Marketing Assignment 2 2021 PDF

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Marketing assignment on Sanitarium...

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--------------------------------------------------------------------------------------------------------------Extension Notice You are hereby Granted an Extension to your Due date for your Assignment. Your extended Due Date is 23:59 on Wednesday 28th April.

Marketing Assignment 2 Brand Report: Sanitarium (Health Food Company) Lauren Jankulovski -103614653 MKT 10007 2021 Date of Submission: 28/04/2021

Table of Contents PART A ........................................................................................................................................................ 3 SANITARIUM BRAND AND HISTORY ................................................................................................... 3 SANITARIUM’S MARKETING MIX ........................................................................................................ 4 THREE LEVELS ANALYSIS OF YOUR BRAND’S P FOR PRODUCT. ................................................. 4 PART B ........................................................................................................................................................ 5 MICROENVIRONMENT ........................................................................................................................... 5 MACRO ENVIRONMENT ......................................................................................................................... 6 PART C ........................................................................................................................................................ 6 SANITARIUM’S TARGET CONSUMER PERSONA ............................................................................... 6 PART D ........................................................................................................................................................ 7 BIBLIOGRAPHY ........................................................................................................................................ 9

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Executive Summary: In this assignment, I chose to focus on Sanitarium (The Health Food Company). My other group members choosing Freedom Foods, Kellogg’s, and Nestle as the business resonates with my passion for the healthy lifestyle they encourage in their products. I will first examine its position in the cereal industry. I will review the threat of competitors within the microenvironment and ways the business can gain a competitive advantage. I will then show the damage of the ecological environment interference in the macro-environment. Lastly, I will recognise Sanitarium’s target consumer persona, including their demographics, motivations, goals, and overall behavior that explain purchase choice.

PART A Sanitarium Sanitarium is a “plant-based health food” brand (Sanitarium, n.d.) known for its healthconscious initiative. Sanitarium Health Food Company was “registered as Australia’s first health food company in April 1898” (Sanitarium, n.d.), and owned wholly by the SeventhDay Adventist Church. In 2010 recorded revenue of $347 million (Sanitarium Health Food Company 2012, p.1.). (Sanitarium, n.d.). The private business operates essentially utilising corporate social strategies for its community, this being a way it markets to young adults and adults who pursue a health-conscious diet. The company sells a range of products but is well known for Weet-Bix.

Sanitarium Brand and History “Sanitarium’s purpose of ‘changing lives every day through whole person health’ is evident through the nutritious foods” (Sanitarium, Profits for a charitable purpose, n.d.) developed by the brand. Established in 1898, it became “one of Australia’s longest-established and most trusted” (Systems, 2021) manufacturers and providers of breakfast food. It entered the market of breakfast cereal products, with WeetBix being dominant within. Sanitarium also sells milk, spreads, and adaptions of the infamous Weet-Bix, which has been prominent for “more than 80 years” (Sanitarium, n.d.). The Australian brand being the first health food company in the market meant they gained a competitive advantage as they maintained the health of their consumers. They gradually declined within the breakfast cereal market as many international brands entered the Australian market, Kelloggs and Nestle being significant contributors. Sanitarium also targets other breakfast areas, like spreads and milk, to further dominate the breakfast market. They adapted the original Weet-Bix into gluten-free, bite-size options and blends to insert into the modern breakfast cereal market. They also have a place in the milk market with ownership of So Good natural milk products. Also, the spreading industry as they “introduced Australians to peanut butter in 1898” (Sanitarium, Our Products, n.d.). Sanitarium, The Health Food Company, has 26% of the Australian breakfast cereal market in 2017 (Evans, 2017). Now the Weet-Bix product can be categorised within the market having 47.5% of the overall market of Cereal Food 2019. According to market research by the Market Research, the Breakfast Cereal grossed a revenue of approximately $1.334 million in 2018 (Breakfast Cereals in Australia, n.d.). However, Sanitarium Health 3

Food Company is underperforming in its market despite its ownership as Kelloggs remains a market leader.

Sanitarium’s Marketing Mix The$cereal$market$within$Australia$is$heavily$impacted$by$the$increasing$knowledge$of$ healthy$eating$and$obesity$awareness.$Sanitarium$ continues$its$model$on$encouraging$healthy$living$ through$its$adverts$and$its$website$to$sell$this$ mission$of$“changing$lives$every$day$through$ whole-person$health.”$Continuing$to$advertise$to$ children$ages$0-15$and$young$male$adults$between$ 15-25,$in$hopes$of$encouraging$women/mothers$to$ purchase,$as$parents$will$attempt$to$continue$ healthy$values$at$home$for$their$kids.$$ $ $ $ Product:$Sanitarium$has$Weet-Bix$as$their$primary$product.$One$of$many$Weet-Bix$ types$retailed$and$sold$usually$in$thin$cardboard$boxes$in$575-gram$packs,$value$packs$ of$800-grams,$and$small$sachets$of$individual$Weet-Bix.$They$are$also$offering$glutenfree$options,$small$bite$sizes,$and$protein-based.$They$also$offer$a$whole-grain$blend.$$ $ Place:$Weet-Bix$is$sold$in$predominant$supermarket$chains$within$Australia,$being$ Woolworths$and$Coles.$Also$sold$in$independent$small$local$supermarkets$throughout$ Australia$such$as$IGA$and$within$some$pharmacies.$Offered$also$in$tourist$ accommodations.$$

$ $ Promotion:$With$continuous$efforts$to$connect$to$their$target$market$of$kids/young$ adults$and$adults$who$strive$for$a$healthy$diet,$Sanitarium$maintains$many$efforts$to$

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promote$Weet-Bix.$A$promotional$budget$of$$1.7$million$in$2014$in$their$Tv,$magazine$ advertisement,$and$billboards$(People,$n.d.).$Sanitarium$utilises$promotion$through$ television$adverts$and$promotes$events$run$in$brand$with$Weet-Bix$values$of$ maintaining$healthy$lifestyles.$With$their$active$Weet-Bix$Kids$Try-Athlon,$they$ continue$to$push$“Aussie$Kids$are$Weet-Bix$Kids”$to$tap$into$their$Australian$market$ with$their$Try-Athlon,$which$increased$their$share$of$the$market$in$35-year$olds$plus$as$ parents$could$enter$with$their$kids.$Sanitarium$continues$to$utilise$TV$advertisements$ as$the$main$promotional$avenue$but$continue$to$appear$in$AFL$and$NRL$magazines$ purchased$before$a$match.$ $ Price:$Weet-Bix$charges$$4.00$for$a$standard$pack$of$575grams$and$$5.00,$one$dollar$ more,$per$pack$for$their$value$pack$of$800gram$at$many$local$supermarkets.$Compared$ to$their$competitors$Nutri-Grain$at$$4.98$for$standard$345grams$and$Uncle$Toby’s$$4.99$ for$standard$$460grams,$Weet-Bix$is$much$cheaper.$Thus,$a$more$appealing$option$for$ customers$(Scribd,$2012).$

Three Levels analysis of your brand’s P for Product. Sanitarium's Core Product is the healthy lifestyle and body it creates, rather than the cereal. Marketed as a quick breakfast meal, that not only is a healthy alternative, but a way customers can gain a healthy diet. This is clear through Sanitarium's statement that their products are a "protentional to be healthy – physically and mentally. The potential to be happy" as it "starts with simple, good nutrition" (Sanitarium, Helping Australians eat well since 1898, n.d.). Sanitarium promotes that its products will result in improved health. Weet-Bix, being the Actual Product, is known for being a healthy simple tasting breakfast cereal sold as rectangular pieces in thin cardboard packaging that can be eaten on the move— sold in various sizes, flavours that suit different dietary needs, making it suitable for all taste palettes. Weet-Bix's Augmented Product is usually included in the packaging, prominent on the value pack of 1.3kg, supermarket chains such as Coles, with competitions. They are encouraging purchases to "scan and win" free items from Asics and many food promotions. Depending on the time of year, the Try-Athlon and any promotional events will be advertised to participate on the boxes. As well as money-back guarantees if the consumer is not satisfied with the product, along with the nutritional gains from consumption.

PART B Microenvironment Competitors are a significant threat to Sanitarium’s Weet-Bix, being that indirect competition is Kellogg’s, Nutri Grain Cereal, and Uncle Toby’s Oats. Kellogg’s performs quite strongly commercially as recorded sales of almost 12.4 billion in 2010 (Wikinvest.com 2012). They play primarily on an international scale, distributing to more than 180 countries (Wikinvest.com 2012). Uncle Toby’s is also a part of the breakfast cereal market, another major competitor for Weet-Bix as they also offer oat/grain options. This has reduced Sanitarium’s market share compared to Kellogg’s, as Kellogg’s has a 10% higher share of the

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breakfast cereal market (Team, 2020). Despite Weet-Bix being amongst one of the two most popular breakfast cereals, Nutri-Grain, a significant competitor is in its way (Team, 2020). The recorded blander taste of Weet-Bix can explain this in comparison to the sweeter NutriGrain. Despite the healthier and cheaper breakfast option, younger consumers actively pursue tastier options despite the price. As of 2018, both Nutri-Grain and Uncle Toby’s were transferred to the mid-shelf in supermarkets while Sanitarium products were shifted to the lower-mid shelf. They were noting this as a significant contributor to the difference in competition (Heath, 2011). Most of Weet-Bix’s competition charges higher prices. Sanitarium apply the differentiation strategy to its product is evident as the price is more friendly to price-conscious consumers who can afford healthy options. Sanitarium can gain a competitive advantage over its breakfast cereal competitors by promoting the health benefits of consuming Weet-Bix and adding to their range to include tastier options that do not compromise the nutritional values. In order to appeal to the market further held by their competitors. Maintaining and promoting a healthy vision while including a range that appeals tastier could increase its market share. These differences allow for the firm to improve in ways competitors succeed.

Macro environment The environmental/ecological impact carries a significant risk to the viability of Sanitarium, as the business continues to “reduce environmental impact” (Sanitarium, Environment, n.d.). However, after further analysis done on their eco-footprint meant Weet-Bix had to reduce the size of packaging from 1.5kg to 1.2kg in 2019 due to “rising input cost pressures such as energy usage” (Gayton, 2019). Being a considerable impact on the production of their WeetBix, their environmental impact has been a significant factor in their business choices and decisions. Affecting their values of maintaining a sustainable business practice throughout the operations process, their healthy lifestyle would be in question if their environmental impact is significant. However, Sanitarium could implement more community projects to continue its corporate social initiatives and ensure packaging is more environmentally friendly on the inside to ensure no waste or harm is done.

PART C Sanitarium’s target consumer persona Geographic Weet-Bix sells best in the Australian market, with targeted advertisement and placements in Australian sporting magazines and sponsoring The Socceroos (Australia 6

Health & Nutrition Association), encouraging a market of Australian people. Due to this, those who have an active lifestyle, who live in rural Australia and suburban areas, are likely to purchase Weet-Bix. As its values are centred around healthy lifestyles, areas with prominent sporting influence like Queensland, New South Wales, and Victoria are associated with the health-food cereal. Demographics Weet-Bix identified the target market as the younger generation, athletic boys between the ages of 12-30 (Australia Health & Nutrition Association) who need a healthy, sustainable breakfast to support their active lifestyle. Sanitarium taps into adults aged 30 to late ’40s, to parents and career orientated adults who purchase for their children and are concerned with health. Maintaining this message of eating healthy and pushing the slogan of “How many do you do?” with males and females actively participating in sports activities in adverts—pushing active individuals, usually young. Socio-economic the target customer for Weet-Bix, being that the price is lower than its competitors being an average of $4.00 for a standard pack at most retailers, this can be assumed for low to medium-income individuals are price-conscious of spending. Due to the middle to high age range, assume are individuals who live within prominent families and must spend more, or are price conscious and want to live healthy lifestyles for a lower price. Psychographic, the target consumer is expected to live an active/sporty life or someone who is on the move consistently. Possibly eat Weet-Bix as a way to maintain health and energy for a busy, active day. Behavioral the target consumer is likely to partake in active sport and work activities, participate in sporting matches and be a part of a busy work schedule. Meaning they must eat quickly or beforehand in order to maintain health and energy throughout. Also, being prominent on television advertisements before sporting advertisements and magazines for the AFL and NRL, consumers spend time watching and reading sports. The persona I chose is motivated by many factors: • The age range is focused mainly on athletic male young adults. • It is unlikely they have a high income because of this. • They are price conscious of what they purchase in terms of living a healthy lifestyle. They will be motivated not to spend money, especially when it comes to keeping up with their active life. Purchasing from major supermarket retailers Coles and Woolworths, ensuring they receive the best price. They will be motivated to find a breakfast cereal that is easy and quick in the morning to keep up with an active sporty life that will support that. Motivated to buy a brand that expresses “health” and allows a “nutritious start to their day” (Sanitarium, Our Products, n.d.). The continuous links to sporting giants in Australia and links in sporting events will motivate the persona to purchase as they too will have a passion for sport and want to be like their sporting idols. The persona may be frustrated by the changes in packaging, which contain smaller amounts. “Male buyers are proven to purchase once the product has been consumed” (Australia Health & Nutrition Association). This may require continuous purchasing, which can lead to more money spent for less. The life goals of the persona would be to maintain a healthy lifestyle to

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improve their “wellbeing” in all aspects of their day but accelerate in their sporting life, which triggers this purchase.

PART D Consumer Decision Making Process (CDMP) The persona will fall under their needs for nutrition in their active lives. Recognising the busy schedule/lifestyle they need to maintain, the need for a quick, easy, and affordable breakfast cereal will be noted. Looking at the options in the market, Weet-Bix highlights its notable “health” food vision and its connection to the sporting scene. The persona can evaluate the options on the market, and the cheaper alternative will be noted first, Weet-Bix being considerably cheaper than its competitors. Being that in December 2020, Sanitarium won Woolworths’ Supplier of the Year (Systems, 2021) can also confirm the reliability of WeetBix and its claim of “nutritional value.” Once purchased for its price and healthy attributes, the persona can note if it plays a part in helping them maintain a healthy lifestyle in their active lives. Conclusion In conclusion, I believe Weet-Bix appeals to an extensive range of customers of all different ages. Being targeted to health-conscious individuals fits the growing awareness of obesity and the change in lifestyles. However, I think their targeted persona excludes young girls in some ways. They would benefit broadly tapping into this market and encourage more women in sports, this being a trend prominent in society with the rise of female sport. Finally, I think the taste-less appearance of Weet-Bix lowers itself in the market. An emphasis on an enhanced taste within its range and health benefits could benefit the brand as this could regain market share taken by internationally known competitors.

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Bibliography Fadhil, I., 2011. Nutrigrain Product Report. [online] pp.7-19. Available at: [Accessed 27 April 2021]. Creativepeople.co.nz. 2021. Sanitarium Weetbix Digital Marketing Strategy. [online] Available at: [Accessed 27 April 2021]. Market Line, 2019. Breakfast Cereals in Australia. [online] Available at:

[Accessed 27 April 2021]. Sarpi, S., 2021. Healthiest Cereals In Australian Supermarkets [2021] | 28 By Sam Wood. [online] 28 By Sam Wood. Available at: [Accessed 27 April 2021]. Sanitarium.com.au. 2021. Profits for charitable purposes. [online] Available at: [Accessed 27 April 2021]. Sanitarium.com.au. 2021. Moments that made us. [online] Available at: [Accessed 27 April 2021]. Australian Financial Review. 2021. Energy costs drag on Sanitarium. [online] Available at:

[Accessed 27 April 2021].

Heath, G, McKenzie, H &, Tully L 2011, Food Solutions 3&4, Pearson Education, Australia. Gayton, E., 2019. Why your grocery shop might be bringing less home. [online] 9news.com.au. Available at: [Accessed 27 April 2021]. Ibisworld.com. 2019. IBISWorld - Industry Market Research, Reports, and Statistics. [online] Available at: [Accessed 27 April 2021].

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Team, M., 2021. Sanitarium Health and Wellbeing Company SWOT Analysis | Top Sanitarium Health and Wellbeing Company Competitors, STP & USP | Detailed SWOT Analysis of Brands | MBA SkoolStudy.Learn.Share.. [online] MBA Skool-Study.Learn.Share. Available at: [Accessed 27 April 2021]. Sanitarium.com.au. 2021. Protecting the planet in the way we do business | Sanitarium Health Food Company. [online] Available at: [Accessed 27 April 2021].

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