Integrated Minds are eager to serve MARS with business solutions of exquisite taste
Sergey Staroverov Ekaterina Palamar Nikolay Ageev Tatiana Kan
Cup Russia 2015 Changellenge >> English section Tour â„– 2
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
The current market situation favours Mars` aggressive expansion in the hot sauce market, but it is necessary to target the right audience to develop it rapidly Despite the current economic slump in Russia, hot sauce market looks very promising against its substitutes 8%
Increasing employment rate makes Russian value time and pleasure more than ever, especially among women.
The sauce market GDP, Russia
6%
4%
5% growth rate, 2014
2%
0%
2013
2014
2015 -7% growth rate, 2014
-2%
3 ‌However, the Russian hot sauce market is underdeveloped in comparison with the international level 70000
GDP per capita, RUB
2
•
60%
70%
64%
69%
68%
72% women men
2013
2014
2015
4 Throughout the pilot project Mars needs to target 3 main susceptible groups to bring set the market on fire.
The size of a circle is determined by the market value Canada
55000
Employment rate, in percent
1
Germany
USA
Japan
40000
Innovators 25000
Russia
Russia* Sauce consumption per capita, kg
10000 5
Summary
8
11
14
17
3 mln RUR
Early adoptors Early majority
Dolmio has a high grow potential that can be realized in three months through targeting three main susceptible groups: innovators, early adoptors and early majority
Sources: team analysis, case materials, ruxpert.ru
Changellenge >> Cup Russia 2015 >> Integrated Minds
2
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
A sufficient influx of contacts can be attained through qualitative approach to satisfying consumers’ needs and removing consumption obstacles 1
Mars should concentrate on the following customer categories and point out their needs as well as overcome possible purchase barriers Their needs Innovators
Barriers
New tastes of the product
Age: 18-25
Students Active Open to experiments
Absence of demand recognition
Unusual components Ingenious recipe
(310 thousand people)
Early adopters Age: 25-35
Young people Businesswomen Lack of cooking time
Easy cooked and fast preparation Affordable Nice to taste
Lack of trust to the product
Dolmio quality
Age: 35+
Housewives Use trusted products Prudent (600 thousand people)
Summary
*
Natural ingredients
Manifold unique recipes
High cost of the product
Makes cooking easier by saving time
Lack of trust to the product
Measured for several portions
Healthful product Tasty
- cost efficiency,
Risk of rotten meal May contain chemical components Lack of trust to the product
- average purchase,
Growth potential
Quality of contacts*
Wide range of tastes
(450 thousand people)
Early majority
Consumption rate
Innovators are the heavy consumers of Dolmio sauces – 0,3 kg/year
Early adopters are also willing to try sauces but less than innovators – 0,1 kg/year
Natural flavor 100% natural components
Early majority instead do not consume Dolmio sauces for the most part
- contact multiplication effect
Consumers’ needs determination as well as purchase barriers elimination are the important drivers for the high growth potential of the hot sauce market
Sources: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
3
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
The client redirection from traditional channels to unconventional ones will raise Mars` contribution margin and increase the number of successful contacts 1
The traditional sales channels make little profit, but alt. approach can use supermarket strength to redirect clients to other channels Strength
Challenge
Super & hyper markets
High profile clients concentration
Low contribution margin
Economy & counter stores
High contribution margin
Low profile clients concentration
Solution
2 Supermarkets are ideal for new contacts if the engaged clients are lured to high-profit channels via efficient packages & stands Attract
Why to buy? Natural Exquisite A win-win Where to go? (Look at 4) Affordable
Redirect clients 3 There is a list of conventional redirection options, but they face insurmountable obstacles and require out-of-the-box thinking Italian Shops
Few outlets
Large CAPEX
E&C stores
Low Pleasure
Sales Rep. failure
Branded Points
High costs
Technical Difficulties
Convey
4 That is why Mars should employ the alternative channels incl. complement sellers, online traders and mass event organizers Sales & Promo Channels Complement Partnerships Mass Events Online Trade
Why Yes? Mutual benefits allow great contribution margin Readiness to try out new experience at higher price
Small transaction costs and precise targeting
Summary
Mars should redirect clients from supermarkets with low contribution margin and economy stores with low profile client concentration to the high-profit channels such as complement sellers, online traders and mass event organizers
Sources: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
4
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
Implementation of AIDA model through digital marketing channels will bring new customers and increase purchase frequency 1
Search engine optimization (SEO) and Pay Per Click (PPC) advertising will help to draw more ATTENTION to Dolmio Key Words research
SERP improvement
PPC for instant results
Ads in Social Meida
2 More quality recipes will provoke INTEREST; social network activity, contests and real stories will create strong DESIRE
Page & Ranking of Dolmio in different Search Engines for “Spaghetti Bolognese”
Create a Dolmio blog Add more quality recipes Put QR-codes on the jars Share/Like/Comment Social network promotion
“My 3 Favorite Dishes with Dolmio” Contest Best story prize: a two-person trip to a Michelin starred restaurant in Italy Requirements for participation: 3 Photos + Short Story + 30 Likes
p.2, #11 p.3, #28 p.2, #18
3 Mars should establish partnerships with online stores to direct ACTION into a modern and convenient channel to get more contacts * 2015
2010
Growing online shopping sector; New-model-stores
Conventional online stores
Online Packs-ofIngredients sellers
Potential Partners
utkonos.ru 7cont.ru av.ru
domavkusnee.ru chefmarket.ru katerina.ru
Benefits
Convenient, Scheduled, Fresh Food
Pre-measured amount of high quality ingredients, no waste
2005
2000
Cost Structure, Thousands rub. 350
PPC+SEO
200
BLOGGING
150
CONTEST
We estimate this approach to bring 110.000 contacts
*Main food delivery stores
Summary
Building quality digital marketing strategy will make it possible to get 110 thd new contacts, while spending 700 thd RUR from the assigned budget
Sources: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
5
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
Partnership with sauce complementary sellers can help Dolmio overcome the most frequently arising barriers on the way to consumer’s hearts and so increase the sales 1 The best ways to cooperate are to insert mutual advertising leaflets, to make cross discounts and to attach testers of sauce to complementary products What to do Why to do Complementary products Profitable since… …conversion is Costs Efficiency Both partners insert leaflets with recipes that connect their products
1,5%
Make discounts e.g. “Buy pasta - have 20%off Dolmio Bolognese”
2,5% 45%
2 These will help Dolmio to overcome the barriers… Barriers Treatment
Makfa, Divella, Pasta Zara, Maltagliati
Chicken, ready to cook meat
Petelinka, Miratorg, Troekurovo
Pelmeni
Siberian delicacy, Caesar, Dunyasha Dr. Oetker, Buitoni, Fantasy,Casa Nostra Monini, Iberica, Vitaland
Olive oil
3 ….and reach its target audience Costs, rub 400 000
Customers receive recipes and products
300 000 I don’t know Dolmio
Customers try bonus sauce and receive the need
Dolmio is expensive
Customers purchase several bottles cheaper than usual
Summary
Different types of pasta
Frozen pizza
Attach a bonus little jar of Dolmio to partner’s products
I don’t know what to cook Dolmio with
Possible partners
Contacts, ppl Leaflets
46 314
Sales
55 181
385 620
Bonus jars
44 649
1 085 620
Total
146 144
Implementation of partnership programs will widen the consumer base and can increase the number of contacts up to 150 000 and cost approx. 1 mil rub
Sources: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
6
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
Starring at TV shows and setting branded stands at public occasions can be more effective than just TV advertising and sampling because they help to overcome the customers distrust 1
Being present at some public occasions with Bolognese-selling stands is a delicate way to reach the stomach, the purse and the mind of hungry customers Where Why Result What Target customers Public Time to eat Festivals Branded van
Fairs Other open air public occasions
Barriers are broken
Branded stand
Concerts Theatres Musicals 2
People will definitely buy Dolmio next time
Customers are satisfied
Cook & sell Bolognese with Dolmio
Appearance of Dolmio at TV cooking shows is a perfect way to make housewives use it, and Calve is a good example of this idea’s efficiency Possible partners: • “Edim doma” • “Adskaya Kuchnya” • “Zvaniy Uzhin” • “Smak” Audience: Thousands of cooking women and men Age: 25-65 Summary
3
Broken barriers: • “I don’t know Dolmio” • “I don’t know what to cook Dolmio with” • “I don’t trust Dolmio”
Goals achieved: → Penetration: consum. taste the sauce → Education: consum. Understand how to cook it → Saving money: portions are paid → Advertising Both actions will result in the boost of the amount of new contacts Costs, rub Contacts, ppl
101 000
Fests
1 113 380 1 214 380
TV Total
8 250 75 000 83 250
These costs are almost covered by sales of hot pasta
Branded stands with hot pasta will do advertising while making profits, and together with the presence at cooking shows they can result in 80 000 of new contacts
Source: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
7
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
The further development of the sauce market should rely on the wider distribution of 350 gm Dolmio jars which will increase turnover by 10 %
Sales, thousand RUR`
1
The last year sales indicate that 350 gm Dolmio sauces sell almost hundred times better than 500 gm ones leaving room for growth –4%
800 600
2 At the same time the weighted distribution of the two types of products increased and decreased by 6 % respectively –6%
500 gm
+ 388%
2014
400
2013
350 gm
200
2013
0
350 gm
500 gm
+6% Weighted distribution 0%
2014
20%
40%
350 gm weighted distribution
20 2015, Q1
Summary
22 +2%
2015, Q2
Sales, thousand RUR
3 The Mars company should raise the 350 gm weighted distribution to 4 The measure will result in a tremendous turnover increase of 10 % the level of leading competitors and consider making smaller jars 400
+10 %
300 200 100 0
2015, Q1 500+ gm
2015, Q2 350 gm
Mars should tailor Dolmio products to the tastes of the Russian consumers by relying on smaller jars rather than try to change the consumption model
Sources: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
8
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
Mars should tailor Dolmio promotion campaign to the needs of the Russian hot-sauce consumers to overcome cross-cultural barriers The sauces for Macaroni sell thirty four times better than those for the Spaghetti Bolognese revealing the Russian preferences Sales, thousand RUR`
1
What is the latest hot meal, which you have prepared?
+16 %
1000 800
2013 2014
600 400
2 Mars should position a line of easy-to-cook sauces for the most popular meals instead of those for the Italian cuisine
VS
+ 536%
Dolmio Meat
Dolmio Fish
Dolmio Chicken
44% meals
include fish, meat or chicken
200 0
Macaroni
Spaghetti
3 The Italian Wedding Campaign will make Dolmio products much closer to the hearts of the Russian consumers
The Dolmio go to meet Sofia`s relatives in Russia & find out new recipes!
Affinity
Overcomes Cultural Barriers
Integrity
Complies with Global Values
Utility
Shows new Sauce Combos
Carlo
Sofia
Summary
4 The promotion in compliance with the global strategy will educate the Russian consumers and boost their consumpion
Mars should tailor the Dolmio products to the tastes of the Russian consumers by relying on the most popular meals rather than try to change the consumption model directly
Sources: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
9
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
The Go-Go strategy will give Mars a total of 340.000 contacts & 12% sales growth over the next three month through the digital marketing, partnerships and entertainment solutions 1
Implementation of the strategy will be conducted over the next quarter and will include the following activities: Schedule
April, 2015
May, 2015
June, 2015
Cost Efficiency
Go Digital
Budget
1. Social networking 2. Search engine optimization 3. The Italian Bolognese contest
Contacts
Make Partners
Budget 15%
1. Negotiation 2. Concluding of contracts 3. Penetration
45% Contacts
Be Public
40% Budget
1. Negotiation 2. Presence at fests 3. Presence at cooking shows
2
Contacts
The Strategy budget ensures the highest cost efficiency and number of contacts resulting in a 12% increase in the Dolmio turnover Cost efficiency, RUR per contact
Budget, million RUR
0,7
360
Digital Public
Summary
Early Majority Early Adopters
1,1
1,2
New contacts, thousand people
180
Inventors
146
340
Partners
Total
Sales growth, thousand RUR +12%
82
110
Partners 0
10
20
0 Digital
Public
Q1, 2015
Q2,2015
The Go-Go strategy allows Mars to achieve a total of 340.000 new contacts over the next three months with the balanced 3 million RUR budget and 12 % turnover increase
Source: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
10
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
Integrated Minds are experienced enough to overcome any challenge in order to implement the MARS strategy with outstanding success
Nikolay Ageev
Sergey Staroverov
Tatiana Kan
Palamar Ekaterina
Executive Chef
Head of Tasting
Cooking Analyst
Inspiration Director
Champion of Cup Moscow Changellenge 2014
Team Founder of Integrated Minds
Champion of Cup Moscow Changellenge 2014
Semi-finalist of Cup Moscow Changellenge`14
MGIMO Master`s 2nd year International Accounting
ESERP Business School Marketing Management
HSE Bachelor`s 3rd year Faculty of Economics
FU Bachelor`s 2nd year Faculty of Economics
89264220333 beovel@gmail.com
89639696350 serge.staroverov@gmail.com
89143174551 tiana_kan@mail.ru
89030136613 ekaterinica@gmail.com
Motto: Integrated Minds – a team worthy of your trust
Changellenge >> Cup Russia 2015 >> Integrated Minds
11
Target Market
Redirect Clients
Go Digital
Make Partners
Be Public
Tailor Products
Assess Results
Appendix. Calculations
Source: team analysis, case materials
Changellenge >> Cup Russia 2015 >> Integrated Minds
12