The Smith's Snackfood Company in Australia - Essay Example

The Smith's Snackfood Company in Australia The Smith's Snackfood Company is an Australian-based snack food manufacturer and distributer in Australia (O,Keefe et al., 2005). The company is the leading manufacturer and distributer of salty snacks in Australia where it commands more than 60% of the snack food market share (Books, LLC, and General Books LLC, 2010). The Smith's Snackfood Company has witnessed tremendous growth over the last few decades with its brand products nowadays a household name throughout Australia. Currently the company has established manufacturing and sales offices in the major towns, in Australia, such as Sydney, Perth, Brisbane, Adelaide, and Melbourne (O,Keefe et al., 2005). The company also boasts as having a very strong distribution network in the country since it is able to distribute its snack products to over 60,000 outlets spread all over the country every ten days. The company’s main products include Smith Crisps, Ruffles, and Lays while its snack brands include Lays, Doritos, Twitties, Cheetos, Parker’s, Burger Rings, and Red Rock Deli. Salty snack food industry is said to contribute greatly to the Australian economy. Salty snack food industry in Australia is worth $26 million according to a report. The industry grew by about 12% in the year 2011, and the growth is expected to continue due to the increased demand for salty snacks in the country. As earlier stated, Smith's Snackfood Company is the leading supplier of salty snacks in Australia with its snack brands reported to have grown by 25% in 2011. However, the company’s market is divided into three segments namely potato (68%), Corn (14%) and Extruded/ Cereal (18%). The company’s dominance is the industry emanates from its strong presence in every product segments, where its main brands such as Doritos, Smith Crisps, and Twisties have remained leaders (Friend, 2012). Segmentation The snack food industry in Australia is marred by stiff competition among leading plays, which competes for the sensitive segments in the country. For instance, Smith's Snackfood Company faces stiff competition from other key players such as Arnotts Snack Foods, and Proctor and Gamble, Smith's Snackfood Company. As a result, Smith's Snackfood Company has always engaged in a strong advertising campaign aimed at attracting certain market segment in the country so as to maintain its dominance and improve its performance. In fact, the company was ranked 21st overall in Australia in terms of the advertising campaign according to 2001survey. The segments mainly targeted by the company include the health conscious people, convenience, kids, and premium (The Smith's Snackfood Company Limited, 2011). In this regard, for the health conscious consumers, the company has ensured that the products are manufactured in a manner that suits the taste and preference of this important segment of the market by manufacturing products that are cholesterol free. This segment is mainly composed of older people in the society, which forms a significant share of the market. As such, the company has always ensured that the product’s fat level is below 40% (O,Keefe et al., 2005). To ensure convenience, the company has several packs from which a buyer can choose. This includes small, medium, and large packs to cater for the needs of every consumer in the country. The Purchasing trend shows that a majority of impulse buyers chose mainly the smaller packs in preference to the large packs with the exception of corn chips where a majority picks the 230-gram pack. The report also reveals that, for potato and extruded segments, a majority tends to choose the 50 gram, and 100 gram packs. As such, the company has analyzed this trend and has ensured that the packs are available in a variety of packs to suit the needs of its customers (Books, LLC, and General Books LLC, 2010). Research indicates that kids are a major consumer of snacks in Australia. As such, the company has put in place strategies aimed at serving better this important market segment. To satisfy the needs of the kids in the country, the company has always been manufacturing snacks that incorporate the taste and preferences of kids through the addition of certain flavors liked most by kids in the country. This has enabled the company control a large share of this segment for years (O,Keefe et al., 2005). Choose one or more products and provide a series of no less than three positioning matrices (perceptual maps) with explanations- referencing competitive brands marketed to the same segments. Smith's Crisps, Doritos, and Twisties are some of the most dominant brands of Smith's Snackfood Company. The brands command the largest market share by value compared to other competitive brands from other companies. For instance, these brands have been able to out-compete other brands such in all the three segments of the market (Friend, 2012). To begin with, Smith Crisps, a brand of Smith's Snackfood Company positions itself at the top in terms of market share by value in Australia thereby out-competing other brands from other companies such as kettle, Thins, Samboy, Pringles, Lays, and French fries. Its dominance is ascribed to the fact that the brand targets all the market segments in Australia be it kinds, the health conscious, premium and the fact that the product is found in a variety of packs. The matrix below shows the market share by value matrix for Smith Crisps in relation to its competitors in the market for 2000 and 2001 (Friend, 2012). Potato Chips by Brand 2000 2001 Smith's Crisps 24.4% 24.3% Kettle 21.5% 21.6% Thins 14.3% 17.0% Samboy 10.6% 10.5% Pringles 11.4% 9.6% Lays 11.9% 8.4% French Fries 3.5% 5.0% Other 2.4% 3.5% Doritos brand, a product of Smith's Snackfood Company also positions itself at the top in terms market share by value under the corn chips segment. In fact, Doritos has been commanding over 65% of the total market share by value for years now out-competing its main competitors such as the CC’S, a brand product of Arnotts Snack Foods. The matrix below shows the positioning of Doritos relative to its leading competitors in the same segment in terms of the market share by value (Friend, 2012). Corn Chips by Brand 2000 2001 Doritos 66.0% 65.8% CC's 33.4% 33.6% Other 0.7% 0.6% Twisties are also another brand manufactured by Smith's Snackfood Company that has positioned itself at the top of the market share by value. This snack falls under the extruded product segment where it has been able to out-compete other products in the same segment such as Cheezels, Burger Rings, Chee-tos, and others. In this regard, a report shows that the brand has been able to command more than half of the total market share by value. The table that follows shows the position of Twisties in terms of market share by value in the Australian market relative to its competitors in the same segment (Friend, 2012). 2000 2001 Twisties 50.3% 53.7% Cheezels 23.0% 24.5% Burger Rings 13.6% 15.6% Chee-tos 9.9% 6.1% Other 3.2% 0.1% Smith Crisps Brand Smith crisps are one of the main branded products of Smith's Snackfood Company. The brand falls under the potato chips segment of the snack. The brand commands a large share of the market compared to its competitors in the same segment. In this regard, a 2000 and 2001 report revealed that Smith Crisps commands more than 24% of the total market share by value thereby out-competing all its main competitors including those from other competing industries. However, its lead in the market has been influenced by a number of factors that have make customers like the brand and remain loyal in spite of the stiff competition from other brands. The brand has been able to maintain its competitive advantage over other brands firstly because it is relatively cheap compared to other competitive brands. It is noted that the prices elasticity of the chips in Australia is exceptionally high. As such, consumers are very conscious and highly elastic to price changes a fact that the company is very much aware of. As such, it has ensured that the Smith Crisps are priced slightly lower than that charged by its competitors so as to attract more customers and maintain its loyal customers. This strategy has so far succeeded because customers still buy the product in large quantity compared to other competitive brands (Smith, 2011). Secondly, Smith Snacks is a product is prepared with oil that is cholesterol free to ensure that the needs of the health conscious market segment are met. This has proved so beneficial to the company based on the fact that many Australians are becoming more sensitive to their health as a way of preventing diseases such as heart ailments and cancers among others. Therefore, the company has been able to attract this market segment towards the brand thereby making it a leader in the market (Books, LLC, and General Books LLC, 2010). The taste has also made Smith Crisps obtain competitive advantage over other competitive brands in the segment. In this regard, customers of the brand have remained loyal to it because it is tasty because it is blended with a variety of traditional flavors that improved its taste. In addition, the salt content is average and is consistent in all the chips. This has made people prefer it to other competitive brands in the market (Smith, 2011). Smith Crisps is also fabulously branded and versatile thereby appealing to many customers. The brand name is also clearly printed making it easy to recognize by customers in the stores and super markets. Many customers attest that the branding of the Smith Crisps is so appealing compared to others and is can easily be pointed out in a grocery. As a result, customers have always been able to identify the brand without having to struggle, as is the case with other brands (Ibisworld, 2012). The company has also engaged in a vigorous advertising campaign and promotion of its Smith Crisps brand throughout the country. This has helped in creating an awareness of the brand to the populous in the country. The companies are reported to have invested large sums of money on advertisement over the last few years so as to increase its brand awareness. For instance, some of the customers of the Smith Crisps brand attest that they began using the brand after recognizing its existence and value through adverts run on televisions, radios, billboards, and road shows among others. This strategy has enable the brand to penetrate in almost every part of the country thereby establishing itself as home brand to people of all generations and status (O,Keefe et al., 2005). Main Segment Health conscious/goodness is one of the major segments targeted by the Smith Crisps brand. Customers that fall under this segment are mainly those who are sensitive to their health and tend to analyze deeply the contents of the snacks they buy. As such, they only purchase products, which they believe has no harmful ingredients capable of affecting their health. For instance, since Smith Crisps is prepared using oil, such customers would in most cases like to know the cholesterol level in the snack they buy. Therefore, in case the cholesterol level is high depending on their accepted limit, then they would not buy the product. On the other hand, such customers will remain loyal to the brand if they find it having low or no cholesterol, which research associate with certain deadly ailments such as heart ailments (Smith, 2011). Health conscious customers are also keen on knowing the type of flavor that might have been added to the Smith Crisps. This is because these customers believe that some flavors may cause health problems to them such as allergies. As such, the company mainly adds flavors that these customers like, which has mainly consisted of traditional flavors. In fact, these customers have cited Smith Crisps as one of the brands that have factored in their health concerns since it is cholesterol free and very low if any. In addition, the brand is natural and has no unhealthy flavors added (Books, LLC, and General Books LLC, 2010). Value Proposition The following are some of the value propositions that I will use to brief an advertising company promoting the Smith Crisps brand. First, I would brief the company to concentrate on quality since every customer is driven by quality of a product in the market. Secondly, I would stress the quantity, which will include a variety of packs available for the brand and their prices. As such, I would certainly brief the advertising company to stress that the prices are low and affordable so as to attract more customers. Thirdly, I would brief the customers to stress health matters such as the brand being cholesterol free or low on cholesterol in order to attract the health conscious segment to buy the product. References Books, LLC, & General Books LLC (2010). Smith's Snackfood Brands: Cheetos, the Smith's Snackfood Company, Gobbledok, Twisties, Burger Rings, Cheezels, Nobby's, Parker's. Sidney: General Books. Friend, T.A. (2012). 2001-MAR/APR - Suppliers strive for space & sales. Retrieved from http://www.c-store.com.au/article-archive/2001-mar-apr-suppliers-strive-for-space-sales. Ibisworld (2012). Snack Food Manufacturing Market in Australia. Retrieved from http://www.reportlinker.com/p0178645/Snack-Food-Manufacturing-in-Australia-Industry-Market-Research-Report.html. O,Keefe, V., Mason, G., Willis, A., & Bell, G. (2005). Commercial taro chip development using Agri-chain partnerships: A processing, marketing, and financial analysis. Australian Government, Rural Industries Research, and Development Corporation. September, pp. 1-82. Smith, A.F. (2011). Fast Food and Junk Food: An Encyclopedia of What We Love to Eat: An Encyclopedia of What We Love to Eat. Santa Barbara, CA: ABC-CLIO. The Smith's Snackfood Company Limited (2011). 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