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MARKETING STRATEGY 468: General Mills Project Bowl Apptit

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Title: MARKETING STRATEGY 468: General Mills Project Bowl Apptit


1
MARKETING STRATEGY 468 General Mills -- Project
Bowl Appétit!
  • Final Project Report
  • Team 11 (Section 201)
  •  Lillian Lilly Jorge Tessey
  • Gabriel Michalup Hide Tomita
  • Amrit Shergill Zoya Trofimenko

2

Contents
  • Our Goal
  • Two Product Solutions Descriptions
  • Contextual Analysis Industry, Category,
    Consumer Trends, and Company
  • Competitive Analysis Porters Five Forces,
  • Product and Brand Specific evaluations Bowl
    Appetit, Betty Crocker, Progresso
  • Concept Testing
  • Marketing Strategy Competitive Positioning
  • Revenue Projections
  • Conclusion
  • Bibliography Appendices

3
Goal
Generate the maximum level of sustainable growth
in single serve, shelf stable food products for
General Mills.


4
Two Product Solutions
  • Progresso Chili Chips
  • Progresso Lunch-to-go!

5
Product 1 Progresso Chili Chips
  • NEED/VALUE PROPOSITION
  • Men and other hearty eaters need a quick,
    healthy, easy-to-prepare meal, all in one
    package.
  • OFFERING
  • 15oz. Progresso Bean Chili Tortilla Chips
    (each part in self-contained bowl snaps
    together as one package)
  • Price 2.89

6
Product 1 Progresso Chili Chips
  • STRATEGIC PLATFORM
  • Hearty and healthy meal kit
  • TARGET CONSUMER
  • By Demographics Men (25 44 yrs)
  • By Usage (Moment-in-Time) Hungry in a hurry.
    Dont want to waste time cooking or bother with
    cleaning up dirty dishes. Want hot filling,
    but healthy.

7
Product 1 Progresso Chili Chips
8
Product 2 Progresso Lunch-to-Go
  • NEED/VALUE PROPOSITION
  • Busy women need a quick, healthy,
    easy-to-prepare lunch, all in one package.
  • OFFERING
  • 12 oz. Progresso 99 Fat Free soup in a bowl
  • 2 breadsticks plastic spoon and napkin
    already in package
  • Price 2.49.

9
Product 2 Progresso Lunch-to-Go
STRATEGIC PLATFORM Portable and healthy
meal kit TARGET CONSUMER By
Demographics Women (25 44 yrs) By Usage
(Moment-in-Time) In a hurry. Need to eat
something filling yet healthy. No time or
suitable place for washing dishes.
10
Product 2 Progresso Lunch-to-Go
11
Ready-to-Eat Meal Industry
  • Total market in 1999 - 14.5 B
  • 40 of the US population carries a meal or snack
    from home at least once in a two week period.
  • Four categories canned ( 3.2 B), dried (
    1.8B), frozen( 8.9B) and chilled ( 0.7B)
  • Fragmented market -- one third of total sales
    come from the top 24 players

Source Euromonitor
12
Ready-to-Eat Distribution
  • Category fragmented by product type (canned,
    dried, frozen) ready-to-eat not grouped
    together in grocery store (see photo slide, next)
  • No consistent product placement from store to
    store
  • Result Consumers confused, their favorites are
    hard to find
  • General Mills can use distribution strength to
    place new products in most appropriate locations
    Chili for Progresso Chili Chips, and Soup for
    Progresso Lunch-to-go!

13
Ready-to-Eat Distribution
Chef Boyardee
Kraft Mac
Hamburger Helper
Bowl Appétit!
Ragu Express
14
Product Analysis Ready-to-Eat Meals
  • We analyzed five popular meal solutions
    Kraft Mac n Cheese, Stouffers Lean Cuisine,
    Uncle Bens Rice Bowl, Maruchan Instant Lunch,
    and Bowl Appetit.
  • These products have a wide range of prices and
    serving sizes.
  • We checked nutrition information on the packages
  • Analyzed
  • taste,
  • brand awareness
  • packaging and
  • promotion.

15
Product Analysis Ready-to-Eat Meals

  Harris Teeter
16
Product Analysis Ready-to-Eat Meals
  •    

17
Product Analysis Ready-to-Eat Meals
18
Soup Industry
  • Overall 4 decline in soup market forecast, but
    three segments are growing
  • Soups away from home
  • Ready-to-serve soups (more likely to be premium
    soups)
  • Menu items in restaurants.
  • Biggest concerns are time, convenience, and ease
    of preparation

19
Chili Industry
  • 85 of consumers surveyed in 1999 considered
    Chili as a meal.
  • Sales revenue growth 25 over last 3 years
  • New products introduced cater to adults, oriented
    around nutrition, eg chili ready meals (cans,
    dried in a pouch).
  • Most popular type is regular chili with beans.

20
Consumer Trends
  • Work Family Home Cooking
  • Result? Higher Willingness to Pay for convenient
    and easy-to-prepare meals.
  • More two-income and single-parent families dual
    convenience nutrition focus
  • More whole meals purchased at stores rather than
    in restaurants(54.2 vs 45.8 of family budget).
  • Microwaves almost universal (86 of households)

21
Our Consumer Survey
  • 52 Respondents queried about ready-to-eat meals.
    Result?
  • Women are more concerned about nutrition than
    men. 50 of Male respondents didnt care vs
    24 of women.
  • However, nutrition is trumped by convenience in
    reason for purchase ready-to-eat meals.
  • Top nutritional concerns are fat, calories, with
    sodium distant 3d.

22
More Survey Results
  • Campbells soup is the product most frequently
    purchased by women in the last 6 months (55)
  • 50 of married respondents eat ready-to-eat food
    for lunch while 77 of singles eat it for dinner.
  • General Mills brands associated with
    ready-to-eat Hamburger Helper Progresso
  • (Text of Survey - Appendix 1)

23
Consumer Survey Results
24
Consumer Survey Results
25
Consumer Survey Results
26
Company
  • General Mills recently acquired Pillsbury
  • Appropriate time to expand the Progresso and
    Pillsbury lines
  • Take advantage of synergies between General Mills
    and Pillsbury
  • Strong distribution and retailing relationships
  • New products should fit with combined firms
    capabilities and strengths

27
General Mills SWOT Analysis
28
Porters Five Forces- Ready-to-Eat Industry
  • Buyer Power
  • General Mills distributes the majority of its
    products directly, through its own sales
    organization, to retailers, co-operatives and
    wholesalers.
  • Targets alternative distribution channels,
    particularly convenience stores, vending and
    non-grocery outlets as well as foodservice
    outlets.
  • Due to its size and huge range of offerings, the
    company is able to command strong representation
    through these channels.
  • Supplier Power
  • Power is low brand manufacturers are in a good
    position to negotiate with suppliers since
    ingredients are commodities.

29
Porters Five Forces- Ready-to-Eat Industry
  • Threat of Entrants
  • Market is so segmented than new entrants can
    always come in to target niche segments.
  • However, its does require a moderate to heavy
    investment in production and distribution
    facilities.
  • Threat of Substitutes
  • Many substitutes including soups, delis, home
    food, frozen foods, power bars, pizzas, noodles,
    canned, chilled and frozen meals.
  • Competitive Rivalry
  • High rivalry many major players like Kraft,
    ConAgra, Hormel, Campbells Soups,
    Nestle,Maruchan and private labels offer products
    that are close substitutes for the Progresso
    range.

30
Porters Five Forces- Ready-to-Eat Industry
31
Bowl Appétit! Marketing Mix
  • Product
  • Variety Bowl Appétit! comes in 10 different
    flavors of pasta, rice and potatoes
  • Quality Low quality of ingredients. No
    nutritional value. High calories.
  • Packaging Medium size plastic bowl covered by an
    appealing carton box. A thin plastic film
    protects the content.
  • Sizes Single-serve portions that range from 57g
    to 88g

32
Bowl Appétit! Marketing Mix
  • Price
  • Bowl Appétit! rice, pasta and potato bowls are
    priced 1.89 at local grocery stores. There is no
    price difference among the 10 varieties despite
    the fact that they contain different ingredients.
  • Place
  • Bowl Appétit! products are located in the
    packaged dinner aisle, and are widely available
    in grocery stores, retail stores, clubs, and mass
    merchandisers

33
Bowl Appétit! Marketing Mix
  • Promotion
  • Advertising The target audience is working women
    and the message is that Bowl Apettit! is a fast,
    convenient and easy to prepare meal.
  • Web Site Customers can sign up to receive an
    email newsletter from Betty Crocker with
    information about their products and recipes as
    well as other useful information such as dinner
    planners.

34
Bowl Appétit SWOT Analysis
35
Bowl Appetit
  • Market share ()
  • Fast penetration /Among all major products, Bowl
    Appétit!Pasta ranks 7th, Rice ranks 12th, and
    Potato ranks 40th.

(Nielsen Data)
36
Bowl Appetit

(Nielsen Data)
37
Bowl Appetit
  • Pasta
  • Ranks 3rd in this category.
  • Easy Mac and Classico are major competitors
    (Nielsen Data)

(Nielsen Data)
38
Bowl Appetit
  • Rice
  • Ranks 4th in this category.
  • A total of Uncle Bens rice products sells about
    six times as much as Bowl Appétit!does.
    (Nielsen Data)

(Nielsen Data)
39
Consumer Profile
  • Bowl Appétit!
  • Age Female Head over 55 is the biggest segment
    (30). FH between 45-54 is the second (28) .
  • Family Size 69 of consumers has the size
    between 2-4.
  • Gender No Female Head counts 6 (Uncle
    Bens10).
  • Life Style Middle Aged Childless couples (21)
    and Empty Nesters (23).
  • Repeat purchase rate is not yet impressive
    (Pasta 28.6 / Rice 19.2) compared with other
    brands (Easy Mac 43.7)

(Panel Data)
40
Consumer Profile
(Panel Data)
41
Consumer Profile
(Panel Data)
42
Limitations of the Betty Crocker Brand
  •       There is an increase in demand for healthy
    food, and Betty Crocker is not associated with
    healthy food. We would like to use a brand that
    can support a healthy product.
  •       Betty Crocker has no experience with
    neither soup nor chili products, making it harder
    to use this brand for launching these types of
    food products.

43
Limitations of Bowl Appétit! Products
  • Dried value meals have seen a decrease in sales.
    The most popular Betty Crocker products are dried
    and thus have a risk in future. Therefore we need
    another brand focused on the growth category.
  • Evidence Over the last year there is negative
    growth tendency with BA even though they launched
    the potato flavor.
  • Primary consumer of Betty Crocker products are
    white women over 55 years old. We would like to
    go beyond this niche market by using a brand that
    is not solely related to older women, but also
    other target segments.
  • Evidence BA is very seasonal not purchased as
    much in summer or Xmas confirms older cook
    woman as key customer.

44
Bowl Appétit! vs. Progresso Consumer Profiles
(Panel Data 98 MRI data)
45
Our Preference Progresso
  • Progresso appeals to a younger consumer Female
    head of Household (FH) under 35 Progresso (31)
    vs. Bowl Appétit! (10).
  • Progresso appeals to families (especially with
    kids) - Progresso (39) vs. Bowl Appétit! (30).
  • Progresso associated with quality soups and
    beans, favored brand name for chili in concept
    test.

46
Progressos Market-Based Assets
  • Reputational Enjoys customer loyalty and brand
    awareness, perceived as having innovative new
    flavors
  • Relational Strong relationships with retailers
    allows wide distribution and nationwide coverage
  • Knowledge Extensive knowledge about customer
    profiles, suppliers and channels

47
Progresso Brand
  • Personality Excitement daring, spirited,
    imaginative, up to-date
  •  
  • Description
  • High-quality Progresso soups, sauces, beans,
    bread crumbs, tomato products, olive oils and
    vinegars
  • Tradition of creating fine Italian and
    Italian-influenced foods and bean and tomato
    based recipes like Chili
  • Convenient Ready-to-serve NOT condensed
  • Big chunks, seasoned, hearty, fresh-from-the-garde
    n
  • Flavorful

48
Progressos Brand Report Card
49
Progressos Strengths and Weaknesses
50
Competition for New Products
  • SOUPS
  • Campbell Soups, Knorr soups (Unilever), Healthy
    Choice, Advantage/10 Soups (light soups from
    ConAgra).
  • Campbells Soup Co ranked as the number one
    manufacturer overall in 1999, with a market value
    share of 54.8.
  • CHILIS
  • Hormel, Armour Star Chili, Wolf Stagg.
  • Hormel is the leader with 39.1 of the market
    share

51
Concept Testing
  • We tested 19 consumers
  • 9 males and 1 female for the chili product
    concept
  • 9 females for the soup product concept
  • See attached Appendix 2 for test questions

52
Concept Testing - Chili
  • Key Results
  • The Progresso Brand preferred, followed by Hormel
  • Surprising result initial product concept was
    Old El Paso branded but consumers strongly
    preferred Progresso
  • 70 of those surveyed would try the product
  • Most said it appealed to single men and kids
  • Consumers overwhelmingly described it as
    complete, convenient and appealing
  • Equally associated with dinner and lunch
  • 70 willing to pay between 2.49 and 2.89
  • Majority preferred name Chili Chips

53
Concept Testing - Soup
  • Key Results
  • Progresso and Campbells close in recognition/
    preference
  • Soup with breadstick, all in one package, would
    appeal to busy women
  • The product was described as quick, convenient,
    high quality
  • Concern about sodium, fat, and presence of meat
  • Consumers associated it primarily with lunch at
    work, with dinner at home as second use
  • 80 of them were willing to pay up to 2.49
  • Majority preferred Lunch to go name over
    Complete

54
Marketing Strategy
  • a) Leverage Market-Based Assets
  • Progresso Brand Equity Enjoys customer loyalty
    and brand awareness, perceived as having
    innovative new flavors
  • General Mills Knowledge Extensive knowledge
    about customer profiles, suppliers and channels

55
Marketing Strategy
  • b) Distribution
  • Traditional retailers such as grocery
    stores/supermarkets are our target consumers
    preferred channel. General Mills commands a
    strong representation here.
  • Continuous Replenishment Strategy to assure
    presence at POS and avoid stock-outs enhancing
    customer satisfaction.

56
Distribution Chili Aisle
Placement for our product
57
Distribution Soup Aisle
Placement for our product
58
Progresso Marketing Strategy
  • c) Pricing Strategy




Price



High

Medium

Low



High


Bear Country

Progresso Kits


Quality

Mediu
m

Uncles Ben
Kraft Mc Pasta

Campbells


Low


Bowl Appétit!

Maruchan

  • High-value strategy High-quality product at an
    average price. We consider that our target
    customers are price sensitive since they can
    easily compare the quality and price of
    substitutes.

59
Progresso Marketing Strategy
  • d) Promotion Strategy - Chili
  • Objective To make our target consumers aware of
    our new offerings.
  • Message Healthy, Hearty, Flavorful Quick.
  • Vehicle Television and Newspaper.
  • - Television In the short term, we will use
    heavy advertising for sports events.
  • - Newspapers We will use free-standing inserts
    in newspapers and issue coupons to induce buying
    by female shoppers.

60
Progresso Marketing Strategy
  • d) Promotion Strategy - Soup
  • Objective To make our target consumers aware of
    our new offerings.
  • Message Healthy, Nutritious, Convenient
    Disposable.
  • Vehicle Television and Newspaper.
  • - Television In the short term, we will use
    heavy advertising in TV.
  • - Newspapers We will use free-standing inserts
    in newspapers and issue coupons to induce trial.

61
Main Competitive Landscape
62
Chili Competitive Landscape
63
Soup Competitive Landscape
64
Competitive Positioning
THE STRATEGIC GAMEBOARD



3


Create and

Pursue a

Unique

Advantage

2

4


Resegment the
Exploit Unique

Market to
Advantage

Create a Nic
he

Industry Wide


1

Do More and

Better of the
Selective

New Game


Same

Mode of Competition
Scope of Competition

(Where)

(How)


Same Game

Across
-
the
-
Board





65
Competitive Positioning
66
Competitive Positioning
67
Competitive Response
As General Mills targets this selective market,
the competitors (like Campbells) may avoid
intense action like price-cutting because
Campbells will be hurt more as a leader in the
field.
Porters Generic Strategic Framework
68
Revenue Model Forecasts
See Appendix 3 for Revenue Model
69
Revenue Forecasts
  • Two markets -- Chili and Soup with different
    behavior and data
  • Principles behind forecast assumptions
  • Use historical data where available
  • Extrapolate conservatively
  • Assumptions (e.g. in price changes,
    cannibalization rates) chosen such that revenue
    outcome is most conservative actual results may
    be higher in each case

70
Our Revenue Model
  • New Model created for this analysis
  • Improves on traditional pricing model
  • is more conservative,
  • adjusts for
  • brand differences in growth rates
  • Cannibalization rates

71
Chili Revenue Model
72
Chili Revenue Model Growth Assumptions
  • Yearly Sales Growth 20, based on historical
    data extrapolated for three years
  • Price Growth 10 year one, based on expectation
    that competitors will respond sharply to our new
    premium entrant, then 5 each year thereafter as
    competition fine tunes its response, 5 also
    applies to our new product

73
Chili Revenue Model Market Share Assumptions
  • No new customers in overall Chili market, all our
    customers are taken from competitors
  • Proportion of Market Share lost by competitors
    based on product attributes, and on price
    differential between their product and ours,
    adjusted by Consumer Price Sensitivity Factor

74
Consumer Price Sensitivity Factor (CPSF)
  • Lack of data prevented precise consumer price
    elasticity calculation
  • Consumer Price Sensitivity Factor is a proxy for
    elasticity captures concern over price
    difference between our product and competitors
  • Base level is 1 above 1 is more price
    sensitive, below 1 is less price sensitive
  • CPSF for Chili is .85 Chili consumers consider
    other attributes to be more important than price

75
Chili Revenue Model Assumptions
76
Chili Revenue Forecast
Revenues are in US Million
77
Taking Market Share from Competitors
78
Source of Customers by percent
79
Market Share before after entry
Market Share including new product
1998
1999
2000
2001
2002
2003
2004
Our Product
0.0
0.0
0.0
0.0
5.0
10.8
17.5
Armour Star
11.0
10.6
10.2
9.8
9.3
8.7
8.2
Dennisons
8.7
8.5
8.3
8.1
7.9
7.7
7.5
Hormel
36.8
39.1
41.6
44.2
42.9
41.0
38.4
Libby's
6.8
6.5
6.3
6.0
5.7
5.3
5.0
Nalley's
6.4
6.6
6.8
7.0
7.1
7.3
7.4
Stagg
7.0
6.9
7.1
7.3
7.4
7.6
7.8
Wolf Brand
8.8
8.6
8.8
9.1
8.9
8.7
8.4
Others
14.6
13.2
11.0
8.5
5.8
2.9
-0.2
Total Market Share
100
100
100
100
100
100
100
Note New Product introduced in 2001, takes 5
share in 2002
80
Sensitivity Analysis
81
Sensitivity Analysis
82
Sensitivity Analysis Results
  • Significant Assumptions in descending order
  • CPSF
  • Product price
  • Market Growth
  • Not significant degree of switching from Hormel

83
Soup Revenue Model
84
Soup Revenue Model Growth Assumptions
  • Yearly Sales Growth based on historical data for
    each brand, extrapolated for three years
  • Price Growth 2.2 annually, across all
    competitors and including new product

85
Soup Revenue Model Market Share Assumptions
  • Overall growth rate of Soup market is 0.1
    distribution of that growth is uneven, favoring
    convenience packaging and premium Soups.
  • Proportion of Market Share lost by competitors is
    based on product attributes, and on price
    differential between their product and ours,
    adjusted by Consumer Price Sensitivity Factor
  • Cannibalization rate is calculated as in 2
    above, assumed no reverse effect (increase in
    canned sales) by consumers introduced to
    Progresso via the new product

86
Consumer Price Sensitivity Factor (CPSF)
  • Lack of data prevented precise consumer price
    elasticity calculation
  • Consumer Price Sensitivity Factor is a proxy for
    elasticity captures concern over price
    difference between our product and competitors
  • Base level is 1 above 1 is more price
    sensitive, below 1 is less price sensitive
  • CPSF for Soup is 1.5 Soup consumers consider
    price to be one of the more important attributes

87
Soup Revenue Model Assumptions
88
Soup Revenue Forecast
Revenues are in US Million
89
Taking Market Share from Competitors
90
Source of Customers (by percent)
91
Market Share before after entry
92
Progresso Expected Market Share
Years
93
Sensitivity Analysis
94
Sensitivity Analysis
95
Sensitivity Analysis Results
  • Significant Assumptions in descending order
  • Price (highly significant up to 2.59, less
    significant above that price)
  • CPSF
  • Degree of switching from Campbells
  • Degree of Cannibalization from Progresso canned

96
Conclusion
  • Synergies created by GM and Pillsbury
  • Progresso high brand equity fits target markets
    -- young, quality conscious and growing
  • Products fill unserved market needs healthy,
    quick hot food in a kit
  • Make optimal use of GM production and
    distribution networks

97
Bibliography
  • Sloan, Elizabeth. Soups On Food Technology,
    October 2000, Vol. 54, No. 10. p26.
  • EuroMonitor
  • SP Market Insight
  • General Mills website and Annual Report
  • Nielsen Data / Panel Data
  • Hormel, Campbell ConAgra website
  • U.S. Department of Commerce
  • Marketing Management, Kotler, Philip.
  • MRI Data 1998
  • U.S. Government Census 2000

98
Appendices
  • Survey Questionnaire
  • Concept Development Questionnaire
  • Revenue Model
  • Product mock-ups
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