase the company’s market share, and attract more investors and

customers through our new products. We will also plan to adjust prices to match and challenge

competitors’ price changes to the best of our ability. We plan to spend five percent of our budget

on developing a complete marketing strategy.

Business Analysis

After we have developed our marketing strategy we must evaluate Pretzel Platters and review

our sales, costs, and profit projections. To do this we will look at our competition as well as

similar products to get an estimation of what our maximum and minimum sales will look like. If

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we assess that Pretzel Platters is not risky and financially attractive, we can then move into the

Product development stage. This whole process should take about a month and use only 5% our

budget to pay the salaries of our employees.

Product Development

Our product development would require a lot of time because we have to create new packaging

for our product. We have two different sizes for our packaging, a smaller one and a bigger one.

Our manufacturers will have to add a new line to create our packaging. In addition we our

partnering with Campbell’s to supply us with the remaining ingredients for our Pretzel Platters.

Some platters will be nonperishable food items so that is not a worry however, our Fresh! Platter

will contain fresher and higher quality food items that will be more expensive. Once our

packaging has been created and the platters have been assembled we will have to divide where

each product needs to go, whether it be to a retailer or be held for online purchases. This step

will be time consuming and expensive therefore it will take about 3 months and 15% of our

budget.

Test Marketing

To get an understanding of how the public views our product we will have it available in retail

stores like Costco as well as convenience stores such as 7-11. On our product we will attach

coupons to our product offering a deal for anyone who provides feedback for our product. This

will notify us if there are any final changes that need to be made to our product. This process will

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not be very costly but will take some time. We estimate this will require only 10% of our budget

and will take 2 months to complete.

Commercialization

Commercialization will not be too hard for us because Pretzel Crisps and Pretzel Platters have a

very similar target market so we do not have to work hard to get our name out there it is already

in consumer’s evoked sets. With that said our product is different and we want to let consumers

know that this product is not your conventional snack. To do this we will have to pay for

television ads and social media ads to target young mothers who will buy this snack for

themselves as well as their families. We will also have to pay our employees to accomplish this

plan. Therefore we estimate our commercialization will take about 5 months and use 15% of our

budget.

Promotion

For our promotional budget we will be using the most logical budget setting method, the

objective-and-task method. We have already outlined our promotional objectives above as well

as stating the tasks that need to be achieved to accomplish our objectives.We concluded that the

final 30% of the budget will be dedicated towards promotion. Of this 30% budget, we will

allocate 15% towards coupons, 15% towards Amazon’s delivery service, 15% towards general

and television advertisements, 15% towards social media advertisements, 15% towards

promotional displays, and 25% towards public relations work.

21

6. Appendices

Segmentation Circle Graphs

22

23

Millennial Survey Data

24

New-Product Strategy / Idea Generation Box

Middle to Upper-class families that intend to use our product for social gatherings as well as daily snacking/school and work lunches.

Supplement current offerings and leveraging the existing recipes created by the company.

Promote public health through healthy snacking of ethically sourced ingredients.

Health-oriented. More-for-less cost structure. Empowers consumers rather than making them feel guilty or forced.

Dips and toppings

Co-branded, healthy

Pre-measured

recipe kits.

Pretzel crisps sandwiches (a la Ritz Bits).

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Product Mock-Ups

Approximation of Inner Container (Top-Down View)

Primary Research: Online Survey via Oregon Qualtrics

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27

28

29

Raw Price Calculations (1)

Pretzel Plate

Hillshire Platter: 2.76 oz = $4.00

Scale to 7.2 oz = $10.43

Lunchables: 4 oz = $1.78

Scale to 7.2 = $3.20

Handi-snacks: 6.54 oz = $3.00

Scale to 7.2 = $3.30

Average: $10.43 + $3.20 + $3.30 / 3 = $5.64

Pretzel Platter

$5.64 x 4 units = $21.96

30

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