Target market and promotional strategy

Yasso – Case 5

Target market and promotional strategy

There has been a Greek yogurt craze in the midst of an overall growth trend for the total U.S. yogurt market. Packaged Facts forecasts the U.S. retail sales of yogurt will approach a $9.3 Billion market by 2017 up from $7.3 Billion in 2012. The major factor influencing this 5-year 27% growth rate has been the growing consumption and interest in Greek yogurt. Chobani was the first Greek yogurt product introduced in the United States. Since then almost every major yogurt brand has included Greek yogurt in their product offerings. With the continued growth of Greek yogurts, it also presents a unique opportunity for specialty and unique brands to create point of differentiation to attract new users and new use occasions often at premium prices.

Yogurt appeals to consumers growing interest in healthful eating. Whether it is regular non-fat yogurt, Greek yogurt, or frozen yogurt, it is packed with nutrients that many consumer segments recognize as being better for them. Thus, the interest in different forms of yogurt products is on the rise.

Enter Yasso! Yasso was started in 2009 as a small startup and introduced the first “frozen Greek yogurt bars” in the United States. They were the pioneers in offering Greek yogurt in a frozen bar format. 2016 sales topped off at approximately $50 Million. Over the years their product line has expanded to include 15 unique flavors. Unlike most other yogurt brands that offer a variety of different yogurt products, Yasso continues to specialize by offering only one product line, frozen Greek yogurt bars. Attached is some basic information, entitled “Yasso information” to get started. You are encouraged to get more information by going to the website, especially their company website www.yasso.com.

For any small retail or grocery product startup, in addition to offering a differentiated, quality product and effective pricing, the major key to success is getting your product distributed. It isn’t easy for most startups to get placement at major retail locations. Often failure is due to the inability to secure enough shelf space, especially in major retail locations. Since Yasso had a differentiated product and was first to market with offering frozen Greek yogurt on a stick they were very successful in convincing a number of the major grocery chains like Safeway, Krogers, Walmart, etc. to carry their product. Much of the company’s initial success in generating $50 million in sales is attributed primarily to these early channel successes.

Yasso believes that they have not been as successful in promoting their product and building more awareness and interest in their frozen Greek yogurt bars. Have you ever heard of Yasso? Have you ever tried a Yasso bar? As a startup they haven’t had the luxury of investing in promotional efforts extensively yet. Often it is important to first get placement and market penetration before focusing on promotional efforts to increase sales. Once you start to promote the product extensively, it is important that the product is already available and on the store shelves. To date their overall promotional strategy has included social media marketing efforts on Facebook, Twitter, and Instagram; sales promotional efforts primarily in the form of online and retail store coupons and developing a Yasso Rewards Program; and finally personal selling used to obtain additional retail distribution partners.

Although Yasso was the pioneer for frozen Greek yogurt bars, other competitors are expanding their product lines to also offer frozen Greek yogurt bars. Adonia Greek Frozen Yogurt by Ciao Bella has entered the market. Of greater significance the giant General Mills brand Yoplait has expanded their line of yogurt products to include Greek frozen yogurt bars. Rich Products has introduced a similar type of product, Greek frozen yogurt bar cakes. It isn’t unreasonable to think that other major competitive yogurt brands might enter the market too if sales and consumer demand continue to grow. Being the pioneer doesn’t always guarantee long term success or remaining the market share leader. With growing competition can Yasso continue to grow as a small business and remain a major player with only their one product offering?

Case Assignment:

Drew Harrington and Amanda Klane have an objective of increasing sales at least 25% in 2017 from $50 million to at least $62.5 million. Although they aren’t marketers they believe that perhaps the best way to increase sales by $12.5 million in 2017 is to develop a more effective integrated promotional or communications strategy and have allocated 5% of current sales as a promotional budget. Thus, they have budgeted $2.5 million for advertising and promotional efforts this year. To date they have not targeted any specific market segments although it seems like most of their sales have come primarily from millennials in larger urban areas.

They have come to you for your advice and recommendations as a marketing consultant.

1) Should they continue to take a mass market approach or would target market efforts toward a more defined segment or segments be more effective and offer greater opportunities? What should their specific target market strategy and specific target markets be for 2017? Support your decision.

2) Based on your target market recommendations propose an integrated marketing communications/promotional strategy for 2017? If they want to increase sales by 25% what specifically do you recommend they do different than this year, and/or more of next year, and/or in addition to next year that you think will be sufficient to help increase sales by 25%, recognizing that you are working with a $2.5 million budget?

In essence, each year a complete integrated promotional strategy needs to be proposed and implemented. That means that you have to indicate what promotional efforts from 2016 you want to carry over into 2017, will there be any changes in how you implement these efforts, will you increase the volume of efforts in these areas and most important what new efforts are you recommending? Be specific enough so the owners understand what you are recommending they do.

The best way to submit this written assignment is in memo format to me as an attachment in a Word or PDF file format using the ASSIGNMENT link provided under Week 8 Content. All you have to do is submit your work for #1 and #2 above.

Also, your recommendations for both #1 and #2 above is all that is necessary to submit as your first group participation post for the online discussion of the case. You don’t even have to include your reasons for making these choices.