Context:
B.C. Packers, a successful publicly traded conglomerate, was considering to market cat
food products in Canada to better utilize its fish by-product and its excess capacity in fish
processing plant in the Philippines. In spite of attractive market opportunities and potential
profitability, B.C. Packers also have to take account of business risks involved to
determine whether or not this investment would add positive value to the company and
which segment(s) of cat food market the company should focus on.
Issues:
The main issue for B.C. Packers is to decide whether entering the cat food market would
be profitable and which categories of cat food the company should target.
Besides, the management team also needs to decide the appropriate amount of
expenditures on advertising and promotion and to decide what is the appropriate package
for canned cat food.
Analysis:
External analysis:
I: Porters Five Forces
A: Intensity of the industry: High
The cat food industry in Canada is fiercely competitive and competitors use aggressive
pricing strategy to gain market shares. Also, each market segment has its well-known
brands. Hence, B.C. Packers needs to decide how to use marketing and pricing strategies
to establish its position and to secure adequate shelf space.
B: Bargaining power of customers: Medium-to-High
Due to the intensive nature of cat food industry, consumers have low switching costs
among different companies. Besides, the products offered by B.C. Packers are not quite
differentiated from those of its competitors. Hence, customers have medium-to-high power
to influence the pricing of cat food.
II: Analysis of consumers
Customers are classified into four groups based on their budget and purchasing
