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Smucker’s Uncrustables in Germany. by Steve Guy Nate Jones Allyson Kappers Lindsey Quinn Kristin Tschantz. Assessment of Potential Market: Competition. 2 Categories: Frozen Food and Ready Made Meals Frozen Food. Competition Cont…. Ready Made Meals

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smucker s uncrustables in germany

Smucker’s Uncrustables in Germany

by Steve Guy

Nate Jones

Allyson Kappers

Lindsey Quinn

Kristin Tschantz

assessment of potential market competition
Assessment of Potential Market: Competition
  • 2 Categories: Frozen Food and Ready Made Meals
  • Frozen Food
competition cont
Competition Cont…
  • Ready Made Meals
    • Competitors in Germany: Nestle, the Campbell Soup Company, Danone ( or Dannon), Unilever, Dr. Oetker, Frost, Suedzucker, Iceline, Nordwest, and Grand Metropolitan
    • Danone is the second largest producer in the world of cereal biscuits and snacks.
  • Market forecast for German Ready Made Meals is predicted to reach growth of $3.32 billion in 2008
assessment of potential market german consumer demand
Assessment of Potential Market: German Consumer Demand
  • German Frozen Food Market:
    • $6.84 billion and growing at 13.8% since 1999
    • Ready Made Meals was largest sector
  • German Ready Meals Market:
    • $2.59 billion in 2003 and growing at 6.7% since 1999
    • Ranked 3rd overall behind France and UK
    • Frozen Ready Made Meals accounted for 81.7% in 2003 ($2.1 billion)
distribution

DISTRIBUTION

Location of Production and Market Entry:

3 Basic Options for Entry:

Scotland

United States

Germany

Current Distribution Agent

1 smucker s production facility in scotland
1. Smucker’s Production Facility in Scotland
  • Part of the United Kingdom, and therefore follows rules of imports, exports, tariffs, and taxation applicable to the UK
    • No Import/Export Tax amongst members of EU
    • VAT Tax: 17.5%
  • There is also an issue of what means of transportation to move the product from the UK to Germany, as there is a body of water and neighboring countries dividing the two countries.
2 producing and shipping from united states
2. Producing and Shipping from United States
  • There is the option to produce within the United States and ship overseas to Germany
    • Drawback to this option is that this would be very expensive, and would tack on a cost to the final product
    • There would be additional costs from export taxes and the VAT of Germany
    • More expensive cost of labor
    • Would require multiple methods of transportation to move from United States to Germany, and would be increasingly expensive
  • Germany and United States are already primary trading partners
  • Smucker’s currently outources logistics to a worldwide company that has operations in the U.S. and overseas
3 create a production facility within germany
3. Create a Production Facility within Germany
  • Would reduce costs of transportation, and would open up future business options for Smucker’s within Germany
    • Would be very expensive, and would be starting from scratch to build new facility
    • Could buy out an existing facility within the country
    • Could partner with existing company within Germany to take existing breads and spreads and brand them with Smucker’s
    • VAT Rate: 16%
    • Highway Systems permit timely distribution
  • Labor Force:
    • Help with currently increasing unemployment rate of 10.5%
    • Would help the slow down of US imports, while boosting German economy
current distribution agent
Current Distribution Agent
  • Smucker’s uses the supply chain management company Tibbett and Britten to handle their distribution of Smucker’s products throughout North America
  • Tibbett and Britten is a worldwide company with a strong presence in Europe and could be used with the three options for market entry.
  • Tibbett and Britten is in the surrounding countries of Germany, and specializes in food and beverage distribution.
    • Have ability to keep frozen and pre-packaged foods fresh, as well as an extremely efficient delivery service
    • They have a new facility Deutschland (western part of Germany) , but is not a food and beverage distributor
    • Possible Locations
      • Austria, Czech Republic, France, Ireland, Netherlands, Poland, Portugal, Spain and UK
consumer related issues
Consumer Related Issues

Segmentation and Targeting

  • Demographics
  • Geographic
  • Benefits
  • Psychographics
  • Behavior
united states target demographics
United States Target Demographics
  • Schools
    • Elementary Schools
  • Busy Parents
    • Parents in their 30’s-50’s looking for a convenience good
    • Upper Middle to upper class lifestyle
  • Teenagers
    • Convenient after school snacks
    • Snacks between school and other activities
german target demographics
German Target Demographics
  • Families in Germany
    • Total Population: 85,424,609
    • 81% live in families
    • Priority on children—feel children complete a family
  • Middle Class to Upper Middle Class Families
    • Personal Income per Capita= $27,600
    • Income Tax Rate: 30.3%
  • Older Population and single-person households for packaged foods
    • Decline of traditional family meals
    • Need for single portion products
    • Higher disposable income
united states target geographics
United States Target Geographics
  • Families in busy suburban settings
  • Target areas with access to large grocery chains that carry Smucker’s products
  • Not typical for areas that are super rural
    • Includes under developed areas with low disposable income
german target geographics
German Target Geographics
  • Target areas of the country with the highest per capita population
    • Cities are located close together, and form one of Europe’s larges agglomerations
    • Three largest cities are Berlin, Hamburg, and Munich
  • Target public housing in the large cities
    • Over 60% of Germans rent homes, furnished with appliances such as refrigerators, freezers, and microwaves
targeted united states benefits
Targeted United States Benefits
  • Time Efficient
    • Reduces time to prepare, clean-up, and pack
  • Goods are Pre-Packaged
    • No mess
  • Easily stored and kept fresh by freezing
targeted german benefits
Targeted German Benefits
  • Can be used as a quick, hassle free meal or snack food
  • Clean and easy product for children’s lunches or snacks
  • Provides valuable daily nutrients for growing and developing children
targeted united states psychographics
Targeted United States Psychographics
  • Targeted for Families with two full time working parents
    • Parents that are working and trying to accommodate the busy schedules of their children
  • Families that do not have time for sit down dinners
    • Too busy to prepare a family lunch/dinner
  • Personality and Behavior types:
    • Busy, organized, impatient
targeted german psychographics
Targeted German Psychographics
  • Target Family Life
    • German tradition is that children complete a family
    • Benefits family life by being clean, easy to use, time saving, small portions
  • German Lifestyle is very concerned for their personal health
    • Much of personal disposable income spent on healthy food and products
    • Interested in Health and Fitness services (exercise and dieting)
united states behavior
United States Behavior
  • Not targeted towards children, but will reward children that participate
    • Online games and activities within the Smucker’s website
  • Product available at schools
    • Children are trying the product at schools and convincing parents to buy the product later
    • Shows parents the ease of using the product
  • Gives a recognizable good, with a homemade quality, at a “grab-and-go” convenience
german behavior
German Behavior
  • Tendency to buy products that are healthier
    • White bread is not commonly consumed
    • Not a large level of consumption of peanut butter, but an increase in the consumption of jams, jellies and spreads (3rd ranking spread market in the world)
  • Germans and Europeans tend to purchase frozen bakery products rather than frozen spread products
marketing mix
Marketing Mix
  • Positioning
    • Distribution
    • Product
    • Promotion
    • Price
uncrustables distribution in the us
Uncrustables distribution in the US
  • Available in many school cafeterias
  • Frozen foods section of grocery stores
  • Can be found in WalMart stores and other similar multipurpose retailers
channels of distribution in germany
Channels of Distribution in Germany
  • No Smucker’s facilities in Germany currently
  • Transportation systems are of more advanced in world
  • Majority of food industry outsources logistics/distribution to other companies
  • Method of logistics/distribution similar to that of US
retail distribution in germany
Retail Distribution in Germany
  • The Great Atlantic and Pacific Tea Company
    • Worldwide retail organization with local headquarters in Germany
    • Stores include Kaiser’s and Tenglemann Sumpermarkets
  • Discount supermarkets
    • Aldi, Lidl, Plus
  • MiniMalls
    • New line of grocery stores, similar to WalMart supercenter
product us vs germany
Made with white bread

PB&J and grilled cheese

Stored in freezers

Boxes of 4 single servings

Under widely recognizable Smucker’s label

Main feature is absence of crust (not a concern in Germany)

White bread not popular

3rd ranking spread market in world

Recent increase in jam consumption

Personal fridge/freezer ownership not as common

Limited freezer space

Don’t place large value on brands and labels

Product (US vs. Germany)
packaging in us
Packaging in US
  • Cardboard box
  • Color matches color of spread
  • Graphic similar to picnic table cloth
  • Picture of glass of milk
  • English label – “Uncrustables”
packaging in germany
Packaging in Germany
  • Box must be recyclable (green dot approval)
  • There are no taboo colors in Germany
  • Europeans like to picnic
  • Milk consumption is similar to that of the U.S.
  • Speak German (with 4 main dialects)
    • translation: Ohne Kruste
    • Translation may not hold same meaning for Germans due to their lack of concern for the crust on bread
promotion of uncrustables in us
Promotion of Uncrustables in US
  • Television Advertisements feature little girl on a tire swing
  • Coupons
  • Provide fact sheets to schools for consideration on lunch menus (example to the right)
  • Focus on Uncrustables on the Smucker’s website
mass media outlets and promotion in germany
Mass Media outlets and promotion in Germany
  • Television reaches 92.6% of population
  • Newspapers reach 95% of pop.
  • Magazines reach 88% of pop.
  • Radio reaches 88%
  • Sponsorship of Sporting Events
    • Germany plays host to Soccer/Football’s World Cup in 2006
germany expenditures on advertising in 2003
Germany Expenditures on Advertising in 2003

Average cost of 60 second spot per screen per week in Germany is $101.42

price
Price
  • $2.89 per package in US
  • VAT incorporated into price of products in Germany
  • Based solely on current US price, would be approximately 3.82 euros.
  • Actual cost would include
    • Possible requirement of production facility
    • Costs of media advertising
    • Possible distribution costs
    • VAT
    • Cost of shelf placement in stores
    • Consideration of personal income availability
ad