1. Module #4 Strategic Management, Products and Services MBA 505 Marketing Management
Peter Giardini Professor Melvin Prince
June 11th 2015 Summer 2015
“Introducing New Food Products into the Market”
Vegetarian Food Products
Abstract
Marketing researcher Micheal E. Porter emphasizes the need for continuous marketing changes
and best practices scenarios to remain competitive in a changing marketplace. These best
practices scenarios remain a common core competency for many industrial sectors as well as
staying ahead of your competitors. However, is it really consumer choice and other variables
such as pricing and packaging that promotes good marketing? This synopsis will examine two
food products; (vegetarian and meat) with emphasis on operational effectiveness, and consumer
choice theory.
Keywords: Operational effectiveness, competitive advantage, consumer choice.
INTRODUCTION
For the purpose of this paper, operational competency is not the only method of attaining
superior competitive advantages in the marketplace. 1
Micheal Porters describes that companies
who reach attain efficiency standards will maximize profits, and productivity. The term
‘operational effectiveness’ attributes to ‘distinct functions’ that provide for performance
measures (evaluations) to improve product and delivery. Further, Porter refers to these variables
as relative cost factors, 2
translates toward improving value and efficiency will enable (higher
prices, and lower unit costs), resulting in overall competitive advantage for the company.
1
Micheal Porter, "What Is Strategy?" Harvard Business Review, 1996, 61. Accessed June 8,
2015. http://www.engr.mun.ca/~amyhsiao/strategy.pdf.
2
SEE: Relative Cost Position, 62

2. Porter elaborates that effective production capacity fosters improvements in
manufacturing productivity; 3
this is also exemplified in (Fournier, 1997) analysis of brand
loyalty assumes the variables and distinctions of selecting and choosing consumer products. The
marketing perspective is to differentiate and compare competitor’s products and determine if a
competitive advantage exist.
Product Differentiation
Implications of product differentiation and market segmentation include brand
recognition, (reputation and delivery of service) as well as relative cost factors. In the
marketplace, the product is differentiated by 1) Its reputable service and 2) Its value. A product
that has a reputation of performing poorly, losses its value; variations exist between food
products in this example provided (vegetarian and meat products) factors include, price by
weight and volume when cross compared to the competitor’s product. Brand X assumes the
value proposition of healthy substitute for meat product with a consumer price value close to Y
although Y product differentiates in price and size the consumer choice indicates determinate
factors that some customers prefer more (quantity over quality) while some customer prefer
healthy substitutes and quality ingredients in selection and decision making.
Vegetarian Product Meat Product
X Consumer Value Y
Determinant factors
Healthy More Volume
Quality Ingredients Lesser Cost
Competitive and Operational Advantages of Product (X and Y)
3
Porter, 63

3. Competitive advantages exist when manufacturing costs are low and capacity is
increased. From a marketing standpoint, companies provide products to customers on a need
based demand. For example, product X promotes healthy ingredients designed to attract and
promote health conscious consumers this consisting of promoting non meat products; studies
reveal that health foods and drinks are more gaining market share. 4
Determinant factors for a
consumer to buy a vegetarian product over a meat product are; health, environmental, dietary
and public health factors of excessive meat consumption. 5
Certain attributes toward consuming
vegetarian food products or meat products are that consumers have a choice of which products
they prefer; therefore, a competitive advantage may exists when the costs of manufacturing meat
products exceeds that of vegetarian products; especially, when consumer (conversion or
transition) occurs when more consumers tend to purchase vegetarian products over meat
products, it is also noted that ingredient branding creates awareness and preference over other
products. 6
The companies operational activity of product Y is greater in capacity that product X
because the meat industry accounts for the largest segment of the agriculture total meat and
poultry reached 92.9 billion pounds in 2012. 7
Alternatively, data reveals there are are about “18
4
Annunziata, Azzura, and Paula Pascale. Consumer Behaviors and Attitudes toward Healthy
Food Products: The Case of Organic and Functional Foods. European Association of
Agricultural Economists, 2009. Retrieved from:
http://ageconsearch.umn.edu/bitstream/57661/2/Annunziata.pdf
5
Spiers, Adam. "The Public Health Dilemma of Excessive Meat Consumption." The Network on
Public Health. May 1, 2009. Accessed June 10, 2015.
https://www.networkforphl.org/the_network_blog/2013/05/09/179/the_public_health_dilemma_
of_excessive_meat_consumption.
6
Kotler Philip, and Keller, Kevin Lane. Marketing Management. 15th ed. Saddle RIver, New
Jersey: Pearson Prentice Hall, 2015. 389.

4. million vegetarians in the U.S., and vegetarian food is a $2.8 billion industry”. 8
The operational
and competitive consideration is deemed obvious due to the inherent amount of natural resources
required to raise animals and produce meat products. Resources such as water and antibiotics
used in animal feed, is absent in vegetarian products. It is also worth noting, that while the
operational advantage of product X outweighs product Y, product Y is mass produced, therefore,
its relative cost factor is lower in retail unit price and slightly higher in volume by one ounce
compared to the vegetarian product. The vegetarian product is transversely superior to the meat
product in both cost and operational effectiveness. Although product Y remains at a competitive
advantage due to larger production and distribution capacity; reports indicate stark futures of the
meat and poultry industry partly due to ramifications of global warming and climate change;
include animal feed, ground water depletion, drought, antibiotic resistance, implicate to a larger
degree uncertainty along with other associated costs such as rising cost of labor, production, and
other negative externalities (e.g., environmental degradation, pollution, and propensity for
zoonotic disease). 9
These (operational and production) risk factors associated with the meat
industry have broader implications in the economy, and even global food security. 10
Consumer Choice (Quality over Quantity)
7
SEE: "The United States Meat Industry at a Glance." 2012. Accessed June 10th 2015.
https://www.meatinstitute.org/index.php?ht=d/sp/i/47465/pid/47465.
8
Formachelli, Linda. "Market Focus-Vegetarians the Meatless Market." Target Marketing,
March 9, 2009. Retrieved from: http://www.targetmarketingmag.com/article/the-meatless-
market-403185/
9
"Some Animal Diseases and Their Possible Impact on Food Safety." April, 2006. Accessed June
10th
2015. http://www.eufic.org/article/en/expid/review-animal-diseases/.
10
SEE: New Harvest Report. http://www.new-harvest.org/2014/08/eating-less-meat-alternatives-
improve-global-food-security-methods-bringing/

5. Consumer choice and rational decision making is often influenced by the products
packaging and labeling; this indentifies the product or service being offered along with its logo,
motto, slogan and services. 11
Customers who prefer product X will look at the packaging and
ingredients which may include a ‘sustainability statement’ and other product features that will
attract and entice the customer to purchase that adds a value added benefit; research found that
consumer preference may vary depending on context.12
External variances include product
marketing strategies such as (consumer outreach programs, discounts, sales warranties and
guarantees). 13
Product X infers (quality over quantity, product Y infers quantity), research
indicates the change occurred when consumer demands for higher quality foods has prompting
change in the agricultural industry and production of genetically modified crops used in food. 14
Further, other studies found the growing social attribution toward vegetarianism and its
economic implications that living a sustainable lifestyle effects people mindset in consuming
more ‘green’ and organic products can actually lower food expenses and help reduce carbon
footprint. 15
Summary
11
Kotler and Keller, 392
12
John, Gowdy, and Kozo Mayumi. "Reformulating the Foundations of Consumer Choice
Theory." Ecological Economics 39 (2001): 226. Accessed June 10th
2015.
http://homepages.rpi.edu/~gowdyj/mypapers/EcoEcon2000.pdf.
13
Kotler and Keller, 393
14
Caswell, Julie, and Siny Joseph. "Consumer Demand for Quality: Major Detriment of
Agriculture and Food Trade Future?" Department of Resource Economics, 2007. Accessed 2015.
http://ageconsearch.umn.edu/bitstream/7390/2/wp070004.pdf.
15
Guillemente, Ann, and John Cranefield. "Food Expenditures: The Effect of a Vegetarian Diet
and Organic Foods." Working Paper. Accessed June 10th
2015.
http://ageconsearch.umn.edu/bitstream/123391/2/Guillemette_FoodExpendituresTheEffectOfAV
egetarianDietAndOrganicFoods.pdf.

6. The distinction between product differentiations refers to creating value with customers;
consumer preference is the degree in which these products represent customer sentiment, choice
and belief in a particular aspect, such as health. The differentiation also exists when products
have benefit and value propositions; (performance, features, and or physical appearances).16
This
follows the internal marking concepts and social cultural concepts, involving choice theory,
brand reputation, and brand distinctions that persuade consumer determinant factors of selecting
a particular brand or product. Competition and strategy involves knowing how your competitors
operate and how to improve customer relations (e.g., customer service and quality) and to
continually grow and build market share. 17
The term operational effectiveness emphasized in Porter discusses the continuity of
activity planning and quality control in order to fully comprehend business analytics that is
crucial in identifying potential weakness in production and operational activity and in order to
avoid myopia. In this example, I infer that company X has a lower operational cost than company
Y, and thusly, company X is operationally more efficient and more sustainable than company Y.
Company Y advantage is greater market share, product availability, larger packages and slightly
lower price per ounce. In conclusion, the manufacturing advantage of product Y outweighs that
of product X due to larger production, distribution and capacity factors. 18
New Product Launch and Strategies
16
Kotler and Keller, 371
17
Kotler and Keller, 418
18
Product (X and Y) compares (Gardein and Tyson) food product.

7. Vegetarian company ‘Gardein’ new products line promotes a distinct message to
consumers; slogans such as “Grab and Go” which target markets people with busy lifestyles;
food that is prepared healthy and easy and to go. The unique packaging displays slogans and
contents such as “Non-GMO, I am meat free, and on the go goodness”. 19
The product packaging
and slogans appeal to vegetarians, and health conscious people looking for a quick bite to eat,
this infers the nature of the services of fast food services without meat. The marketing concept
here says that you can still have fast food without the meat and be good for you, similar to
Chipotles strategic marketing of providing wholesome (non-GMO) fast foods. Customers who
prefer fast food will typically find street restaurants (e.g. McDonalds, Burger King Etc). Today,
there is not a single drive through that will serve non-meat items; the traditional American drive
thru has been the cornerstone of fast food giants marketing success, and perhaps non-meat fast
food vegetarian products can be optimally served at the drive through as well to promote healthy
living for people on the go. The application is whether the marketing concept of fast food at the
drive through can apply to tasty vegetarian products has yet to be discovered; it may perhaps be
that the availability of meat products and relation of overabundance and waste in the consumer
food marketplace, and whether preference or choice of selecting (meat products over vegetarian
products) depends on other factors such as availability, cost and flavor. What we find today is
that vegetarian products can be surprisingly tasty with new varieties of ingredients, sauces and
spices; it may in fact be the new wave of the fast food future.
19
See: http://gardein.com/new-products/

8. The market concepts describe how pricing and packaging influence consumers
purchasing behaviors of existing and new products known as the “strategic concept” follows
customer based target marketing and satisfaction oriented results. Kotler and Keller discuss the
importance of manager to look not only at financial performance, but on service performance.20
This is accomplished by rating scales, surveys, and follows up customer satisfaction responses
which are separate from consumer preference and choice theory because new products especially
food products require first time buyers to provide feedback. This is true with all products, as well
as services because service also can be measured. Kotler and Keller describe that changes in
service quality may cause customers to switch services.21
The concept here involves supports the
notion that companies must stay ahead of their competitors in order to have a competitive
advantage, it also includes marketing strategy that focuses on what drivers will build on
customer sentiment and repeated sales. These marketing points will begin to map a plan of
launching a new product or service, with a higher probability of success than not following a
strategic marking plan. The goal is to maximize customer satisfaction and delivery of service that
will enable shoppers to prefer one product over an.
20
Kotler and Keller, 411
21
Kotler and Keller 417