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Colangelo Brothers Inc.
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Agenda
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Company History and Structure
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Marketing Audit
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Industry Trends/Competition
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Problem and Objectives
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Strategic Domain
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Market Segmentation/Consumer Analysis
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Positioning
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Conclusion
Simon
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Company History and Structure
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Founded in 1965 by 5 Italian brothers
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4-person partnership
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Mr.Dominic Colangelo– General Manager
Manager Assistant – Accounting, Ordering, Phone lines
Father – Purchase decisions, local and overseas
Inventory Manager – Purchasing activities
25 employees
Education – part-time university, college, high school, trade in
butchery
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Product
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Key product areas
 Meats – veal, beef, pork chops, chicken
 Delicatessen dairy/meat – cheeses, precooked meats
 Produce – seasonal fruits, vegetables
 Groceries – Italian imports, consumer staples
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Homemade sausages
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Deli, produce, chicken daily; veal and beef biweekly
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Product
Best-selling products – pork and veal
Worst-selling products – produce
Product overall sales %
15%
30%
40%
15%
Dairy
Meat
Produce
Grocery
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Price
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Value-pricing
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Consistent – only meat retail prices raised by 15%
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Meat $2.00 - $7.99/lb (Specialty sausages – $3.69/lb)
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Produce (on par with supermarket chains)
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Stable earnings for the past 3 years. Average ~5% sales
increase last year
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Fruits come in larger per-unit sizes, more variety than No Frills
Declining growth rate in produce revenue for past 3 years
Revenue growth up to 100% per year in 1960’s and 70’s
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Place
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Scarborough, Toronto
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Hours of operation: Mon-Thu 8 a.m. to 8 p.m.
Friday 7:30 a.m. to 8 p.m.
Saturday 7:30 a.m. to 6 p.m.
Sunday 9 a.m. to 5 p.m.
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Promotion
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In the 1970s – flyers, newspaper ads and TV ads used
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Currently no budget set aside for advertising
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Mainly word-of-mouth
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Compensated for supplying food at churches/schools/picnics
(500 on average)
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Partner with United Way at fundraising events
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Current TV ads (4 in 2 weeks) paid for by supplier on a Italian
news network
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http://colangelos.ca/
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Industry Trends
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More awareness and preference for healthy diets as a result
of an aging population
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Ethnic immigration part of 70% population growth – demand
for diverse products
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Greater environmentally-friendly packaging and sociallyconscious products
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Industry Trends
Industry size: $74.9 billion
Average Expense growth in 2008-2009: 3.3%
Average sales growth in 2008-2009: 3.8%
Colangelos: ~5%
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Competitors
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Asian supermarkets (pricing is about 20% lower than Col.)
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Italian-focused supermarkets (pricing is 15% higher)
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9 competitors in Scarborough
Carries about 60% different product line than mainstream
supermarket/grocery stores
Bruno Fine Foods – 4 locations in GTA, has catering service
Pusateri’s – high-end store, 4 locations in GTA, catering, confectionary
Supermarket chain stores (pricing is on par/lower than Col. )
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No Frills (10 locations within 30km drive in Scarborough)
Metro (6 locations within 20km drive in Scarborough)
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Business Problem
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Colangelo Brothers has had a decline in the growth rate of
produce sales for past 3 years.
Low profit margin
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Root cause
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Store location in comparison to consumer target market
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Small target market creates reluctance to increase prices in
comparison to costs
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Objectives
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To increase produce sales and in turn contribute to the
overall growth in sales
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To increase the low profit margin, in order to consider
possible expansion of the business
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Strategic Domain
Company Strengths
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Long Existence and reputation
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High quality fresh meat section and strong in term of sales
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Famous for their unique brand of home-made sausages
Customer friendly image
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Strategic Domain
Company Weaknesses
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An annual decline in produce sales in comparison to its other
departments
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Limited capacity of the supermarket
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Low profit margin
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Strategic Domain
Customer Strengths
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Existing consumer are very brand loyal to the supermarket
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Customer friendly image leads to a good word-of-mouth
marketing strategy
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Strategic Domain
Customer Weakness
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Focuses on European customers: Italians and Greeks
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In Scarborough, Asian population now accounts for 40%
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Italian and Greeks accounting for 3%
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Existing consumers. 60 – 70% are from Pickering, Danforth
Markham.
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30 – 40% are from local neighborhood
+ Consumer Decision Making Process
Problem
Recognition
Feedback
Purchase
Decision-Act
and
Evaluation
Search
Evaluation of
Alternatives
+ Market Segmentation and Target
Market
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Geographic
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Targeting local consumers, usually within 30 min drive
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High saturation of supermarkets in GTA
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Some loyal customers located in Etobicoke, Pickering, Markham
+ Market Segmentation and Target
Market
Geographic
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Focuses on European customers: Italians and Greeks
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Located in area with growing Asian population
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Scarborough has a population of 600,000, data from latest
census
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Asian population now accounts for 40%
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Italian and Greeks accounting for 3%
+ Market Segmentation and Target
Market
Demographic
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Targeted towards families and senior residents
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Above average income
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Largest customer base is 50 years old and up (30%)
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Second largest is 35-50 age group (21%)
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Consumer Analysis
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The Canadian Consumer
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High purchasing power, quality oriented
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Different consumer preferences
Selection – multicultural
Knowledgeable consumers
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Ease of access
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Promotion and ads
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Price conscious  influenced by weekly ads and promotions
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Positioning
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Position itself as a value-oriented supermarket
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Create loyal customers
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High quality image  higher prices
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Infeasible to compete on the basis of price
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Customer friendly image
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Customer Interaction
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Food samples
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Ability to offer knowledgeable service to customers
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Conclusion
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Small family-oriented business with potential growth for
many years to come
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Sales growth decline in produce; aims for improvement
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More aggressive promotion to current target market
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THE END
Thank you!