Poultry and Poultry Products
Presented by
Patarica Chongcharoen
20048351
Kulthida Trongnipatt
Peter John Henry
Amanda Field
Vikram Sharma
20549229
19763549
20022042
19558627
1
Agenda
• Industry Overview
•
•
•
•
Environmental Analysis : PEST
Threats & opportunities
Company profile : Lenard’s
New Product Development Proposal
- Idea generation and screening
- Concept testing
- Business analysis
- Product testing
- Launched strategy and Marketing plan
• Q &A
2
Industry overview
Global Poultry Market
• 81 million tones in 2006 (3%
increase over 2005)
• Major exporters – Brazil, USA., EU25, and China
• Major importers – Japan, Russia,
Germany, and Hong Kong
• Market growth – increasing demand
of Western country for consume highprotein and low-carbohydrate
products
• Market drivers – income and
population growth, demographic
change, urbanization and healthier
lifestyle changes.
Ovine
Meat,
5.20%
Pig
Meat,
41.60%
Bovine
Meat ,
25.70%
Poultry
Meat,
32.50%
3
Industry overview
Australian Poultry Market
•
•
•
•
Revenue value at A$ 1.3 billion in 2005
773.7 million kiloton in 2005 (5.4% increase over 2004)
Expecting to increase over 39 kg. per person in 2008
Generated 120,000 jobs employed 40,000 people for workforce
40
39.8
37.7
36.8
35
36.2
Beef &
Veal
Pig
32.8
30
25.7
25
20
22.1
19.4
18.8
15
12.5
21.8
12.5
10
1995
2005
2007
Lamb &
Mutton
Chicken
Meat
4
Industry overview
Australian Poultry Market
800
• Most of poultry products are
consumed domestically;
exporting, less than 3%
750
• Market drivers
– high prices of substitute
meats
– increasing of health
awareness
– switching from red meat to
poultry products.
650
773.7
733.9
708.7
700
692.3
631.4
600
550
500
2001
2002
2003
2004
Poultry consumption
2005
5
Industry overview
Bargaining power of
suppliers is Low
Supplier
Power
Rivalry among existing
competitors is Medium to High.
Barriers
To Entry
Industry
Completion
Threat of
Substitute
Threat of substitutes is
Medium.
Barriers to entry of new
entrants are High.
Buyer
Power
Bargaining power of
buyer is High
6
Environmental Analysis (PEST)
Political and law
• Food regulations under Australia New Zealand Food
Standards Authority (ie. HACCP regulations)
• Occupational Health and Safety (OHS) legislation
• The Australian Organic Standard (AOS)
7
Environmental Analysis (PEST)
Economic
• Australian economy is continuing to increase
• Income per household – increased from approximately
A$ 50,000 in 2000 up to A$ 60,000 in 2015
• Expecting the growth of per capita GDP from 2.7%
to 3.2% between 2005 and 2010
8
Environmental Analysis (PEST)
Socio-cultural
• Increasing of health and wellness trend (Obesity – health
concerns)
• Demographic changes – aging people
• Growing of organic products
• Positive perception in poultry products as a healthier option
• Changing consumer lifestyle (busier lifestyle)
- ready meals, chilled food and better-for-you products
9
Environmental Analysis (PEST)
Technological Trends
• New processing methods
• Air-Chilled chicken process to keep the chicken fresh
• Food Safety
• Packaging Methods and materials
• Waste management
10
Industry threats
• Disease (Avian Influenza - bird flu)
• All chickens on affected farms will need to be
destroyed
• Limited water resources (drought)
• Rise in consumer demand for healthy food
(organic products)
• Aging population (less fast food)
11
Industry opportunities
• New export markets
• Developing and growing markets
• Healthier food
• Free range products
• Organic products
• Australia’s fast food market is growing
• Busier lifestyle, more demand for convenience
food products
12
Mega Trends
Convenience:
Taste & Indulgence:
Eat on the go
Dinner time convenience
Buying small portions
Snack food
Premium foods
Authentic regional tastes
Great Flavour & taste
Healthy Food:
Ethical:
Trendy:
High nutrient value
“Free from” foods
Low pathogen
High energy foods
Organic Foods
Sustainable
Fair Trade
Café dinning
Espresso Coffee
13
Lenard’s
The Best Fresh Chicken
Company Overview
•
•
•
•
•
•
•
•
Leading food retailer distributing
poultry and poultry products
Revenue FY06/07 $145 million,
growth of 3.35% on prior year results
190 retail outlets throughout Australia,
39 in New Zealand
Store-within-a-store operations
+13 million chickens sold per year, all
supplied from local producers
Employs approximately 2000 staff
Serves in excess of 10 million
customers per year
Awarded from National Retail
Association
14
Lenard’s
Strengths & Weaknesses
• Strengths
– Strong brand
– Extensive poultry-related
product offering
• Raw
• prepared
• easyliving range
– Stock sourced from local
producers
– GM free products
– High quality control of
suppliers
– Tight internal policies and
procedures
• Weaknesses
– Global Grain Shortage
– Avian Influenza
– Limited to single product
category
– Absence of free range or
organic varieties
– Direct competitors are the big
supermarket chains
• Coles
• Woolworths
• Safeway
– Negative consumer perception
re: food poisoning
15
Lenard’s Supplier
Bartter Enterprises Pty Limited
• Owner of the Steggles brand
• Australia's second largest poultry producer
• Distribute fresh and frozen, whole and portioned chicken and turkey
products nationally.
• One of the top three producers of chicken in Australia.
• Steggles chickens are processed in accordance with Commonwealth
and State regulations.
• Steggles chickens are raised in large purpose-built chicken sheds and
are able to roam through the whole shed with easy access to food and
water.
16
Idea generation and
screening
Source of ideas
• Primary data
- Customers
- Potential retailers
- End users
- Competitors
- Suppliers
- Research and Development team (Brainstorming)
• Secondary data
- Collect from previous research
(Industry data, Environmental trends, customer needs)
17
Idea generation – Key finding
Increasing
requirement
for
convenience
food
Increasing
consumption
of poultry
products
More
demand
for
healthy
products
Slow
growth of
red meat
industry
New
technolog
y in
processin
g
18
Ideas generated
1.
2.
3.
4.
5.
6.
7.
8.
9.
Calcium enriched chicken
Different colour yolks
Featherless chickens
Boneless chickens
Lenard’s Chicken Café
Free range chicken products
Organic chicken range
Vertically integrate by acquiring chicken farm
Lenard’s Organic Chicken Café
19
Screening Map – for top 3 ideas
Sale Potential
10
Utilizing existing resources
5
Leverage of existing brand
0
Long term profitability
Does it address a mega-trend?
Consumer innovativeness
Organic Chicken Bar
Chicken Café
Organic Chicken Café
20
Idea screening VS Roger’s five factors
Roger’s
5 factors
Idea
Organic
generated chicken bar
Organic
chicken cafe
Lenard’s
café
Relative
Advantage
Complexity
Compatibility
Communicability
Trialability
21
Concept Testing
Concept A: Organic Chicken
Concept B: Lenard’s Chicken Café
Concept C: Lenard’s Organic Chicken Café
22
Concept A
Organic Chicken Range
Overview
• New organic section within store
• Strategy, new product range innovation
• Product range extension – new organic chicken range
• Gap: fills needs of organic healthy customers
• In house products offered to customers, thus establishing close
contacts
• Product Testing
• Laboratory testing
• New supply channel required for organic products
• Niche market - Increase in cost, good margins
23
Concept B
Lenard’s Café
Overview
• Use mega trend of Cafés to attract more customers and leverage
sale of current product
• Business model based on McDonald McCafe experience within the
Australian market
• Strategy, use Café to PUSH product via new in-house channel
• In house food preparation facilities are available
24
Concept C
Organic Chicken Café
Overview
• Combination of Concept A&B to maximise the benefits
of the current mega trend Café and Organic healthier
chickens
• Proposal possibility too Niche
• Possible 3 Stage roll out of concepts;
 Lenard’s Café - Stage I
 Organic products range - Stage II
 Lenard’s Organic Café - Stage III
25
Franchisee Requirements
Lenard’s Café
Franchisee will have:
• To share the expenses which will add value for the franchisee
• To have some insight and understanding about the operations of
Café
• To accept the training given by the franchisor
• Agree to catchment areas
• Two options: Deli only or Deli plus Café
Franchisor will have:
• To evaluate the space for setting up in house cafes in already
existing stores.
• To evaluate the location with high traffic of customers in shopping
centres for the pilot program.
• To conduct a needs analysis in regards to the material required e.g
Coffee Machines, Equipment, Staff, etc
26
• To establish a menu for the cafe
Concept Testing: Intended market profile
New Organic Chicken
Range
New Lenard’s Chicken
Café
Current Buying
Patterns
•Fast growth (20%) market
•Price of organic chicken
falling due to better
economies of scale
•Café culture is a current
MEGA trend, very popular
Existing
Segment
•Working class
•Families/ busy mums
•Baby boomers (45-60)
•Middle to Upper Income
•All ages
Customer view of
available products
•Healthy convenient choice
•Social activity
•Both healthy and trendy
27
Concept Testing: Purchase intentions
and product positioning
New Organic Chicken
Range
New Lenard’s Chicken
Café
Trial and repeat
purchase
•Customers looking for
healthier food options
•Trial organic range to
existing products
•Free sampling
•Loyalty card (Club Lenard’s)
•Mixed promotions – Coffee
and Chicken meals
Brand loyalty
•Club Lenard’s
•Established loyalty to use as
leverage to enhance our new
Café concept
‘gap’ analysis
•Fits into Lenard’s product
range to fill a gap in the
organic chicken market
•Brand extension
28
Concept Testing: Refinement and
improvements
New Organic Chicken
Range
Overall
Specific features
and attributes
•Healthier food offering
•No pesticides
•Low wastage
•No generic modified
products
•No antibiotics
New Lenard’s Chicken
Café
•Café recipes and trial
products to be posted on
website and available on take
home flyers
•Extended loyalty card
features
29
Concept Testing
• 2 research approaches have been conducted
• First Approach : Qualitative Research
• Second Approach : Quantitative Research
Research Approach
Purpose
Methodology
Sample Size
Qualitative research
• Consumers’ reaction
• Consumers’
purchasing behaviour
• Focus groups
• Projective technique
• Working people (Age
25-45)
• Baby boomers (Age
45-60)
• Middle to upper level
of household income
Quantitative Research
• Evaluating existing
purchasing pattern
• Supporting the results
from focus group
• Telephone Survey
• Satisfy random
sampling
• Health conscious
person (Age 25-60)
• Middle to upper level
of household income
30
Our new product :
Lenard’s Café
31
Business Analysis
Financial Year
No. of Cafés Opened
No. of Customers per annum
Avg. Spend per Customer*
Projected Sales
Expenses
Production Costs:
Start Up: Materials & Labour
Start Up: Tables, Cultery, China
Start Up: Coffee Machines
Start Up: Training, Misc, other
On Going: Supplies
On Going: Labour
Marketing Costs
Total Expenses
Profit/Loss
Allocation to Frachisee (40% of profit/loss)
Profit Margin
Break Even (years)
Phase I
2008
5
56,420
14.00
789,880
Phase II
2009
25
338,520
14.42
4,881,458
Phase III
2010
50
902,720
14.85
13,407,739
19,079,077
17,171,170
20,986,985
50,000
10,000
25,000
25,000
25,000
330,000
50,000
500,000
15,000
125,000
125,000
125,000
1,980,000
250,000
500,000
25,000
250,000
250,000
250,000
3,300,000
1,250,000
1,050,000
50,000
400,000
400,000
400,000
5,610,000
1,550,000
945,000
45,000
360,000
360,000
360,000
5,049,000
1,395,000
1,155,000
55,000
440,000
440,000
440,000
6,171,000
1,705,000
515,000
3,120,000
5,825,000
9,460,000
8,514,000
10,406,000
274,880
109,952
1,761,458
704,583
7,582,739
3,033,096
9,619,077
3,847,631
8,657,170
3,462,868
10,580,985
4,232,394
34.80%
1.87
36.08%
1.77
56.55%
0.77
Total
80
1,297,660
50.42%
0.98
Sensitivity Analysis
-10%
+10%
72
88
1,167,894
1,427,426
50.42%
50.42%
0.98
0.98
* Adjusted Annually to reflect Inflation
32
Projected Marketing costs
1st year
(5 Stores)
2nd year
(+25 Stores)
3rd year
(+50 stores)
Marketing research
$10,000
$ 35,000
$ 50,000
Product/Brand management
• Loyalty program
$ 10,000
$ 60,000
$120,000
$ 5,000
$ 15,000
$ 10,000
-
$ 50,000
$ 50,000
$ 120,000
$ 85,000
$ 25,000
$30,000
$ 50,000
$ 500,000
$ 275,000
$ 50,000
Sales and Promotion
• In-store promotion
• Leaflet
• Lenard’s website
• TV
• Magazine
• Radio
Total cost
$ 50,000
Cost per store
$ 10,000*
$ 250,000
$ 10,000*
$ 1,250,000
$
2,500
33
Product testing
Objective
• To investigate target consumers’ perception towards
their experience in Lenard’s Café
• To identify the value gap between the café concept
and the actual results for further improvement
• To highlight main profitable products for focusing on
the right target market and to maintain competitive
advantage
Methodology
• Launching 5 Lenard’s Café in select locations
34
Product Testing
Enjoyment
Customer service
Products
Convenience
0%
10%
20%
30%
40%
Product Testing Result
•
•
•
•
Convenience: location, easy to order
Customer Service: friendly and well-trained staff
Products: wide range of products, fresh and healthy foods
Enjoyment: spending time with their friends
35
Target market
Who are our customers
Geographic
- Location
Demographic
- Gender and Age
- Life-cycle Stage
- Income level
Psychological
- Attitude and Belief
- Personality
- Lifestyle
Behavioral
- Decision role
- Consumption occasion
- User Status
- Usage Rate
- Rate of Adoption
Why do customers buy
- Physical benefit
- Emotional benefit
Where do customers buy
- Retail Outlet
Characteristics
Urban area in Australia
Male and Female, aged 25-45 years old and 45-60 years old
Young Adult, Middle-aged Adult and Baby boomer
Medium to High level
Self-conscious, Image driven
Outgoing, Trendy, Active, Enthusiastic
Seeking for healthier products and information, Shopping,
Eating out
Decider
Every day
Current purchasers and non-purchasers in healthy food
Medium to heavy users
Medium to fast
Health conscious , nutrition seeking
Feel more confident, gain self-appreciation
Shopping center and high-traffic areas
36
Key competitors
• Direct competitors
– Supermarkets
– Independent retailers & Butcher shops
• Indirect competitors
- Leading fast food outlets such as:
Subway,
Pizza Hut,
McDonald,
Red Rooster,
Nando’s, KFC
Independent café
37
Positioning – Perceptual map
High price
“ Position as a premium brand
with healthy food”
Mc Café
Unhealthy
product
Healthy
product
Salad Bar
Standard
Product
Low price
38
Marketing objective
• To achieve a profit from “Lenard’s Café” of $9.6
mn by the end of phase III
• To create relative brand awareness of “Lenard’s
Café” by 20% of customers for the end of phase
III
39
Commercialization
• Roll-out strategy
• Test marketing: 5 initial stores
• Pull Strategy
• Relationship Management
– Customer
– Franchisee
40
Launch Strategy &
Marketing Roll-out Plan
Phase 1
Test Market
Open 5 stores
1 years
Phase 2
Expansion
25 additional
stores
2 years
Phase 3
Ramp Up
50 stores
Australia Wide
3 years
Total 80 stores
Feedback will be conducted between each phase to ensure
the optimal strategy and marketing mix is achieved.
41
Marketing Strategy:
Product strategy
• Introduce “Lenard’s Café” as a new concept
• Create brand positioning of Lenard’s Café as a premium
brand of café by providing a high quality product and
superior service
42
Marketing Strategy :
Pricing strategy
• Use skimming pricing to create consumer’s perception
in “Lenard’s Café” as the premium quality position in
the market and boost profit margins
Distribution strategy
• Launch “Lenard’s Café” in high traffic
locations, especially shopping centre
• Use the existing franchise store for
adding the new store concept to expand
its café throughout Australia
43
Marketing Strategy :
Promotion and communication strategy
• Use below-the-line in the first year to reach prospect
customers
- In-store media, Leaflet, Coupon
• Use above-the-line in the second &
third year to reach mass market
- TV, Radio, Magazine and Internet
• Apply customer loyalty program to create a long-term
relationship with customers by creating “Lenard’s Card” to
offer special promotion
44
Marketing Strategy :
People strategy
• Recruit energetic and friendly staff to
provide a good service quality
• Recruit experienced NED and staff to
aid in the roll-out strategy
• Create training program for franchisees
and employees to learn about a new
concept (Café) to deliver customers
with a good service
• Launch incentive and reward program
to encourage employees performance
45
Marketing Strategy :
Physical assets
• Create a service environment by the use of store
decoration, staff uniform in line with Lenard’s logo and
use red color as a main color in store
Process management
• Products will be recommended by staffs in order to
offer the right product to the right customer
• Orders will be retrieved through front-line staffs for
preparing products to each customer
• Ask customer feedback with warm and friendly to gain
customer’s insights for improving the product and service
46
Exit and Repositioning Strategy
End of Phase I
• If phase I unsuccessful, pull plug on Phase II and III
End of Phase II
• If other aggressive entrants in market, may have to
bring forward phase III of launch
47
Summary
Critical Success Factors
• Loyal customer base – brand leverage
• Strong retail and supplier relationship
• Knowledge of the poultry industry
• Leverage of existing product lines
• Utilizing current mega trends to our
advantage
• Existing economies of scale within the
poultry products industry
48
Questions?
Thank you
30
Friday
49
Reference List
• Lenard’s (2007), viewed 23rd November, 2007 www.lenards.com.au
• Australian chicken meat federation INC. (2007), viewed 24th November, 2007
www.poultrycrc.com.au
• R&D Plan for the Chicken meat Program 2004-2009 (2007), viewed 21st
November, 2007 www.rirdc.gov.au/pub/chick5yr.htm
• Poultry Outlook Report – October 2004 (2007), viewed 21st November, 2007
www.thepoultrysite.com/articles/239/poultry-outlook-report-october-2004
• Poultry Meat (2007), viewed 22nd November, 2007
www.bareconomics.com/interactive/ac_mar07/htm/meat.htm
• Laux, M. (2007), Organic Poultry, viewed 22nd November, 2007
www.agmic.org/agmrc/commoditty/livestock/poultry+organic.htm
• The industry in brief (2007), viewed 22nd November, 2007
www.poultrycrc.com
• Agricultural Economics of Australia and New Zealand (2007), viewed 22nd
November, 2007 www.abreconomics.com/interactive/aus
50