ManagementParadise.com : Worlds Leading Management Portal. MBA | Classroom, Boardroom and Beyond


Go Back   ManagementParadise.com Forums - Your MBA Online Degree Program and Management Students Forum for MBA,BMS, MMS, BMM, BBA, students & aspirants. > Projects HUB for Management Students ( MBA Projects and dissertations / BMS Projects / BBA Projects > PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT > Marketing Management

Marketing Strategy of Bozzutos, Inc.

Marketing Strategy of Bozzutos, Inc.

Discuss Marketing Strategy of Bozzutos, Inc. within the Marketing Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Statistics: Public Company Incorporated: 1945 as John Bozzuto & Sons, Inc. Sales: $319.13 million Employees: 400 Stock Exchanges: NASDAQ OTC ...

Reply

 

LinkBack Thread Tools Display Modes
Advertisements
Marketing Strategy of Bozzutos, Inc.
Old
 (1 (permalink))
Anjali Khurana
anjalicutek is an unknown quantity at this point
 
anjalicutek
Student of BBA at DAV College
Amritsar, Punjab
Management Paradise Guru
 
Institute: DAV College
Status: Offline
Posts: 2,223
Join Date: Nov 2010
Location: Amritsar, Punjab
Marketing Strategy of Bozzutos, Inc. - December 13th, 2010

Statistics:
Public Company
Incorporated: 1945 as John Bozzuto & Sons, Inc.
Sales: $319.13 million
Employees: 400
Stock Exchanges: NASDAQ OTC
SICs: 5122 Drugs, Drug Proprietaries and Druggists Sundries; 5141 Groceries, General Line; 6159 Miscellaneous Business Credit Institutions; 7358 Equipment Rental and Leasing; 8721 Accounting, Auditing and Bookkeeping Services


Company History:

Bozzuto's, Inc. is a wholesale distributor of groceries and nonfood items to independent retail supermarkets and grocery and convenience stores in northern New Jersey, southeastern New York (including Long Island), and southern New England. A subsidiary, AB Small Business Investment Co., Inc., offers secured business loans to qualified independent small businesses; in many cases, loans are granted to Bozzuto's retail grocery-store customers so that they can open new stores or expand existing facilities. Another subsidiary, A.B. Leasing Corp., leases data-processing and delivery equipment. Under the direction of Adam M. Bozzuto, its founder, Bozzuto's, Inc. celebrated its 50th anniversary in 1995.

A native of Waterbury, Connecticut, Bozzuto founded his wholesale company in 1945. However, Bozzuto's remained relatively obscure until 1970, when 190,000 shares of the company's common stock (about one-third of the total) were offered to the public. By 1970, there were some 1,930 grocery wholesalers in the United States, of which 469 were of the type called "voluntaries"--food jobbers selling largely to affiliated retailers. Voluntary grocery wholesaling began in the 1920s as a means of meeting competition from chain stores. Such wholesalers were usually privately owned, and they sold their wares to a select group of independent supermarket owners with whom they had developed close relationships. Typically, voluntary wholesalers also provided additional services on a fee basis such as site selection, financing, training, advertising, and accounting. Voluntaries accounted for nearly half of all wholesale grocery sales in 1970.

Voluntary wholesale grocers provided retailers with goods at warehouse cost plus a small fee, based on volume, freight charges, and other relevant service fees. In addition, they received a two percent discount from their suppliers for prompt payment. Often they provided financial aid to retailers as well. While the profit margin for voluntaries usually was less than one percent of volume, the return on volume could be augmented in a number of ways, such as by packaging and manufacturing. The sale of nonfood items also helped boost revenue so that by the end of 1966 voluntary wholesale grocers were carrying as many as 7,205 different items.

Like many other wholesalers, Bozzuto's established an affiliation with IGA (Independent Grocers' Alliance), a group of about 4,000 retailers, in 1970. Through this alliance, food and other products were typically sold to affiliated retailers on a cost-plus-commission basis. By entering this association, Bozzuto's began serving as many as 184 stores, and its sales and revenues increased from $17 million in 1965 to $46.8 million in 1970. Furthermore, net income rose from $104,503 to $620,131 over this period, while long-term debt shrank from $299,909 to $42,765.

During this period of prosperity, Bozzuto's bought leases on six supermarket locations which it in turn subleased to retailers for a profit; in addition, the company rented a 183,860-square-foot warehouse in Cheshire, Connecticut, which provided customers with 45 percent of their product requirements. Bozzuto's then went on to construct a 42,000-square-foot distribution center for perishable food products in 1971, enabling the company to expand service to its customers in frozen foods, meats, ice cream, fruits and vegetables, and dairy products. Ultimately, this investment markedly increased Bozzuto's capacity to provide the product requirements of its customers to the level of 61 percent. During this period, Bozzuto's also employed a lucrative method of distributing its nonfood items; called dropshipping, this practice gave customers the option of purchasing products for delivery directly from Bozzuto's suppliers rather than from Bozzuto's own warehouses. Drop shipments represented 30 percent of company sales in 1970. By early 1972, Bozzuto's managed a group of 196 customers, 62 of which were affiliated with IGA and accounted for about two-thirds of the company's total sales and revenues.

This period of strong financial growth also afforded Bozzuto's the opportunity to acquire other businesses. In 1971, the company bought Gordon Fruit and Produce Co., a wholesaler, to provide an entry into the produce business. That same year, Bozzuto's purchased another wholesaler, J. Daren and Sons, Inc. of Norwich, Connecticut, for $757,500 in cash and notes. This acquisition brought Bozzuto's into the institutional-food field for the first time. In 1973, Bozzuto's bought Wayco Foods of Elk Grove Village, Illinois, but sold its controlling interest three years later. The company then sold J. Daren and Sons in 1978. These acquisitions helped raise Bozzuto's consolidated sales to $132 million in 1974, while net earnings rose to $612,494. In addition to its food-service operations, Bozzuto's had by this time developed 10 new supermarkets and remodeled many others for its customers. Moreover, it was engaged in advising independent businessmen in all phases of investing in a supermarket, from raw site analysis to store planning, equipment, and labor supply. This venture led to the creation of a department of advertising and sales promotion in 1974; two years later, Bozzuto established a loan subsidiary called AB Small Business Investment.

Net sales rose from $86.9 million in 1974 to $116.4 million the following year, but dipped slightly during the next three years due to the sales of Wayco and Daren. Similarly, net earnings rose from $612,494 to $942,596 in 1977 during this period, before falling to $528,258 in 1978, largely due to a $133,438 loss posted by Daren. By 1981, Bozzuto's had become the exclusive distributor of products under the IGA label in its marketing area, even though its number of retail grocery customers had fallen to about 150. The company continued to expand operations by buying food and nonfood items from hundreds of suppliers, some of them manufacturers and processors and others food brokers. Furthermore, in 1980 Bozzuto's opened an experimental warehouse-style retail grocery store in New York called Buy-N-Save Cash & Carry.

Bozzuto's also continued to expand its existing operations. Additions to the Cheshire warehouse had brought its capacity up to 245,000 square feet by 1981. In addition, the company's fleet of vehicles now consisted of 45 cargo trailers, 27 refrigerated trailers, 39 tractors, and 27 automobiles. Continuing its rise in profitability, Bozzuto's posted net sales which rose from $148.4 million in 1979 to $179.5 million in 1983. Net income, $717,000 in 1979, dipped as low as $434,000 in 1981 but recovered to $702,000 in 1982 and $757,000 in 1983.

By 1988, Bozzuto's was distributing products to about 245 supermarkets and superettes and 500 convenience stores, although the latter represented only 4 percent of sales. The majority of Bozzuto's customers remained in small- or medium-sized cities. Food products distributed included canned goods, cereals, dairy products, delicatessen items, meats, poultry, seafood, fresh fruits and vegetables, and frozen foods. Nonfood items included cigarettes and tobacco products, health and beauty aids, paper products, cleaning supplies, and small household items. Most products distributed bore the brands of the manufacturers or processors from which Bozzuto's purchased the products, including many nationally advertised brands.

Also during this period, Bozzuto's convenience-store distribution warehouse was moved into a separate facility for greater flexibility and increased production. The fleet of tractors and trailers was being continuously upgraded to preserve the company's record for on-time deliveries. In addition, the company invested in a computerized purchasing system, which was specifically designed to balance inventories and included a "forward buy" feature to maximize the return on investments. Bozzuto's also offered a complement of advertising, merchandising, accounting, and store-design and development services to independent retail grocery operations. Promotional aids included a "Monopoly" game intended to raise spending by retail customers.

In late 1986, Bozzuto's acquired a new subsidiary called A.B. Leasing Corp. for about $1.2 million. This company leased data-processing and delivery equipment. During this period, the company enjoyed steady growth from $220.8 million in 1984 to $233.9 million in 1988; but net earnings fell every year, from $852,000 in 1984 to $450,000 in 1988. Furthermore, long-term debt amounted to about $2.8 million at the end of 1986. However, Bozzuto's fortunes began turning around in 1989, when revenues rose to $259.8 million and net income to $511,000. Two years later, net income passed the $1 million mark for the first time and revenues totalled $260.7 million. 1992 proved even more successful, with $1.65 million earned on revenues of $289.5 million.

In 1993, revenues reached a record $319.13 million and net income a record $1.84 million. Long-term debt was about $13.5 million at the end of the fiscal year. By that time, Bozzuto's offerings included its own Shur Valu private-label line. About 20 Shur Valu items were being offered in bulk to warehouse clubs, as well as nationally branded club packs like 20-pound Meow Mix from Ralston Purina, 35-ounce Cheerios twin pack, 12-pack Scott paper towels, and 256-ounce Tide detergent. Joel Sebastian, Bozzuto's vice president of merchandising and advertising, told Progressive Grocer that the company priced club items to make an 8 to 14 percent profit margin. In 1994, Bozzuto's was conducting quarterly IGA-brand promotions. Brian McColgan, a private-label buyer for Bozzuto's, told Progressive Grocer that in a single promotion the company "moved close to 50,000 cases, including 6,000 cases of apple juice, 4,000 of paper towels, and 4,000 of bleach."

The 1970 public offering of Bozzuto's stock was priced at $9.75 a share. By 1986, shares were trading over-the-counter at a range between $14 and $22 on the NASDAQ exchange. In subsequent years, the value of the stock fell, although trading was always thin; in 1990 and 1991, for example, there were no bids at all. In 1992, Bozzuto's stock traded in a range of only $8 to $10 a share, well below its book value of $24.50. Interviewed by a reporter for Barron's in 1993, Ed McLaughin, an investor in closely held and inactively traded securities, said the stock was grossly undervalued. As of 1994, there were only 210 stockholders. Adam Bozzuto controlled about 44 percent of the stock, his son Michael A. Bozzuto about 10 percent, and his daughter Jayne A. Bozzuto about 10 percent.

Michael Bozzuto, who had been serving as executive vice-president and treasurer of the company since 1981, was named president and chief executive officer in 1994. He also continued in his former posts. Adam Bozzuto, who had been president and chief executive officer, remained chairman of the company at the age of 78, and his son continued to report to him. Jayne Bozzuto continued to serve as a vice-president, a position she assumed in 1982.

Principal Subsidiaries: A.B. Leasing Corp; AB Small Business Investment Co., Inc.; Boz-White Hills, Inc.; Fresh-Line Distributors, Inc.; Tolland Supermarket, Inc.
Advertisements

Last edited by anjalicutek; December 13th, 2010 at 04:43 PM..
   
Friends: (0)
Reply With Quote
Related to Marketing Strategy of Bozzutos, Inc.
 

Similar Threads

Thread Thread Starter Forum Replies Last Post
Marketing Strategy of BAA Ltd. Anjali Khurana Marketing Management 0 December 11th, 2010 11:58 AM
Marketing Strategy of Advanced Marketing Services, Inc. Anjali Khurana Marketing Management 0 December 9th, 2010 09:42 AM
Marketing Strategy of AUO Anjali Khurana Marketing Management 0 December 8th, 2010 02:24 PM
Marketing Mix Strategy Sunanda K. Chavan Marketing Management ( RM , IM ) 0 September 15th, 2010 12:09 PM
Marketing Strategy: Developing a Website Marketing Plan rohit_pn Articles !! 5 August 24th, 2010 10:27 PM
 

Reply

Bookmarks

Tags
advertising strategy, brand promotion, case study, company in us, distribution network, innovative marketing, market capitalization, market research, marketing in europe, marketing mix, marketing project, marketing strategy, marketing strategy of us, multinational corporation, new products, online productivity, pest analysis, product development, product research, project analysis, public corporation, revenue stream, swot analysis, united states

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


Login
Forgot Password?  New User?
  

» Ads





» Recent Threads

Management acounting
Last post by H? Ly Tinh
10 Hours Ago 10:24 PM
0 Replies
topics for project on... ( 1 2)
Last post by Hrishita Sahay
13 Hours Ago 07:43 PM
10 Replies
Hello Everyon
Last post by Bhautik Kawa
15 Hours Ago 06:12 PM
2 Replies
Indian Rupee Update by...
Last post by Market Magnify
16 Hours Ago 05:16 PM
4 Replies
Investment Banking...
Last post by Aaina Khan
17 Hours Ago 04:11 PM
3 Replies
Short Term Technical... ( 1 2 3... Last Page)
Last post by Windsor Brokers
17 Hours Ago 04:02 PM
66 Replies
Readers are advised to...
Last post by Hrishita Sahay
17 Hours Ago 03:39 PM
2 Replies
Asian Markets Update by...
Last post by Epic Research
20 Hours Ago 12:50 PM
4 Replies
Start Your Business with...
Last post by Juhani Gallen
21 Hours Ago 12:07 PM
0 Replies
Supply Chain Management...
Last post by Tom Murdoch
23 Hours Ago 10:03 AM
1 Replies
Test bank on... ( 1 2)
Last post by Yuut Muguh
1 Day Ago 01:26 AM
11 Replies
Solution manual on... ( 1 2 3... Last Page)
Last post by Yuut Muguh
1 Day Ago 01:25 AM
44 Replies
Solution manual on... ( 1 2 3... Last Page)
Last post by Yuut Muguh
1 Day Ago 01:23 AM
30 Replies
Solution manual of... ( 1 2 3)
1 Day Ago 09:30 PM
20 Replies
SSC vs CBSE vs ICSE vs...
Last post by Joel Francis
1 Day Ago 02:37 PM
0 Replies

» Projects Helpline

project on privatisation
Last post by Shatrughna Bhoir
3 Days Ago 08:05 PM
topics related to 100...
Last post by Rachini Pandey
5 Days Ago 10:35 PM
Retail Management Notes
Last post by Rajesh Nimbunkar
6 Days Ago 05:12 PM
Final Year MBA Projects...
by Raasi
Last post by Raj Raj
1 Week Ago 03:23 PM
Project Management...
by onjono
Last post by Raj Raj
1 Week Ago 03:13 PM
ManagementParadise.com is not responsible for the views and opinion of the posters. The posters and only posters shall be liable for any copyright infringement.


Management Paradise
About Us
Press
Jobs
Contact Us
Kartik Raichura
Legal
Terms & Conditions
Privacy Policy
Disclaimer
Copyrights
Help
Zeitgeist
Support
FAQs
Tour
Feedback
Partners
Follow
Copyright © 2004 - 2013 Management Paradise. Site Developed by Available.co.in