Expansion of Kingsmoor organic pet food

1. Kingsmoor Situation Analysis
- B2C Market
Vivien w

2. ● Kingsmoor manufactures 100% Danish
natural premium pet food.
● Founded in Bjerringbro in 2005 by Bent
Randsborg. The company is family-owned
● Products available in Norway, Sweden,
Poland and Germany.
● Support decision proposal for new factory
Introduction
2

3. Contents
● Background
● Industry insights
● Financial overview
● Reasons behind the figures
● Target market, STP, Market mix
● Project planning
● Porter’s 5
● Way forward
● Kingsmoor capability to compete
● Future insights
● SWOT

4. ● More than half of Danes own a
pet.
● 600,000 dog owners.
● The humanisation trend pushing
need for quality and health
conscious consumption.
● The industry has experienced
rapid growth in the past years,
valued at DKK 1,8M in 2017.
● Kingsmoor had a steady growth
in retail sales value from 2012 at
0.9% to 2016 at 2.6%.
4Source: Passport / Euromonitor/
hunden.dk
Background

5. Industry insights for new factory
success indicators
● Humanisation of pets calls for premium quality food.
● Niche players have an edge i.e premiumisation
● Steady growth in internet retail
● Strong growth in organic pet food next five years.
● Popularity in gluten, grain & allergy free pet food
● Eco-friendly pet food production process a key
focus.
5

6. Financial
overview
6
ROI ATOR ROE BETO
2016 -23% 86% 49% 145.50%
2015 3% 145% -7% 87.50%
2014 -52% 56% 107% 236.70%
2013 6% 107% 183% 80.80%
2012 -27% 57% 753% 292%
● KPIs analysis for the ability to
generate return on the capital
invested
● ATOR for the relationship
between activities and capital
employed

7. Reasons behind the numbers
Fluctuating profits
from 2012 -16 could
be because of the
irregular expenses.
Introduction of new
line of allergy, gluten
& grain free dry dog
food and treats in
2016 plummeted
sales revenues.
The company
posted a 7%
increase sales
value in 2016.
However, had poor
credit standing at
(0) C-14, in 2016.
7
Concerns about the
company’s equity
amounts to -1,982
DKK whereby the
capital is lost. Maybe
due to capital
injection in 2017.
According to
erhverv.nnmarkedsd
ata the company’s
largest creditor has
committed to
continuing credit to
ensure liquidity.
Source: Principles & Practices of
Market - D,Jobber
Norwegian investors
brought in a 3.9
Million DKK capital
injection with a 33%
shareholding in
February 2017.

8. Target Market
Pet food market key segmentation is
categorized by pet type, food type
either dry or wet, treats, and veterinary
diet, organic, and nutritional foods.
Segmented the market based on food
type trending health factors purchase
decision made by the pet owners.
8
Fur baby owner
Source: Principles & Practices of
Market - D,Jobber

9. 9
STP process
Source: Principles & Practices of
Market - D,Jobber

10. 10
Market Mix for the focused market segment
Product
• Product Range : Pure, Lunches, original and energy boosters.
• Premium quality, allergy-free, gluten-free and non-artificial dry
food crafted with nutritious herbs, meats, fruits and vegetables.
• Ingredients such as chicken, lamb, seafood and horse meat to
different life-cycles of dogs and different lifestyles and breeds.
• Branded, clear transparent packaging, 100% environmentally
friendly.
Price
• Medium priced premium product
• Retails at 12-10kg@400kr, 3kg@150kr, 7.5kg@280kr)
• Pet owners get value for money
• Prices encourages the buyers to get bigger volumes.
• The perceived value of buying Kingmoors products outweighs
the perceived sacrifice.
Placement
• Internet retailing a strong and significant,15% retail value sales
2016.
• Kingsmoor should emphasize on their e-commerce platform.
• Improve efficient distribution channels with their own retail
store.
• For a short a direct transaction, home delivery will be advised.
• Pet shops, hypermarkets & retail stores are key distribution
channels.
• The choice of raw material is seasonal.
Promotion
• Digital channels is the fastest and the most effective i.e email
marketing, TV ads, Adwords, Instagram/Facebook Ads, billboard
& digital screens in train stations & malls.
• Aggressively promote the brand through campaigns.
• Kingsmoor promotes campaigns against dog testing to bring
awareness.
• Partnerships with pet stores, vetenary, industry associations
and other retails outlets.
Source: Principles & Practices of
Market - D,Jobber

11. Project Planning Recommendation
11Source: Mindview

12. 12
Project description :
Objective :
Resources :
Duration :
Key planning elements for Kingsmoor
Expand Kingmoor’s natural food line production factory.
Facility/land, skilled experts, dog food ingredients, investment capital.
Approx. 6 months
Elements Key Areas Details
Task distribution &
Team
● Project manager
● Marketing employee
● Finance employee
● Operations employee
● Veterinary
● External consultant
● Oversee running of project
● Device marketing plan for the product line.
● Ensure supply of financial resources
● Technical details of machinery & production
● Testing, certification & verify product quality.
● Provide external project insights
Communication Follow the proposed target group
according to the proposed Market mix.
Print and digital media Ads
Focus on improving brand growth
Risk management ● Investors’ withdrawal
● Faulty machines
● Product recall
● Minimize by alternative sources of investment
● Minimize by back up plan foralternative machines
● Elimininate through quality assurance in every
production process.
List of stakeholders Investors, customers and retailers Ensure their demands are met
Final budget for the
project
Approx. 10 Million DKK for facility rental, raw
materials & machinery.
Source for investors or joint venture
Timetable Phase 1 (3 mnths): Starting & Planning
Phase 2 (2 months): Implementation
Phase 3 (1 month): Evaluation
Meet deadlines & ensure efficiency
Source: Oksana Lecture slides

13. Porter’s 5
Summary
13
High
Buyers bargaining
power
● Lower (stronger brand, bigger
market share, larger capacity)
Low
Suppliers
bargaining power
● Lower (own source of raw
materials)
MediumThreat of substitutes
● Medium ( mitigated by strong
brand & higher quality pet food)
Medium
Threat of new
entrants
● Lower ( higher compliance,
standard, strong brand and
bigger market share)
HighIntensity of rivalry
● Average ( Kingmoor’s will be a
stronger brand, big production,
premium quality leader)
Force Current situation Near future
Highly attractive market.
Source: Tutor2u

14. 14
Exploitable Market assets - capacity to offer solutions in
the niche for allergy free, gluten friendly, grain free
healthy pet food market segment.
Managerial Capabilities & commitment - skilled staff and
veterinary doctors for testing and ensuring pet food
quality is 100% natural.
Cost advantages - Financial implications shows a strain in
the company’s cash flow in the last five years, but
plumeting sales indicates a steady growth in the products
in retail.
Technological advantage - Kingsmoor R&D shows
innovativeness in providing premium and healthy
alternatives thus giving them an edge.
Kingsmoor
Capability
to compete
Source: Principles & Practices of
Market - D,Jobber

15. ● ½ of danes plan to spend more in
future.
● 44% will spend upto 10% more
● 5% will spend upto 30% more
● 80% will spend more on pets
health & reduce Vet bill with
insurance
15
Future Spending
on quality animal
food & toys -
AniCura survey
Source: Hunden.dk

16. Kingsmoor SWOT Analysis
16
Weakneses
Bad credit score
Lack own retail store
Opportunites
Growing industry
Low supplier
baragining power
Strong consumer
spending capcity
Threats
High industry rivalry
High buyer
bargaining power
Changing social
trends
Strenghts
All natural dog food
Established brand
name
Wide selection of pet
food

17. ● Introduce made-to-order dog food fully dedicated facility,
to ensure efficiency and to cover costs by prepaid orders.
● Focus on ingredients, processes, and operational
excellence based on veterinary nutritionist-formulated
recipes that dog owners would love.
● Partnership veterinarians and animal clinics to offer
Kingsmoor food as a healthy alternative.
● Advisable to seek external private investors for the capital
investment or joint venture.
● Kingsmoor to focus on, operational skills, growth skills,
special relationships, and privileged assets.
● Factory to be set closer to affordable source of raw
materials for smooth supply chain management.
17
Way
forward
Source: markedsdata

18. 18
Thanks!
Any questions?