SMITH`s HOME FOODS CASE

Question 1 - Outline Smith`s Home Foods marketing strategy ? What is Smith`s Home Foods really selling

In outlining Smith 's Home Foods marketing strategy , it is best to divide our discussion into five parts . First , we will discuss Smith 's Home Foods market positioning . Next , we would delve into their product pricing , distribution and promotional strategy

Smith 's Home Foods market positioning is with the middle to upper income bracket . In to enjoy Smith 's Services , a homeowner has to pay money for the freezer and buy meat and other groceries . In effect

br these homeowners have to pay a minimum of 655 for the smallest package and upto 1000 for a family of three or four . Geographically , it has initially confined itself to the Ashton area . It has not yet competed with other companies operating outside of the region . A competitor that was specifically named in the study is Southern Foods of Greensboro North Carolina

The competitive advantage of Smith 's Home Foods comes with its already existing meat business . The service being provided by the Home Foods division of Smith actually helps the sales of meat produced by Smith 's Country Hams . The effect of not having a middle man between the primary producer and the immediate seller results in the company 's ability to compete at lower prices

The product that Smith 's Home Foods is actually selling is NOT the meat but the service provided to its customers . Smith 's service is to provide homes with quality meats and grocery at affordable prices . It alleviates the burden of homeowners from the need to shop regularly Moreover , since these customers will be buying in bulk , Smith 's Home Foods can actually sell the meat at cheaper prices . The product provides is divided into the eleven (11 ) food packages featuring a particular number of pounds of meat wherein the customer can choose his own mix of meat

The pricing strategy employed by Smith ranges from 655 to 1532 including tax and finance charges . It 's cost of goods sold averages 48 percent of the 11 packages not including a variable cost of 30 per package for delivery . Smith also provides credit to qualified customers through the Fair Finance Company of Akron , Ohio

The distribution strategy of Smith is to store its inventory in the Smith 's Country Hams warehousing and cold-storage facilities . It has a one-ton pickup truck equipped with a freezer box to make the delivery to customers . Two Smith Country Hams employees make the deliveries personally placing the food in the customer 's freezer

The promotion strategy of Smith includes the use of full time and part time sales people , several mass-selling techniques , and giving off coupons to the local Welcome Wagons . Smith 's top sales people , Sonny Jones and Barbara Johnson , earn on commission basis . They also earn for sales made by their part-time hires

In promoting the product , the salespeople make a call and meet with customers in the evening , spending as long as two...