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Table of Contents
Introduction .....................................................................................................................3
MARKET DYNAMICS ....................................................................................................3
MARKET SIZE ................................................................................................................4
KEY EMERGING TRENDS IN THE MARKET ................................................................4
KEY PLAYERS/MARKET SHARE: MICROENVIRONMENT.........................................5
CONSUMER BEHAVIOUR: MACROENVIRONMENT ..................................................6
Marketing Strategy & Segmentation. ................................................................................7
SEGMENTATION PROFILING.......................................................................................9
TARGETING .................................................................................................................10
......................................................................................................................................10
POSITIONING ..............................................................................................................11
Positioning Statement ................................................................................................12
Product Development ................................................................................................13
Product.........................................................................................................................13
Promotion ....................................................................................................................15
Place .............................................................................................................................16
Price .............................................................................................................................16
Pricing Forecast ..........................................................................................................18
Conclusion ...................................................................................................................18
References...................................................................................................................19

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Market Analysis and Product Development
Report

Introduction
This market analysis will inquire and investigate the Australian Frozen Pizza
environment including the overview of market segmentation, targeting and
positioning of products within the market and a dive into the forces that drive a
successful entry with new product development. For convenience and ease of

MARKET DYNAMICS
The market for frozen pizza is not genuinely known for being large, with only a
few major competitors in the space, there are however still numerous statistics
of factors and variables that affect both the supply and demand in the
marketplace as a result of influence stemmed from suppliers, consumers, public
sphere, and business venturers creating opportunities and threats in the market
(Kotler et al. 2020). The succeeding are main principles that are at current

Health-conscious customers are an increasing share of the frozen pizza market,

with the perception of pizza being seen as unhealthy and opposing to the health
targets society has grown into in the past decade. Industry operators must be
creating new products that meet healthier lines, and more specific diet
requirements.

COVID-19 outbreak began the favour towards home delivery fast food, this
worked congruently against the industry. With homebodies opting for more
convenience and even less effort with the choice of fast-food delivery over
cooking pre-made and frozen options. However, consumer stockpiling and

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spiked the purchasing of frozen pizza as last-minute saves.

Supermarkets influence and introduction

to the market is both beneficial and
detrimental. Positively supermarkets
provide outlets for wholesalers to sell
their products through, but they are also
venturing into their own home brand
labels that are becoming key competitors
in the market. Supermarkets like
Woolworths and Coles hold large
thresholds over consumer habits and
choice, with slogans and customer bonus
systems that are increasingly threatening
industry revenue (Richardson 2021b).
Figure 1 Woolworths, 2022, Frozen Pizza Hawaiian,
woolworths, image, <
https://www.woolworths.com.au/shop/productdetails/5
08041/woolworths-frozen-pizza-hawaiian>

MARKET SIZE
The market size for frozen pizza in the relation to industry revenue, is measured
at $161.5 million from statistics taken in 2022, and is projected to increase at a
growth rate of 1.6% by the end of 2022. It is notifiable that the market size is
still however on a decline overall, taking a higher declining rate on average than
the economy, between 2017 and 2022 the market has reduced 2.2% of its size
(Richardson, 2022).

KEY EMERGING TRENDS IN THE MARKET

The primary drivers of market expansion are in escalating urbanisation and
rising consumer demand for convenient food items. Consumers are increasingly
choosing trends of quick-to-prepare and ready-to-eat meal options as a result of
changing lifestyles, nutritional habits, and hectic schedules. This pattern, along
with the growing working population, is encouraging market expansion. The
introduction of gluten- and dairy-free product varieties, which are quickly
gaining popularity among customers, is another result of rising health
consciousness among consumers.
The higher demand for frozen pizzas is also aided by the availability of creative
toppings, healthy ingredients, and vegan options, resulting from trends in
society following a more gourmet style of convenience over the traditional
choices (IMARC, 2022).

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Through product innovation, including new flavours, healthier ingredients,
premium vegan, plant-based, and gluten-free choices, portion-controlled sizes,
and microwaveable options, the sector has the potential to increase its income
commendably through trends (Richardson, 2022).

KEY PLAYERS/MARKET SHARE: MICROENVIRONMENT

The frozen pizza market is dominated as seen in Figure 2 by McCain Foods
(Aust) Pty Ltd, with the rest of the market being held and operated by smaller
companies that gained market share through international grounds and niche
specific areas.

Market Share in Frozen Pizza Industry

39.30%

60.70%

McCain Foods Other Companies

Figure 2 Market Share, Adapted from IBISWorld Information and Research.

McCain Foods offers a variety of frozen pizza goods, including family pizzas,
ultra-thin crust pizzas, pizza bases, pizza snacks and pockets, and its line of
Rustica pizzas. Additionally, the business makes frozen pizza singles, which are
sold as a part of its food-service assortment.
McCain finished stage one of a $57.0 million facility improvement in the mid
2017. When the update is finished, it is predicted to boost the plant's capacity by
25.0%. The business is presently working to construct a renewable energy
system that will lessen annual CO2 emissions from its Ballarat site by more
than 27,000 tonnes. The system is anticipated to be the biggest behind-the-meter
renewable energy system in Australia. All factors affecting consumer opinions
and perspective on the company, following trends towards lager companies
holding environmental values as higher importance over sales and monetary
profits.
-related revenues are expected to grow at an annual rate of
2.6% over the period of 2021-2022, totalling estimated $98 million, a growth

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rate the outperforms the overall industry during the same time period
(Richardson, 2022).

Other companies make up the other 39.3% of the market share, consisting of
several private label companies whom produce and exist in the upstream
manufacturing of frozen pizza, it is notifiable difficult to determine the identity
and size of these companies as most are on international grounds or not
contributing enough revenue to be considered major in the sphere. Collectively,
these smaller companies are estimated to represent less than 15% of the
evenue (IMARC, 2022).

CONSUMER BEHAVIOUR: MACROENVIRONMENT

The macro environment refers indirectly to the larger society and its
aspects, including demographic, economic, technologic, natural, cultural,
political, and social (Armstrong et al. 2021). In the Australian frozen pizza
market this macroenvironment is built by the consumption choices and
rates of varying products. This leads to impeding pressures on companies,
specifically McCain who hold the largest share, to constantly adapt to
changes in the marketplace.

Economic factors insinuate and provide evidence towards the affected

trends of real household disposable incomes. Consumers have more
purchasing power when their disposable income rises. Due to their busy
lifestyles and the convenience that the product provides, consumers with
more disposable money can afford to purchase more expensive frozen
pizza options. However, during periods of weak growth in disposable
income, consumers are compelled to re-evaluate their expenditure and opt
for less expensive frozen pizza options (Richardson, 2022).

Demographically factors in the market mainly represent a distinct section

of the human population, whether that be in relation to gender, age, race,
occupation, and density (Kotler et al. 2020). Frozen pizza consumption is
at its highest level among sociocultural working groups aged 18-44 years
of age, with consumption dropping at a steady decline any age above this.
The presence of children in a household also increases the likelihood of
that specific house to purchase frozen pizza for consumption (Holcomb,
n.d.). This will mean that businesses entering the market will most likely
have to target towards the working force families, who have lower social
class and less time due to employment engagements.

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Political and environmental factors influencing the Australian frozen
pizza market include States and the federal government that hold strict
laws and regulations in place. For the sake of preserving public health, this
includes food safety laws. The implementation of food labelling
regulations can be highly expensive. Waterway conservation, chemical
emission control, and other ethical factors like packaging are all subject to
environmental standards that must be adhered to. Large-scale
manufacturing processes frequently incur high costs due to this
(Richardson, 2021b).

Cultural factors enforce behaviours within shared perspectives, with the

current trend towards health-conscious products, the agenda can be seen as
a dominant cultural force in the market. This factor poses a large threat
towards companies that produce frozen pizza based on convenience over
health star ratings and offers opportunities for the new market entrances to
meet modern health aspirations and demands.

Marketing
Strategy &
Segmentation.

The Australian Frozen Pizza Market whilst not holding a highly competitive
environment, does have a diversity in its production. The aim of this report it to
develop a consumer driven marketing strategy, of which beneficial factors and
relationships between manufacturers and customers can be fostered and grown.
By combining the current understanding of the frozen pizza market, as

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explained in the marketing analysis, we can begin to design a marketing
strategy through segmentation, targeting and positioning.

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SEGMENTATION PROFILING
Name of segment The health-conscious segment The Gen X Gen Z and student The indulgent
segment

Description of segment Consumers looking for healthy Middle-aged, full-time Young adults, often. Consumers with the
motivations/values alternatives, nutritional and dietary employment, busy Students, employed pat budget or desire for more
health star ratings, more likely to be schedules with limited time time, small budget due to than the average
looking at gluten free and plant- to cook, looking for easy new expenses living out takeaway pizza, looking
based ranges. of home, student lifestyle. for gourmet options and
sensitive and feed families. ingredients, range in
products.
Behavioural, demographic, Hold behavioural and physiographic Buys frozen pizza in bulk Behaviourally are known Usually have a medium
geographic and characteristics that lead them to for easy freezer storage. for taking the cheaper to higher income, later in
search for healthier products, less Desires something of high options, and sacrificing life cycle to be
psychographic attributes.
sugar, and higher nutritional values. calorie and nutritional health values for comfortable spending on
Options like gluten free and dairy value, to serve as a meal for monetary decrease, based indulgence Looking for
free, etc. the whole family in on their economic statis higher product quality,
opposition of a small snack. and psychology. with premium taste.

Average branding picture

of segment

Segment size 23% market share. Predicted 24% market share. 57% market share. Steady 10% market share.
increase in sales and growth. Predicted decrease in sales increase every year, Levelled growth,
and decline in growth. trends line up with expected to maintain
growth. same market share.

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TARGETING
The above segmentation table, highlights, and analyses consumer segments of the frozen pizza market, having specific needs, demands and product wants. To develop a
company in the market that is both successful and increasing in market share, we can use the following table to shape our product to meet these needs, wants and desires of
our chosen target market (Elliot et al. 2017).

Name of Health-Conscious Segment Gen X Student Segment The Indulgent

Segment
Segment Segment size: Small/Med Segment size: Small/Med Segment size: Large Segment size: Small
Size & Market share: 23% Market share: 24% Market share: 57% Market share: 10%
Growth Growth rate: 3.5% increase Growth rate: 1.2% decline Growth rate: 1.2% increase Growth rate: 0.2%
Sales: Approx. $37.14 million annual Sales: Approx. $38.76 million annual Sales: Approx. $92.05 million increase
revenue revenue
annual revenue. Sales: Approx. $16.15
million annual revenue
Level of Low competition, no companies entered in High competition, key players like High competition, from supermarket Medium competition,
Competition the health-conscious sphere, only McCains, Ristorante and supermarket brands. Woolworths and Coles who directly from
competition would be in the limited gluten brands (Coles, Woolworths, ALDI) market separately from McCain Ristorante brand, who
free and vegetarian ranges of Ristorante controlling large amounts of market company, by targeting lower prices target gourmet and
(low market share) and McCains (high share. and sacrificing nutritional values, for
indulgence, but hold
market share). cost effective products.
such little market
share that their
company is not
considered high
competitors.

Figure 4: Figure 5: Woolworths Pizza Range

Source: Source:
https://www.mccain.com.au/product/bbq- https://www.woolworths.com.au/shop/
Figure 3: Ristorante Vegan Pizza meatlovers-family-pizza-500g/
Source: productdetails/508041/woolworths-
https://www.conveniencestore.co.uk/products/dr- frozen-pizza-hawaiian
oetker-adds-vegan-frozen-pizza-to-ristorante-
range/656863.article
Should we Yes. No. No. No.
target this
segment?

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 POSITIONING
When investigating the frozen pizza market, evidence towards the trends of healthier,
higher nutritional value is evident over that of sugary, fattier, unhealthy pizza products. As
a result, health-conscious products and emerging companies are more likely to appeal to
consumer demographics, psychographic and behavioural segments. It is also a segment
with little to minimum competition, higher nutritional value is seen to sacrifice tastiness in
the market at current, it will therefore be beneficial for new companies to produce towards
high health value and range with evidence for good taste also, this is where the gap in the
market exists.

Figure 6, Positioning Map on Nutrition vs. Taste

Whilst taste is subjective to the consumer and opinion; nutritional and health value is based
on rankings in fats, sugars, and calories. New brands must be able to prove their health star
ratings to exist successfully in the market gap.
Another factor that markets segmentation analysis highlights as an area for targeting, is
expense. The student segment has the highest market share because of its cheaper nature,
with students looking for affordable products over indulgent, the segment itself is no the
best to position a new product within as competitors are high and market share is already

recommended highly to be targeted, without the sacrifice of health or quality. A space in the
current market for an introductory company to exist, as seen in the below diagram, is in
production of high quality and higher range of gourmet options with ability to still be
affordable for the student/young adult lifestyle, where the business will find most of their
consumers.
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Figure 7, Positioning Map, Quality vs Price

There is evidence in these maps that to position our new product (to be
introduced in the next section of this report), the younger generations and
students are to be targeted with a gourmet and dietary product, with no artificial
colourings, minimum sugar and a range of gluten free, vegetarian and vegan
options. Gourmet done affordably will become the focus for the product to
differentiate from competitors and gain a loyal customer basis and brand.

Positioning Statement
-conscious students and employed
who want to provide their bodies with healthier alternatives at an affordable
rate. M Pizzeria hits the taste buds just right, with incredible flavour
and the added benefit of low fat, high nutritional, and dietary ranges, all at an

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Product Development
De
our introducing company to create a controlled and evolved plan. Reinforcing
and specifying how our product and brand as a whole expects to be positioned
within the market and in the eyes of consumers (Kotler et al. 2020).

Product
Ms
ranges in the frozen pizza industry. The products produced under the brand are
targeting the health-conscious achievers

to gain consumer trust, placing a name in the brand holds accountability,

customers begin to develop a relationship with this figure as the warm, feel-
good mother cooking at home. The product becomes more trustworthy that the
average frozen pizza, presenting itself as a fresh, steaming pizzeria option.

The logo itself was created in

correspondence towards a
memoir of the neon signs that
consumers often connect
subconsciously in their brain to
pizzerias, including a pizza that
openly presents itself as of
healthier value, showcasing a
range of vegetables on the pizza
base this bridges the products
as healthier in the minds of
customers.
All these branding
characteristics contribute to the

a healthy pizza option, that intends and succeeds at maintaining the fresh, hot
feeling of pizza straight out of the oven, cheesy goodness and all.

The products main selling ranges will be as follows below, these four products
are gluten-free in ingredients, low in fats and sugar, high nutrition, and made
from locally sourced products, the packaging itself will also be made of
recycled products and disposable straight into the recycling bin, marketing to
eco-friendly demographics also.

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Ingredients for our products are of high value to us, we utilise low calories, fats and a
lower average of carbohydrates, and in return boost fibres and proteins in the product
using fresh and nutritionally high food components during manufacturing. This is
essential for our brand as we target health-conscious alternatives from the wider market.

Taste is also a large factor in the company, healthier products tend to hold the stigma of
having a displeasing or mediocre taste. Finding a balance between tastiness and

create our promotional selling point a range of healthy, tasty pizzas!

Packaging for the product, as seen above, is primarily plain to reduce costs. But works
with the logo and allows consumer to actually see the product they are buying the
recyclable plastic covering, meaning customers can trust what they are expecting is what
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they are buying, eliminating disappointment at point of opening.
Promotion
Young adults and Gen Z at current account for around 36% of total purchasing power in
Australia (After Pay, 2021) which is a larger share, but also insights that the target market
is particular about what they spend on, for this reason our company will have to
effectively communicate the value of our product to encourage sales proportionally, to do
this we must better understand how the target bracket consumes advertisement.
For youth, unsurprisingly, the top marketing channels to consider are: television ads,
online ads, and social media. The use of a mix of these channels would be the most
beneficial for our brand to increase knowledge and awareness (Kotler et al, 2020).

When creating a marketing strategy, the push or pull mix approach are the two main
promotional techniques that can be used (Kotler et al. 2020).
Utilizing retailers as middlemen that conduct their own advertising and sales campaigns in
order to sell products to consumers, makers of goods move things through marketing
channels utilising the push method (consumers). In a pull strategy, these intermediaries are
avoided, allowing the producer to market directly to the final consumer (Elliot et al. 2017,
Kotler et al. 2020)

Ms
around social media advertisement, as this
is where our target consumers are most
likely to divulge in media. In the
introductory stage of our company, we will
be using websites, social media platforms
and email marketing to develop brand
loyalty and developed campaign, these
avenues can be used for sales promotion
and public relations and are ultimately a
cheaper option for a baby company and
will reach larger audiences by itself and
further in word of mouth, making our
advertisement easy to share.

push and pull strategics to reach our target

market. The pull strategy will take form in
online website that for which consumers
are directed to through advertisements on
platforms such as Instagram and Facebook,

itself will link back to our push strategies

also, providing links to purchasing of
product on sites.
As our products will be sold in
supermarkets across Australia, including
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big companies like Coles and Woolworths, where we expect most of our sales to be

marketed products that are also accessible in these major wholesalers. Doing this by
maintaining a consistent message of our healthy, nutritional values that differentiate us as
a brand from our competition and effectively positioning us high in our target audience
awareness.

Place
Supermarkets in Australian culture are highly competitive and the chances of success in
marketing products through these organisations would often be difficult, especially with
previously established companies and home brands competing. The risks involved means
that our wholesale price is most likely to be beat down and the stores will frequently only
carry our product on consignment, this means they will only pay for the product that they
sell (Wootten n.d.) Although our business is small, supermarket channels are still a
sizeable option for the company, there is only one major competition (McCains) so the
product will not have too much to differentiate from, altogether it is still a good idea for
our brand to have other distribution channels also.

Our introductory distribution channel will be ourselves, retailing through online stores
for inspiration and understanding, we will be marketing like companies such as Marley
Spoon who market ready-made meals for health kicks. To facilitate and develop this
process, logistics will continue in our existing warehouse, form which orders will be sent
form directly as ordered through Australian delivery networks. This enables us to make
product as ordered and minimise wastage and costs, further allowing us to develop a
cheaper price. Again, it is vital that we market ourselves as the healthy, accessible, and
minimum effort alternative to differentiate successfully.

As operation expands in the future, our second distribution channel will be within the
wholesaling industry, supermarkets will increase possible customer basis tenfold, it is
then reasonable for us to begin outsourcing our logistics to third-party companies.
Organisations provide delivery, warehousing and operations, allowing for a smoother run
of the company, and enabling consumers to access the product as they want it, in the
distribution channel they desire and with the correct quantity increasing likelihood of
customer satisfaction and building brand loyalty.

Price
In choosing our companies pricing strategy it is important first to compare pricing of
competitors. Competing prices do depend on the quality of ingredients and life cycle of
the company, but below is a comparison of the major key players in the market that will
, to best illustrate the price
differentiation between competitors, the below products are of the same pizza type
meat lovers, giving an overarching idea of how similar prices are in the market.
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McCains Meatlovers (500g) Ristorante Meatlovers (310g)
$7.50 ($1.50/100g) $8.50 ($2.74/100g)

Woolworths Meatlovers (500g) Coles Meatlovers

$4.00 ($0.80/100g) $4.00 ($0.80/100g)

(Lopez-Vito, 2022)

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The products come at 500g, and being based on health rating, material suppliers, and fixed
set our base cost to be $4.20 per product, averaging
$0.84/100 grams.

We have set estimated sales for the introductory five years of the company, based on the
health-conscious market share. The health alternative segment as shown in market
segmentation analysis, are estimated to hold around 23% market share, averaging around

about 10% of this share, sitting at 37, 400 in sales, this is what our predicted sales and costs
are based around. Our price is competitive but follows penetration strategies due to the size
of our business at current, the brand wishes to create brand loyalty and trust through low
prices and affordability, in response gaining this goal of 10% market share by the end of
this five-year period.

Pricing Forecast

Conclusion
The enclosed report provided strong and secure evidence of a segmentation of the frozen
pizza market that marks a gap in potential. Further, it has instigated and proposed a new

and growing in this gap, positioning itself to target younger student adults, looking for
health-conscious behaviours and accessibility. Identifying the lack of competition in the
target market and offering strategic evidence of price, promotion, and distribution channels
to combat and maintain success within market share over the next five years of operation in
the field. 18
References

AfterPay, 2022, Millennials and Gen Z in Australia: Next Gen Index, AfterPay,
viewed 23 October 2022, < https://afterpay-corporate.yourcreative.com.au/wp-
content/uploads/2021/08/Afterpay_NextGen_report_AUS.pdf>

Elliot, G, Rundle-Thiele, S, Waller, D, Smith, S, Eades, L & Ingo, B 2017,

Marketing, 4th edn, Wiley

IMARCGroup 2022, Frozen Pizza Market: Global Industry Trends, Share, Size,
Growth, Opportunity and Forecast, ResearchandMarkets, viewed 23 October
2022, < https://www.researchandmarkets.com/reports/5530322/frozen-pizza-market-
global-industry-trends>

Kotler, P, Armstrong, G, Harris, LC & HE, H 2020, Principles of Marketing,

Pearson.

Lopez- Vito, K 2022, Best-Rated Frozen Pizzas, Canstar, viewed 23 October

2022, < https://www.canstarblue.com.au/groceries/frozen-pizzas/>

Richardson, A 2022, Frozen Pizza Production in Australia, IBISWorld, viewed

23 October 2022, < https://my-ibisworld-
com.ezproxy.uow.edu.au/au/en/industry-specialized/od4016/industry-at-a-
glance>

Wootten, S nd., How to Get Your Product on Grocery Store Shelves, Dynamic
retail https://dynamicretail.com.au/how-to-get-your-product-on-grocery-store-
shelves.

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