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Pillsbury Cookie Challenge
Rashmi Agr Rashmi Agraw awal al Misty Hayden Datta Datt a Kos Koshti hti Sun Ah Park Pramo Pr amod d Rao Arthur Thomas Pat Tramonte
Agenda Company Background Financial History Challenges Quantitative and Qualitative Analysis Alternative Alternativ e Solutions Recommendation Q&A
Company Background
GMCC
is the second largest of the General Mills international divisions GMCC
is a leader in the Canadian packaged foods market
Company Background Cont. RBG is the fourth largest category in GMCC Pillsbury dominates 85% of RBGs market share Pillsbury refrigerated cookie product line generates 75% of the categorys profit
Financial History
Zero volume growth for RBG between 2004 & 2006
1% annual volume growth for RB G for the last 3 years
Marketing Challenges Promotional Product Price Place
Promotional Challenges
Prior Market campaigns developed in US and adapted to Canadian market failed to generate the desired 5 7% annual growth for the RBG category
Product Challenges Household penetration reduced to 24% ONLY 15% of Canadian customers surveyed believed that the cookies were sized appropriately
Price Challenges Average retail price is 63% higher than feature price Only 32% of customers perceive value for the price of the Pillsbury refrigerated cookie product
Place Challenges No challenges related to Place ±
Channels
±
Coverage
±
Assortment
±
Inventory
±
Transport
±
Locations
Q uantitative Analysis Impulse Buy
Canada
US
Difference
They are easy to make
79%
75%
4%
They are quick to make
79%
75%
4%
Can make them at the spur of the moment
68%
68%
0%
Easier than baking cookies from scratch
59%
52%
7%
Good Value for
32%
31%
1%
30%
39%
-9%
the Price
For my own indulgence
Q uantitative Analysis Kid s
Canada
US
Difference
The kids like to eat them
47%
37%
10%
As a special treat for the kids
42%
34%
8%
Fun thing to bake with the kids
42%
29%
13%
The kids like to make them
42%
30%
12%
Fun activity with the kids
41%
28%
13%
My child(ren)
28%
20%
8%
19%
15%
4%
requests them
Is an opportunity to teach the kids how to bake
Q uantitative Analysis Scratch/Qual it y
Canada
US
Difference
Easier than baking cookies from scratch
59%
52%
7%
It's similar to homemade cookie dough
31%
36%
-5%
Is a high-quality cookie dough
29%
41%
-12%
Is like homemade cookie dough
28%
35%
-7%
Q ualitative Analysis Easy, Quick, Practical, Affordable, and Pleasing to Children Brings Smile, Feels Good to Make Difference Special: Sharing, Eating Cookie not Baking All Devoted Mothers Love for Pillsbury : Little Secret
Alternatives: Placement in Refrigerated Section Reasoning: Eye Level placement is ideal for the impulse buy.
Additional expense required associated with location
Greater exposure to scratch
May
buyers
not be feasible for some retailers Increased inventory expense for retailers
Alternatives: Create a Box-Top Initiative For Schools Reasoning: Establishes a new channel for marketing brand while maintaining the target involvement of children.
Cons Additional Expense to promote to schools Possible Push-back from parents/teachers (nonhealthy product)
Alternatives: Right Message on Packaging for Kids & Mothers Reasoning: To focus more on quality for mothers and attractive packaging for kids.
Pros Appeals to the scratch users on quality of the product Appeals to the kids to associate Pillsbury as a fun product
Cons Expense to License the Characters, e.g. Tigger Possible Increase in unit Price, Lower Sales
Alternatives: Create Rewards/Incentives for Children Reasoning: Use Stickers/Tokens/Codes to increase the awareness, brand loyalty and attract customers with children
Pros Increase brand loyalty Use influence of children to increase sales
Cons Additional expenses to run the program
Alternatives: Develop New Product for Kids Reasoning: Kids play a larger role as purchase driver in Canada than US.
Pros
Cons
Potential higher volume of sales due to influence of children
Possibility of missing the segment of target market which is scratch users
Establish brand loyalty
Negative media exposure regarding childhood obesity Specialized product development costs for Canadian market alone
Alternatives: Develop a New High Q uality Product Reasoning: To target scratch users.
Pros Quality ingredients are more in line with made from scratch cookies Higher profit margin opportunity
Cons Higher price point Cannot replicate the user experience of making a cookie from scratch Development costs for premium product for Canadian market alone
Alternatives: Develop Marketing Ad-campaign Reasoning: To target scratch users.
Pros
Cons
Increased customer value perception
Large expense of the advertisement development
Refrigerated cookie is just like homemade
Cannot compete with freshness or experience of scratch cookies
Reduced time and effort involved in baking Increased market share
Recommendations Create Target Market Campaign Restructure Product Placement Restructure Packaging Create a Rewards Program
Target Market Campaign
Television Ad Campaign Aimed at Untapped Scratch-Users Segment ±
