Title

Hills Pet Nutrition

Analysts
Abenaa Ampratwum Mylissa Blangger Brian Costello Mike Gerome Heather McKnight Ben Perkins

AGENDA
Brief Background Problems Internal Analysis External Analysis Recommendations

Mission Statement Mission

Our mission is to enrich and lengthen the special relationship between owners and their pets by providing the best pet nutrition in the world.

Background Background
Dr. Mark L. Morris Formulated Hills Science Diet more than 60 years ago. The Company was Inspired by a Guide Dog.

Parent Company Colgate Palmolive

Hills is currently following a niche strategy Two Product Lines- Hills Science Diet & Hills Prescription Diet

Problems
Losing

market

market share in our niche Problems

Narrow product line relative to competitors

No presence in retail food markets Saturated niche market Lack of effective advertising campaign

Strengths

SWOT Analysis

SWOT Analysis

Support vet schools

Top seller in veterinary clinics

Experienced workforce (vets)

Brand image

Company reputation
Better product quality versus competitors

SWOT Contd SWOT Contd

Weaknesses

Narrow product line

Not distributed to retail food stores

Low brand awareness

SWOT Contd SWOT Contd

Opportunities

Expand product line

Gain market share from growth markets

Steal market share from existing high volume areas Increase brand awareness through media outlets

SWOT Contd SWOT Contd

Threats Loss of sales to substitute products Increasing intensity among competition Brand image could suffer due to new product lines

US Pet Food Market Share 1998

Alpo 7% Others 10.6% Friskies 28.5% Purina 24% Heinz 18.1% Kalkan 11.8%
US Market Trends and Forecasts

US Pet Food Market Segmentation . (market share)

Other 21% Dog Food 48.1% Cat Food 30.9%

US Market Trends and Forecasts

US Pet Food Market Forecast Market forecast (1999-2004)

12000 10000 8000 6000 4000 2000 0 in millions
Growth is continuous at 0.1% per year

19 99 20 00 20 01 20 02 20 03 20 04

Distribution Distribution
US pet food sales by retail type for 1997* ($ mil)
Grocery store Mass market Pet specialty store 5,365 1,418 1,403

Distribution Survey
Where do you buy pet food?
5% 3% Supermarket Pet store Vet Other

38%

54%

Brand Brand Recognition Recognition Survey

Are you familiar with these brands of pet food?
Brand Re cognition
100% 90% 80% 70% 60% No 50% 40% 30% 20% 10% 0% Hi l l 's S ci e n ce Di e t Yes

Consumer Analysis
What is most important when choosing a brand of pet food?
5% 15% 35%

20%

Ingredients Vet Recommendation Taste Brand Price

25%

Porters Five Competitive Forces LOW 5 Porters Threat of

Substitutes HIGH Rivalry Among competing Sellers

High Supplier Power

Moderate Buyer Power

High Barriers to Entry

Perceptual Map Perceptual Map

MARS Inc.

Strategy Introduction
Introduce new cat/dog product line

Hills General
Placement in mass retailers Specific regions

Competitive prices
Keep Hills name

Dog Food: Top 5 Markets Sales in Millions Dog top 5

12% 29% 15%

NYC LA SA SC Phila

15% 29%
Integrated Resource Inc. 1998

Dog Food: Top 5 Growth Markets Dog growth Sales in Millions

28% 29%

SA Raleigh MISS ATL SC

15% 9%
Integrated Resource Inc. 1998

19%

Cat Food: Top 5 Markets Cat top 5 Sales in Millions

12% 33%

13%

NYC LA Phila Boston Balt/DC

13%

29%
Integrated Resource Inc. 1998

Cat Food: Top 5 Growth Markets Sales in Millions Cat growth 5

18% 32%

15%

Miami/FL SA Jackson PITT ORL

10% 25%
Integrated Resource Inc. 1998

Strategy Continued Strategy Advertising

Television

Radio
Magazines Internet Promotions Coupons

Direct mail/Informational Packets

Free Samples Pet Seminars

Strategy Continued Strategy Cont

Sponsorships Society for the protection from cruelty towards animals

Dogs Shows

Introducing

HILLS GENERAL

Available in a Supermarket near you

Thank You

Thank You