A Marketing Plan for Truman Popcorn

AGSC 303, Food & Agricultural Marketing Class Project, Fall 2000
Nurtay Abdubek, Laci Cook, Katie Dallam, Krista Hediger, Jenny Howk, Matt Jones

Truman popcorn was developed at the University farm by Dr. Mark Campbell. This has been an ongoing project, since 1997, in order to strive for perfection in kernel color and a perfect blend of purple and white kernels on each ear. Due to its uniqueness and its individuality it stands out from common popcorn. This gives us reason to believe that there is a market for this type of popcorn on campus and in the Kirksville area. To reinforce our belief that there is a market for this product, secondary research was performed and two focus groups were arranged. The focus groups viewed all aspects of our marketing plan, including target market, product, promotion, place, and price. Both groups contained those who we believed to be potential consumers.

Target Market

The focus group helped to define the target market for Truman’s purple and white popcorn. As a result of the group it is found that the most likely purchaser of the product would one of Truman’s faculty/staff, alumni, or a parent that is interested in the crafty characteristics of the corn. It is also viewed as an ideal gift for someone for certain occasions.

Initially the target market was a general one that included mainly Truman students, faculty/staff, and alumni. The reason for this general group was that there was no sure way of telling who would want to purchase the purple and white corn. The basic understanding was that those affiliated with Truman in some way would be the most likely to purchase the corn

The focus groups were to be made up of Truman students, faculty/staff, and alumni both male and female in order to determine who would be the most likely to purchase the product, in what forms, for what purpose, and at what cost. The actual groups totaled 17 people, constructed mainly of females. Of the 17, eight were students, and nine were faculty, staff, alumni or parents.

As a result of the focus group ideas were formulated on how marketing the popcorn may proceed. Of the group, most felt that they would purchase the product as a gift for someone else rather than for the purpose of popping. It was learned that students were less likely to buy the product because they were more concerned with what they were spending their money on. In all cases of product pricing, except for the jars, a majority of the students would pay only the minimum amount for the product. The faculty/staff members, alumni and parents were willing to spend more on the products.

Those who were interested in the craft appeal of the item had a lot of ideas to offer. The discussion of the groups continually returned to the thought of buying the item at craft or art fairs. These thoughts led to the idea that the corn had more of an appeal to those who are involved in crafts. Those who are not interested in those practices are not as attracted to the product.

The results of the focus groups led to further discussion about the pricing, packaging, and promotion of the product. Where and when the product would be sold was dependent on where the target market would see it. All of the conclusions pertaining to these topics from the focus will be discussed further in the report.

Product

The product we are trying to market, in and of itself, is quite unique. The fact that the Truman Popcorn is purple and white is its most distinguishing characteristic. Since the package should display this unique characteristic and double for functionality, transparent packaging material is a must.

 

Three packaging options we recommend marketing the popcorn in were kernels in a plastic bag, kernels in a pint jar, and whole popcorn ears tied together in a bundle of three with the husks still attached.

 

Pint jar packaging Whole ears packaging

Initially, we used secondary research to determine these three packaging options. We found that most types of popcorn were available in plastic bags, microwavable bags, and jars. All of these types of packages were primarily available for food consumption use. However, our product is more on the novelty side of corn, such as Indian corn, which is most often sold on the ear with the husks still attached. With reference to the results of our focus group and secondary research, the best packaging choice to market is the clear pint jar. Thirteen out of seventeen people in the focus groups chose the pint jar as their first packaging preference. Before the focus groups, however, this recommendation would have been slightly different. What was initially thought was that the bundle of ears would sell the best because most novelty corn on the market is sold in this way. It was quite surprising that the pint jar was so popular. The reasons stated by the potential consumers for choosing the quart jar over any of the other two packaging options were that they did not want to care for and store the real ears and the plastic bag was not transparent enough to see the corn. Furthermore, the transparent bag would be messy if it had to be opened, where as the jar would be very easy to open and to use. The jar should be marketed in the pint size only. This size seemed to be overwhelmingly preferred by our focus groups. Consumers stated that if the jar was smaller, it would not be as noticeable when using it as a decoration, and if it were larger, it would not be as appealing to the eye. If you must market the popcorn in a bag, using white paper bags with transparent windows would be a good idea, since we found that the plastic bags folded and tied at the top were not preferred by consumers in our focus groups.

The second issue that we encountered in packaging the corn was the label. First of all, the label needed to be easy to read and contain:

  • Cooking instructions
  • Product title
  • Background information (History of the product)

What was also found through the focus groups was that people over all thought there should have been more background information on the label. Many other suggestions were brought to our attention as well, such as including that the popcorn was from Kirksville, producing the label in a fold-out gift card fashion with the inside blank, making different labels for each individual product form, and placing a price and pricing information on the label. All of these seem to be good ideas for producing a label for this product, but label size should also be kept in mind as well. Placing a large label over the jar would prevent viewing of the product and would hamper the reason for purchasing it as a novelty item.

Promotion

The promotion of a product is strongly tied to the place, price, and packaging. But what separates promotion from the other "Ps" of marketing is how its sale is publicized. Where should advertising be placed / what media outlets should be used? When should advertising take place?

 

According to the responses given during both focus group sessions, Truman faculty, staff and students rely on word-of-mouth to learn about events, fundraisers, and other activities held on campus. Other media outlets suggested were Truman Today, the Index, KTRM, posted flyers, Truman Review, and the University’s website.

By utilizing the University’s website parents and alumni will be aware of the opportunity to purchase Truman Popcorn. The Truman Review will also reach parents and alumni. Using a color photograph of the popcorn combined with a story about its history and purchasing options, parents and alumni could order by mail or via the internet through the University’s website.

A mass mailing would also put specific information about the product and its ordering options directly in the hands of alumni, parents, and students. A short letter or small brochure detailing the history behind Truman Popcorn could be sent with an order form, phone number, or e-mail address to which orders could be made. The cost of postage is the great disadvantage to this type of promotion.

Promotion on campus that targets faculty, staff and students, may be most feasible for a student organization. Conducting presentations in conjunction with the residential college programs would be a great way to combine education and product sales. Offering popcorn and other refreshments to those in attendance could enhance a brief program outlining the history of the product, its current status, and the purchasing options.

Another type of "active" on campus promotion could take place at athletic events. Delta Sigma Pi, the professional business fraternity, handles the concession stand at all athletic events. The fundraising organization could donate a certain amount of popcorn to them to pop instead of the standard popcorn. Flyers and posters advertising the specialty popcorn would boast people’s awareness of Truman Popcorn and possibly lead to sales at athletic events, even though we found that is where people would be least likely to buy the product.

Advertising for Truman Popcorn should coincide with specific University events and certain times of the year. For example, Homecoming would be an opportune time to catch faculty, students, parents, and alumni at the height of their "school spirit." Any promotional material about Homecoming could also contain some literature about Truman Popcorn and where and when it will be sold on campus during Homecoming.

Other "hot" advertising times include autumn, Christmas, and Mothers’ Day. A few strategically placed flyers or ads in the Index and other campus media should be sufficient in getting the word out for seasonal sales. As stated before, the focus group participants indicated word-of-mouth as their primary source of information. By placing a few ads in the public, information about the sale should travel quickly.

Place

Place will need to be determined on the preference of the target market. When conducting the focus group on Truman Popcorn numerous ideas were introduced. The most important goal that was established when determining a place and time to distribute the product is making the product easily obtainable.

 

Numerous locations of sale were indicated by the focus group. Annual Truman activities were the most popular sites recommended. Special events that were discussed included:

  • The Red Barn Arts Craft Festival      (September)
  • Ryle Christmas Market                     (December)
  • Armory’s Annual Craft Sale              (December)

The college bookstores and shops downtown were also considered. However, marketing in local downtown stores may not make the product as obtainable to the individuals associated with Truman. This may limit the number of consumers within the target market that would be able to acquire the product. The idea of selling the product at athletic events was also explored. Unanimously the focus group decided that due to the packing that the product would not be as likely to sell.

The focus group suggested that the product should be available at specific times of the year. They recommended holidays before students would be going home or when individuals would be most likely to purchase gifts. Occasions that were evaluated included:

  • Mother’s Day                                    (May)
  • Christmas                                          (December)
  • Fall season                                         (September, October, November)

Other events included:

  • Parents Weekend                               (September)
  • Homecoming                                      (October)
  • Freshmen "move in day"                      (August)
  • Semester finals                                     (December, May)

These times attract those who are closely related to Truman and would find a novelty in Truman’s purple and white popcorn. Selecting the correct time is critical to ensure the popularity and sales of this product. The focus group assisted the marketing team in concluding that careful consideration be taken when choosing the time and place to market Truman Popcorn to receive the greatest results.

Price

With all other points in place, price is the last item that needs to be established. It has become apparent, within our research, that the following price levels may be used for each product type:

 

  • Shelled Corn in Jar: $5.00
  • Shelled Corn in Bags: $2.00
  • Whole Ears Bundled Together: $3.00

These prices are based upon a combination of secondary research, cost estimates, and focus group information.

To ensure that profit is being made at each of these price levels, total costs were calculated for the three product types. Total costs are a sum of packaging costs, labor costs, and the cost of the popcorn itself. A collection of different price levels gathered from area retail stores helped to establish an average bulk popcorn price of $.43 per pound. Next, labor costs were calculated. Shucking, shelling, cleaning, and packaging of the corn all need to be figured in as labor costs. Our estimate was ten minutes per package at a wage of $6 per hour, resulting in a $1 labor charge per unit. Finally, packaging costs were considered. Each package type consists of its own individual decoration and costs were calculated accordingly. A summary of all costs are shown in the following table.

 

Total Costs
 
Jar
Ears
Bag
Corn
$0.39
$0.30
$0.26
Package
$1.25
$0.73
$0.58
Labor
$1.00
$1.00
$1.00
Total
$2.64
$2.03
$1.84

With all costs considered, information from the focus group helped finalize price levels for each product type. Focus group participants were given a choice of three or four different price levels and were asked to choose the highest price they were willing to pay for each product type. Net profit per unit at each price level offered for the three package types are shown in the following table.

 

 

Net Profit Per Unit
 
$2.00
$2.75
$3.00
$3.50
$4.00
$5.00
Jar
— 
$.36
$1.36
$2.36*
Ears
-$.03*
$.97
$1.97
$2.97
Bag
$.16*
$.91
$1.66

 

*Modal price level selected by focus group for each product type.

Those attending the focus group revealed that they were actually willing to pay more for the jar than for the other two package types. In fact, 9 out of the 17 revealed that they would be willing to pay $5 for the jar. This would result in almost a 90% markup over total costs and a $2.36 net profit for each unit sold. The focus group revealed that they would be willing to pay more for the jar because it is more of a gift type item and $5 is a fairly reasonable and round price for a gift such as this. Some also stated that this type of packaging has a common price of $5 at craft shows. Some liked the fact that that jar added value to the product, in that, after the corn was gone the jar could be reused for another purpose. Others did recognize that the jar was more expensive to package and they were willing to pay a higher price for this reason.

The ears were valued at $2 by five of the focus group participants. Pricing the ears at $2 would actually result in a loss of $.03 for each package sold unless production costs could somehow be lessened. However, four focus group participants did indicate that they were willing to pay a higher price of $3. This was the same for a price of $4. Therefore $3 is a safe price for the whole ears bundled together. The focus group uncovered the fact that if they were going to buy a decorative item such as this they would be more willing to buy Indian corn over Truman popcorn. Also, the group mentioned that they would probably not be as apt to buy the ears as a gift, and thus were not willing to pay top dollar. These two statements may indicate a need for consideration in the continuation of this product.

The shelled corn in the bag was also priced at $2 by the focus group insuring a profit of only $.16 per unit sold. Almost 53% (9 out of 17) of those responding revealed that $2 was the most they were willing to pay for this product. This was due to the fact that the popcorn in the bag was not as gifty and the corn in the bag could not be saved as well as the other two packages. Also, some brought out the fact that the plastic bag was cheaper and a high price would not be paid for cheaper packaging. Another point mentioned regarding this was the fact that most would purchase this package for the purpose of popping. It would be cheaper to buy popcorn for this purpose at competing HyVee or Wal-Mart. If one were buying the product only to pop, the wrapper would most likely be thrown away. This may be a good reason to change the package of this product to bring down packaging costs and increase net profit per unit.

Our ongoing research and information provided by the focus group helped to us conclude that there is in fact a market for Truman Popcorn. The target market and the most beneficial aspects needed to be included in each of the 4 P’s: product, price, promotion, and place have been discovered. Any group who wishes to market Truman Popcorn can consider each of these aspects.