Case Study 2 - Pillburys Cookie Challenge

BPMM 6013 Marketng Managemen Group 2 Case Sudy – Pillsbury Cookie Callenge

BPMM 6013 MARKETING MANAGEMENT

Proff: Nor Pujawati Binti Md Said Group 2 Assignment Case Stu! " Report 2#$ Case Stu! No%2 & Pi''s(ur! Coo)ie C*a''enge S*aran!a Ramasam!

+22,+,

S*armi'a -e.i Su(ramaniam

+22$11

S*ri Brinas*ini A#P T*anapa'

+22$12

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Table of Contents No

Contents

. 1!0 2!0 3!0 '!0 )!0 6!0 !0 !0 !0

"#e$ut%e Summary &nrodu$ton Siuatonal *nalysis Proposed Marketng +b,e$t%es Proposed Marketng Mi#- Sraegy and .a$t$s /inan$ial /ore$as Conrols Con$lusion e4eren$es

Page

3 '() 6 11(13 13(1) 1) 16 16 1

1%0 E/euti.e Summar!

Ivan Guillen is the Marketing Manager of the Refrigerated Bakes Good (RBG) at General Mills Canada Cororations (GMCC)! GMCC is the Canadian seg"ent of the General Mills In#! (GMI) and is the largest division in the international seg"ent of the GMI! GMI is the $ th largest food rodu#t "anufa#turing #o"an% in the world &% having food rodu#ts in "ore 2


than '#ountries!otal revenue of the #o"an% in *$ was + ''!$ Billion! Refrigerated Baked Produ#ts (RBG) is the fourth largest #ategor% of the GMCC &ut in the last %ear few %ears this #ategor% haven,t shown "u#h rogress! In the RBG #ookie is the &a#k&one of the #o"an%! Cookie rodu#t line "akes the -./ rofit of this #ategor%! 0en#e when RBG #ookie erfor"s well than this #ategor% erfor"s well and so is the vi#e versa! In the last three %ears the annual growth of the #ookies seg"ent is just '/ whi#h is far less than the #o"an% wants fro" this #ategor%! Moreover the house hold enetration has also fallen to .1%ear low! he #o"an% is looking for the ./1 -/ annual growth &ut the #ookie growth in Canada is not "ore than '/! In 2e&ruar% *-3 Ivan Guillen has to resent RBG new &usiness lan to senior leadershi and for this urose he wants to know a&out the taste issues3 "arketing and the advertising #a"aigns of his division ese#iall% Pills&ur% #ookie! 0e wants to do a resear#h so that he #an know the #onsu"er referen#es of the Canadians and how "u#h the% are different fro" the 4S #onsu"ers as nearl% all the advertising #a"aigns are leveraged fro" the 4S seg"ent of the #o"an% whi#h is GMI!

2%0 Introution

he Canadian Pills&ur% RBG (Read%1Baked Goods) line is e5erien#ing disaointing erfor"an#e3 and the "arketing "anager at GMCC (General Mills Canada Cororation) is under ressure to "ake a strategi# de#isions that will hel turn around the seg"ent! he "arketing "anager has engaged the hel of the #onsu"er insights tea" to #ondu#t "arket resear#h studies 3


that will shed light on #onsu"ers and their attitudes3 &ehaviours3 and referen#es towards the rodu#t! 6ne of the world7s leading food #o"anies3 General Mills oerates in "ore than ' #ountries and "arkets "ore than ' #onsu"er &rands3 su#h as 8olait3 Pills&ur%3 0aagen19as3 Nature ;alle% Green Giant3 and "ore! 0eadith annual sales of .$$ "illion 4S+3 GMCC is a leader in the Canadian a#kaged foods "arket and the se#ond largest division within the International seg"ents! he Canadian division is slit into four &usiness units: &reakfast3 &aked goods3 "eals and sna#ks! he Canadian Refrigerated Baked Goods Categor% is one of the fourth largest division of GMCC is he Refrigerated Baked Goods (RBG)! he #onvenien#e and fa"il% aeal "akes the RBG rodu#ts to &e so are#iated! Pills&ur% &rand is art of the General Mills ortfolio and the leader in the RBG #ategor% in#luding a full range of rodu#ts3 su#h as &is#uits3 #ookies3 sweet rolls3 and ia and ie #rusts! Canadian "arket doesn,t have a se#ifi# "arketing strateg%3 using an adated 4S advertising! In ter"s of the "arket3 Pills&ur% was the "ost rofita&le seg"ent of General Mills Canada3 with refrigerated #ookie dough owning $*/ of read%1&aked1goods sales and %ielding -./ #ategor% rofit! Pills&ur% held ?./ of the "arket share and was #arried &% all "ajor Canadian retailers! 0owever3 volu"e growth3 household enetration3 and #ookie seg"ent growth were all flat!

'


3%0 Situationa' Ana'!sis

he Canadian e5erien#e Pills&ur% read% astr% #ookie erfor"ing less than stellar erfor"an#e3 and the "arketing "anager is under ressure to #ontri&ute to strategi# de#isions that will turn around the seg"ent! Refrigerated Baked Goods (RBGs) erfor"an#e has not &een ro"ising over the ast two %ears! he volu"e growth &etween %ear *@ and *$ had re"ained nearl% flat at '/! 0ousehold enetration had fallen to *@/ fro" the revious %ears!

)


0en#e3 i"roving the &usiness erfor"an#e of this #ategor% was the &iggest #hallenge that #onfronts Ivan3 the "arketing "anager! Guillen,s goal is to understand the differen#es &etween the Canadian and 4!S! #onsu"ers3 in order to understand how to rea#h the Canadian "arket effe#tivel%! GMC e"lo%ed "arket resear#h #o"an% Market ools to #ondu#t a 4sage and Attitude Stud% of the #usto"er regarding the RBG Cookies and to understanding the &rand and rodu#t er#etions in the "ind of #usto"ers! Also to understand whether the Pills&ur% Baking 5erien#e vi&rated with the #usto"ers or not! Market Strategies to #ondu#t are In10o"e I""ersions and 9is#over% worksho! he results and insights #an &e used to hel GMCC to in#rease &oth ur#hase freorksho is &eing #ondu#ted outside the houses and #olla&orative in nature! he resear#h was designed to give a natural #o"forta&le environ"ent to the #usto"ers so that the% #an share their thoughts3 e5erien#es and issues a&out the rodu#t! Several te#hni
6


#losel% with internal "arketing tea"s and  rd art% resear#h fir"s to #ondu#t #onsu"er resear#h! 6n#e resear#h is #ondu#ted3 results are anal%ed and re#o""endations are rovided to the &rand tea"! As the resear#h revealed later in the #ase3 that there were so"e signifi#ant differen#es &etween the 4SA and Canadian #usto"er &ehaviour whi#h the #o"an% never took into #onsideration &efore designing a "arketing rogra" or rodu#t offering! he #onsu"ers in Canada like to do their &aking fro" s#rat#h and hen#e it "akes the target "arket a &it different #o"ared to that in 4S! he target "arket in Canada should &e "others who are working3 where it hels the" save a lot of ti"e and also ersonalie the #ookies till a oint! Another target should &e the kids3 who" la% a "ajor role in ur#hase de#ision in Canada! 0en#e3 the% should &e one of the "ain targets! 3%1 ASSESSMENT TS

A##ording to the #ase stud%3 we had dis#ussed that the suita&le assess"ent tools to &e used is the S>6 anal%sis D Porter,s five &asi# for#es! his tool would a&le to identif% and evaluate the various alternatives availa&le in order to de#ide what a#tion to take regarding the "arketing lan for Pills&ur%! ST Ana'!sis Strengt*s

      

Enown as innovative! Fui#k D as% to "ake! Brand awareness is high Great aste! Strong RD9 deart"ent sta&lished rodu#ts Convenient3 ese#iall% when valueri#e fa#tor added! 


ea)nesses

In Canada the "ajorit% of households refer to &ake #ookies fro" s#rat#h and Pills&ur% is er#eived as H#heatingH Produ#t #o""onl% out of sto#k Produ#t awareness not in#reasing through advertising pportunities

Co"le"entar% rodu#t Eid re
0el fir"s understand how #usto"ers view their rodu#ts 0el a fir" identif% gas or a ni#he in the "arket 5tend the &rand into new uses and new seg"ents Mothers who &ake fro" s#rat#h! 2or her3 using Pills&ur% has a H#heatingH i"li#ation PRTER4s 5i.e 5ores T*reat o ne7 entrants he threat of new entrants orter #reated affe#ts the #o"etitive environ"ent for

Pills&ur%! A high threat of entr% "eans new #o"etitors are likel% to &e attra#ted to the rofits of the industr% and #an enter the industr% with ease! New #o"etitors entering the "arketla#e #an threaten or de#rease the "arket share and rofita&ilit% of Pills&ur% and "a% result in #hanges to e5isting rodu#t



0igh intensit% of rivalr% "eans #o"etitors are aggressivel% targeting ea#h other,s "arkets and aggressivel% ri#ing rodu#ts! his reresents otential #osts to all #o"etitors within the industr%! 0igh intensit% of #o"etitive rivalr% #an "ake an industr% "ore #o"etitive and de#rease rofit otential for Pills&ur%! 6n the other hand3 low intensit% of #o"etitive rivalr% "akes an industr% less #o"etitive and in#reases rofit otential for Pills&ur%! Bargaining po7er o supp'iers he idea is that the &argaining ower of the sulier in an industr% affe#ts the

#o"etitive environ"ent of Pills&ur% and influen#es its a&ilit% to a#hieve rofita&ilit%! Strong suliers #an ressure Pills&ur% &% raising ri#es3 lowering rodu#t
Bu%er &argaining ower refers to the ressure #onsu"ers #an e5ert on &usinesses to get the" to rovide higher



si"ilar &enefits to the #onsu"er as the rodu#t rodu#ed &% the fir"s within the industr%! he availa&ilit% of a su&stitution threat effe#ts the rofita&ilit% of Pills&ur% &e#ause #onsu"ers #an #hoose to ur#hase the su&stitute instead of the Pills&ur%,s rodu#t! he availa&ilit% of #lose su&stitute rodu#ts #an "ake an industr% "ore #o"etitive and de#rease rofit otential for the fir"s in the industr%!

,%0 MARKETING B8ECTI9ES

he roosed "arketing o&je#tive in entering the Canadian "arket to enhan#e the &usiness #an &e &% &uilding &rand awareness to the Canadian "arket3 having an e5traordinar% laun#hing sensation to attra#t Canadian #onsu"ers3 attra#t the targeted #usto"ers3 i"rovise the stakeholder

relationshis3

enhan#ing

#usto"er

relationshi3

and

i"rove

internal

#o""uni#ations using the s"art "ethod su#h as &e se#ifi# to the Canadian "arket3 "easura&le on the targeted #usto"er3 a#hieve the goal in in#reasing sales towards ointing the targeted "arket!

$%0 Propose Mar)eting Mi/ Strateg! an Tatis $:i;% Prout

o i"rovise the &usiness3 Pills&ur% should e5and the idea &% introdu#ing health% and different flavors own &aked #ookies dough using the de"ograh% of targeted Canadian "arket! Sele#ting the right target "arket will hel the" to enh an#e their &usinesses in further! As #ookies are the "ost favorite ite" for kids hen#e3 the% #an narrow towards Canadian kids! 10


>hen ti"e is the li"itation3 Pills&ur% #an &e the tool of assistant3 to hel the Canadian "arket to tr% the new rodu#t enhan#e"ent! No artifi#ial reservative3 gluten free #ookies dough with "ultile flavor &ased on #usto"er,s referen#e #an &e introdu#ed to the Canadian "arket as their likelihood of the rodu#t is low! 9esign of the rodu#t should &e attra#tive and follow the Canadian "arket #ulture in order to #ature the &usiness goal in foreign "arket! $:ii; P'ae

Pills&ur% "ust deter"ine the se#ifi# lo#ation to rea#h their targeted "arket in allowing the" to rea#h the rodu#t easil%! Availa&ilit% of the rodu#t in all la#es is the "ajor art of "arketing and rodu#t should &e availa&le in all gro#er% #hain3 leading retailers in#luding in the kiosks in airorts3 ter"inals and online ur#hasing site in Canadian "arket! hese la#es are "ost #onvenient and eas% for an%one to #onsu"e the rodu#ts! ven the targeted eole will also &e a&le to identif% the availa&ilit% of the rodu#t! $:iii; Promotion

4on failure fro" the first atte"t3 Pills&ur% should hire so"e advertising agen#% in Canadian "arket to design the ads a##ording to Canadian "arket #ulture! his will hel the" to rea#h the targeted #onsu"er easil%! ele#ast those ads during ri"e ti"e3 whi#h will attra#t "ore eole to #onsu"e the rodu#t! 9o a live de"o on the &ake #ookies in h%er"arket D suer"arkets and let the" taste i""ediatel%! his will hel to realie the effi#ien#% of the rodu#t and Pills&ur% #an sell that ite" on the sot! 0ave attra#ting

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a#kaging to ull their attention as it will hel the" to do self ro"ote a"ong fa"il% "e"&ers and eers! $:i.; Priing

Before introdu#ing the ite" in Canadian "arket3 the "arketing unit of Pills&ur% should do a resear#h of ri#ing "ethod ra#ti#ed here! At the &eginning3 Pills&ur% should give a reasona&le ri#ing as this involves kids and the% should &e a&le to afford it! Aart fro" that3 have dis#ounts during festive season or sell for a ro"o #o"&o ri#e for ur#hases in &ulk haens! his will hel the" to grow a reuta&le re"ark on Pills&ur% rodu#t! or sell for a ro"o #o"&o ri#e for ur#hases in &ulk haens! his will hel the" to grow a reuta&le re"ark on Pills&ur% rodu#t!

6%0 5inania' 5oreast E/*i(it 1

GNRA MIS C6NS6I9A9 SAMN 62 ARNINGS

In Millions3 5#et er Share 9ata 2is#al 8ear nded

*?1Ma%1$

*=1Ma%1.

Net Sales Costs and 5enses:

+''3$@

+''3*@@

Cost of sales Selling3 general and ad"inistrative Interest3 net Restru#turing and other e5it #osts 9ivestitures (gain) 9e&t reur#hase #osts otal Costs and 5enses arnings &efore In#o"e a5es and After1ta5  In#o"e a5es After1ta5 arnings fro" Joint ;entures Net arnings

$3=$$ *3$-? ==    +'3- '3.$.@' $@ +'3=

$3?@ *3@'? @.. ?@ (@==) '+=3@*= '3?'. $$@ ?= +'3*@

1 Ma% 1@ +''3- $3.?@ *3@@ .? *$   +=3.$' '3.= .*? -@ +'3..

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BPMM 6013 Marketng Managemen Group 2 Case Sudy – Pillsbury Cookie Callenge arnings er Share K Basi# arnings er Share K 9iluted 9ividends er Share Source: Company files.

+!. +*!= +'!@

+!@ +!? +'!*@

+*!?* +*!$ +'!'

E/*i(it 2

PISB4R8 RA98 BAE9 G669S CAG6R8 B8 SE4 CKIES C<=BS Cookies ‐ Chu&s ‐ Cho#olate Chi Cookies ‐ Chu&s ‐ Cho#olate Chunk Cookies ‐ Chu&s ‐ Peanut Butter CKIES REA-> T BAKE Cookies ‐ Read% to Bake ‐ Cho#olate Chi Cookies ‐ Read% to Bake ‐ Cho#olate Chunk D Chi CKIES SEASNA Seasonal Cookies ‐ Read% to Bake ‐ 0eart Shaes Seasonal Cookies ‐ Read% to Bake ‐ Bunn% Shaes Seasonal Cookies ‐ Read% to Bake ‐ Chi#k Shaes Seasonal Cookies ‐ Read% to Bake ‐ 0alloween Cho#olate D C an Seasonal Cookies ‐ Read% to Bake ‐ Pu"kin Shaes Seasonal Cookies ‐ Read% to Bake ‐ Christ"as Cho#olate D C and Seasonal Cookies ‐ Read% to Bake ‐ Snow"an Shaes Seasonal Cookies ‐ Chu&s ‐ Ginger&read

T=RN9ERS urnovers ‐ Ale urnovers ‐ Blue&err% urnovers ‐ Cherr% urnovers ‐ Ras&err% urnovers ‐ Straw&err% T
Seasonal Cookies ‐ Chu&s ‐ Sugar CINNAMN RS BASE Cinna"on Rolls ‐ Regular ‐ Cara"el I#ing Cinna"on Rolls ‐ Regular ‐ I#ing CINNAMN RS PREMI=M Cinna"on Rolls ‐ Grands ‐ Crea" Cheese I#ing Cinna"on Rolls ‐ Grands ‐ I#ing

>iener >ra Breadsti#ks ‐ Garli# Breadsti#ks ‐ Italian Pia Crust

Cres#ents ‐ Garli# T
Source: Company files.

2ro" the #onsolidated re#ord3 the #ookie seg"ent,s annual volu"e growth was onl% '/ over the ast  %ears and household enetration had fallen! Besides that3 we #an also see there is an in#rease in the selling3 general and ad"inistrative e5enses where "ost ro&a&l% it is due to heav% #a"aigning and advertising LEisses,! 2ro" here3 we #an sa% that the &aking ha&its of Canadian and 4!S! #onsu"er "arket that 4!S! #onsu"ers use "ore refrigerated &aking3 (.@/ #o"ared to*@/) and "i5 &aking (*/ #o"ared to '$/)! In order to in#rease the refrigerated

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#ookie rodu#t sale3 RBG need to invest in so"e RD9 to reall% get to know #onsu"er,s taste and needs

?%0 Contro's

After anal%ing these #ase studies3 we #an advise GMCC to look into so"e of the #ontrols so that it "a% result favor to GMCC: '! GMCC should #o"e out with a rodu#t that fits Canadian taste and referen#es instead of using the sa"e t%e of rodu#t that have &een introdu#ed to 4SA "arket! *! In order to attra#t the e"otional oint of the "others3 GMCC should also design an advertise"ent that also involves kids! his kind of ads #an give a sensitive and e"otional tou#h to "others and also fa"ilies! ! GMCC should fo#us in delivering the
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Case Study 2 - Pillburys Cookie Challenge

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