Industry overview

Potential capacity of the market. Size of the segment. Annual sales volume (in natural units and in terms of value)

Consumption of meat in the Moscow Region is higher than in other regions (65 kg per capita). Citizens of the Russian capital get about 20% of the actual volume of meat consumed in the country. However, people of the Moscow Region strongly depend on imports of meat. The authorities take actions to weaken this dependency, stimulate development of the local agricultural companies, but the latter prefer not to produce but to deliver goods from other regions. Thanks top them supplies of meat produced in Russia have grown 2.3 fold within the last 4 years. But even with the trend being this positive Russian meat products cover only 61.2% of the market.

In the course of the last 3 years the pork market has grown over a third. The growth is expected to continue for some more years. Moscow's pork market can be said undersaturated, with the demand for the product growing.

In 2005 the segment witnessed increase of supply from the agricultural companies and food processing enterprises that sell their produce on a retail basis. Share of the smaller private producers of chilled pork has decreased, consequently sales of this type of products on the farmers markets have grown smaller.

Consumers groups

The most active consumers of pork are people aged 30 to 50 years with monthly income over 20 thousand rubles. Target consumers of the chilled pork are citizens of Moscow aged below 50, with monthly income varying from 5 to 10 thousand rubles, and middle-aged consumers earning over 20 thousand rubles per person a month. Commonly, chilled pork is bought by women, but the main consumers are men.

Table 4. Target consumers of chilled and frozen pork

Marketing strategy of the project

__ will use flexible pricing, i.e. the price will depend on the market situation.

Sales stimulation programs

The main target groups are:

Corporate buyers of semi-finished (half-carcass) and finished products (chilled pork):

category managers of retail chains;

product managers of retail chains;

distributors working with independent outlets;

distributors working with HoReCa outlets

directors of smaller retail chains;

directors and chief managers of independent stores;

directors and chief managers of independent HoReCa outlets.

Final buyers of packed and unpacked chilled meat - consumers.

Since the brand is of small importance for the buyers, crucial for the successful sales are:

Level of interest towards the supplier and loyalty, determined by a number of factors:

entry price level and possible extra charge (80%);

range of packed products (10%);

convenient logistics schemes (delivery of minor and medium orders) (10%);

scale of “entry” bonuses (for retail chains).

Level of distribution (as the result of item 1):

interest expressed by owners of the distributing companies;

interest expressed by the sales teams of distributor.

Corporate clients service arrangements:

Group 1. Corporate buyers

Chains

catalogues covering the range of products;

negotiations with chains and reimbursement of the “entry”;

negotiations with chains and reimbursement of the retro bonuses;

participation in the marketing events initiated by the chains (price-related events, special offers, cross-promo);

reimbursement of the products' merchandizing.

Distributors

catalogues covering the range of products;

flyers;

system of bonuses for plans accomplishments;

shared financing of the marketing events, according to the planned sales;

motivation system, competitions and bonuses awarded to best distributors, trade representatives that attracted the biggest number of customers, made the biggest sales, accomplished all plans etc;

motivation programs developed for directors and chief managers of independent stores and HoReCa outlets.

Group 2. Final buyers

Peculiarity of the chilled and frozen pork market - low awareness buyers have of the producers and brands. This explains relatively low effectiveness of direct influence on buyers.

Among actions taken in the context of working with final buyers are:

merchandising support in retail outlets;

price promotion in retail chains.

Chilled meat produced by the complex under the present project will be priced at 115 rubles per 1 kg (including VAT 10%), which is the same to the wholesale price stated by the Russian companies producing the same goods.

Distribution enjoys support from the marketing policy of the company, including advertising and sales promotion actions.