Name/ID : Nadya Safarina/29119063

Class : MBA MM 5003 YP61C

Date : 22/10/2019

K9FUELBAR: AN ENERGY TREAT FOR DOGS

BASIC RELEVANT FACTS

 K9FuelBar is a new energy treat for dog created by Carol Hutchinson, a culinary nutritionist with
several years’ experience in the Canadian food industry.
 There’s no current direct competitor for K9FuelBar in Canada, but there was a company in the United
States called TurboPUP that had really similar product and could enter Canada at any time.
 These are following alternatives Hutchinson consider to ensure effective market penetration:
o Product
1. Made by experienced nutritionist that also a dog owner.
2. Nutritional value.
3. 100 percent natural, mostly whole food ingredients, baked locally.
4. Has two flavors: peanut butter and liver.
5. Each pack contained two of energy bars that weighed about 31 gram.
6. Biodegradable wrapper.
o Pricing the product
1. $2.99 (premium pricing, same level as TurboPUP).
2. $2.79 (intermediate pricing).
3. $2.59 (penetration pricing).
o Distribution
1. Distribution through their own website.
2. Distribution through outdoor sport stores (such as Mountain Equipment Co-op).
3. Distribution through veterinarians.
4. Distribution through pet supply stores (such as PetSmart).
5. Sell through online retailers (such as Orvis Company Inc. and Amazon).
6. Use various trade shows.
o Promotion
1. Maximize the use of social media.
2. Give 1% of contribution to build a partnership with charitable organization, Veterinarians
without Borders (CSR).
3. Purchasing list from certain publication specializing in outdoor adventure and then follow up
with direct email to selected groups or retail partner.
4. Sampling the product.

KEY ISSUES

Carol Hutchinson as a founder of K9Fuel bar has many things to consider making this product
successfully penetrate the Canadian market. She needs to define and attract the target market and
consider all of marketing mix (product, price, place, promotion) and formulating three-year marketing
plan so K9FuelBar can penetrate the Canadian market. Another thing to consider is even though it
doesn’t have any competitor in Canada, Hutchinson must carefully consider TurboPUP, the US company
that produce very similar product to hers, ready to enter Canada market at any time and has already
penetrate the market successfully.

ANALYSIS

The market of K9Fuel Bar is really attractive. It was stated on the case that Canadian households
owned one or more dogs, for a total population of nearly 6.5 million dogs and the popularity of animal
ownership is still going. By seeing the Canadian dog treat market, specified on 5 percent of the
population that owned a dog and were involved in outdoor activities we assumed the annual sales could
reach $2.9 million which is really profitable. Besides, in Canada K9FuelBar has no competitor. It means
K9FuelBar has less competition and has possibility to obtain high margin.

For product pricing, I recommend to set the price at $ 2.99 (premium price). The only competitor
K9FuelBar has is TurboPUP that selling their product for $ 2.99 in US Dollar. If it converted to Canadian
Dollar, the product TurboPUP sell will be about $ 3.92. So even we set the highest price, this price is still
significantly lower than its competitor. From financial analysis, setting the price at $ 2.99 will make the
company produce fewer units to the other price point and by choosing this price, the company will meet
the target faster and will able to pay promotional cost.

Year 1 Year 2 Year 3

Revenue $ 15000 $ 75000 $ 150000
Gross margin $ 9000 $ 45000 $ 90000

COGS $ 6000 $ 30000 $ 60000

Units to achieve Year 1 Year 2 Year 3

revenue
$ 2.99 5017 25084 50167
$ 2.79 5376 26882 53763
$ 2.59 5792 28958 57915
The ingredient of K9FuelBar that mostly made by organic food and its nutrition also can make this
product viewed as high quality product compare to TurboPUP. Apart from that, the characteristic of the
market is compatible with premium price. It was stated that pets more likely to be found in households
with higher income (greater than CA$100,000) and the pet owners preferred purchase nutritionally
enhanced foods and more attentive to value-added health claims that suitable with the offered attribute
of K9FuelBar.

About product promotion, we have to consider that the company has low budget for promotion
cost. I will recommend using social media and social responsibility with 1% contribution to promote
their product on the first year. Promoting through social media may need a lot of time, effort, and
creativity to make it appealing to customer but the cost will be minimal. By using social media platforms
such as Facebook or Twitter, Hutchinson can educate the customers about the product, it can create
awareness and interest and it may lead the customers to check in the website and place an order.

Besides the traditional approach, I recommend to do the promotion by creating public relations
possibilities. By partnering with Veterinarian without Border which is charity organization, it creates
positive image and shows social responsibility of K9FuelBar. It can promotes its existence as the ‘well-
being’ product and it will give K9FuelBar higher moral ground for the premium price that we have set
before.

For product distribution, I will recommend using the website and trade show for the first year. It
was stated that Hutchinson’s website is already built and fully operational. By using website as one of
the distribution channel it will reduce the cost for operational activity and it will be easier for customer
to order. And in accordance to social media as one of platform to promote the product, the possibility to
lead the customers to visit the website is much higher which means the possibility of customer
purchasing the product is also increasing. So using their own website to channeling their product must
be put into the consideration.

Besides distributing on the website, the other alternative is to distribute the product via trade
shows like One Kind of a Show and Sale, The Canadian Outdoor Adventure, or The Royal Agricultural. By
distributing the product through trade show, she can meet the potential customer directly. She can
educate the customers about the product and answer immediately if there are questions asked by the
potential customers. Doing direct marketing or zero-level marketing give her chance to sell the product
directly and reducing additional fees and she can give detailed information about the product.

Because of the limited budget and sources, I just consider several using of the promotion method
and distribution channel. But for the following years when the sales increase, she can distribute the
product to other channel especially through outdoor sport store like MEC. One of the reasons is the
person who shopped in MEC was exactly the group she was targeting and once MEC had committed to
carrying a product, it required all retail stores to stock it. It means she doesn’t need to call on individual
stores which will be really beneficial for increasing the sales and reduce the promotion cost.