ilasq:

liir {'k xnd

Snacks to Co

foAnn K. Linrud Central Michigan University

Jill Harms' half-year tenure as Assistant Category Manager for the Nuts, Natural Snaclm

and Cookies Category at Sathers, Inc. had been exciting. The variety oftasks in her cogory had been a challenge partly because Sathers management had targeted the Nuts, \r-ural Snacks and Cookies Category for growth, and partly because she had been given ffiresponsibility for the category from the first day she had started at Sathers. That meant &ltshe had direct responsibility to Mike Halverson, Director of Marketing.

Her focus on this Friday in mid-July of 1995 was the recommendation she

make to Mike on Monday concerning Snacks to Go, ihe snack nuts product line iduced earlier in the year. After a fast start, sales had lagged. Now, with lackmarket-monitoring reports on her desk, Jill was being asked to decide the line's fas-As she thought about possible alternatives for the product line, she knew she co*Iillcommission a new round of research. But pressures were mounting toline's performorc€-soon-or drop the line completely.

HistoryAs if the economic woes of the Great Depression weren't enough, in 1936 John Sa

grocery store in Round Lake, Minnesota, burned to the ground. With a tenacity of spiritwouldn't allow him to give up, he instead began to distribute cookies in bulk to areacers, adding other products as time passed. Ten years later, his son Kennelhjoined the hness, after serving as a bomber pilot in WWII. Kenneth implemented the philosop$value by selling packages ofcookies and other products such as almond bark, fourages for $ 1.00, to grocers in a five-county area. Sathers serviced their accciunts with a

force that personally took orders, delivered product, and stocked shelves. A turningcame when a number of salesmen le ft the organization, leaving Sathers shorthanded. .stop-gap measure, Sathers management offered discounts to the customers who wouldder by telephone and stock their own sheives. Consequently, Sathers became an earf-trant in the field of telephone marketing.

Reprinted with permission from the. Cos e Research Journof volume 21 , issue 4. Copyright 2001 b!loAnn K. Linrud and the North American Case Research Association. All rights reserved.

Case 9 Snack.y ro Go 3Ss

f#j"l ?:::ff5:jffi:',H ;Hfi,'j:l::.T*",dispray: hanging ce,,ophane bags;:Tffi j::ltji;i*,;:"*****:Ti:: j,;;:ifl 3:i,xH:1fffi1::r:iff ;:.1:il:J;:ffi1,ffi ,,ff

:::*"I#::;;,::i::H:;:,"1ffi :;:kT:T,;:119

j..jri:ir for their o"nn ,,or*u."i.nn'eti;;,liijl g $'

:90, s",1"* ;

".,** "iJJil:'#.T'1,:i::::.,:f :i: jl :",:r,'"o uie, i,li::r,*,1" rhese stores teO io ttre il;;;

;;Jff "#Hffart account uv ,zz io u.;;;Jff;i:fi.[-ffiiTil:i:T::',H:T;packaged candyStill emphasizine repackaging (called "rebagging,,by some in the trade), Sathers purrchased a nut roastin"s operatiJn in ,rr. rso0r, expalding the product line beyond cookiesand candv Further ulquru:lion, r;"il;;N;w orreanJma"ft;;;;;; pranr from Ameri-can candv companv in. r985. una un uaaiiio""r

"ra, ,nr;;;ffi;,il;erarion in rhe rater1980s' Sarhers acquired po*"rriln.., , ii"o'i,"r.,,,i,".r",".1^raf"n,,.unuru.,urer and drs_

:!l$*{ ::#Lf; "*Hftffi :fi ffi " r J",i}l o' ;;ii,i"T, ee,, bringing the

i ts goar t r . i gr' tv p... Jn, rh e. powe il's acil;iJ;'"[Ti[::i:", lxi]' lilii:J.il;]**tness, Flex-o-print, which would increa* ri"j o""O"ging capabilities.tn 1992. Sathers uog.radecr i,r n"r"Jlll.'i:u."r;;a.rri,v *i,r., "

roborics operarion.Bv r993' Sathers'sr:3, *iriion ;ffi r".fl; :!",..nlh straight r.",

"rsares gains. rnI994, Sathers broadened ,r," or"o""iri;;;ffi." in tr,e Hopt in-s

"0.*,,"" That year arson?.t::i:;;'*H::," ortt'' u"'i''"iil"nr'"s"r candy company. u wisconsin-based

3rffin:::, ;:ilil *"fi.*j:H::,':, rrurb.,urer, Sarhers hired a proressionarrffi'J',gffi 'ffi ::?J"IiJ?,i::".'":il;".";ff;ff :',::;:":,i:ir#:Hi:::?::J::f :"", $;;'";x};:, n'i:i: i:*$fiil; iff ililx::"::",?Ji;l:XJifi"ji j:il,tlli?; j::r.:;;;Jeilffi ;i::tHi:?;',T::lued to hold. Michael Halverson *il;ilv

attu r-r€Srd€nt tn 199 l. positions he contin-position. ;n rssz.'Mr.

"a,u....,n insrir,,to.r,r^ ^llDirector

of Marketing. a newly createdposition, in 1992. Mr. Halverso" i"rii**a"rr*rr 4r r/rl'ecror ot Marketing, a newly created

his.departmenr, ,o*. Cur.*o.u Mannser", ^^.,.,1:9:|l rdanager.organizational o"rig" r",his. departmenr; some d;;;ft;;il; il;

u,! Ldrcgory luanager organizatipositions were unfilled. (See Ma

!fiT:fi HIJil:?;'"j#":**: jlr:;::.:"."':y':e,::3f lf ::ffi :::;f "T:il;i:ffi fin"#,:f i r m anagement srr e was' o"ixif

"Hl iffi i J:,Hf;:l"tH"$iii:Round Lake facility.

Operations

rlli:* :;lilrHx'i",;Ts::l-:"":'"t":fd bag candv, nurs, naturar snacks, and cook-

i{,liilTi:rr":il:::*l:r:*:*i#L+r["illiJJ';.1;xTii';;iil;Uff iJ::;a description or"u"i.ur.gorv.; ' and private label candy. is* e-rrliiiJ'rj.

Hanging bag candv *u! sutt ..r'mainsray: 11.'.I:: for sr.00..varue Line generated up

to fifrv percenr of the ue'icarv i"i.*r"i.o iJ;ianv,s s r 50 mirrion inrJu"nu"r. Salhers em_ploved approximarerv r.500;"";l;";;;;;,ii*"*n,

orants in Hoi*in.. a Minneaporissuburb' and New orieans, and in its oirniu"ii* cenrers in ctuuunooJu, oirr*on, pennsyr_vania' and Round Lake. and ar Frex-o-ffi ",

*"*.r;.1;;,;;ffi;ffilnn.uporir.The 350,000 square foot fac'itv;r'R;;# !:r" tp"p"l"ii""^oti,'* the southwesrernpart of Minnesora) was command centrar .i il lo::"rions. incruding the teremarketinearm and the fleet of trucks

"r.o r",lirir,o""r,"" in the U.S. una cuniau. The prant wa!equipped with a $5 mir1111^10uot1;; r*"';';operarion, - r"" ,* ii"es using the ratesrroborics and vision insne*ion system, .noi"ng i"iti,, .0",i., o"rl.Jrr,"". The system gave.S;ffi JiTr"Illl llg: A ; ;#;' f':n d q ua, i,y cl;;;;ft;;. Lake a r so ha d ae" i s,in g,.;;;;;,: ;;;:a?i:fi iH ;1' li:$ ;i.,|"::::fr:iii;; ;il.. week s, o, rac k

I

3$S Section V Marketing Management Ca'tes

EXHbfjS[ "l Marketing Organizational Chart

nK**#gY ; Sathers Product Categories

..:'.'1"::t'-t:'.,'.1:t

,,..'ri::.i.r:,:i,rll'l id;6:a$ :iaqdtir ndv;lhai*;qndt it$el:!4ldtir:; itionak&dv;re$ai'rree

:.:'::tii':i:tl.::ltr.t!'.l?O'.:ittiml':in1h0:piafit:4.aitqniager:!n{i:.i:l:ll':,:lli:ti',:t,i.::r:.llr'r.ri,::,rilii!rn;rinritrarl$ll00:iin€:,.inir$€::iiaditign:all'b

'.botidl1::lit itg:,bistt::':':r.::,..,

.i:ri:irt:.:,..itlllt*ei*tikt tllier:nAlitx: tlgdirgpliepaite .rlh'i'p€ilat!:&t99]4y,:d,qwn&g candv'

:r$tti6* n 1r,:t:r:t,'.:,tfr.:i:r :ir:: g-tn!dlitn0y.!4ll;e{9rd it.tp,,e.!i1!.pgcfqeesirh{::pilced rot

:,t::l:rl:l:::t:.:.,ali:i:l:']:a]t!gilq!1gi',p'ro''.d.ucli:l}.10vgl}1alitr,r'',:)r'.'i.i:r,]rlrr,r,',,:]i:rr

irfi.* :rtd:Ntttrtii:lna*i:,::rr,rrrii::.aejit$irit:rth€,.] iio0,iine:&t*. !],,5.ile*:.i{lrlt*!!lellr''$u'ntlqwgi:$idirnd:'Peanu*,t iir:::l:t:::::,,::i5$r'1ith,:t!tttt{i8ana;t*ipirtnllitedi,NttsirAle a@jtLi!,ujx1:Fi{txpFle:ldbits'

Red and Nalural Pistachios, etc.);

t,:,r::lj:ir;i:i:,,.rr:,'::,ri:it:,i:,ahib:r,Co;t "--inr€ri':S.ai:in:C'oakieiirFi6,,86'si,5,!tit€d::3.h6rtb'!€-td{Ogkig,i;:r!andwichcrEmes, etc.);

rfiriir,.'l,:t..rii!:i;lrisrillitqwailri 1n lo-vt flevqrs ryi1h lgpq1.atfirld],iileianq;{ pi iytri,,.i:t1i.lir.l

a:J,.;:,a*;;.,r;*,,1[;i.rtiikxarn,

i.titil:.]]::rr,:t]:t::liaicio.f;lindr,nurtrrna:rtalqirlisn,lfi,ttrib6lr:e1'e!iia0ijln!5' !1 cnalllgnole$i9nat

, t :L.l'rrrri::::;i::l]::j,:rriir:r:,i::,:r.:'r::,.,.,.,:,:,,,',,,.,,..,,,.,,,',,..

Case 9 Snacks to Ca 3Sy

The Sathers truck fleet capped its distribution system with over 300 trucks running ar al-most 100 percent efficiency, carrying finished product out and supplies in. The system en-abled Sathers to complete delivery in about half the time of typical truck delivery allowingcustomers to minimize inventory. Sales were to confections distributors, retail chain distrib-ution centers, and some direct store-door delivery accounts. And, while Sathers did very iit-tle consumer promotions, it heavily supported retailers and distributors' efforts to sell toretailers. For example, Sathers provided point-of-purchase signage and racks, product re-order tags, product samples, and detailed instructions for product display, order and reorder.Sathers paid no slotting allowances.

Candy Marketcandy consumption, in generai, was on the rise in the U.s., from l6 pounds per capita in1986 to almost 22 pounds tn 1994. with a retail market of $12 to $15 billion. Reasons forthe growth varied. Candy was often treated as a reward, even in (and because of) troubledeconomic times. Value lines were likely to do better in recessions. Some experts believedthat the growth had occurred at a time of increasing health-consciousness because peoplewere eating better overall, so they were more willing to reward themselves. About eightypercent of consumer candy decisions wers made at the retail store.

The candy market could be divided into two parts: chocolate and nonchocolate. Sincechocolate candy made up sixty percent of all confection sales, Sathers competed withother nonchocolate producers for the remaining shelfspace. "[The nonchocolate category]is a tough game," according to Jan Kitt, a sales and rharketing consultant who specializiiin candy. "Good hard candy tastes the same no matter who makes it. lt's very difficult toget a point Of difference . . . Since candy is a commodity business^ distribution is the nameof the game. If the product is out there, it will be purchased. The more it's available, themore people will buy it. That stands more true for confection than for any other category.',Of all suppliers of confections, gum, and snacks to U.S. convenience stores in 1991.Sathers ranked twelfth. according to the ICC/Accutracks Convenience Srore Report, aheadofCornnuts, Inc., and E. J. Brach Corp. And, Sathers ranked seventh ofall nonchocolatebrands, ahead of Tootsie Roll. After-tax profit margins in the candy industry ranged fromtwo to five percent.

Sathers' Strategy for SuccessCompetitors and the trade recognized Sathers'competitive advantages. "There are a lotofrebaggers, but Sathers'strength is in distributing the product," according 1o KennethMcCarley, of the winona Division of Brock candy company of Chattanooga, a com-petitor. Another competitor, Ron Meyer of Shari Candies, Inc. (Mankato, Minnesota)recr:gnized Sathers as a "very well-run company whose business has been built on ser-vice." Keith canning of Pine State Tobacco and candy (Augusta, Maine) called Sathers"the single most successful company we've brought on in the last five years. The pene-tration they've had in the East has been nothing short of phenomenal. you can,t go irrtoa store in this area and not see it." And Dave McElhatten, a candy buyer for Kmart,pointed to Sathers'creativity: 'lThey're always looking for new products. They're verygood at innovation."l

Sathers'strategy for success was built on offering a price point, exemplified by the .,Two

for $ 1 '00" Value Line, and building a distribution network based on service. Sathers pres-ident wiiliam Bradfield pointed out that value, to Sathers, ..doesn't only mean more prod_uct fior the money. It includes product quality, variety, availability, price, packaging and

I Fink, Laurie (1 992), "Sweet Success,,, Corporate Report-Minnesot4 (March), pp. 2g_32.

lrryy candy, fnint

3w€ sags;

3SS Section V Marketing Management Cases

quantity, , . . The consumer value is the driving force of the company. We have a

mindset that whatever we do has to add value for the customer."2Vice President of Operations Charlie Mayer echoed the idea. "The path we'r'e take: -,r*

i,:nii:ffi ':*$#;#i*'"::ilT,ffi"Ji:1i:':,:::*?#:,T":n::",#1:ii;,il. tribution is. That has been the cornerstone of the development of this company."r

Building on that cornerstone. William Bradfield identified Sathers' goals. "We har e . ',:-''

simple formula-be profitable, continue to groq with a focus on candy." Sathers'stra:e:., -ir

the fwenfy-first century will be to "continue to develop our position in nuts, natural sm;i- .m...............un

cookies, but we will dominantly be a candy manufacturer."

The $n*{:k$ {{} {l* $ir"*c}q;l:{. $,ine;

Development of Snacks to GqWhen Jill arrived at Sathers as an Assistant Category Manager and was given res:,-c*,*

bility for the Snacks to Go line in January of 1995, progress in developing the l::= u'u

well underway. The idea for a snack nuts product in a ziplock package for "on ::i :1; '

consumers was initiated in early 1994. The aim in developing the line was to becc::: :tr*

of the first in the industry to introduce a ziplock package filled with nuts ans :"::r:ur

snacks, while achieving Sathers' company objective of developing the nuts ani i::irmsnacks category.

To explore the feasibility of using a ziplock bag closing for snack nuts, Sathers hal :::rfl*

tacted Zip-Pak, the originator of the ziplock zipper bag closing, to learn more aboui ;::,:tmzippers. Zip-Pakprovided information from a 1989 Food Packaging Research Studl '::

jlilii

food shoppers in four U.S. cities conducted by an independent research firm. The s*; it-vealed that most consumers who preferred resealable packaging wouid switch 'Dran,:s i{'fti[

pay more lor the food protection, convenience, and freshness that resealable packag::; :l-*

fered. Over halfofthe respondents preferred nuts in resealable packaging, and ofthos ;,rii

ate nuts often, most believed that if was important to preserve the freshness of the .-;":': ukeep it from dryin$ out and becoming stale, and that the package should be easl'ti :i:tmand close.

In general, consumers appeared to have positive responses to the idea of rese"-::,*packages. With that information, the next step was to gain knowledge of consumers' ':,r:*nuts consumption. To do that, Sathers commissioned a nationally recognized markellt.:*-search firm to conduct focus groups and personal interviews. Sathers believed such::;..'*sis would offer greater depth about usage patterns than other research types, such as -ialror telephone surveys, for instance.

7. Focus Groups*Phase 7 The firm conducted two focus groups in June. 1y*: uexplore positioning and package themes. Qualifying participants for these focus gr;,;;conducted in Chicago, had purchased nuts for snacking within the past three mon:ri, u.

a drug, convenience, or discount store, from a stand-up display, pouch, or hanging :o{.jar or can, and were between 18 and 44 years old. Objectives of the research incluie; x-termining attitudes toward snacking and the role of nuts in snacking; attitudes to\raic Lrutr

usage ofpackaged nuts; awareness, attitudes, and imagery ofpackaged nut brands: r:n-ions regarding packaging formats; reactions to the ziplock concept and execution: :3.!N:-

tions to three selected positionings: "freshness," "convenience," and "health"; reac:.irs

2"lt's in the bag: hanging bag candy manufacturer Sathers, lnc." {1994), U.5. Distribution Joum:(f uly 1s), pp. 4243.3Tiffany, Susan (.1 995), "Sathers secures niche as manufacturer," Condy lndustry (uly), pp.5l-5-

Case 9 Sneck\.ro Go 3Sg

to three package designs; and interest in a microwaveabie snack nut product sold in con-venience sfores.Results reveared that these focus group participanrs snacked every day, eating both sartyand sweet snacks' while snacking' for them, was often solitary, nuts were associated withparties; as well as with routine snacking, and were chosen for iheir taste, convenience. andprotein' Disadvantages of nurs as a snack incruded being fattenin;, ;;;;;;, ;;;;;;ffi,and containing harmful oils" There was no ..right time,,io, ,nu.r.Trri * nuts; purchase wasoften driven by mood and a coupon or sare, and included a variety lrou, ,yp"r, rather thanjust one type. snack nuts were purchased in discount, gro..ry, unJ.onu"nirn.. stores, asplanned and impulse purchases.In terms of package format, the advantage of cans and jars was their resealability, whilebags were more portable, more appropriate for one of several snacks, and more easily dis-posed when finished. However, they were oflen easy to spill and not resealable. A ziplock

ciosing for snack nuts was seetr as a clear advantage, with a primary benefit of preventingspilling' A larger bag that could be resealed for a later snack ctuld also yield a cost savings.The "convenience" positioning,drerefore, captured the essence ofthe portability concept.While "freshness" was an appeaiing concept, most of these respondents did not have prob-lems with stale nuts. Because of their high fat cortent, snack nuts were not seen as being"healthv'" Consequently, the ideal packa[ed snack nuts product would be convenient, easyto open and seal, fresh, portabre, and a heaithier alternative to ..typicar,,

snacks. A mi_crowaveable snack nut product was not appeali'g to these .oorurn..r.Packaging designs viewl!.bv these fbcus groups corresponded with the three position-

ing alternatives, "freshness," "convenience,,, and .ihealth." ilr"r. pu"tuges were larger andmore colorful than the traditional sathers "TWo for $1.00" heaie, pact age. participanfsseemed to prefer the new iively package, considering it to be *or. ,y"-.urching, commu_nicating a better quality, fresher product, and perhaps more successfuiat upgrading the im_age ofthe "Two for $L00" package.

while Planters' Fisher and Evon's were the most recognized, better quality brands, therespondents exhibited little brand loyalty within the snack*nuts .ur.gory. irrr;r. oi;; ;;:known brand was more rikery, however, if rhe consumer could see the product through afilrn or cellophane "window" The participants' attitudes towards brands revealed thatSathers was either not werl recognized or was known for candy. Respondents, perceptionswere drawn from the sathers' "Two for $ i.00" package, planters' Mr. peanut, and Fishertcolorful fcril packages and advertising. A projective technique used to ascertain brand im-pressions resulted in the following profiles.

Sathers: unsophisticated prain, common! not necessariry downscale, but thriftyrfrugal;Planters: conservative/traditionar/crassic, stable, ranging between affluent and middleclass, aged 50s;

Fisher: trendy, sophisticated, affluent, aged 30s to 40s.

2' Focus Groups-Phase 2 The research firm conducted a second set of two focusgr'ups in Tampa in August,. rgg4, to gauge reactions to revised positionrng and packag-ing designs and to assess ziplock pu"t uging for Sathers. The qualifying characteristicsfor these participants were the tu*" u, rerori; the purposes .u"r. tt . ,u*e, except fbr theaddition of an objective about attitudes toward salt, ancl the omission of the ..microwave-able" objective.

Tampa participants'responses about snacking in general and snack nuts in particularwere very similar to the chicago groups' responses. However, brand was more importantfor these consumers. They purchased from a imail set of .,known,'brands (pranters, Eagre,and Fisher, most often) partly because of their confidence that better-known brands werefresher, a concern in the hot, humid Florida climate. Planters'quaiity imuge wus favored for

I

3t$ Section V Marketing Managenrent Cases

its duration in the marketplace, availability, and advertisements. Brand impressions result-ing from a projective technique included:

Sathers (based on the traditional "Two for $1.00" package): Younger group memberssuggested a teenaged, downscale male. Older members suggested a 2040 year oldmale or fcmale. unsophisticated and nondescript:

Planters: older gentleman who enjoys the finer things in life and has finances to pay forthem;

Fisher: upscale, young, trendy male or female.

Members of these groups were also more particular about package format features. D*-termination of freshness came from a package with evidence of air in the bag (vacum.sealed) and a clear product-viewing area (more important for unknown brands). Flas!"brightly colored packages appealed more to younger respondents. Reactions to the concegt

and execution ofa ziplock package closing were universally favorable.Tampa respondents preferred the "freshness" positioning concept over the "conr-e-

nience" concept. ldeal positioning, however, would include both, plus being easy to opfland close, economical, and a healthier aiternative to "fypical" snacks.

The Tampa residents viewed somewhat different package executions than the Chica*e'.groups, since the designs were modified on the basis of the Chicago groups'responses. Offour executions, all larger and more brightiy colored than the traditional Sathers i'Two fol$1.00" package, more preferred a lively white and green Snacks to Go package with nrncartoon'characters, a design that they believed to be more attention-getting and that upgraded the image of the brand. Some expressed concern that the window didn't revee-enough of the product within.

While the presence of salt was a concern, particularly among the 35-44 year old con-sumers, most agreed that salt was an important ingredient in snack nuts. "Lightly salted" nuEwere viewed favorabiy; most group members did not purchase "salt substitute" products.

3. Personal Interuiews To enhance and crystallize these findings, an additional researcheffort was conducted in September, 1994,by the same research firm. In this investigation.seventy-six respondents completed personal interviews at two locations in Chicago. Re-spondent qualifications were identical to the earlier studies, with the exception of extend-ing the upper age limit to 54. These respondents answered questions about the ziplockfeatures and the Snacks to Go name, and they rated three different package executions:

green package with red letters;

blue package with graduated darkening of the blue;green package with yellow letters.

The blue package rated highest on a 5-point like-dislike scale. In addition, it was alsochosen as the best at gaining attention, conveying a quality product, and conveying apremium-priced product. Again, the ziplock was overwhelmingly rated as a good idea.Over eighty percent liked the Snacks to Go name. In a comparison of the blue Snacks to Gopackage with competitive brands'packages, Planters outperformed Sathers, but Satherswas rated higher than the Fisher package.

The Snacks to Go ProgramWith these three research reports to guide their decision making, Jill and Mike Halverson de-veloped the program for introducing Snacks to Go in the spring of 1995.

ProductsProducts chosen for the Snacks to Go line were the top two items in the Sathers snack nuts line(Salted-in-the-shell Sunflower Seeds and Shelled Roasted Sunflower Nuts) and the top two items

. Case 9 , Snacks to Go 3_i 1

in their Natural Snacks line (Trail Mix and califomia Mix). The main seiling point wourd be theziplock package crosing fearure, *rri.r, ''ouia

appear to *d; il;;year olds. To accommo_date their on-the-go lifesg;le, the product wodi L. u*irulr. in'JonJ.ni"n.e stores. To ensurefreshness, a 'hitrogen-flurhing" p.or.Jur" ,i,o"ld, il,r;;;il ;;;"* the packages. Someproduits, parricuiarly sheiled i.oast.a s,rnno'".. Nuts, had " rc"d;;; ; spoil when exposed tooxvgen' rn packaging, "nitrogen flushing" w3lrdlernove rh;;;;;"flom the package, pre_serving freshness an{ ensyne a longer sielf life. ri.," p.or.r, ,o;il;* be necessary for non-roasted products' such as Trail Mix, ialifornia Mix, and Salted-in-,t"*rr"u sunflower Seeds.Packaging for the four items, identical but ror the item *,*., .""risted of a g .5,, by 6,,film package' bright blue in the center g*auut.a to dark rtu" urit,. uofiom. (see Exhibir 3.)A bright yellow band crossed the uppeipo.tion of ti,. package; . Snu.t, to Go,,was printedin large yellow letters across rhe c#er utu" po.tlon. g"tor i1.," l;ft"*, on the left side weretwo cashew nut cartoon characters uearing helmets,

"", ,rriJ"g'" ,po.ty .ao cartoon car,the other on in-line skates'.depicting "on iir. go" activities. roiir".ignt of the characterswas a clear windoq approximatelv i'by r.s- [ oirfru/;;";;,;;;r, above which read theitem name in a half-inch band, black f"tt.i, on white background.The brand name "Sathetrs" was embrazoned in harf-inc"h ,.d Ltt.r, on the yelrow bandnear the package top, beside a. red banner proclaiming ..NEwr n.r."r"ur. package.,, At rhevery top, a red stripe crossed the package, with the woros ..ztp_peK,,

and ,.ResealablePackaging" identifying the closing ieutu.Jin whire letters. The package backside conraineddirections for opening and,reseali"ng th. ;if".,nrtrition facts, ingredients, distribution in-formarion, a guaranree a'd thank yJu *"rJJg. from Sarhers, ; #;;. and a repear of thecashew clraracter in the red sporrs car. c

These packages were desrgned to hang on a state-of-the-art tubular brue metar disprayrack approxim aterv 5' high bv r 8" wide, ii u it r""-uy-{b-, fb;;;;;lree facings of an itemin a row with four rows, approximatery six bags deep. rl* top ortn" oirptoy repeated theyellow-on-brue "snacks ro Go'' name r"a ".i,

with ..iathers,, unor.zip_peK,, in somewhatsmaller le'ers. The rack would hord six cases'of p.oourr rli pu.rl*r, , u of each product).

Pricing

;:'ffi:,tl:#o;::j;*""* reature required a minimum package size, the price points rorbinedmargin""'"'iixxr{fi ffi ff ffi K*::HJJJJ::;f;i'::"*ffi d:nia Mix (6.25 02.),Trair Mix 17.0 02.)..rJir-,lrr"a nourr.al"unnoio.. Nuts (9.0 02.) .onurdbe $1.4e, whire SalteiJ-in+he_shen s;;n;;;;Seeds (6.25

";.;,;";l; be sold at $.8e. A .s'99 price poinr was considered ror u, iou, iu:f:c.:.J^r, it was nor profirabre to producethe smaller package wirh a ziproct ctosing-,iu, ,r,'. s.9l price po;nirl,orro have r.equired.Suggested retail prices were not printed orithe packages.

Promotion and DistributionSathers account executives wourd be responsibre for introducing the Snacks r. Go programto convenience store distributors and large ,"ruil.., with trrel. ulwn-J"..nour.r. Incentivesincluded a $3.00 per rack spiff for urr iirtriJutor salespeople who gained placemenr instores. There was a $.20 per case ailowan". to, airt.iuu;;;:;;o',*;'inio

ouo,u, estabrished

:J;?i*?Ji: ii:',::l,Tj:: rack 1ar ;;;;;;;;;p,"ximatery soo .acr, to sathers) wourd be

Sales incentives for the account executives were designed to successfully modvate thesales force during the roll-out period of the ,i"* p.ogru-. As such, both individual and re_gional performance would be rewarded. e".frr"f.b. p,ou io"o u'r,,."ii, j. sa re s quotas o, ;,; il:: ",i:#THiJj'tr#15%trf;

"T:f:month duration of the progmm,,case sares by rut"rp".ro-n 1uJ;;;.#[uota) and regionarsales would be posted on a taily board. At the end or tr,. ro*tr, ;;, alr salespersons

nKHl&?Y 3 rheSnacks to Go ProductLine

SATHERS"

The National Value Line'

€XF,,S'T 4ESnacks to Go SellSheet

Case 9 Snack; to Go 3.13

lntroducing...

SATHERS. has created a brand new innovationrn the nur and snack market. SATH*6,"',i,"1.i,tresh ro.a.sted nuts are now available in convenientresealable zip lock oack,uu" ,on,'"]#;;;;;i"'"ug"s' Eat some now . .

Your customers will love the convenience of aresealable and spill_proof packaop.vour rmpulse sales will soar with"the colorfuland bold graphics.The unique and dynamic floorstand willattract consumers to trre snacts'iJ Co "disPlay. - - '-"'rJ rv vuThe Snacks to Go,,provide a fresh ,nu.k 1.p-l:tf package will

we oner-a #,;-ffi ?,i}"Jyn,:me vorr-,se it I

Catifornia fr/ix, Trait l,lir, Su f t"O'_in- ii"fiSunftower Seeds and sunrro*"i'r,rJir"',

sATltfnSThe Nariorul Vatue Liil6

Item

C.pie

5 200520 1

s2025203342A

SATHERS

The National Valle line,

Description

:he]tgg Roasred Sunftower Nutstrail MixCalifornia MixSalted-in-Shell Sunflower Seeds

Round lake. Minnesota i6l6?

{s95}

Floorstand (provided bt sil;; with prJg/ram panicip$atiint

Case'Pir_,k

121212

53Ps1.49

$1.49

$ 1.49'l)

achieving quota would earn a choice ofa Sonv I* e sa r e Jp e,so; ;; ;. h sh ilil, ; :;y,.:;,Hffi : ffi ; i:lf :J:ii: : lJ"f];;getawav package worth $50b' F"r r; ;;;;";*ion u.rri.u,ne ;"";, "

,0.",r, evenr, such as a"' T"""::,1? ;'J;"il ?:T -".' b; ;;;; ;u 1.., *o u, o u. o'd.. il'' " u"'

::i:i: j; q;,F'",*_::: #Ilnilfi ljJ:iT*fii.l "JlffJilTiffi:liil:Tl,T;program and rhe bord oraphics orrn. pu"t agiiJ tn aaairio". , ;li:h*,, Iine arr (an artist,s

rendering ot what ilreiiipray ,".k;."td i;ii.it:1, a planogram iu-oiugrurn of productpackages ro be dispraved;" ih";;;i,;;;#;*ract), and r;il;,,"re designed ro aid

rn the selling efforto distriburors (r;J;;il;'4a4dj.d";;;r,la.s binding between

?14 Section V Marketing Management Cases

trx$"{,&'Y 4&Snacks to Go LineArt

SNACKS TO GO LINE ART

Sathers and the retailer; among other specifications, it stated rhat the rack would be used ex-clusively for Snacks to Go product. The direct mail kit included a large sample of theSnacks to Go ziplock package, a sales flier, and an introduction letter to the distributor'sbuyer to familiarize each account with the program and prepare them for the saiesperson,svisit. No consumer promotions were planned.

The Roll-OutWhile convenience stores throughout the nation were the eventual outlet through whichSathers would market Snacks to Go, convenience stores in the Southeast region were tar-geted for the March to June program roll-out. Specifically, this included oklahoma.

Case 9 Sntrt.ks t<t Co 315EXtdgsr? 4{Snacks to GoPlanogram Slrt€Lt.€&,l.*S1?}.

*Ut*F ::...r,

TFTA:ILicllX

F*RiE${&ttx

TFt \tt*{r{lK

tlA{rF*Rt\tr.a!l{lx: -: ':

#{t,x

*ALlp$ar{JA&,li..x

S{s.S$trtlFLt*r'x cts,suetrt,bvRssg,tls, '

Arkansas' Louisiana, Mississippi, Tennessee, Alabama, Georgia, North and South car_olina, Virginia, Florida. and paiiof re*ur. erri orgh the entire inurt nu, category,s heav-iest concentration of sales was i" th; N;;;ast, the Southeast *u, u ,r.onger area forthe sathers brand. competition in the Southeurt *outa corne mostly from planters (with1994 rnarket share of 35.2. pe^rcenr), Fi;h;;i3.8.percenr), and Eagre (2.6 percent). pri-vate labels accounted for rg.2percent *a.krt shar.. rir..emainie. irrrr" market wascomposed of many small, regionar brands. David and s"",,ulr'ti"*n in,i,. sunflower

3 16 Section V Marketing Management Cases

trxfi-"&t&tT 4*Snacks to GoContract

SATHERS'SNACKS TO GO PROGRAM

Sathers lnc. (hereinafter referred to as "Sathers") and

-,

the participating customer (hereinafter referred to as the "Participant"), agree to thefollowing:

'1. Satherswill supply Participant with themerchandising floorstandattachedasExhibit Aasspecified below at no charge to the Participant.

2. participant will order sufficient quantities ofopenstockSathers Snacks toGorM(zip lock bags) on

an ongoing basis to fill and maintain distribullon of Sathers Snacks to Go'" {zip lock bags) on thefloorstands.

3- Participant will display only Sathers Snacks toGo"(zrp lock bags) proclucts onthef'oorstand.The merchandising floorstands remain the property of Sathers lnc.

4. lf the floorstand becomesdamaged or additional stands are ne€ded,participant agrees to contacttheir Sathers sales representalive immedlately.

5. Floorstands will be settoaplanogram agreedtoby Particrpant and Sathers.

This contract becomeseffective on the daysigned andwillParticipant or Sathers.

Particapant:Number of stands per store:

Number of stores:

Total floorstands requested:

Siqnature:

Date:

remain in effect until cancelled by either th€

Sathers lnc.

Signature:

Title:

Date:

HIADQUARiSRS: WIITE COPY / SALES: Y€LLO'lt COPY / P,ARIICIPANTT PINK COP! s-221 i295)

seeds and sunflower nuts categories. The Snacks to Go line would be competitivel-'rpriced (see Exhibit 5). There was some seasonality in the snack food market. Generalh.presentations to distributors were made six months in advance to obtain seasonally-appropriate distribution. Snack food presentations often began in January.

One hundred ten distributor accounts in the southeast region were selected, to be soldby seven account executives and a Regional Sales Manager. The goal for this region *'asto have 10,000 cases and I ,200 diqplay racks placed by June 30, with sales of $650,00:iby December l, 1995. The initial presentation to the Sathers sales force occurred Febru-

ary 27, at the American Wholesale Marketers Association trade show. Through Marchand April the sales force introduced the Snacks to Co program to their targeted accounts-

All accounts had been presented by the end of May, with product completely placed Sthe end of June.

EXHIS'T 5Frice Comparisons

Case 9 Snac,ks ks Go *.r?

iil$Er

PerformanceBeginning with initial placernenr, rhe sales fiffiTJ"l'Jf; .ffi :: : i:'t'' "";; u;; ;

";"

rce tra cked sa r es o r th e t

nerwork. of the , ,,1,.u, ,n.

"r,r.L u"iloi;j11]ttn: s"..,,r"," c"',[:"y:a*:,r.*il]:

*nH** j*#5[q5:rffirr'i;:L:xi::Tii''1':'1':tYj:::':;;;;ffi;srowed again. whire

a a'umutr. ';;::';ll Y"l"l il il'fi"','. ;:'illl"f,l'1,|'i,iiu,orsrooi*"0,"*ii'll;fj*i1ilx\*i*:*,1l,ll-":';H:#;ffi

f *j:flhe June sales reosrore. very .to* n1.,.,r1l"r'o*.4

tiur'ru;;;;::.ttwenty-six distribJtors placed..o.o*l*"^"'

j1*d:x:tr#:;T.tlT;ry1:$i1;3;,",ffi Lril1;',iii'H.ffi x$*

June's srow ru1." *llTltioll p'og';H;'l;il:lin corsultation 'it" no*" lr";;;'",";

ffi *:1;;x1;[**#i t :fl:1J : T,mt *;i;t lll fr :: *s:, n g pr. b, e m J

#t#JfiItri,T,?":yitt,'n:rT#$i:l;t1':!:i;Jl:i.[":l,li;'il1".Hi::d_,. : d b. * ;ili;J* *, r i:n"* *l *: # }j {:: !:*TH [: ,}; nl ni i*T:$t['.:'1"[?iuct

had atready;;;; ffi: resilient film. and distributed. uu"r,i.ooo

a quick i"".".1 ,irJ, ie; teeking specific reasor

had been distributed. a;1t"".1 ,i"t, ;;;;;ffi;'lt ror the declining sales. Jill had asked for

sheu just,;;;;;;il;...;lg,;i*:f ruf

,*f,*';itrlf ::n:-+mf,.**:;

g.xa"'itm'T $Weekly Case SalesPatterns for Snacksto Go Products

sx$"*rffig? rCnnvenience StoreSurvey Results*

--a_ Sunflowe'seeds

i)ct

=,'c,.DiSc

l:311

'iirS0l.:t100r:

::tr::a:atiit,::ru

rtliltlr:i:ai:r,url:l::i:riir,::

troi.

iStAFi:

t1:s.l

l0q.

r.+ vairi!

Mix

rx*t8rT 7(concluded)

&x!-{rs&? sComments fromDistributors'Surveys*

rTh;s s'as a mall-intercept survey ofconsumeru in one convenience stors where the Snacks to Go iine u,as sol4

*Thes€ comments werc ollered by thc twenly-one distributors $4ro returned the surve!'. Additionally, they reported that someconveoicnce stores utilized the rack. wbilc orhers plmed the Snacks to Go products "in line," on the streliwith other snack products. Ofthose that did use thc rack, some placed it near the fiont of the store, some near the back. some near the pop cooler, and some in otherlocalions $ ithrn thc storL'.

3:S Section V Marketing Management Cases

Mike Halverson was anticipating her review and recommendation. What would she tellhim? She could commission a new round of research, which should include store tests atgrocery and drug stores, in addition to convenience stores, to monitor cas€ sales by prod-uct type. But this would take ten weeks, at a minimum, and cost approximately $30,000. or,she could suggest a different approach to marketing the product. She'd have to give morethought to exactly what she would change: additional trade promotions? price changes? ad-ditional design changes? How about a product change-a switch to candy? But, would thatbe consistent with the Snacks to Go concept and William BradfieldS charge to develop thesnack nuts category? Finally, she knew she could recommend dropping the line completely.That would be a tough decision; would it be giving up too soon?

It was a mixed blessing that the company was closing at2:30 this Friday, Jill thought, asshe packed the sales and research study reports into herbriefcase. It wab going to be a longweekend of careful thinking about what she'd recommend to Mike on Monday morning forthe future of the Snacks to Go product line.