Question

Please read the background information and answer the following questions

Background: Country Table Potato Chip Company is a small, privately owned company that produces a limited line of snack foods sold in a three-state range including most of Illinois, Indiana, and Iowa. The company has been in business for 57 years and was started by Franklin Brewster. Frank developed a faithful following for his chips as a result of a cooking process that sealed in flavor. The brand name is well respected in the region. The company was run by George Brewster (third generation) for the past 31 years until his recent death. The company has been handed over to the fourth generation of the Brewster family, Ms. Emily Brewster. Emily has a financial background and has worked in the company in the accounting department for the past eight years.

She wants to take the company in a new direction, knowing from her accounting knowledge of the company that some changes need to be made. She admittedly understands the “bottom line”, but little else about running a business. She has brought in a new team to assist her. You have been hired as the marketing team member to develop the new direction for the company.

From background interviews, you have learned the basics of the company’s history. The company has been regional since its inception. There was some interest in a potential buyout of the company by Frito-Lay five years ago, but the negotiations stalled and Frito-Lay lost interest. Emily has expressed interest for some sort of merger of the company in the future.

The company’s product line consists of six types of potato chips (regular, barbeque, and cheddar cheese flavors all in a thin chip and ruffled chip texture). In addition, the company has regular and cheese flavored popcorn, pretzels, and peanuts. All potato chip products are fried in peanut oil while the other products are baked. Ten products in all, with no change to the product line in the past eight years. Products are packaged in “family sized” bags of seven to ten ounces, depending upon the product.

Years ago, Country Table chips were seen as a “premium” product and priced above other competitors. In the last five years, retail prices to consumers have decreased in response to competition and to the large grocery chains pushing for lower prices to them. Originally, the company sourced their potatoes from a premium supplier in Idaho. Those potatoes were part of the original “flavor formula” that gave their chips a distinctive taste. A few years ago, George Brewster decided to source potatoes from a co-op in order to lower costs. These potatoes were indeed cheaper, but the quality and flavor profile were not as good.

All products are made in five factories, spread out across the three states mentioned above. All distribution is done through a fleet of company owned trucks and delivery vehicles working out of a total of 27 regional offices. Frank Brewster relied on “word of mouth” advertising based on the company’s brand. Also, their fleet of company trucks acted as rolling billboards for the products. Country Table has concentrated on placing their products in grocery store chains and larger convenience stores.

The company is “old school” in that very little has been done to keep up with technology. The company does have a website and offers customers a way to suggest improvements. One consistent theme from customers is a need to expand the flavors of potato chips to keep up with competitor product offerings.

Overall, the industry for snack foods has been increasing. In the past five years, industry sales have increased at a rate of 3% per year. However, the mix of product lines has been shifting. Traditional fried chip products have seen an annual decrease of 4% over the same period. Other new, more healthy snack products have seen a growth rate of over 6% a year.

Country Tables’ unit sales have been essentially flat for the past three years. Profits have been decreasing about 3% per year as a result of higher costs and lower prices. Lower prices have been offered in order to offset competitive efforts to take sales away from Country Table.

Questions:

• If you proposed any new products in the product section, what promotional activities would you recommend for those new products?
• Emily has a financial background. What stage(s) of the product development process do you think she would be most interested in?
• If you proposed new products in the product section, what impact does that addition have on distribution?
• Are there any packaging changes you would recommend?

Answer 1

1. If the marketing team at Country Table proposed any new products in the product section, the most important factor in the beginning would be to increase awareness for the new products and then maximize conversions. The promotional activities for these products would be recommended in two different directions, that is online and offline promotion.

Offline/Physical Promotion

The FMCG(Fast Moving Consumer Goods) industry till date makes majority of its marketing spends on offline and physical promotions for its products. The savory snack market has been increasing at more than 4% every year and potato chips continue to rule this market. The below are few suggestions for physical promotion that can help Country Table to grow its business:

• Sampling

For food products and especially chips, a snack that can be consumed while on the go, consumers look out to try and taste new products before they proceed with purchasing. If a consumer likes the taste and flavor of the snack while sampling, the chances of conversions become very high. Country Table can surely promote their products by providing samples of their new products.

One way of leveraging sampling could be to provide free samples of the new products in small packages, given out along with the existing product line. This would solve dual purpose. One, it would encourage more customers to buy the existing products and hence increase the sales. Two, it would let the consumers try the new products.

Another way of promoting through samples is by setting up sampling kiosks at places that are frequented by people. These could be places like malls, cinema halls, popular squares, etc. Since Country Table is a regional brand, the kiosk could be set up at major events in Illinois, Indiana and Iowa where the footfall is high. These places could be really helpful in building awareness about the new products and increasing sales.

• Retail Promotion

Since the sales of Country Table snacks are majorly carried out through grocery store chains and large convenience stores, the company can perform retail promotion to push its new products. Retail promotion includes placing the product at strategic location inside the store, which provides maximum visibility to the customers. Keeping the product in a shelf at eye level has also proved to increase sales. Better incentives (monetary and non-monetary) can be offered to these retail chains and stores to push the new products that Country Table has come up with.

• OOH Advertisements

Billboards and hoardings can be placed at strategic locations with maximum footfall, to advertise the new products. The truck fleet of the company, which acts as the rolling billboard can advertise the new product line. These hoarding/billboards/posters to be put up at places which are frequented by the major target group of the snacks company

Online Promotion

Even though the snacks business still relies on promoting their products through traditional media, its high time that companies start increasing their online presence, because that is where their consumers spend most of their time. Country Table needs to take the following steps to develop its online presence and convert more potential consumers:

• They need to ramp up their website to a new age interactive web address, that should include all the information about their products. Since Country Table has a unique process of cooking, the website could also show that unique process and how the company has continued to live up to the 57 years old legacy of its founder.
• Country Table needs to increase its social media presence through platforms like Facebook, YouTube, Instagram etc. Since most of the target group spends majority of their time on these platforms, it would a good opportunity for Country table to grab the consumers’ attention
• A lot of people are now using OTT platforms like Netflix and Amazon Prime to watch movies. Since potato chips and savory snacks are best consumed while watching something, Country Table can advertise their new products on these platforms, where users might be craving for such products.
• Partner with online grocery stores and start selling their products online.

2. Given Emily’s financial background, the stage of product development that Emily would be most interested in would definitely be the stage of Business and Market Strategy Development. Emily had particularly shown interest and understanding of the ‘bottom line’ of the company, which has been reducing over the last few years. Now, Emily would be interested in forecasting the expenses and revenue of the company, and the ways in which both bottom line and the top line could be improved. This automatically drives Emily’s interest and focus on the phase of Market Performance analysis and competitor analysis and how her forecasts have fared out when they were actually put into application

Another stage of product development where Emily could show interest is the phase of product development. The product was developed and nurtured by her ancestors. Her forefather developed a unique cooking process that sealed the flavor in the potato chips. She would definitely want to take forward the legacy and history of her family and the family owned business.

3. If new products were proposed in the product section, Country Table would have to ramp up its distribution network as well. Although it already has a decent distribution network and logistical capabilities, a new line of products would require additions to be made. The distribution network can be improved in the following ways:

• Country Table needs to expand its reach beyond grocery chains and large convenience stores. If they plan to promote the new product line aggressively, they need to make sure that their product is available in the store shelves. Country Table needs to start selling its products through small convenience stores and gas station stores as well as through vending machines.
• Country table needs to start distributing its products online, through e commerce and online grocery stores. This would provide them access to a larger set of customers.

· Country Table can also look at institutional sales by partnering with organizations and institutions who would help them distribute their products in bulk. These institutions include schools, corporates, restaurants, cafes, movie theatres etc.

4. Packaging

The first and the foremost job that Country Table needs to do is to start distributing their chips and snacks in smaller packagers, quantities ranging from 3 ounce to 10 ounce. This would help drive additional sales as with smaller packages, they would not have to rely on household sales and also the product can be distributed through additional channels like vending machines.

Apart from that, I would suggest Country Table to not make much changes in the layout and aesthetics of the conventional packaging of their snacks. Country Table being a legacy brand is recognized more through its old name and packaging. A change in the packaging would create confusion in the mind of the consumer and could possible decline sales.

However, if a new product line is launched, then the recommendation would be to revamp the packaging so that the new and the conventional products can be easily differentiated. Today’s technology driven world works mostly on visual appeal, and this is something that Country Table needs to keep in consideration.