IntroducingKingCrabtotheTrade

Vista previa del material en texto

S w 
 
909A04 
 
 
 PHILLIPS FOODS, INC. — INTRODUCING KING CRAB TO THE TRADE 
 
 
 
Professor Frédéric Brunel, with the assistance of Deborah Utter, wrote this case solely to provide material for class discussion. The 
authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised 
certain names and other identifying information to protect confidentiality. 
 
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of 
this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to 
reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of 
Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. 
 
Copyright © 2009, Ivey Management Services Version: (A) 2010-04-29 
 
 
 
On a hot Baltimore day in August 2006, Phillips Seafood Restaurants were full of tourists lunching on 
local seafood specialties. Among them, Cherry Stockworth, vice-president of marketing for Phillips Foods, 
Inc., and Ron Birch, product manager for the new pasteurized king crab, were discussing the upcoming 
phase II of the launch of king crab (see Exhibit 1). In phase I, Birch had targeted foodservice buyers and 
had spent almost half of his $160,000 king crab launch budget for ads in foodservice trade magazines. For 
phase II, Stockworth was advocating a different strategy. She summarized: 
 
Ron, king crab is one of the most important launches we have done in years. We are the 
leaders in blue swimming crab and our pasteurization process is arguably the best in the 
business. However, if we want to maintain our double-digit growth, we need to leverage 
the product diversification that king crab provides. In phase I, you have advertised the 
product in restaurant and institutional foodservice magazines, and the response has been 
good and the trade ads have worked well. Now, for this second phase, we must ensure an 
equally successful launch in the other two markets: food retailers and wholesale 
distributors. I know that your phase II plan is to stick with the proven trade advertising 
strategy but I think that we can generate more sales leads if we make king crab the 
centerpiece of our booth at the IBSS (International Boston Seafood Show) in March. This 
will generate buzz and give king crab the needed exposure to distributors and retail buyers. 
If we go that route, I will charge your budget for half of Phillips’ cost for the trade show. 
Please take a few days to consider this idea; work up the numbers on the two options and 
let’s talk next week to finalize the decision. 
 
 
PHILLIPS FOODS, INC. 
 
Founded by Augustus E. Phillips in 1914 on Hoopers Island, Maryland, Phillips Foods Inc. had grown into 
one of the largest seafood businesses in the United States ($160 million for 2006 sales1) and was the
 
1 Hoover’s Profile, 2008. 
Page 2 9B09A004 
 
 
number one U.S. brand for crab meat. The company was made up of three business units: (1) a restaurant 
division which operated eight full service restaurants in the Baltimore region and a growing franchise 
division along the East Coast (e.g. airport locations), (2) a foodservice products unit that sold to restaurants 
and foodservice institutions, and (3) a retail products division which sold directly (or indirectly via 
wholesalers and distributors) to grocery stores and other retail food merchants. 
 
Phillips was renowned for its crab products and the brand image remained closely associated with its 
Maryland origins. Yet, the company had actively diversified its supply sources and production, and had 14 
manufacturing sites (one in Baltimore and 13 overseas), and three sales offices outside the United States. 
Unlike most of its competitors, Phillips owned and operated all of its plants. It believed that this strategy 
ensured greater food safety and quality. 
 
Phillips had also differentiated itself on at least two other fronts. Phillips was the first to perfect a method 
to pasteurize and can crabmeat while preserving a fresh-like product taste and texture. Once canned, the 
crabmeat needed to be refrigerated, but it enjoyed an 18-month shelf life. In retail stores, pasteurized crab 
was typically sold in self-service refrigerators that were located in proximity to the seafood counters (see 
Exhibit 2). To support these product innovations, Steve Phillips (CEO Philips Foods, Inc.) also 
implemented a bona fide branding strategy. Instead of selling crabmeat as a commodity, he invested in 
brand-building activities for the Phillips brand. In 2006, Phillips’ products could be found in over 10,000 
retail stores in the United States. To sell to these stores, Phillips relied on its own direct-to-retailers sales 
force and on a network of food brokers, distributors and wholesalers who acted as intermediaries between 
the company and some retailers. 
 
In recent years, Phillips’ product strategy had centered on developing value-added products (e.g. ready-to-
eat products) that offered higher margins than plain seafood. According to Bob Goldin, executive VP with 
Technomic Inc., a food research and consulting firm, profit margins for commodity food items ranged 
between one per cent and three per cent, whereas margins for value-added products could be eight times as 
large.2 By 2007, Phillips expected to derive most of its revenues from sales of value-added items. In the 
retail channel, its product line included refrigerated crab meat, crab dip, frozen appetizers, frozen crab 
cakes, assorted frozen seafood (e.g. shrimp, salmon, tilapia, mahi-mahi), a line of frozen Asian-inspired 
products, and also a line of seasonings and cocktail and tartar sauces (see Exhibit 3). 
 
Phillips’ latest innovation was king crab. In 2006, no other company had a pasteurized king crab product 
with the same fresh-like quality. The pasteurization technique allowed Phillips to position the product as an 
alternative to fresh or frozen king crab. The product was available in two packages: one targeted at 
restaurant and institutional foodservice markets, and one for retail consumers (see Exhibit 1). For phase II 
of the launch, Birch was looking into the best way to secure retail distribution for the consumer market 
version of the product. 
 
 
KING CRAB 
 
While blue swimming crab might conjure images of family fun, summer days and sandy Maryland 
beaches, king crab was “synonymous with the raw, rugged beauty of Alaska.”3 Most king crab was fished 
in the rough Northern Pacific waters off the coast of Alaska and Russia. Fishing for king crabs was often a 
dangerous and epic affair, and had been the subject of a popular program (Deadliest Catch) on the 
 
2 Baltimore Business Journal, January 11, 2008. 
3 Seafood Business, June 15, 2007. 
Page 3 9B09A004 
 
 
Discovery Channel. Seafood Business magazine stated that “during the show’s rise to prime-time 
prominence, king crab became a seafood spectacle.”4 
 
The crabs themselves were spectacular. Depending on the sub-species, mature specimens weighed up to 
eight pounds for golden king crabs and up to 20 pounds (with leg spans of five feet) for blue king crabs. 
King crab was considered a delicacy and a luxury seafood product, and was mainly consumed in 
restaurants. Most king crab meat was shipped cooked and frozen in bundles of legs and claws still in the 
shell (some was shipped fresh or live). Restaurateurs said that consumers enjoyed king crab “because of its 
sweet and succulent taste” as well as “the wow factor” of the large legs. “You crack open a leg, and 
there’s a huge piece of meat… you don’t have to fight with it to get a little teeny piece.”5 
 
Kingcrab legs used for Phillips’ product were cooked, chilled and brine-frozen at sea. They were then 
transported to Asia, where the meat was extracted from the shell, pasteurized and packaged in 8-ounce 
containers (16 ounce. for warehouse clubs). The product had no additives or preservatives. Advantages to 
retailers were the 18-month shelf life and the potential for retail margins in the 35 to 45 per cent range. The 
suggested retail price was $16.99 for an eight-ounce container. Besides Phillips’ brand reputation, 
advantages for consumers were: a reasonable price in comparison to fresh or frozen; the convenience of 
100 per cent usable crab meat; and the high-quality taste of fresh without the mess of cracking and 
removing the shell. Phillips expected that a sizeable number of U.S. consumers would buy this new retail 
product. 
 
 
SEAFOOD RETAIL MARKET 
 
U.S. seafood retail sales ($14.4 billion in 20066) had been fueled by increased health concerns of U.S. 
consumers, the introduction of innovative seafood products, and the growth of warehouse clubs. Over the 
next six years, five per cent to six per cent annual growth was predicted. Fresh seafood (chilled or 
refrigerated) represented 54 per cent of seafood retail sales, frozen represented 33 per cent and shelf-stable 
seafood (non-refrigerated) accounted for 13 per cent.7 These relative shares were not expected to change 
significantly. 
 
Seafood consumption patterns varied greatly across products and situations. Amongst the 110 million U.S. 
households, 90 per cent of them ate seafood; however, 43 per cent of these households ate seafood mainly 
when they dined out. Further, only 27 per cent of U.S. households reported buying frozen seafood and 18.5 
per cent buying fresh seafood, with crab (all forms) being purchased by eight per cent of U.S. households.8 
Generally, most U.S. homemakers were not confident in their ability to properly cook seafood, thus 
resulting in this low penetration of seafood for home-cooking. As a result, experts agreed that direct-to-
consumer advertising campaigns and cooperative promotional programs (e.g. in-store signage, sampling, 
demonstrations) were necessary to achieve successful new seafood product launches.9 According to the 
CEO of Blue Horizon Organic Seafood Co., when seafood was cooked at home, “consumers want 
approachable flavors similar to those they’ve experienced in restaurants or on vacation… they are looking 
for something tasty and nutritious that they can put on the table in minutes.”10 In response, manufacturers 
 
4 Seafood Business, January 28, 2008. 
5 Seafood Business, June 15, 2007. 
6 Mintel, US Fish and Seafood Industry Report, January 2008. 
7 Mintel, US Fish and Seafood Industry Report, January 2008. 
8 MRI+, Spring 2006 Product Survey. 
9 Mintel, US Fish and Seafood Industry Report, January 2008. 
10 Refrigerated & Frozen Foods, June 2007. 
Page 4 9B09A004 
 
 
had introduced products that emphasized “convenience,” “natural,” “premium” or “microwaveable” as the 
main product benefits. 
 
The retail side of the market had been marked by: 1) a considerable industry consolidation within 
supermarkets (grocery stores with annual sales over $2 million) and 2) the growth of warehouse clubs (see 
Exhibit 4). In 2006, seafood products were sold through 34,000 supermarkets (75 per cent were part of 
chains), 1,100 warehouse clubs and 13,000 smaller independent food stores11 (including 3,800 specialty 
seafood markets12). 
 
Seafood sales accounted for four per cent of supermarket sales, with packaged seafood representing one 
third of that amount and bulk seafood representing the rest. It was also estimated that sales of packaged 
seafood in supermarkets accounted for 25 per cent of total U.S. seafood retail sales.13 Most retailers 
purchased either directly from the manufacturers or through food brokers. Brokers were used for their 
relationships with retailers and their geographic coverage. They sold the products to retailers and visited 
the retail outlets frequently to maintain the presentation of the products on the shelves. Food brokers were 
typically paid a three to five per cent commission based on the manufacturer’s selling price. 
 
Most retailers were ambivalent about new products. On one hand, they sought them to gain a competitive 
advantage or improve margins, but on the other hand, they were resistant because of limited retail shelf 
space and a desire to minimize risk. To carry a new product, retailers would routinely eliminate another 
SKU (stock keeping unit) in order to make room for the new one. New products were selected based on 
their bottom line potential and their potential inventory turn rate. It was common when negotiating with 
retailers to offer a promotion calendar, which included discounts and promotional events during the year. 
To support the retailers and educate consumers, Phillips had developed a king crab recipe booklet that 
would be available for free at the point of purchase, shelf signage and an icelator display bin to hold the 
products during promotional events (see Exhibit 2). 
 
Two main trends were expected to shape the future of seafood retail. First, consumers were expected to 
purchase a greater share of their weekly food basket in warehouse clubs and large mass merchandisers; 
thus, the share of seafood sold through these channels would increase. Second, there was a trend toward 
greater emphasis on self-service selling for seafood. For example, loose seafood counters were being 
phased out by several grocery chains (e.g. Stop & Shop, Giant). In these instances, the traditional counters 
were replaced with prepackaged seafood in refrigerators or freezers. The Food Marketing Institute 
estimated that, by 2007, less than 60 per cent of supermarkets would still have a full-service seafood 
counter. Chains following this strategy were mainly motivated by cost savings and a desire to align their 
operations more closely with the models used by mass merchandisers and warehouse clubs. Although 
consumers might enjoy more competitive prices thanks to these changes, they had also lost a key source of 
seafood information and home cooking advice: the counter employees. Though, there were some notable 
exceptions to this trend. Some up-market chains such as Whole Foods had gone in the opposite direction: 
hiring more personnel in their seafood departments and offering more education and premium items.14 
 
 
 
11 Food Marketing Institute, Key Facts & Figures, 2006. 
12 Encyclopedia of American Industries, Vol. 2, pp. 710-711, 2005. 
13 Mintel, US Fish and Seafood Industry Report, January 2008. 
14 Mintel, US Fish and Seafood Industry Report, January 2008. 
Page 5 9B09A004 
 
 
TRADE SHOW MARKETING 
 
In the United States and Canada, over 14,000 trade shows (a.k.a. exhibitions, expos, fairs) would be held in 
2006. A typical show ran for two or three days and had about 35,000 square feet of exhibition space and 
over 100 exhibitors.15 Smaller shows were typically held in hotels or conference facilities and larger ones 
were held in large exhibition and convention centers. Most of these face-to-face events were aimed at 
business audiences. Although consumer shows (e.g. a local boat show) tended to have more visitors, they 
only accounted for 18 per cent of all shows. 
 
Exhibition professionals argued that shows were a unique sales and marketing medium because (1) they 
brought the most active prospects and customers to the exhibiting company, (2) companies could 
demonstrate products, answer questions, overcome objections and interact face-to-face with their current or 
potential customers, (3) companies could build on all five human senses in order to deliver impactful and 
memorable messages and (4) multiple marketing goals could be pursued at once (e.g. from long-term 
relationship-building to immediate sales leadgeneration).16 
 
However, there were limitations to the marketing power of this medium. A small number of trade shows 
might not always deliver on the promises made to the exhibitors and attendees. Occasionally, attendees and 
exhibitors had reported that some shows felt too cramped. There were also isolated anecdotes of keynote 
speakers being disappointing or even failing to show up. It was thus important that attendees and exhibitors 
selected well-managed shows with a strong reputation and a positive track record. Also, because most 
attendees wanted to be able to see the key industry players for one industry under one roof, the absence of 
some important exhibitors had contributed to the downfall of several shows. Conversely, while some 
shows failed to attract enough exhibitors or attendees, others might fall victim to their own success. Trade 
shows could be so large that exhibitors had problems standing out amongst all exhibiting companies and 
attendees had problems finding the companies or products they sought. As attendance grew larger, 
exhibitors found it challenging to properly staff the exhibits or make sure that their exhibit space was large 
enough to accommodate the volume of visitors. Irrespective of overall show size or exhibit design and 
staffing, there was one common complaint from attendees and exhibitors: shows were tiring and it was 
hard to be “on” for 12 or more hours per day, for two to three days at a time. 
 
In 2005 in the United States, firms spent $7.5 billion on trade show exhibit space and 42 million visitors 
attended.17 In addition to renting floor space, companies spent money on exhibit design (e.g. design and 
construction of display, refurbishment, storage, display material), show services (e.g. electrical, plumbing, 
carpet, janitorial services, security, lead retrieval information system), shipping (e.g. freight and material 
handling), travel and entertainment (e.g. travel and lodging of personnel, meals, hospitality and client 
events), and advertising and promotion (e.g. sponsorship of events at the show, ads in programs, pre-show 
marketing, print material, giveaways and prizes) (see Exhibit 5). As a rule of thumb, total trade show costs 
were about three times the cost of floor space for small exhibits that did not require extensive setup and 
show services. However, if the exhibit was larger and required more services, a better rule of thumb was 
five times the cost of floor space. 
 
A comparison of the effectiveness and usage of face-to-face events versus other marketing tactics 
suggested that B2B marketers viewed face-to-face events as the most effective tactic for generating leads 
and building brand image (see Exhibit 6). These results could be reinforced by the fact that most attendees 
 
15 Center for Exhibition Industry Research, 2006 Census. 
16 The Global Association of the Exhibition Industry, Exhibitions Work, 2006. 
17 B2B Media Trends and Forecast, Expo, 2006. 
Page 6 9B09A004 
 
 
had not been called on by a salesperson in the 12 months preceding a show.18 Yet, the majority of attendees 
were planning a purchase in the next 12 months and had some direct buying influence (e.g. final say in 
purchase decision, specify products, or make recommendations).19 
 
The number one reason buyers attended trade shows was to see new technology or products. Other motives 
included building relationships, comparing brands, getting insights in the industry and interacting with 
salespeople without the obligation to make a purchase.20 When buyers were asked to identify the most 
useful sources of product information, exhibitions were the most often mentioned (90 per cent), followed 
by direct sales and field sales (75 per cent), public relations (75 per cent), the Internet (63 per cent), direct 
mail (58 per cent), trade advertising (55 per cent) and telemarketing (50 per cent).21 Besides their 
informational value, exhibitors and attendees also pointed to the shows’ usefulness in building and 
maintaining vendor/customer relationships (see Exhibit 7). Most attendees went to only one or two shows 
per year and selected which one to attend based on word-of-mouth and trade magazines.22 
 
Trade show interactions had an impact beyond the show itself. Estimates suggested that show attendees 
would share the information they had received at the show with other people in their own companies.23 It 
was therefore important that exhibitors created positive and memorable show experiences. Exhibit 8 
summarizes the top reasons (other than exhibit size) that make an exhibit memorable. Jefferson Davis, a 
prominent trade show consultant, argued that exhibitors should measure outcomes with hard and soft 
metrics (e.g. visual impact of the booth, quality versus quantity of interactions, number of leads generated, 
cost per lead and return on expenditure). Second, exhibitors should be prepared to leverage the fact that at a 
trade show, “customers come to you with an open mind, looking for products and ready to engage in 
discussions.” Therefore, it was crucial that companies be properly staffed, have an appropriate exhibit size 
and have processes to capture client information at the show. 
 
Following up on trade show leads could be effective and efficient. Research had shown that sales leads 
from trade shows were more likely to yield sales and have lower costs than regular sales calls. In the 
absence of a prior trade show interaction, it took on average one initial field sales meeting and 2.7 follow-
up field sales meetings (at an average cost of $308 for each) to close a sale. However, if the initial sales 
meeting took place at a trade show (average cost of a trade show sales lead was $212), it took 1.6 follow-
up field sales meetings to close a sale.24 
 
 
THE INTERNATIONAL BOSTON SEAFOOD SHOW 
 
The IBSS was held annually in early March at the Boston Convention & Exhibition Center and was the 
largest seafood show in the United States. The show lasted for three days and is open from 10 a.m. to 5 
p.m. on the first two days and 10 a.m. to 3 p.m. on day three. Attendance for the 2007 show was expected 
to be about 18,000, with a net attendance of 12,000 (this excluded exhibitors, show organizers and the 
press). With 175,000 square feet of exhibit space and over 800 exhibitors promoting products ranging from 
wild Alaskan salmon to farm-raised fish from Vietnam to refrigerated display cases and ice machines, the 
shows covered the full range of industry players. 
 
 
18 Center for Exhibition Industry Research, ACRR 1120, 2000. 
19 Center for Exhibition Industry Research, ACRR 1130, 2007. 
20 Center for Exhibition Industry Research, AC32, 1999. 
21 Center for Exhibition Industry Research, PE II, 2000. 
22 Center for Exhibition Industry Research, AC31, 1999. 
23 Center for Exhibition Industry Research, SM36, 2000. 
24 Center for Exhibition Industry Research, SM17.01, 2001. 
Page 7 9B09A004 
 
 
The show drew decision-makers from food retailers, foodservice providers and distributors (see Exhibit 9). 
Visitors represented companies with median annual seafood purchases of $3.4 million (see Exhibit 10). 
Most visitors had purchasing authority and were looking for new products; 81 per cent said that they had 
found new products at the show; 73 per cent had planned purchases after attending the show and 88 per 
cent wanted to return from year to year. 
 
Floor space was $30 per square foot and exhibits were available in many sizes (multiples of 100 square 
feet) and configurations. The minimum size was 10 feet by 10 feet. There was an extra charge of $500 per 
corner. At the time of the case, Phillips had not committed to a specific space; however, the company was 
trying to decide the size and location that it needed to reserve (see Exhibit 11). 
 
 
PHILLIPS’ TRADE SHOW STRATEGY 
 
Phillips exhibited at several trade showsand had recently built an exhibit that could be shipped to any 
show. It was modular and made up of multiple elements that could be assembled based on different booth 
sizes (from 600 to 2400 square feet) and shapes. The main visual theme was reminiscent of an old-
fashioned seaport crab shack. The exhibit used large wooden pilings, wooden shelves for product displays 
and zinc lighting fixtures. However, the exhibit also included hi-tech details such as large flat-panel TVs 
(see Exhibit 12). The dominant colors reinforced Phillips’ brand identity: red carpet and black for most of 
the furniture, and counters shaped as oversized cans of Phillips crab. The exhibit elements needed 250 
square feet for set-up. For larger shows such as the IBSS, Phillips also included a kitchen where food 
samples were cooked. The kitchen area occupied 350 square feet and three staff members were needed to 
run it. Because of its large size and number of elements, it cost $9,000 each way to ship out and then return 
the exhibit to storage in Maryland. Exhibit 13 gives the breakdown of Phillips’ cost estimates. 
 
Phillips tended to limit pre-show marketing expenses and instead used its resources for the elaborate 
exhibit and prominent locations where its brand name and samples it served were used to draw visitors. In 
addition, during each show, it was Stockworth’s policy to organize a VIP party where Phillips’ staff could 
foster relationships with the most important accounts. VIP parties were usually held in the evening in one 
of the hotels adjoining the conference center. Typically, a VIP party cost $20,000 (including rental of 
venue, food, beverages, entertainment and decoration). 
 
One of the main decisions that Stockworth and Birch would need to make was to determine the size of the 
exhibit and the number of staff that would travel to the show. Phillips wanted its exhibit to look busy but 
not be overly crowded. Decisions on space and staffing were based on the traffic expected. In the open 
floor area of the exhibit (total size minus kitchen and space taken by exhibit elements), an average density 
of four people per 100 square feet was comfortable and ideal for most shows. It was important to note that 
most show attendees would not spend time in the actual exhibit; most would walk the show aisles and grab 
food samples from the outward-facing displays. However, potential target customers would typically enter 
the exhibit and spend some time with staff members. 
 
Based on past experience and industry averages, Phillips estimated that an average interaction with a 
potential customer lasted six minutes,25 long enough for them to express some interest in the products, 
share contact information (attendance badges were scanned) and request some literature. It was Phillips’ 
goal to have one Phillips staff member to accommodate every potential client who stopped in during the 
three days of the show. However, it was also important to realize that some potential customers might not 
have enough time or sufficient interest to stop at every exhibit in a show. Based on initial attendee 
 
25 Exhibit Survey Inc., ROI Toolkit, 2008. 
Page 8 9B09A004 
 
 
registration data, Phillips estimated that 65 per cent of its target attendees (retailers, distributors and 
foodservice) were looking for products that matched Phillips’ offerings. Among that group, 16 per cent of 
them were looking for king crab. Further, based on past trade show experience and the draw of the 
Phillips’ brand, Phillips believed that over the duration of the show, it could typically attract and interact 
with 70 per cent of these target customers who had an actual interest in Phillips’ products. This was 
slightly better than the industry average of 57 per cent.26 
 
Although certain times of day were a bit busier than others, variations were not very large and customers 
tended to come throughout the duration of the show. However, Phillips believed that it was a good practice 
to have two extra staff members above the minimum needed in order to accommodate potential peaks, plus 
also have two more people whose sole job was to manage the displays, refresh the samples and attend to 
the general good state of the exhibit. 
 
 
PHILLIPS’ TRADE ADVERTISING STRATEGY 
 
Industry specific (trade) magazines were critical information sources in most major industries. These 
publications provided up-to-date business news, research and insights to managers in key decision-making 
positions. Many managers tended to read several trade publications, often including vertical publications 
which were specific to their industry as well as horizontal publications which cut across industries but were 
specific to their job functions. For example, a human resources manager at a grocery retailer might read 
Progressive Grocer and Employee Benefit News. 
 
In 2005, B2B magazine advertising spending reached $10.7 billion.27 This amount of spending was a 
testimony to the value that vendors placed on this type of marketing communications. In addition to the 
magazines’ articles, the advertisements were a valued source of information for readers. Forrester reported 
that business decision-makers rated industry-specific magazines as one of their most important information 
sources.28 In fact, 44 per cent of business decision-makers spent three or more hours reading trade 
magazines per week, a rate that had more than doubled from 2001. Importantly, 80 per cent of the Forrester 
study’s respondents agreed with the following statement about their advertising involvement: “When 
reading or interacting with industry-specific magazines, I find that I spend more time reading or thinking 
about the editorial content and product/service messages than with other general business media.” 
 
Birch believed that trade advertising was particularly effective in generating sales leads and reaching large 
audiences: “Trade shows may allow you to interact one-on-one with a few prospective buyers over three 
days, however trade ads reach broad audiences and can build your brand twelve months per year.” During 
the six months of phase I of the launch, Birch had run a total of 12 full-page color ads (placed across four 
monthly foodservice publications). Birch was pleased by the results. In response to each ad, an average of 
0.30 per cent of the foodservice readers had called Phillips to inquire about more product information. This 
response rate was consistent with average response rates for trade magazines.29 Based on these direct 
response leads, subsequent field sales meetings (2.7 on average) had yielded substantial sales for the 
product. Birch expected a similar response amongst retail and distributor audiences in phase II. He had 
identified three trade magazines that could potentially reach retailers and distributors (see Exhibit 14) and 
he felt that the two ads that had been developed for phase I could be used again for phase II (see Exhibit 
15). 
 
26 Exhibit Survey Inc., ROI Toolkit, 2008. 
27 B2B Media, Expo, November/December 2006. 
28 Forrester Research Inc., “The Power of Industry-Specific Business Magazines,” 2007. 
29 Direct Marketing Association, Response Rate Report, 2004. 
Page 9 9B09A004 
 
 
THREE DAYS LATER 
 
Three days had passed since the lunch with Stockworth, and Birch was still uncertain about what to do for 
phase II. He had reviewed the trade show information but was wondering if Stockworth’s idea was the 
right thing for the retail launch. Stockworth had asked him to make a decision quickly because she wanted 
to offer the trade show opportunity to another product manager if Birch were to turn it down. Was the best 
strategy to focus his remaining budget on the March trade show or spread it across a series of trade 
advertisements? This was going to be a difficult choice. He knew how to evaluate advertising buys inmagazines and he had a good sense of the potential return that these buys could generate. However, trade 
shows were another beast. Trade shows were large one-time expenses with hard-to-gage results. After 
supporting half of the cost of the trade show, would he have any money left for other marketing activities? 
Would he be able to reach enough buyers during the three days of the show? His instincts were telling him 
that he would be able to reach a larger audience through mass media. But what about actual sales leads and 
overall return on marketing expenditure? What was the most cost-efficient way to obtain sales leads and 
ultimately sales in the retail channels? 
 
 
 
 
 
 
 
Frédéric Brunel is an Associate Professor of Marketing and Dean’s Research Fellow at Boston University School of 
Management; Deborah Utter is a Senior Lecturer, also at Boston University School of Management. The authors 
recognize the assistance and support of the Society of Independent Show Organizers and the Exhibition Industry 
Foundation. 
Page 10 9B09A004 
 
 
Exhibit 1 
 
KING CRAB PACKAGE — EIGHT OZ. SIZE FOR FOODSERVICE AND RETAIL 
 
 A. Foodservice packaging B. Retail packaging 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 2 
 
EXAMPLES OF REFRIGERATED SEAFOOD DISPLAYS 
 
A. Open merchandiser refrigerator B. Open display case 
 
C. Display on ice 
 
 
 
D. Icelator bin used for in-store promotions 
 
Page 11 9B09A004 
 
 
Exhibit 3 
 
SELECTION OF PHILLIPS’ RETAIL PRODUCTS 
 
 
Crab Cakes 
(Frozen) 
Blue Swimming Crab 
(Refrigerated) 
Seafood 
(Frozen) 
Asian Rhythms 
(Frozen) 
 Boardwalk Crab 
Cakes 
 Crab & Shrimp 
Cakes 
 Crab Cake Minis 
 Maryland Style Crab 
Cakes 
 
 Jumbo Crab Meat 
 Lump Crab Meat 
 Backfin Crab Meat 
 Special Crab Meat 
 Claw Crab Meat 
 
 
 Coconut Mahi Mahi 
 Lemon Peppercorn 
Ahi Tuna 
 White Wine & Herb 
Mahi Fillet 
 Salmon Cakes 
 Crab-Stuffed 
Shrimps 
 Stuffed Salmon 
 Stuffed Tilapia 
 Crab & Shrimp Fried 
Rice 
 Hot & Spicy Shrimp 
Soup 
 Shrimp Green Curry 
 Shrimp Pad Thai 
 Shrimp Red Curry 
 Spicy Coconut Shrimp 
Soup 
 
 
 
Appetizers & Dips 
(Frozen) 
Shrimp 
(Frozen) 
Condiments & 
Seasonings 
Seafood Soups 
(Frozen) 
 Crab & Shrimp 
Spring Rolls 
 Crab & Spinach Dip 
 Crab Pretzel 
 Crispy Dim Sum 
 Jalapeno Crab 
Slammers 
 Party Pack 
 Maryland Style Crab 
Dip (Refrigerated) 
 
 Breaded Shrimp 
 Buffalo Shrimp 
 Coconut Shrimp 
 Blackening 
Seasoning 
 Seafood Seasoning 
 Tartar Sauce 
 Cocktail Sauce 
 
 Crab & Corn Chowder 
 Crab & Shrimp 
Chowder 
 Cream of Crab Soup 
 Lobster Bisque 
 Maryland Style Crab 
Soup 
 New England Clam 
Chowder 
 Shrimp Bisque 
 
Source: Company material. 
Page 12 9B09A004 
 
 
Exhibit 4 
 
TOP 100 US SUPERMARKET CHAINS AND WHOLESALE CLUB STORES 
 
Number of 
stores 
per chain 
 
Number 
of chains 
 
Chain names 
(Partial list) 
>1,000 stores 5 Delhaize, Kroger, Safeway, Supervalu, Wal-Mart 
500-999 stores 6 Ahold USA, Aldi, B.J.’s, Publix, Sam’s Club, Winn-Dixie 
100-499 stores 33 Albertsons, Costco, Great Atlantic & Pacific, Hannaford Bros, H-E-B, Price 
Chopper, Roundy’s, Shaw’s/Star, Smart & Final, Whole Foods, Weis Markets
50-99 stores 28 Big Y Foods, DeMoulas/Market Basket, Wegman’s, WinCo 
< 50 stores 28 Gristede’s, King Kullen, Roche Bros, Stew Leonards, United Supermarkets 
 
Source: Food Marketing Institute Data, 2007. 
 
 
Exhibit 5 
 
HOW THE EXHIBIT DOLLAR IS SPENT 
 
Exhibit space 28% 
Travel and entertainment 21% 
Show services 19% 
Exhibit design 13% 
Shipping 9%
Advertising and promotion 6% 
Other 4%
 
Source: Center for Exhibition Industry Research, SM22, 2001. 
 
 
 
P
ag
e 
13
 
9B
09
A
00
4 
 
E
xh
ib
it
 6
 
 
U
.S
. B
U
S
IN
E
S
S
 T
O
 B
U
S
IN
E
S
S
 (
B
2B
) 
M
A
R
K
E
T
IN
G
 P
R
A
C
T
IC
E
S
 (
20
05
 D
A
T
A
) 
 T
yp
es
 o
f 
m
ar
k
et
in
g 
ta
ct
ic
s 
T
ac
ti
c 
ef
fe
ct
iv
en
es
s 
fo
r 
b
ra
n
d
-b
u
il
d
in
g*
 
T
ac
ti
c 
ef
fe
ct
iv
en
es
s 
fo
r 
le
ad
 g
en
er
at
io
n
* 
%
 o
f 
co
m
p
an
ie
s 
u
si
n
g 
**
 
%
 o
f 
m
ar
k
et
in
g 
b
u
d
ge
t*
* 
In
-p
er
so
n 
ev
en
ts
 (
e.
g.
 tr
ad
e 
sh
ow
s,
 c
on
fe
re
nc
es
) 
60
.9
%
 
62
.6
%
 
78
.9
%
 
22
.2
%
 
P
ub
li
c 
re
la
ti
on
s 
51
.7
%
 
45
.4
%
 
36
.8
%
 
3.
1%
 
In
du
st
ry
 tr
ad
e 
m
ag
az
in
es
 (
e.
g.
 P
ro
gr
es
si
ve
 G
ro
ce
r)
50
.2
%
 
47
.4
%
 
63
.2
%
 
12
.6
%
 
C
us
to
m
 p
ub
li
ca
ti
on
s 
(e
.g
. b
ro
ch
ur
es
) 
44
.6
%
 
41
.3
%
 
56
.1
%
 
5.
6%
 
T
V
 
42
.9
%
 
36
.3
%
 
35
.1
%
9.
2%
O
nl
in
e 
m
ar
ke
ti
ng
 
39
.8
%
 
42
.1
%
 
52
.6
%
 
14
.4
%
 
D
ir
ec
t m
ai
l 
39
.7
%
 
42
.0
%
 
56
.1
%
 
8.
3%
 
P
ri
nt
ed
 n
ew
sl
et
te
r 
39
.0
%
 
35
.3
%
 
54
.4
%
 
5.
3%
 
G
en
er
al
 b
us
in
es
s 
m
ag
az
in
es
 (
e.
g.
 F
or
be
s)
 
37
.9
%
 
34
.6
%
 
49
.1
%
 
7.
2%
N
ew
sp
ap
er
s 
(e
.g
. W
al
l S
tr
ee
t J
ou
rn
al
) 
37
.4
%
 
33
.3
%
 
49
.1
%
 
6.
4%
R
ad
io
 
31
.8
%
 
30
.7
%
 
22
.8
%
1.
8%
P
ri
nt
ed
 d
ir
ec
to
ri
es
 (
e.
g.
 Y
el
lo
w
 P
ag
es
) 
29
.9
%
 
31
.7
%
 
28
.1
%
 
1.
2%
O
th
er
 
--
- 
--
- 
--
-
2.
6%
 * P
er
ce
nt
ag
e 
of
 r
es
po
nd
en
ts
 w
h
o 
se
le
ct
ed
 o
ne
 o
f t
he
 to
p 
tw
o 
b
ox
es
 (
5
 o
r 
6)
, 
w
he
re
 1
=
“v
er
y 
in
ef
fe
ct
iv
e
” 
an
d 
6
=
“v
er
y 
ef
fe
ct
iv
e
” 
N
=
86
7,
 c
om
pa
ni
es
 fr
om
 a
ll 
B
2B
 s
ec
to
rs
. 
**
 N
=
57
, m
an
uf
ac
tu
rin
g 
an
d 
pr
oc
es
si
ng
 s
ec
to
r 
co
m
pa
ni
es
. 
S
ou
rc
e:
 F
or
es
te
r 
R
es
ea
rc
h,
 2
00
5.
 
Page 14 9B09A004 
 
 
Exhibit 7 
 
IMPORTANCE OF FACE-TO-FACE INTERACTION DURING THE PURCHASE PROCESS 
 
Source: Center for Exhibition Industry Research, Report F03.03, 2003. 
 
Exhibit 8 
 
TOP REASONS FOR REMEMBERING EXHIBITS 
 
Product interest 64% 
Well-known company 51%
Product demonstrations 43%
Stage/theatre presentation 26%
Exhibit color/design 19%
Exhibit personnel 18%
Giveaway 15%
Literature 13%
 
Source: Center for Exhibition Industry Research, MCRR 5040, 2000. 
 
Exhibit 9 
 
IBSS NET ATTENDANCE BREAKDOWN 
Source: Diversified Business Communications. 
 
 
 
Purchase process stage 
Percentage of respondents who find 
face-to-face interaction important 
Show attendees Exhibitors 
Awareness-building 76% 86%
Evaluation of product or service 67% 74% 
Narrowing choice 50% 59% 
Purchase 32% 48%
Implementation of product or service 37% 45% 
Maintaining vendor/customer relationships 51% 76% 
Upgrading/repurchasing 40% 51%
 
Segment represented % Attendees 
Suppliers (processors, importers, exporters, aquaculture, etc.) 41% 
Services (packaging, research, transportation, etc.) 16% 
Seafood distributors, brokers and wholesalers 15% 
Foodservice (hotels, restaurants, institution food services, catering, etc.) 10% 
Retailers (supermarkets, warehouse clubs, seafood markets, etc.) 8% 
Others 10%
 
Page 15 9B09A004 
 
 
Exhibit 10 
 
PARTIAL LIST OF KEY BUYERS TYPICALLY ATTENDING 
THE INTERNATIONAL BOSTON SEAFOOD SHOW 
 
According to registration data from previous shows, this is a partial list of some key buyers who 
traditionally attend the show. It is not exhaustive, but rather illustrative of the types of attendees. 
 
Foodservice 
Aramark Corporation 
Avado Brands 
Applebees 
Bonefish Grill 
California Pizza Kitchen 
Captain D’s Seafood 
CKE Restaurants 
Compass Group 
Darden Restaurants 
Friendly’s Ice Cream Corp 
Golden Corral 
Ground Round 
Harrah’s Entertainment 
Houlihans Restaurants 
Isle of Capri Casinos 
J Alexanders Corp 
Legal Seafoods 
McCormick & Schmicks 
Outback Steakhouse 
Perkins Family Restaurants 
Popeye’s Chicken 
Princess Cruises 
Red Lobster 
Rubios Fresh Mexican GrillRuby Tuesday 
Sonny’s Franchise Co (Sonny’s BBQ) 
Subway 
Sushi Shop 
Retail 
Ahold USA 
Aldi Inc 
A&P Supermarkets 
BJ’s Wholesale Club 
Costco 
Giants Foods 
Hannaford Bros 
HEB 
Price Chopper/Golub 
Roche Bros Supermarkets 
Roundy’s 
Shaw’s/Star Markets 
Smart & Final 
Stew Leonards 
Target 
WalMart 
Wegman’s 
Weis Markets 
Whole Foods Market 
 
 
Distributors 
C&S Wholesale Grocers 
SYSCO 
US Foodservice 
 
Source: Diversified Business Communications. 
Page 16 9B09A004 
 
 
Exhibit 11 
 
BOOTH SPACES UNDER CONSIDERATION BY PHILLIPS 
 
 
 
Partial Floor Plan - Boston Convention & Exhibition Center 
 Space shown in the Exhibit represents about six per cent of the total floor space of the 
International Boston Seafood Show. 
 White-colored booths are available for lease. Grayed-out booths have already been leased. 
 Booth types: 
- Linear or inline booth: only one side of the booth is exposed to the aisle and the booths are 
arranged in a series along a straight line (e.g. #546; 10 x 10 minimum) 
- Peninsula: exposed to the aisle on three sides (e.g. #533; 20 x 20 minimum) 
- Island: Exposed to the aisle on four sides (e.g. #633; 20 x 20 minimum) 
Source: Diversified Business Communications. 
Page 17 9B09A004 
 
 
Exhibit 12 
 
PHILLIPS’ TRADE SHOW BOOTH (OVERALL LAYOUT AND SPECIFIC ELEMENTS) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kitchen 
Half-can counter used to 
setup product samples 
Support beam 
Seating areas for more 
extensive client meetings 
Display table 
Video display and 
product shelves 
Page 18 9B09A004 
 
 
Exhibit 13 
 
PHILLIPS’ EXPECTED TRADE SHOW COSTS (EXCLUDING EXHIBIT SPACE) 
 
Exhibit design
 Booth design (maintenance, updates, wear and tear) $16,000 
 Display materials (food to be cooked in kitchen) $10,000 
 Set-up & tear-down $7,000 
Transportation & freight $18,000 
Show services $27,000 
Travel & entertainment 
 Travel and lodging $1400 per staff 
 Meals & entertainment $300 per staff 
 VIP party $20,000 
Advertising & promotion 
 Print advertising and mailing $2,000 
 Collateral material $2,000 
 
 Source: Company. 
 
P
ag
e 
19
 
9B
09
A
00
4 
 
E
xh
ib
it
 1
4 
 
T
R
A
D
E
 P
U
B
L
IC
A
T
IO
N
S
 F
O
R
 F
O
O
D
 R
E
T
A
IL
IN
G
 IN
D
U
S
T
R
Y
 
 P
u
b
lic
at
io
n
 
In
d
u
st
ry
 f
oc
u
s 
M
on
th
ly
 
ci
rc
u
la
ti
on
 
N
u
m
b
er
 
of
 is
su
es
 
p
er
 y
ea
r 
C
os
t 
of
 1
 
fu
ll 
p
ag
e 
 
co
lo
r 
R
ea
d
er
s 
b
y 
se
ct
or
 
P
er
ce
n
t 
of
 
re
ad
er
s 
in
vo
lv
ed
 
in
 s
ea
fo
od
 
b
u
yi
n
g 
F
oo
d
se
rv
ic
e
D
is
tr
ib
u
ti
on
 
/
w
h
ol
es
al
in
g
R
et
ai
lin
g 
 
Pr
og
res
siv
e G
ro
cer
 
 
F
oo
d 
re
ta
ili
ng
 
43
,0
00
 
14
 
$1
2,
20
0 
n/
a 
13
%
 
65
%
 
4%
 
Se
afo
od
 B
us
in
ess
 
 
N
or
th
 A
m
er
ic
an
 
se
af
oo
d 
in
du
st
ry
 
15
,0
00
 
12
 
$4
,5
00
 
32
%
 
37
%
 
21
%
 
90
%
 
Re
fri
ger
at
ed
 a
nd
 F
ro
ze
n 
Fo
od
 R
eta
ile
r 
F
oo
d 
re
ta
ili
ng
 
12
,0
00
 
11
 
$4
,4
00
 
n/
a 
16
%
 
78
%
 
35
%
 
 So
ur
ce
: D
at
a 
fr
om
 S
R
D
S
 (
20
07
) 
an
d 
in
du
st
ry
 in
te
rv
ie
w
s.
 
 
P
ag
e 
20
 
9B
09
A
00
4 
 
E
xh
ib
it
 1
5 
 
C
R
E
A
T
IV
E
 F
O
R
 K
IN
G
 C
R
A
B
 A
D
V
E
R
T
IS
IN
G
 C
A
M
P
A
IG
N