Estimate of Size of Dog Food Market

Estimate of Size of Dog Food Market

One in five households in the United States has a member of the family that isn't human. 53 million families can call themselves dog owners, and this number is growing at a continual rate each year. Annual sales of dog food nationally is $6.08 billion, 3.1 billion of these sales derive from supermarkets. Boston holds 1.2% of the entire U.S. population or 3,548,809 current or potential dog owners. If the one in five households being owners of "mans best friend" holds true in Boston, only 645,238 people in its population are pet owners, leaving a large market open for opportunity.

Target Market

Many adults, single or married, that are between the ages of 21 and 54 consider their pet to be a part of the family. This is why Show Circuit Dog Food's target market will consist of this age group.

The first four categories (parents with school aged children, roommates, childless couples, and parents with younger or older children) are specifically the target market for Show Circuit Dog Food. To say that the dog food is for the upper class would be an overstatement by the example of the target market. The basis of this product is targeted toward the middle class to give them the feel of upper class by feeding a "member of the family" high quality food.

* Average consumer use per week

According to a local veterinarian a healthy dog should eat 1/5 pound of dog food for every 10 pounds. The average small dog weighs about 15.4 pounds, hence this size dog generally consumer 4.8 ounces of food daily, 33.6 ounces a week (2.1 pounds), 9.3 pounds a month, and 111.6 pounds a year.

The average medium dog weighs about 28.6 pounds. These dogs generally consume 7.5 ounces of food daily, 3.3 pounds weekly, 13.1 pounds monthly, and 157.5 pounds yearly.

The average large dog weighs about 41.2 pounds. On an average, these dogs consume 13 ounces of food daily, 5.7 pounds weekly, 22.75 pounds monthly, and 273 pounds yearly.

* Positioning relative to other dog foods

From the consumer's standpoint, this particular dog food should be positioned above the other brands, be it dry, moist, canned, or treat. The history of the frozen food should allow Show Circuit Dog Food to position the product in the minds of the consumer as upper class, yet affordable enough to be on the grocery list once a week. Show Circuit Dog Food should hold a sort of "authority" over all other dog foods.

* Pricing

As stated in the case the cost of production, freight, and packaging of the frozen dog food is $6.37 per case of 12 tubs containing 15 ounces of food. A 7% markup for food brokers' commission and a 22% markup for supermarket commission should also be added to this total. Including both of these, the cost per ounce is about 4.4 cents. Not included in this price is the $30,000 slotting fee, and $400,000-$600,000 cost of start up. The cost, including a 15% profit for TPF, is about 6.5 cents an ounce, 97 cents a tub, and about $12.00 a case.

Canned dog food prices range from 5 and 10 cents per ounce. Dry dog food

prices range from 3 and 9 cents per ounce. The range for treats is between

12 and 45 cents per ounce. The range for moist foods is between 5 and 7

cents per ounce.

* Opportunities and Challenges facing TPF

Tyler Pet Foods has many opportunities facing them with Show Circuit Dog Food. The market for this type of dog food is very open; there has been a substantial growth for premium and super premium dog good. An estimated $15 billion is spent annually on veterinarian bills, food, clothing and toys for dogs. This amount is continually growing along with the average of dogs per owners. Another opportunity is the fact that TPF will technically be the market innovator, leaving all dog owners as potential customers. The positioning of the product is an opportunity as well. The history allows the product to be seen in an "upper class" light. The idea of feeding a family member high quality food will spark interest in many dog owners.

As there are many opportunities, there are challenges that face TPF as well. Being a market innovator can be a double-edged sword. Instead of watching

another company test the market and jump in when the time is right, TPF has to basically create the market and pray for the best when they put their product on the shelf (or in this case, in the freezer). Another threat is that many consumers are brand sensitive. Another product added to the market might be just one more product to push out of the way in search of their

favorite brand. Some consumers might be a little concerned with the thought of frozen dog food. Some concerns might be thawing, time constraints, safety for the pet, freezer space, and quite possibly (depending on the consumer) the closeness of the pet food to the people food. Concerning retail behavior, some retailers might react anxiously to taking on such an innovative product, considering it somewhat risky.

Success in the Dog Food Market- KSF's

One main key success factor for a competitor to be successful in the dog food market is proper utilization of advertising expenditures. An average of only 2% of sales is spent on advertising. The effective use of advertising assists in brand awareness which in turn assists in brand sensitivity. The placement of many of the brands is also a key success factor. Purina, for example, placed itself as an upper class pet food, and in turn holds 30% of the market share of dog food in supermarkets. Pedigree, which placed itself as healthy option for dog food, holds 19% of this market share. The placement of each runs parallel to their market share. The distribution of each of these products is also a key success factor. Most of them are nationally distributed.

* Tyler Pet Foods SCA's

Show Circuit is placed as a high quality dog food. This product placement is an asset to TPF. The price of the product can also be considered a sustainable competitive advantage. Consumers will be content with the knowledge that they are paying average to just above average price for a considerably upscale product. TPF has a large promotional plan that will reach out to many of its prospective customers. The plan includes half and