Kayem Foods Case Analysis

MKTG 702

Erica Henton

Kayem Foods, Inc. Case Analysis

Central Strategic Issue

In the case of Kayem Foods, Inc., the Central Strategic Issues is as follows: How does Kayem Foods sustain the growth of Al Fresco chicken sausage and increase the market share, and do so using a very limited marketing budget?

Al Fresco Chicken Sausage had seen tremendous growth in 2004, at least partly due to the buzz marketing campaign put on by BzzAgent. Matt Monkiewicz, the director of marketing for Kayem Foods, Inc., had two weeks to determine whether or not to utilize another buzz campaign or follow more traditional advertising methods in order to drive the continued growth of the Al Fresco product. Because of such growth, the marketing budget for Al Fresco had grown from $90,000 for the 2004 fiscal year to $185,000 for 2005, which was a great boon for the brand and its potential. This increased budget still did not compare to some of the other competitors within the market however, which continued to put constraints on the type and size of advertising that Kayem Foods could participate in. With Kayem’s profit margins eroding and gross margin declining due to supermarkets gaining power and the company’s significant volume in private label (a break-even product financially) and co-pack (a below break-even product), the company needed to stretch the smaller advertising budget for Al Fresco in order to get the most bang for its buck.

Relevant Factors

As Kayem Foods, Inc. prepared its 2005 marketing campaign for Al Fresco, the #1 chicken sausage brand in the nation, it was faced with some tough knowns and unknowns to consider and weigh. Here is a list of some of the relevant factors that contribute to the central strategic issue.

Knowns:

* Kayem Foods sales force reported that supermarket executives and food distributors were not impressed with the heavy reliance on buzz marketing, and felt that the recent popularity of Al Fresco was not sustainable using...