ilasq:

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 co gory had been a challenge partly because Sathers management had targeted the Nuts, \rural Snacks and Cookies Category for growth, and partly because she had been given ffi responsibility for the category from the first day she had started at Sathers. That meant &lt she 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 i duced earlier in the year. After a fast start, sales had lagged. Now, with lack market-monitoring reports on her desk, Jill was being asked to decide the line's fasAs she thought about possible alternatives for the product line, she knew she co*Iill commission a new round of research. But pressures were mounting to line's performorc-soon-or drop the line completely.

liir {'k

xnd
History
As 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 spirit wouldn't allow him to give up, he instead began to distribute cookies in bulk to area cers, adding other products as time passed. Ten years later, his son Kennelhjoined the h ness, after serving as a bomber pilot in WWII. Kenneth implemented the philosop$ value by selling packages ofcookies and other products such as almond bark, four ages 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 turning came when a number of salesmen le ft the organization, leaving Sathers shorthanded. . stop-gap measure, Sathers management offered discounts to the customers who would der by telephone and stock their own sheives. Consequently, Sathers became an earftrant 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

Snack.y ro

Go

3Ss

f#j"l j::ltji;i*,;:"*****:Ti:: ?:::ff5:jffi:',H ;Hfi,'j:l::.T*",dispray: hanging ce,,ophane bags j,;;:ifl 3:i,xH:1fffi1::r: ;:Tffi iff j..jri:ir for their o"nn,,ff :::*"I#::;;,::i::H:;:,"1ffi :;:kT:T,;: ;:.1:il:J;:ffi1,ffi ,,or*u."i.nn'eti;;, 119 "iJJil:'#.T'1,:i::::.,:f :i: jl :",:r,'"o uie, i, liijl g $' :90, s",1"* ; ".,**,zz account uv li::r,*,1" rhese stores teO io ttre il;;; io u.;;;Jff;i:fi.[-ffiiTil:i:T::',H:T; "#Hffart packaged
;;Jff
candy and candv Further ulquru:lion,

Still emphasizine repackaging (called "rebagging,,by some in the chased a nut roastin"s operatiJn trade), Sathers purr in ,rr. rso0r, expalding the product

can candv companv in. r985. una un uaaiiio""r 1980s' Sarhers acquired po*"rriln..,

r;"il;;N;w

orreanJma"ft;;;;;;

in "ra, , ii"o'i,"r.,,,i,".r",".1^raf"n,,.unuru.,urer rhe rater

,nr;;;ffi;,il;erarion

line beyond cookies pranr from Ameriand drs_

tn 1992. Sathers uog.radecr i,r Bv r993' Sathers'sr:3, *iriion

I994, Sathers broadened ,r,"

ness, Flex-o-print, which would

r J",i}l o' ;;ii,i"T, " :!l$*{r .::#Lf; "*Hftffi :fi ts goar t gr' tv p... Jn, rh powe il's acil;iJ;'"[Ti[::i:",
i
i

e.

increa*

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ortt''

or"o""iri;;;ffi."

gains. rn "rsares in tr,e Hopt in-s That year arso u"'i''"iil"nr'"s"r candy company. u "0.*,,"" wisconsin-based

;ffi r".fl; " :!",..nlh straight r.",

ri"j o""O"ging capabilities. lilii:J.il;]**t n"r"Jlll.'i:u."r;;a.rri,v *i,r., roborics

lxi]'
operarion.

ffi

ee,, bringing the

i:ffi fin"#,:f
Operations

Round Lake facility.

!fiT:fi HIJil:?;'"j#":**: jlr:;::.:"."':y':e,::3f r m anagement srr e was' o"ixif

i

4r r/rl'ecror of Marketing, ot Marketing. a newly created position. ;n 1992. Mr. position, in rssz.'Mr. Halverso" insrir,,to.r,r^ Ldrcgory i"rii**a"rr*rr u,! ^llDirector rdanager.organizational luanager organizati his. departmenr; some "a,u....,n his.departmenr, ,o*. Cur.*o.u o"rig" r", Mannser", positions were ^^.,.,1:9:|l unfilled. (See Ma

3rffin:::, 'ffi *"fi.*j:H::,':, rrurb.,urer, Sarhers hired a proressionar rffi'J',gffi ;:ilil ::?J"IiJ?,i::".'":il;".";ff;ff :',::;:":,i:ir#:H i:::?::J::f :"", $;;'";x};:, n'i:i: i:*$fiil; iff ililx::"::",?Ji;l: attu r-rSrdnt tn ued to hold. Michael Halverson XJifi"ji j:il,tlli?; j::r.:;;;Jeilffi ;i::tHi:?;',T::l l. positions he contin*il;ilv
199

d;;;ft;;il;

il;

iffi i J:,Hf;:l"tH"$iii: "T:il; "Hl

lf ::ffi :::;f

rlli:*

:;lilrHx'i",;Ts::l-:"":'"t":fd

bag candv, nurs, naturar snacks, and cook-

a description

centrar arm and the fleet of trucks incruding the teremarketine r",lirir,o""r,"" lo::"rions. una in the U.S. equipped with a $5 mir1111^10uot1;; "r.o cuniau. The prant wa! r*"';';operarion, r"" roborics and vision insne*ion ii"es using the ratesr system,

orants Hoi*in.. oirniu"ii* cenrers in ctuuunooJu, a Minneaporis oirr*on, Frex-o-ffi *"*.r;.1;;,;;ffi;ffilnn.uporir. pennsyr_ The 350,000 square foot ", fac'itv;r'R;;# part of Minnesora) was !:r" tp"p"l"ii""^oti,'* the southwesrern command suburb' and New orieans, and in its vania' and Round Lake. and ar

Hanging bag candv *u! sutt ..r'mainsray: to fifrv percenr of the ue'icarv 11.'.I:: for sr.00..varue Line generated up i"i.*r"i.o iJ;ianv,s s r 50 mirrion ploved approximarerv inrJu"nu"r. Salhers em_

i{,liilTi:rr":il:::*l:r:*:*i#L+r["illiJJ';.1;xTii';;iil;Uff iJ::; and private label candy. or"u"i.ur.gorv.; ' is* e-rrliiiJ'rj.
r.500;"";l;";;;;;,ii*"*n,
in

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il

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,*

;i.,|"::::fr:iii;; ;il.. week s, o, rac k

cl;;;;ft;;.

Lake

gave so ha d a

3$S

Section

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

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t

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Red and Nalural Pistachios, etc.);

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Case

Snacks to

Ca

3Sy

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

Candy Market
candy consumption, in generai, was on the rise in the U.s., from l6 pounds per capita in 1986 to almost 22 pounds tn 1994. with a retail market of $12 to $15 billion. Reasons for the growth varied. Candy was often treated as a reward, even in (and because of) troubled economic times. Value lines were likely to do better in recessions. Some experts believed that the growth had occurred at a time of increasing health-consciousness because people
were eating better overall, so they were more willing to reward themselves. About eighty percent of consumer candy decisions wers made at the retail store.

lrryy candy, fnint

The candy market could be divided into two parts: chocolate and nonchocolate. Since chocolate candy made up sixty percent of all confection sales, Sathers competed with other nonchocolate producers for the remaining shelfspace. "[The nonchocolate category] is a tough game," according to Jan Kitt, a sales and rharketing consultant who specializii in candy. "Good hard candy tastes the same no matter who makes it. lt's very difficult to get a point Of difference . . . Since candy is a commodity business^ distribution is the name of the game. If the product is out there, it will be purchased. The more it's available, the more 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, ahead ofCornnuts, Inc., and E. J. Brach Corp. And, Sathers ranked seventh ofall nonchocolate brands, ahead of Tootsie Roll. After-tax profit margins in the candy industry ranged from two to five percent.

Sathers' Strategy for Success

3w sags;

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 service." 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 penetration they've had in the East has been nothing short of phenomenal. you can,t go irrto a 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 very good 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 president 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

Competitors and the trade recognized Sathers'competitive advantages. "There are a lot ofrebaggers, but Sathers'strength is in distributing the product," according 1o Kenneth McCarley, of the winona Division of Brock candy company of Chattanooga, a com-

Fink, Laurie

(1

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

3SS

Section

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."2 Vice 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:., the fwenfy-first century will be to "continue to develop our position in nuts, natural sm;icookies, but we will dominantly be a candy manufacturer."

-ir

.m...............un

The $n*{:k$ {{} {l*

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

Development of Snacks to Gq
When 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::irm
snacks 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 ;::,:tm zippers. 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*; itvealed 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 .-;":': u keep it from dryin$ out and becoming stale, and that the package should be easl'ti :i:tm and 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'

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 -ialr or telephone surveys, for instance.

':,r:*

7. Focus Groups*Phase 7 The firm conducted two focus groups in June. 1y*: u explore 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; xtermining 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:nions 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

Sneck\.ro

Go

3Sg

to three package designs; and interest in a microwaveabie snack nut product sold in convenience
sfores.

either not werl recognized or was known for candy. Respondents, perceptions were drawn from the sathers' "Two for $ i.00" package, planters' Mr. peanut, and Fishert colorful fcril packages and advertising. A projective technique used to ascertain brand impressions resulted in the following profiles.
Sathers: unsophisticated prain, common! not necessariry downscale, but thriftyrfrugal;

through a filrn or cellophane "window" The participants' attitudes towards brands revealed that Sathers was

Results reveared that these focus group participanrs snacked every day, eating both sarty and sweet snacks' while snacking' for them, was often solitary, nuts were associated with parties; as well as with routine snacking, and were chosen for iheir taste, convenience. and protein' 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 was often driven by mood and a coupon or sare, and included a variety lrou, ,yp"r, rather than just one type. snack nuts were purchased in discount, gro..ry, unJ.onu"nirn.. stores, as planned and impulse purchases. In terms of package format, the advantage of cans and jars was their resealability, while bags were more portable, more appropriate for one of several snacks, and more easily disposed 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 preventing spilling' 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 problems 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, easy to 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 positioning alternatives, "freshness," "convenience,,, and .ihealth." ilr"r. pu"tuges were larger and more colorful than the traditional sathers "TWo for $1.00" heaie, pact age. participanfs seemed 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, the respondents 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

Planters: conservative/traditionar/crassic,
class, aged 50s;

stable, ranging between affluent and middle

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

addition of an objective about attitudes toward salt, ancl the omission of the ..microwaveable" objective. Tampa participants'responses about snacking in general and snack nuts in particular were very similar to the chicago groups' responses. However, brand was more important for these consumers. They purchased from a imail .,known,'brands set of (pranters, Eagre, and Fisher, most often) partly because of their confidence that better-known brands were fresher, a concern in the hot, humid Florida climate. Planters'quaiity imuge wus favored for

2' Focus Groups-Phase 2 The research firm conducted a second set of two focus gr'ups in Tampa in August,. rgg4, to gauge reactions to revised positionrng and packaging designs and to assess ziplock pu"t uging for Sathers. The qualifying characteristics for these participants were the tu*" u, rerori; the purposes .u"r. tt . ,u*e, except fbr the

3t$

Section

Marketing Managenrent Cases

its duration in the marketplace, availability, and advertisements. Brand impressions resulting from a projective technique included:
Sathers (based on the traditional "Two for $1.00" package): Younger group members suggested a teenaged, downscale male. Older members suggested a 2040 year old male or fcmale. unsophisticated and nondescript: Planters: older gentleman who enjoys the finer things in life and has finances to pay for them;
I

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

ofa ziplock package closing were universally favorable. Tampa respondents preferred the "freshness" positioning concept over the "conr-enience" concept. ldeal positioning, however, would include both, plus being easy to opfl and 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. Of four 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 nrn cartoon'characters, a design that they believed to be more attention-getting and that up graded the image of the brand. Some expressed concern that the window didn't reveeenough of the product within. While the presence of salt was a concern, particularly among the 35-44 year old conand execution
sumers, most agreed that salt was an important ingredient in snack nuts. "Lightly salted" nuE were viewed favorabiy; most group members did not purchase "salt substitute" products.

3. Personal Interuiews To enhance and crystallize these findings, an additional research effort was conducted in September, 1994,by the same research firm. In this investigation. seventy-six respondents completed personal interviews at two locations in Chicago. Respondent qualifications were identical to the earlier studies, with the exception of extending the upper age limit to 54. These respondents answered questions about the ziplock
features 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 also chosen as the best at gaining attention, conveying a quality product, and conveying a premium-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 Go package with competitive brands'packages, Planters outperformed Sathers, but Sathers was rated higher than the Fisher package.

The Snacks to Go Program

With these three research reports to guide their decision making, Jill and Mike Halverson developed the program for introducing Snacks to Go in the spring of 1995.

Products
Products 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 the ziplock package crosing fearure, *rri.r, appear to il;;year olds. To accommo_ date their on-the-go lifesg;le, the product ''ouia wodi L. u*irulr. in'JonJ.ni"n.e stores. To ensure freshness, a 'hitrogen-flurhing" p.or.Jur" ,i,o"ld, the packages. Some produits, parricuiarly sheiled i.oast.a s,rnno'".. Nuts, had rc"d;;; spoil when exposed to oxvgen' rn packaging,

*d;

il,r;;;il

cartoon car, the other on in-line skates'.depicting "on "", iir. go" activities. roiir".ignt of the characters was a clear windoq approximatelv i'by r.s- oirfru/;;";;,;;;r, above which read item name in a half-inch band, black the f"tt.i, on white background.

the package, pre_ serving freshness an{ ensyne a longer sielf life. ri.," p.or.r, be necessary for nonroasted 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 printed in large yellow letters across rhe c#er utu" po.tlon. g"tor i1.," l;ft"*, on the left side were two cashew nut cartoon characters uearing helmets, ,rriJ"g'" ,po.ty .ao

"nitrogen flushing" w3lrdlernove " rh;;;;;"flom

;;;"* ;

,o;il;*

*,*.,

near the package top, beside

The brand name "Sathetrs" was embrazoned in harf-inc"h

a.

very top, a red stripe crossed the package, with the woros ..ztp_peK,, and ,.Resealable Packaging" identifying the closing ieutu.Jin whire letters. The package backside conrained directions for opening and,reseali"ng th. ;if".,nrtrition facts, ingredients, distribution formarion, a guaranree a'd thank yJu in*"rJJg. from Sarhers, ; c and a repear of the cashew clraracter in the red sporrs
These packages were desrgned to hang on a state-of-the-art tubular brue metar dispray rack approxim aterv 5' high bv r 8" wide, ii u it r""-uy-{b-, fb;;;;;lree facings of an item in a row with four rows, approximatery six bags deep. top ortn" oirptoy repeated the yellow-on-brue "snacks ro Go'' name r"a with ..iathers,,

red banner proclaiming ..NEwr

,.d Ltt.r, on the yelrow band n.r."r"ur. package.,, At rhe

car.

#;;.

rl*

smaller le'ers. The rack would hord ".i, six cases'of p.oourr

rli pu.rl*r,

unor.zip_peK,, in somewhat
,

Pricing

u of each product).

binedmargin""'"'iixxr{fi

;:'ffi:,tl:#o;::j;*""*

reature required a minimum package size, the price points ror

nia Mix (6.25 02.),Trair Mix 17.0 02.)..rJir-,lrr"a nourr.al"unnoio.. Nuts (9.0 02.) .onurd be $1.4e, whire SalteiJ-in+he_shen s;;n;;;;Seeds (6.25 be sold at $.8e. A s'99 price poinr was considered ror u, iou, iu:f:c.:.J^r, it was nor profirabre to produce the smaller package wirh a ziproct ctosing-,iu, ,r,'. s.9l price po;nirl,orro have r.equired. Suggested retail prices were

ffi ff ffi K*::HJJJJ::;f;i'::"*ffi d:

";.;,;";l;

not printed orithe packages.

Promotion and Distribution

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

:J;?i*?Ji: ii:',::l,Tj:: j.

rack 1ar

;;;;;;;;;p,"ximatery

ouo,u, estabrished soo .acr, to sathers) wourd be

executives were designed to successfully modvate the sales 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, sa re s quotas o, ;,; month duration of the progmm,,case sares by rut"rp".ro-n and regionar sales would be posted on a taily board. At the end or tr,. ro*tr, alr salespersons

Sales incentives for the account

il::

",i:#THiJj'tr#15%trf; "T:f: 1uJ;;;.#[uota) ;;,

nKHl&?Y
Line

rhe

Snacks to Go Product

SATHERS"
The National Value Line'

XF,,S'T 4E
Snacks to Go Sell
Sheet

Case

Snack; to

Go

3.13

sATltfnS
The Nariorul Vatue

lntroducing...

Liil6

,uu"

snack market. SATH*6,"',i,"1.i, tresh ro.a.sted nuts are now available in convenient resealable zip lock oack Eat some now

SATHERS. has created a brand new innovation rn the nur and

,on,'"]#;;;;;i"'"ug"s'

disPlay.

Your customers will love the convenience of a resealable and spill_proof packaop. vour rmpulse sales will soar with"the colorful and bold graphics. The unique and dynamic floorstand will attract consumers to trre - snacts'iJ Co '-"'rJ rv vu

"

we oner-a

The Snacks to Go,, package will provide a fresh ,nu.k 1.p-l:tf

Catifornia fr/ix, Trait l,lir, Su t"O'_inSunftower Seeds and sunrro*"i'r,rJir"',

f

#,;-ffi

?,i}"Jyn,:me

vorr-,se

it I

ii"fi

Item

C.pie
5

Description
1

Case
'Pir_,k

200

520

:he]tgg Roasred Sunftower Nuts trail Mix

California Mix Salted-in-Shell Sunflower Seeds

s202
5203 342A

12 12 12
'l)

53P
s1.49
$1.49
$ 1.49

Floorstand (provided bt
Round lake. Minnesota {s95}

sil;;

with prJg/ram panicip$atiint

SATHERS
The National

i6l6?

Valle line,

packages ro be dispraved;" rn the selling efforto distriburors

; :;y,.:;,Hffi : ffi ; i:lf :J:ii: : lJ"f];; u.rri.u,ne ;"";, u"' -".' b; ;;;; ;u 1.., *o o u. o'd.. il''" ,0.",r, evenr, such as a "' T"""::,1? ;'J;"il ?:T q;,F'",*_::: #Ilnilfi ljJ:iT*fii.l ::i:i: j;and rhe bord oraphics program orrn. pu"t agiiJ tn aaairio". "JlffJilTiffi:liil:Tl,T; rendering ot what ilreiiipray , ;li:h*,, Iine arr (an
F"r

achieving quota would earn a choice ofa Sonv e sa r e Jp e,so; h sh getawav package worth $50b'

;; ;.

ilil, r;

;;;;";*ion

u,

"

planogram iu-oiugrurn of product ih";;;i,;;;#;*ract), aand r;il;,,"re designed ro aid (r;J;;il;'4a4dj.d";;;r,la.s binding between

,".k;."td i;ii.it:1,

artist,s

?14

Section

Marketing Management Cases

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

Art

SNACKS TO GO LINE ART

clusively for Snacks to Go product. The direct mail kit included a large sample of the Snacks to Go ziplock package, a sales flier, and an introduction letter to the distributor's buyer to familiarize each account with the program and prepare them for the saiesperson,s
visit. No consumer promotions were planned.

Sathers and the retailer; among other specifications, it stated rhat the rack would be used ex-

The Roll-Out
Sathers would market Snacks to Go, convenience stores in the Southeast region were targeted for the March to June program roll-out. Specifically, this included oklahoma.

While convenience stores throughout the nation were the eventual outlet through which

Case

Sntrt.ks t<t

Co 315

EXtdgsr?

4{

Snacks to Go Planogram

*Ut*F

SlrtLt.&,l.*S1?}.
::...r,

TFTA:IL

icllX

{r{lK

TFt \tt*

#{t,x

&ttx

F*RiE${

!l{lx:

tlA{rF*Rt\tr.a
-:

':

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

S{s.S$trtlFLt*r'x

ssg,tls,

cts,suetrt,bvR '

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 heaviest concentration of sales was i" th; N;;;ast, the Southeast *u, u ,r.onger area for the sathers brand. competition in the Southeurt *outa corne mostly from planters (with 1994 rnarket share of 35.2. pe^rcenr), Fi;h;;i3.8.percenr), and Eagre (2.6 percent). private labels accounted for rg.2percent *a.krt shar.. rir..emainie. irrrr" market composed of many small, regionar was brands. David and s"",,ulr'ti"*n in,i,. sunflower

16

Section

Marketing Management Cases

trxfi-"&t&tT Snacks to Go

4*

Contract

SATHERS'SNACKS
Sathers lnc. (hereinafter referred following:

TO GO PROGRAM

to as "Sathers") and the participating customer (hereinafter referred to as the "Participant"), agree to the
with themerchandising floorstandattachedasExhibit Aas

-, Satherswill supply Participant '1.

2.
participant
floorstands.

specified below at no charge to the Participant.

an ongoing basis to

will order sufficient quantities ofopenstockSathers Snacks toGorM(zip lock bags) on fill and maintain distribullon of Sathers Snacks to Go'" {zip lock bags) on the

3- Participant will display only

Sathers Snacks toGo"(zrp lock bags) proclucts onthef'oorstand. The merchandising floorstands remain the property of Sathers lnc. becomesdamaged or additional stands are neded,participant agrees to contact

4. lf the floorstand

their Sathers sales representalive immedlately.

5.

Floorstands

will be settoaplanogram agreedtoby Particrpant

and Sathers.

This contract becomeseffective on the daysigned andwill remain in effect until cancelled by either th

Participant or Sathers.
Particapant:

Number of stands per store: Number of stores:

Sathers lnc. Signature: Title: Date:

Total floorstands requested:

Siqnature:
Date:

HIADQUARiSRS:

WIITE COPY

SALES:

YLLO'lt

COPY

P,ARIICIPANTT

PINK COP!

s-221 i295)

seeds and sunflower nuts categories. The Snacks to Go line would be competitivel-'r priced (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-ap propriate distribution. Snack food presentations often began in January. One hundred ten distributor accounts in the southeast region were selected, to be sold by seven account executives and a Regional Sales Manager. The goal for this region *'as to have 10,000 cases and I ,200 diqplay racks placed by June 30, with sales of $650,00:i by December l, 1995. The initial presentation to the Sathers sales force occurred February 27, at the American Wholesale Marketers Association trade show. Through March and April the sales force introduced the Snacks to Co program to their targeted accountsAll accounts had been presented by the end of May, with product completely placed S the end of June.

EXHIS'T 5
Frice Comparisons

Case

Snac,ks ks

Go

*.r?

iil$Er

Performance

whire ';;::';ll u,orsrooi*"0,"*ii'll;fj*i1ilx\*i*:*,1l,ll-":';H:#;ffi

srowed again.

*nH** j*#5[q5:rffirr'i;:L:xi::Tii''1':'1':tYj:::':;;;;ffi; a a'umutr. Y"l"l il il'fi"','. ;:'illl"f,l'1,|'i,ii

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

ffiTJ"l'Jf; .ffi :: : i:'t'' "";; u;; ; ";" s"..,,r"," ,n. nerwork. of the , "r,r.L u"iloi;j11]ttn: ,,1,.u,
sa
r

Beginning with initial placernenr, rhe sales fi rce

tra

cked

es

r th e

c"',[:"y:a*:,r.*il]:

j1*d:x:tr#:;T.tlT;ry1:$i1;3;,",ffi
June's srow ru1."

lhe June sales reo srore. very .to* n1.,.,r1l"r'o*.4

*j:f

Lril1;',iii'H.ffi
corsultation

*llTltioll

p'og';H;'l;il:lin
t

'it"

no*"

lr";;;'",";
b, e m J

x$*

ffi

*:1;;x1;[**#i

:fl:1J : T,mt

*;i;t

lll

fr

::

*s:, n g pr.

a quick i"".".1 ,irJ, ie; had been distributed. a;1t"".1 sheu

#t#JfiItri,T,?":yitt,'n:rT#$i:l;t1':!:i;Jl:i.[":l,li;'il1".H b. * ;ili;J* }j i::d_,. : d *T:$t['.:'1"[?iuct had *, r i:n"* *l *: # film. and distributed. nl ni resilient {:: !:*TH [: ,}; atready;;;; ffi: uu"r,i.ooo teeking specific

,i"t,

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

;;;;;ffi;'lt
ruf

reasor

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

ror the declining sales. Jill had asked for

g.xa"'itm'T

$
--a_
Sunflowe'

Weekly Case Sales Patterns for Snacks to Go Products

i)

seeds

ct

l:311

c,.
'iirS0l.
:t100r:

=,'

Di

Sc

::tr::a:atiit,::ru
rtliltlr:i:ai:r,url:l::i:riir,::

troi.

iStAFi:

r.+

vairi!

Mix

t1:s.l

l0q.

sx$"*rffig?

Cnnvenience Store Survey Results*

rx*t8rT
(concluded)

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

&x!-{rs&?

Comments from

Distributors'
Surveys*

*Thes comments werc ollered by thc twenly-one distributors $4ro returned the surve!'. Additionally, they reported that some conveoicnce stores utilized the rack. wbilc orhers plmed the Snacks to Go products "in line," on the streliwith other snack products. Of those 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 other localions $ ithrn thc storL'.

3:S

Section

Marketing Management Cases

Mike Halverson was anticipating her review and recommendation. What would she tell him? She could commission a new round of research, which should include store tests at grocery and drug stores, in addition to convenience stores, to monitor cas sales by product 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 more thought to exactly what she would change: additional trade promotions? price changes? additional design changes? How about a product change-a switch to candy? But, would that be consistent with the Snacks to Go concept and William BradfieldS charge to develop the snack 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, as she packed the sales and research study reports into herbriefcase. It wab going to be a long weekend of careful thinking about what she'd recommend to Mike on Monday morning for the future of the Snacks to Go product line.