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Marketing Strategy of Dawn Food Products, Inc.

Marketing Strategy of Dawn Food Products, Inc.

Discuss Marketing Strategy of Dawn Food Products, Inc. within the Marketing Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Statistics: Private Company Incorporated: 1920 Employees: 1,200 Sales: $350 million SICs: 2045 Blended & Prepared Flour; 2099 Food Preparations Company ...

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Marketing Strategy of Dawn Food Products, Inc.
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Anjali Khurana
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anjalicutek
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Marketing Strategy of Dawn Food Products, Inc. - December 16th, 2010

Statistics:
Private Company
Incorporated: 1920
Employees: 1,200
Sales: $350 million
SICs: 2045 Blended & Prepared Flour; 2099 Food Preparations


Company Perspectives:

Dawn's bigger now, with international expansion and a product line that practically grows daily! To meet increasing customer demands, we utilize the latest equipment and procedures in all our facilities. Our product development team works hard to anticipate market trends and formulate new mixes, icings, fillings and frozen products for today's customers. But some things about Dawn remain the same&mdash′oducts that, most importantly, taste delicious. Fresh, high quality ingredients. Demanding, quality control testing of every batch. Personal "Dawn family" supervision of every aspect of the business from our door to yours. And you have our promise that Dawn will continue to help grow your business in every way we can ... because our success depends on your success. That's what our Dawn "Circle of Excellence" is all about: Great People--Making Excellent Products--Taking Good Care of Our Customers.


Company History:

Dawn Food Products, Inc. is the largest, oldest, most experienced and renowned bakery mix producer in the United States. The company makes a large assortment of mixes, icings, fillings, and frozen products that are marketed, sold, and distributed to both major retail supermarket chains and small, owner-operated grocery stores who run their own in-house bakeries. The Dawn Food Products line includes such items as Hand-Cut Donut Mixes, Blueberry and Cherry Cake Donut Mixes, Apple Cake Donut Mixes, Sour Cream Old-Fashioned Donut Mixes, Holland Creme Filling, French Donut Mix, RTU Donut Icings, RTU Donut Glazes, Carrot Cake Mix, Sponge Cake Mix, Cream Cheese Icing, Caramel Glossy Icing, and a host of other products such as pie glazes, pie fillings, danish fillings, brownie mixes, muffin mixes, bagel mixes, bread mixes, and frozen kosher fruit sticks. Through expansion of its distribution and sales network overseas, the company has established a presence in Costa Rica, the Dominican Republic, England, Jamaica, Japan, Malaysia, and Mexico.

Early History

During the period immediately before America's entry into World War I, Eugene Worden and Grover Lutz, both from Union City, Michigan, decided to open a bakery of their own. The two men, with extensive training and experience as bakers, were determined to establish a new business that made a whole range of fresh-baked goods such as donuts, breads, pies, and cakes. Knowing their reputations as bakers, the local townspeople encouraged Worden and Lutz in the pursuit of their dream. With a small loan from the local bank and savings they had accumulated for many years, the baking entrepreneurs opened their own store located at 112 East Michigan Street in the small town of Jackson, close to Union City. Named the Century Bakery, the new bakery was an immediate success, and both Worden's and Lutz's reputations as bakers spread throughout the local vicinity.

During the First World War, there was no interruption in the production of pastry and breads by the Century Bakery. In fact, the bakery's product line was growing at a fast rate, and the two owners could hardly keep their ovens hot enough for the increased demand. The bakery's most popular and largest selling item, however, was a light, fluffy donut that, according to legend, made people's mouths water. Soon the company's donuts products were in greater demand than any other item, including bread. By the time the war ended on November 11, 1918, Century Bakery had become widely known as the preeminent bakery in the region. Most important, numerous bakers in neighboring communities began to ask Worden and Lutz for the mixes to their products. The greatest demand was for the bakery's donut mixes.

In a change of direction that was to have far-reaching consequences for their bakery, Worden and Lutz decided to begin selling prepared pastry mixes to other bakeries in the vicinity. As the demand for prepared mixes grew, the owners finally recognized that their company was making more money by selling its mixes than it was by selling its bakery products through the store on East Michigan Avenue. After some intense deliberation, Worden and Lutz decided to close the bakery and its retail operation and open a company devoted exclusively to producing, marketing, and selling pastry mixes. Named Dawn Food Products, for the time of day that donuts are made, the country's first industrial mix company was formed and incorporated in 1920.

Since the location on East Michigan Avenue was well suited for a small bakery, but hardly adequate for the manufacture of mixes on a large scale, the owners moved the entire operation to 330 Otsego, a location within Jackson that allowed for extensive expansion. As the company grew during the decade of the 1920s, its product line became more and more varied. Dawn Food Products began to sell prepared mixes not only for a wide variety of donuts, but also for bread and other kinds of pastries. By the end of the decade, the company was supplying mixes to bakeries throughout western and central Michigan.

The Great Depression and World War II

When the stock market crashed during the autumn of 1929, Dawn Food Products was affected like most other companies in America. Numerous employees who had been hired during the previous years were laid off, and the wages of those who remained were frozen. Production dropped precipitously, especially in pastry mixes, since most people during the early 1930s did not have the money to spend on items such as desserts. Demand for bread mixes remained, however, at a constant level and actually helped keep the company solvent during the harshest years of economic upheaval. The one thing people did need was bread.

In 1936, a young man named Marlin Jones joined the company. Although the Great Depression would not end until the beginning of World War II, the worst years for Dawn Food Products were over, and the country once again began to resume its normal course of activities. These activities included, of course, the increased consumption of pastries, and the demand for Dawn's mixes began to increase slowly. As the company's financial situation became more stable, it started to hire more employees, with the ultimate intention of returning to the pre-Depression level. One of the new workers was Marlin Jones. Ambitious and industrious, Jones was quickly noticed by management and given greater responsibilities in marketing and sales.

When America formally declared war on Germany and Japan in December of 1941, the entire agricultural industry, from small farms to large cooperatives, was organized by the federal government to ensure the flow of food to the country's soldiers serving both at home and overseas. Commodities such as flour and corn grew scarce, as the nation converted its industrial base and agricultural produce to a wartime footing. Jones, now a part of Dawn's management team, was assigned the task of supplying a constant flow of necessary grain for the production of bread and various other mixes. Traveling from one state to another across the broad expanse of the American landscape, he made arrangements with both the federal government and farmers to commit large tracts of grain fields to Dawn Food Products for specific kinds and quantities of food production. By the time World War II ended in 1945, numerous soldiers had tasted the wares that came from Dawn's packaged mixes.

Postwar Transition and Growth

In spite of the developments during the war years, and the benefits the company garnered through its association with the federal government, Dawn Food Products, Inc. remained a relatively small and highly localized operation. After the original owners passed away, their families were not inclined to assume leadership of the company. Sensing an opportunity that comes once in a lifetime, Marlin Jones decided to purchase control of the company in 1955. The transition in ownership did not signify any changes in the company's basic product, namely, pastry mixes, but in terms of long-term strategy and operational matters, Jones was ready to implement a comprehensive development program. The new owner's first step was to expand the product line to include icings and fillings for pastries, as well as increasing the number of different types of donuts mixes available to bakeries and other retail food establishments. One of the most important developments during this time was the formation of Dawn Equipment Company. Created in 1957, just two years after he took control of the firm, Dawn Equipment Company began to manufacture bakery equipment for large volume users. One of the first pieces of equipment sold was a bakery fryer that produced donuts.

From the time Jones took control of the company, he was committed to expanding its presence from a local operation to a nationwide organization. Consequently, a new marketing strategy was initiated and directed to bakeries and supermarket chains across the country. As the company continued to grow, Jones decided to build a new plant in Jackson's Micor Industrial Park. Completed in 1967, the new building featured an office area, a total of three floors devoted just to production, and a mixing tower that rose five floors high. The building and its facilities was, at the time, a reflection of state-of-the art technology in the mixing industry.

During the 1950s and 1960s, Marlin Jones's sons began their association with Dawn Food Products. During summer vacations and other holidays during their college schooling, Ronald, Steven, and Miles began to work at various odd jobs around the company's production and distribution facilities in Jackson. Starting at the bottom of the ladder, the brothers first unloaded boxcars of sugar and flour for use in production. Later, at the suggestion of their father, the three young men worked in the plant and learned the intricacies of mixing different concoctions for pastry, bread, and a wide variety of other products. As they grew older, with each successive summer holiday they learned more and more about the company and were given greater responsibilities. Before long, the three young men just out of college were ready to assume the leadership roles within the company for which their father had prepared them.

Continued Growth and Expansion in the 1980s

Many changes were to take place at Dawn Food Products during the 1980s. Marlin Jones died during the early part of the decade, but his cultivation of family ownership, control, and hands-on management continued through his three sons. Readily prepared to run the company, Ronald became the president of the firm. Steven served as executive vice-president and Miles was appointed vice-president of operations. Marlin Jones, during the time of his tenure from 1955 to 1983, had increased the company's annual sales from less than $1 million to more than $27 million. Without changing the direction and purpose of Dawn Food Products, the three sons developed the company's marketing techniques and production facilities with uninterrupted resolve.

A typical week at Dawn's mixing plant during the late 1980s involved the use of more than one million pounds of flour, 300,000 pounds of sugar, 20 different varieties of shortening products, and, something that an industry analyst would not expect of an American firm, spices and herbs from as far away as East India and other exotic locations around the world. The new generation of management renewed its commitment to quality control and guaranteed that the same mixes would bake the same way all of the time. To ensure this type of quality control for all of its products, Miles made certain that a sample of the baking mix was extracted for testing from each batch. As the reputation of the company grew, annual sales increased and more expansion was undertaken. Soon the company's product mixes were sought after by companies in other countries, and management arranged licensing agreements with firms in Canada and Japan to use its tested formulas to produce mixes for pastries and breads.

The 1990s and Beyond

During the late 1980s and early 1990s, the trend toward in-store bakeries became more and more pronounced within large supermarket chains across the United States. In-store bakeries that were in full operation--baking breads, preparing birthday cakes, and making donuts--were beginning to reap large profits for their retailers. As a result, Dawn Food Products decided to capitalize on this movement by providing a planning and operational package for supermarkets to employ. Dawn emphasized the importance of product consistency to its customers, stressing that the single most important factor in keeping customers happy was that all mixes, fillings, icings, toppings, and frozen products exhibit the same taste from one day to the next. When large supermarket chains began to contract with Dawn to help set up their own in-store bakeries, the company was ready with more than 3,500 manufactured products of its own to provide to retailers.

Relying heavily on consumer research and sophisticated marketing techniques, Dawn helped in-house bakeries customize their products to the needs of its clientele. One such program, called the "Select Cake Program," used socioeconomic data gathered from customers to tailor its cake assortments to the preferences of the neighborhood within which the supermarket was located. By the mid-1990s, cakes accounted for approximately 30 percent of in-house bakery sales volume, and there was no indication that the trend would diminish. Equally important as the demographic research for its Select Cake Program, management at Dawn started to give greater weight to children as one of the preeminent and fast growing consumer segments. Through its marketing and research department, Dawn discovered that children influence decisions on what to buy in the in-store bakeries, and the company began to develop promotions and products that were sure to appeal to these young customers. Another development at the company was its emphasis on "better for you" bakery products. Once again, Dawn's marketing and research development department had discovered that people were willing to pay a bit more for natural ingredients in the food that they eat. If they could believe the manufacturer's list of ingredients on the package, and the product tasted good, consumers were more than ready to take these items home to their families.

Although some management changes occurred at the top in the 1990s (for example, Peter Staelens was brought in as chief financial officer), the three Jones brothers continued to retain their ownership, control, and management of Dawn Food Products. The family business had no intention of slowing down and, by the mid-1990s, Dawn had established distributorships in each of the contiguous states as well as numerous offices worldwide, including Canada, Japan, Costa Rica, the Dominican Republic, England, Jamaica, Malaysia, and Mexico.
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Last edited by anjalicutek; December 16th, 2010 at 04:57 PM..
   
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