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Chewy Company Debrief
- 1. Chewy and theYumities Market Analysis of Cake, Cocoa and Candy brands Cake Cocoa Candy Team 03
- 2. Yumities Market Chewy Whippit Tasty Savor New entry Walnut CHEAP Wafer Wizard Toffee Sushi STANDARD CHEAP Taco STANDARD PREMIUM Tomato Salad PREMIUM
- 3. Repositioning Candy asStandard-Premium market Reasons No evident competitive advantage against main competitors Salad and Tomato, but high disavantage in key attributes in Premium Market Continuous spending on its marketing-mix in the previous three periods didn’t make it better than its competitors Actions Price reduced by 3.40 $ Implementing the cost and quality R&D formulas
- 4. Launch new productCocoa in Standard Cheap Market Reasons Existing brands Cake and Candy were targeting the Cheap and the Standard-Premium market and company still didn’t have presence in the Standard-Cheap market. Standard-Cheap market share was 35% of the Yumities market Actions A new formula, C07D-I, was developed with key attributes higher than the competitors’
- 5. Comparative analysis ofthe company across periods From period 0 to 1 From period 1 to 2 Revenues + 4,5% Revenues (-4.7%) Brand contribution + 14,1% Brand contribution (-1.6%) EBIT + 10,1% EBIT (-1.5%) Increase in Brand contribution of Launch of brand tomato with high both brands cake and candy. key product attributes than Candy.
- 6. Comparative analysis ofthe company across periods From period 2 to 3 From period 3 to 4 Revenues (-11.3%) Revenues +23,1% Brand contribution +0,8% Brand contribution (-27.6%) EBIT (-1.9%) EBIT (-40.7%) Although the cost formula for Candy was ✓ Launch of a new-product Cocoa implemented but the price was increased whereas ✓ Strong response by the competitors to the launch its competitor Salad improved the formula with only ✓ Negative contribution of Cocoa (-9500 k$) slight increase in price shadowed the good performance of other brands
- 7. Comparative analysis ofthe company across periods From period 4 to 5 From period 5 to 6 Revenues +22,5% Revenues +19,7% Brand contribution +77,5% Brand contribution +48% EBIT +166,5% EBIT +65,5% ✓ Repositioning strategy of Candy worked out well ✓ Increase in sales revenue of Cocoa by 54% ✓ Brand contribution of Candy increased by 9000 k$ ✓ Increase in brand contribution of Candy by more ✓ An improvement formula for candy was than 10,000 k$ implemented
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- 9. Brand Cake -Main Performance CAKE is in a maturity of market with main competitor of WALNUT. Main objective for CAKE is to maintain its market performance, and allocate more resource and budget for CANDY and other new products on the company’s level. Low-price strategy is the most efficient way to stimulate sales; while other marketing tools such as advertising, store penetration and promotions are not that effective. However, due to the unsteady pricing strategy, consumers were quite confused and didn’t go for sales.
- 10. Brand Cake -Main results CAKE P0 P1 P2 P3 P4 P5 P6 Unit Sold 8724 9464 8813 6963 8308 8205 7959 Av Retail Price 7.08 6.39 6.90 6.89 6.40 6.36 5.90 Sales Revenue 38826 38494 38250 30217 33067 32464 29230 Brand ContribuBon 6288 7821 11747 7145 8920 8622 6926 MarkeBng Budget 17336 16009 16040 14538 14718 14593 13567 Market Share 7.10% 6.90% 6.30% 4.50% 4.70% 4.20% 3.50% WALNUT P0 P1 P2 P3 P4 P5 P6 Unit Sold 8690 8310 9527 11019 10269 10482 10373 Av Retail Price 7.6 7.50 7.45 7.35 7.30 7.25 7.15 Sales Revenue -‐ -‐ -‐ -‐ -‐ -‐ -‐ Brand ContribuBon -‐ -‐ -‐ -‐ -‐ -‐ -‐ MarkeBng Budget -‐ -‐ 16667 17255 18623 17367 -‐ Market Share 7.50% 7.10% 7.30% 7.60% 6.60% 6.00% 5.50%
- 11. Brand Cake -Strategic Decision Adopt improved formula C03A-COST to lower down production cost at Period 0; Reduce the price over time as its target consumers are price sensitive; however, due to the unsteady/changeable price strategy, it is NOT effective enough to attract more consumer base or increase the units sold Reduce marketing budget over time and allocate more for the company’s new brand – COCOA as the first priority;
- 12. Brand Candy -Strategic decisions Since Candy was in a Growth phase, company decided to invest more in. At the beginning we decided to not develop any formula waiting for new R&D discoveries in P1 and to know what were key attributes thanks to Market Studies. Starting Strategy Target - Highs and Affluents Families (in order of importance) Product - high value with good average attributes Price - high price but less high than the Salad one Place - specialty stores and in second instance, supermarkets Promotion - high investments in Adv and low investments in promotion
- 13. Brand Candy -Strategic decisions Repositioning In P3, with the new competitor in P2 (Tomato) and the improvement of Salad (forecasted), the life-cycle of Candy in Premium market speeds up. So, we decided to reposition Candy the segment below: the Standard Premium. New Strategy Target - Affluents, Highs, Singles, Medium (in order of importance) Product - High quality (with new formula Improvement) Price - High Value for Money (High Quality and competitive price) Place - Trade marketing budget turned in specialty stores, supermarkets and mass merchandisers too to reach new target Promotion - Adv to reposition product on price and performance, increase of promotion budget to attract customers price sensitives
- 14. Brand Candy -Main results Competition in Premium Market Competition in Standard-Premium Market CANDY P0 P1 P2 P3 P4 P5 P6 SALAD P0 P1 P2 P3 P4 P5 P6 Units Sold 4.874 5.366 4.918 4.684 4.798 6.178 7.451 Units Sold 5.018 5.000 6.500 8.000 8.000 8.141 7.644 Av Retail Price ($) 26,50 25,41 25,36 25,50 22,11 23,09 22,64 Av Retail Price ($) 28,10 27,65 27,25 27,45 27,75 28,00 28,30 Sales Revenue ($) 67.166 72.221 67.217 63.366 59.168 78.320 92.571 Sales Revenue ($) -‐ -‐ -‐ -‐ -‐ -‐ -‐ Brand ContribuAon ($) 18.148 20.056 21.779 20.524 20.777 29.585 39.692 Brand ContribuAon ($) -‐ -‐ -‐ -‐ -‐ -‐ -‐ MarkeAng Budget ($) 17.872 21.122 22.950 21.129 15.855 17.800 18.475 MarkeAng Budget ($) -‐ -‐ 26.051 25.389 25.150 25.355 -‐ Market Share ($) 14,8% 15,6% 12,9% 11,2% 9,3% 11,4% 12,6% Market Share ($) 16,1% 15,8% 18,3% 20,6% 19,5% 18,2% 16,1% TACO P3 P4 P5 P6 TOMATO P0 P1 P2 P3 P4 P5 P6 Units Sold 6.382 6.750 6.877 6.984 Units Sold -‐ -‐ 2.446 3.882 5.219 6.711 7.601 Average Retail Price ($) 22,20 22,50 22,70 22,95 Av Retail Price ($) -‐ -‐ 26,65 26,90 27,25 27,45 27,75 Sales Revenue ($) -‐ -‐ -‐ -‐ Sales Revenue ($) -‐ -‐ -‐ -‐ -‐ -‐ -‐ Brand ContribuAon ($) -‐ -‐ -‐ -‐ Brand ContribuAon ($) -‐ -‐ -‐ -‐ -‐ -‐ -‐ MarkeAng Budget ($) 18.800 24.300 26.700 -‐ MarkeAng Budget ($) -‐ -‐ 17.061 18.258 20.500 26.000 -‐ Market Share ($) 13,3% 13,4% 12,5% 12,00% Market Share ($) -‐ -‐ 6,7% 9,8% 12,5% 14,7% 15,7%
- 15. Cocoa - Thenew product Cocoa is a Chewy’s new product launched in Period 4 The reasons for launching: Competitor Whippit launched new brand Wizard We was not in the 35% of the market (Standard-Cheap) Cake’s market share was going down for the maturity of the product Improve Chewy’s total performance and revenue
- 16. Cocoa - Physicalattributes comparison Physical ALributes (0-‐100) Avg. Retail Est. Unit Firm Brand Performance NutriAon Packaging Flavor ackaging Price ($) Cost($) Chewy COCOA 55 55 35 45 16.90 3.4 Tasty TOFFEE 65 45 25 60 16.10 3.45 Savor SUSHI 60 57 56 40 16.40 3.4 Attributes of Marketed Brands in Period 4
- 17. Budget Allocation, PriceMarkup and Market Share Budget Allocation Price Markup Market Share 30000 16,9 15% 25000 11,25% 16,65 20000 5993 4611 7,5% 15000 4699 16,4 10000 8979 9425 8480 16,15 3,75% 5000 5000 5000 6000 15,9 0% 0 P4 P5 P6 P4 P5 P6 P4 P5 P6 Promotion COCOA COCOA Trading TOFFEE TOFFEE Advertising SUSHI SUSHI
- 18. Q&A BE FRIEND LY,THANKS =)
- 19. Sales Profit Cake Candy Cocoa Time IntroducAon Growth Maturity Decline