Marketing Plan of Approach for Rob s Jalapeño How Hot? You Decide! Dr. renee hughner, COLTON HERNANDEZ, LOGAN ROHLOFF, katie sieverding, DAISY SOLIS-ALVAREZ Morrison School of Agribusiness W.P. Carey School of Business
#1 Question Consumers Asked How hot is it?
How Hot? You Decide!
Agricultural Marketing Resource Center Bell and Chili Peppers Profile September 2014, h Western Farm Press March 2012 US chile pepper industry under assault from foreign imports NY Times 2008 U.S. authorities find salmonella at farm in Mexico and cite 'key breakthrough Market Analysis: The Chili Pepper Industry U.S. chili pepper consumption up 21% from 2005. In 2014 the U.S. chili pepper industry was worth $216 million 38.5% increase in 2 years! 80% of all jalapeños consumed in the U.S. are imported Mexican-grown jalapeño peppers linked to a nationwide salmonella outbreak
Market Analysis: The Produce Industry 8% growth in produce purchases from 2012-2014 $50 billion in sales of fresh produce in 2014 Continued growth predicted for produce that is: fresh value-added (packaging & convenience) locally grown
Consumer Trends 25-49 Ethnically diverse population Tastes shifting towards hotter, more intense flavors Consumers seek adventure in meals seek healthy snacking incorporate more produce in their meals eat more home-cooked meals read nutritional labels increasing fresh produce consumption
SIGNIFICANT OPPORTUNITY EXISTS FOR PACKAGED,HEAT-GRADED JALAPEÑOS
Competitive Analysis
SWOT Analysis S Heat-graded W On premise cooling & packaging Domestically grown Traceability / Food Safety Inexperience in retail market Limited staff and marketing budget O T First mover advantage to introduce fresh, packaged, heat-graded jalapeños Capitalize on consumer demand for: healthy snacking, unique produce, and flavor preferences. Appeal to retailer concerns for food safety and differentiation Entrance of domestic competitors
Marketing Strategy Target Market 25-49 seeks flavor, excitement, convenience and health Positioning unique fresh flavorful heat-graded convenient healthy
Target Market: 25-49 Women are primary shoppers Lead active lifestyles Interested in nutritious foods Seek fresh and healthy snacking alternatives Health-conscious Environmentally concerned Convenience-oriented Buy a wide variety of vegetables Adventurous eaters would eat more different types if they had more information on how to prepare them! Mintel Reports 2014 Shop at conventional supermarkets for produce Prefer locally grown 35-49 significantly over index on food spending 25-34 are extremely ethnically diverse
Marketing Strategy Target Market 25-49 seeks flavor, excitement, convenience and health Positioning unique fresh flavorful heat-graded convenient healthy
Product heat-graded packaged fresh jalapeño pepper Flavorful, Crunchy, Healthy, Convenient
Product Overview Brand name Quality CORE BENEFIT: Flavor Pizazz Health & Convenience Packaging Product Attributes
Capsaicinoids & The Jalapeño Pepper Pepper 2,500 This dramatic range of heat is what makes a heat rating so valuable to consumers. Scoville Heat Units Capsaicin glands Capsaicinoids have been found to exert anticancer, anti-inflammation, antioxidant and anti-obesity effects. Recent advances in the study on capsaicinoids Journal of Pharmacology 2011 10,00 0
Brand American Grower/Product Dependable Trustworthy Unique
Packaging
Labeling FRONT OF BAG BACK OF BAG 62% of Gen X pay attention to the health and nutrition information on packaging. Mintel Reports 2014 Easy-to-follow, mouthwatering recipe Nutrition information / Capsaicin Brief story on Knorr Farms Grown in Arizona by Farmer Rob"
Where can Rob s Jalapeño be found? Distribution Strategy
Consumers are most apt to buy produce at conventional supermarkets (69%) Mintel Reports Perimeter of the Store U.S., June 2014
Distribution Local In-State Distribution Independent Retailers-Bashas Central distribution warehouse reaches metropolitan and suburban areas Oriented to local companies/growers Fits consumer profile and target market age 25-49 Specialty Food Stores- AJ s Fine Foods Consumers fit convenience-oriented and foodie target market Retailers seek unique products to provide competitive advantage
Promotion
Goals of the Promotional Campaign Build Brand Awareness Educate Consumers Encourage Trial Gain Loyal Consumers
Integrated Marketing Communication Plan Weekly Circulars PUBLICITY Bloggers Incentives Local TV Shows Rob s Jalapeño is unique, fresh, flavorful and healthy POINT OF PURCHASE Display Sampling ONLINE Website Facebook Trade Shows
Publicity: Bloggers AZ Bloggers that meet the demographic and lifestyle profile of our target market o Females 25-49 o Enjoy cooking o Spicy, flavorful foods o Have families with young children Contact and send samples to local Arizona food bloggers
An Example Food Blogger Post
Publicity: Local Television Shows Cooking segments feature: Local chefs Local products Local companies For the Arizona market these include: Arizona s local 3TV, Fox10 and ABC15
Point of Purchase Displays Farmer Rob Point-of- Purchase Cardboard Cutout o with recipe book holder Recipe Book o recipes from local chefs Promotion of website and Facebook page in booklet would eat more different types if they had more information on how to prepare them! Mintel Reports 2014
Jalapeno Lime Grilled Chicken Club
Point of Purchase: Sampling Educate Consumers o Heat Levels o Flavors o Uses o Nutritional & Health Benefits o ** Capsaicin ** Gain Brand Awareness Trial Samples have boosted sales in some cases by as much as 2,000%! PINSKEROCT 1 2014, The Atlantice
Point of Purchase: Sampling In store Local food festivals Scottsdale Culinary Festival Over 40,000 attendees
Online Presence: Website Redesigned Website o Authentic, Local Farmer Knorr Farms & Farmer Rob s story Recipe Resource for Easy, Flavorful Recipes
Online Presence: Facebook Engage Consumers Create Community o Life On The Farm o Harvesting The Jalapeños o Share Recipes And Experiences With The Brand
Circular Advertising 85% use the circular to plan their shopping trips. o Wakefern Shopper Survey 2015 Circular advertising is highly effective and easily reaches consumers
American Dietetic Association Partner with ADA to educate consumers on the health benefits of capsaicin Adds credibility to the health claims Place logo on bags of Rob s Jalapeño
Pricing and Financial Analysis
Pricing MSRP $1.99/10 oz bag Knorr Farms: $1.00/bag Retailer Margin : 99% Packaged Shishito Peppers: $1.99/package (6 oz) Sweet Mini Bell Peppers: $2.99/bag (1 lb bag) Bulk Jalapeños: $0.99/lb
Financial Analysis Year 3 Income Statement Sales $945,000 Cost of Goods $378,000 Sold 1 Gross Profit $467,000 Marketing Expenses $168,158 Total Expenses $198,158 Costs of Goods Sold Harvest Costs $103,950 Growing Costs $94,500 Cooling, Packing $37,800 Grading, Packaging $103,950 Delivery $37,800 Marketing Expenses Administrative $30,000 Website $3,000 Sampling $68,500 Display Materials $42,978 Recipe Book $47,880 Circulars $1,800 Blogger Incentives $4,000 Net Income $268,842 Total COGS $378,000 Total Marketing Expenses $168,158
Financial Goals Year 3 Net Profit Margin Net Income 28% $265,000
Monitoring and Measurement: Sales RFID technology Monitor internal reports Analyze progress towards sales goals in each area
Monitoring & Measurement: Sales Not Met? Refocus marketing on poor performing areas Evaluate potential for price reduction
Monitoring & Measurement: Brand Awareness Goals 10% of produce buyers aged 25-49 50% brand trial among all jalapeño buyers
Monitoring & Measurement: Measuring Brand Awareness Monitoring Contact with produce managers Monitor website and facebook activity Shopper surveys
Monitoring & Measurement: What s Rob s? Reallocation of marketing dollars from high-performing markets to low performing ones
Rob s Jalapeño Fresh, Domestic Heat Graded Adventurous and Exciting Mild or Hot
Questions? Morrison School of Agribusiness W.P. Carey School of Business