Kayem Foods Case Study

Executive Summary

Our group was assigned to take the position to continue the "buzz" marketing campaign recently conducted by Kayem Foods, Inc., for their speciality sausage product, Al Fresco chicken sausage. Matt Monkiewicz, director of marketing for Kayem Foods, Inc., had a critical decision to make in whether to continue with this type of marketing or find an alternative method. Thorough analysis of the case by our team was conducted in order to assist in providing reasons to continue with the "buzz" marketing campaign. The analysis consisted of learning about Kayem Foods' products and in particular the Al Fresco chicken sausage, studying its current competitors in the specialty sausage market, measuring the effectiveness of the recent "buzz" marketing campaign, and finally to provide a solution for Kayem Foods, Inc., as to how their current budget for marketing should be used.

Kayem Foods, Inc.

Kayem Foods, Inc., is a medium sized, privately held, and family controlled meat processing company located in Chelsea, Massachusetts. The company processed and distributed fresh delicatessen meats, hot dogs, and sausage; with New England and parts of the Mid-Atlantic being its primary trading area. In its fiscal year ending February 28, 2004, annual sales had been approximately $140 million; of this amount approximately 60 percent was from meat products sold under several brand names, and the remainder was from private label supermarket products made for other manufacturers and merchandise Kayem sold acting as a distributor. Gross margin for the company had been declining for several years due to supermarkets gaining "power" through consolidation and demands for greater discounts and promotional allowances from suppliers. Kayem had no choice but to fulfill these demands as their main sausage brand and other products, excluding the Al Fresco chicken sausage, had no distinguishing factors from leading competitors and had low brand awareness. This caused Kayem to price their main sausage product, Genoa, aggressively low in an attempt to compete in the market. A major concern was the low margin Kayem was able to make of this brand, and needed to focus its attention on a brand that was distinguishable and would increase the opportunity to gain higher profit margins. In order to get out of these profit concerns, Kayem needed to develop distinctive branded products.

Al Fresco Chicken Sausage

This brand was simply an answer for the profit concerns the company was facing with its other products. The decision was to develop a gourmet product line and the result was Al Fresco chicken sausage. Kayem introduced the Al Fresco brand in 1999. The product line originally consisted of fresh pizza (since discontinued) and gourmet chicken sausage. The company had finally been able to produce a differentiated,