Tyler Pet Foods Show Circuit 1 Introduction Tyler

Tyler Pet Foods: Show Circuit 1. Introduction • • Tyler sells dog food to the Kennel Market Food brokers approach Tyler to sell its products through supermarkets in Boston. They had achieved a huge success with a similar product in the Southwest. 2. Issues • • Promotions strategy for introducing a new product Segmentation Positioning Pricing

3. Situation Analysis • • • $5. 6 B market (at manufacturers prices) Less than 50% of dogs are fed by prepared foods 55% for sales in supermarket 50 Mfgrs. And 350 brands The big 8 account for 75% of sales Product categories Dry Canned Treats Moist % of sales 42 30 15 13 100 • Adv. & promotion Ø 2% of sales on adv. Ø $7~8 M for national brands Ø $Adv. To introduce new products $30 M Heinz (reward, premium canned dog food) $25~30 M Ralston (nature’s course; dry dog food) $10 M Alpo Lite

4. Product Attribute / Market Matrix Attribute Dry Moist Canned Treats Ease of preparation Nutrition Palatability Price Storage Appearance

5. Marketing Intelligence • Show circuit has best chance of success if positioned as a moist or canned dog food with premium quality • Canned food has twice the market potential as moist food • Canned food (current prices per ounce): $. 10 (Mighty dog) to $. 048 (Alpo) • Moist food (price per ounce) $. 065 (Gaines Burgers) to $. 045 (Moist And Meaty) • Coupons cost. 12/case or. 01/tub, with each coupon valued at $. 10, ten percent redemption rate is typical

6. Launch Strategy 1) Positioning 1. 1. 2) Media 1. 2. 3) Dogtime TV Better home and gardens (Inserts) Promotion Objectives 1. 2. 3. 4) “Finest Dog Food Available At Any Price” Acceptance by dog breeders Positioned against canned and dry dog foods (Questions as to whether appeals are desirable/believable/sufficiently exclusive) Create awareness Motivate trial via coupon redemptions and TV ads Obtain distribution via grocery channels How Much Should Be Spend On Adv. ?

EXHIBIT 1 ESTIMATING TOTAL AND CATEGORY DOG FOOD SALES POTENTIAL IN BOSTON AT MANUFACTURERS’ PRICES Estimate Percent of Boston dog Boston area Dog food category National (U. S. )* Percent of dogs/ Boston dog food sold through supermarket sale data x people in Boston** = food sales = supermarkets*** = dog food sales Dry $2. 352 Bill. (42% of total) $1. 680 Bill. (30% of total) $. 728 Bill. (13% of total) $. 840 Bill. (15% of total) Canned Moist Treats Totals $5. 6 Bill. 1. 5% $35. 28 Mill. 55% $19. 40 1. 5% $25. 20 Mill. 55% $13. 86 1. 5% $10. 92 Mill. 55% $6. 01 1. 5% $12. 60 Mill. 55% $6. 93 1. 5% $84. 0 Mill. 55% $46. 2 Mill *Category percentages based on case Exhibit 2; US dog food sales at manufacturer prices were $5. 6 billion given in case. **Assume a relationship between the percentage of dogs in a geographical area and the percentage of total food consumed. ***Supermarkets account for 55% of dog food sales.

EXHIBIT 2 ESTIMATED SHOW CIRCUIT CONTRIBUTION AT ALTERNATIVE SUGGESTED LIST PRICES PER CASE OF 12 AND 15 -OUNCE TUB Premium priced canned dog food Case Tub $18. 00 $1. 50 Premium priced moist dog food Case Tub $11. 76 $0. 98 Price to retailer (assuming 25% retailer gross profit margin)* $13. 50 $1. 125 $8. 82 $. 735 Broker commission (7% of price to retailer)* ($0. 945) ($0. 079) ($0. 617) ($0. 052) Production + Freight + Packaging Costs (all variable)* ($6. 37) ($0. 531) Contribution $6. 185 $0. 515 $1. 833 $0. 152 Show circuit Price to consumer Less: *Given in the case

EXHIBIT 3 BREAK-EVEN CALCULATIONS FOR SHOW CIRCUIT AT DIFFERENT CONTRIBUTION AND PROMOTION SPENDING LEVELS Promotion Strategy Expenditure Contribution/Case Premium-priced canned dog food: $6. 185 Premium-priced canned dog food: $1. 833 $300, 000 B/E (cases) = $6. 185 = 48, 504 B/E ($) = 48, 504 cases x $13. 50 $654, 804 $300, 000 B/E (cases) = $1. 833 = 163, 666 B/E ($) = 163, 666 cases x $8. 82 $1, 443, 534 $500, 000 B/E (cases) = $6. 185 = 80, 841 B/E ($) = 48, 504 cases x $13. 50 $1, 091, 354 $500, 000 B/E (cases) = $1. 833 = 272, 777 B/E ($) = 272, 777 cases x $8. 82 $2, 405, 893