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.
