Perdue Farms Case: Chicken Hot Dogs

Marketing

Perdue Farms Case: Chicken Hot Dogs?

Don Mabe: executive VP of Perdue Farms

Mike Moriarty: Assistant divisional controller, young MBA

        Perdue knew he had perfected the chicken hot dog but wasn’t sure of the demand for the product

Perdue could only do a prelim. Of the processing of hot dogs and final processing would have to be done by other meat processors

Advertising costs maybe too high as projected by the advertising company

Unsure of whether or not to promote the product as a totally new or to promote it as an alternate to hot dogs with other meat

Concerned that at best the used of mechanically deboned meat would cheapen the image of Perdue

Company History

        1920, by Arthur Perdue, to sell hatching eggs to chicken farmers in and around salsisbury

1933 company began to sell live chickens for human consumption, frabk joined the business at the age of 19 and was president 10 years later

1941, company became a commercial feed dealer to provide internal source of chicken feed

1943, first hatchery was added         

58-61, made facilities for processing feed from soybeans and other ingredients

Late 60’s dressed poultry was quite stable in the markets and live chicken had high fluxuations of prices 

Perdues backwards integration was paralleled by a marketing strategy based on product differentiation and consumer pull → unprecedented in the poultry industry

The perdue difference: more meat, more tender, perdue tag (insuring money back guarantee), never frozen

Strict quality standards → through tv and radio advertising

Simple mission: person-to person concern for quality→ demand premium prices at the retail level and profit was shown every year since its start

Distribution: almost full penetration of the market in NY and Boston → future growth through supermarkets

        Problem: supermarkets experiencing declining profits → bc of rapidly rising operating costs, intense competition within the industry, and the consumer trend of eating at resturants and fast food

Problem: packaging

Frank: Hot dog must be subject to three condiditions (1) most superior hotdog on the market (2)new product lines revenue had to cover all costs including overhead (3) all perdue meat