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Progressing Progresso:5 Year Consumer-Focused Strategy for Market LeadershipTeam C6:Margaret GentileSatoko HiraiChristopher PowersMatthew RedmondAlex SirkinSteven Wang
2•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
3•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
Executive Summary4
Implementation of our recommendations will increase our Net Present Value 19% to $2.7 billion
Implementation Process5
Strategy1
Establish a Sense of Urgency2
• Opportunity to gain market share and connect with consumers
Planning for and Creating Short-term Wins2
• Implementation of Balanced Scorecard
Structure1
Forming a Powerful Guiding Coalition2
• Executive buy-in to vision and opportunity
Empowering Others to Act on the Vision2
• Two-way communication with customers
Shared Values1
Creating a Vision2
• Customer-centric thinking and action
Institutionalizing New Approaches2
• Co-branding work with other GIS brands
Systems1
Communicating the vision2
• Use of online community
Improvements and Producing More Change2
• Enhancements to online community
1 Johnson, Leonard. “A Note on the 7-S Model”2 Kotter, John P. “Leading Change: Why Transformation Efforts Fail”
Industry Overview6
Campbell's; 49%
Progresso; 35%
Heal-thy Choice; 5%
Private
La-bel; 5%
Other; 7%
2
Progresso is a strong #2 competitor in $1.6 B Ready-to-Serve (RTS) wet soup industry1
Low Sodium11%
Light12%
Veg-etable Clas-sics19%
Rich and Hearty15%
Traditional43%
Progresso Soup Sales byProduct Line3
4 weeks ending 12/01/07
RTS Sales by Brand2
1 Calculated with equivalent unit data from AC Nielsen 2 Mintel Report: Soups – US – 20083 JP Morgan Analyst Report from Jan 08, 2008
• Partnerships/first mover on trends
• Product innovation• Good turn-over on booked
sales1
7
• Build brand preference• Continue exploring
healthy eating options targeted towards women
• Targeted ethnic-based marketing programs
Strengths Weaknesses• Brand indifference of
consumer− Customers purchase based on:
1. Taste2. Health3. Price4. Brand
Opportunities Threats• Campbell’s push into
healthy offerings through Select Harvest brand (Healthy Request line)2
• Private label growth• Commodities prices and
effects on inventory
1 AC710 Presentation by Six Sigmas on General Mills; GIS: Financial Ratios. investing.businessweek.com2 Campbell’s Select Harvest Website URL: http://www.campbellsoup.com/select.aspx
The Road Behind, The Road Ahead
8•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
9
What Are Our Touch Points?
“Each branding campaign should seek to identify ‘touch points’ — the media or location where it makes the most sense to locate and contact the target consumer.”
Mark AddicksCMO, General Mills1
1 Knowledge@Wharton, November 20, 2008, http://knowledge.wharton.upenn.edu/article.cfm?articleid=2097Emphasis added
Online Community Plan10
• Goal: ▫Engage Progresso consumers in two-way
communication via the launch of an online community
• Action:▫ Introduce integrated marketing▫Provide a space for promoters to celebrate the brand
• Expectation:▫ Increase Net Promoter Score▫Build brand preference
11Importance of Women on RTS Purchases
Initiator
Influencer
ApproverBuyer
User
Gatekeeper
Diet ProgramsGeneration Z
Decider
ApproverBuyer
Baby BoomersGeneration XGeneration YGeneration Z
12
Integrated Marketing
•Open Brand
•Engage consumers
•Two-way communication
PRODUCT
PACKAGING
CONSUMER
ADVERTISING
CRM
DISTRIBUTION
Chart from Professor Melvyn Menezes‘s Course Materials
13
Engage Promoters
•Small groups of enthusiasts dominate online conversations1
•New community website will include:▫Recipe forum for including Progresso as
part of a home-cooked meal▫Weight-loss community▫Customer feedback on new product
introductions
1 Marketing VOX Magazine
14•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
15
Progresso Light: Opportunity
“The sharp increase in those claiming to be watching their weight suggests a cultural shift to more awareness of food and relationship to overall health. There is a great opportunity for marketers, food retailers, and restaurants to focus on healthy eating—for the sake of overall health.”1
Mintel – Marketing Health to Women
1 Mintel – Marketing Health to Women – US July 2007Emphasis Added
Light Product Plan16
• Goal: ▫Expand into the women’s Weight Watchers and self-
designed diet markets
• Action:▫ Increase number of SKUs by 10 each in 2010 and
2011
• Expectation:▫Gain 42% market share by 2013▫Win over early adopters and early majority▫New product lines account for $342 million per year
in additional retail sales
17
Current Diet Demographic Share
Projected Share 2008
Women on Weight Watchers and Self-Designed Diets
13 million1&2
Current Progresso Light Consumers 1.1 million / 7%3
Inno
vato
rs
Early
Adopt
ers
Early
Majo
rity
Progresso Light Adoption CurveCurrent4
1 & 2 Estimated through “Interest in Dieting Slims Down; More Accepting the Extra Pounds,” The Boston Globe & http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-3 Estimated through Mintel - Soup - US – September 2008 , and 1 & 2 4 Estimated through http://www.quickmba.com/marketing/product/diffusion/
18
Entrance into Early Majority
1 http://www.progressofoods.com2 Findings through primary survey data3 Estimated through http://www.quickmba.com/marketing/product/diffusion/
11Progresso
Light SKUs1
20Light SKUs
introduced by 2011
4:1Meat +
Feature to Vegetable2
$342 MAnticipated Yearly Sales 2010-2013
Inno
vato
rs
Early
Adopt
ers
Early
Majo
rity
Progresso Light Adoption CurveProjected 20133
19•E
xecutive Summary & Overview
•Create an Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
20
Which Do You Prefer?
Images: Margaret Gentile
SoupServer Plan21
•Goal: ▫Improve relationships with both retailers and
consumers
•Action:▫Introduce SoupServers to 500 stores per
year
•Expectation:▫Increase in sales of 5% in each store that
installs the SoupServers1
1 Campbell’s Comes Out, http://www.strategymag.com/articles/magazine/20060701/biz.html
Campbell’s IQ Maximizer22
• Represents a shift in advertising philosophy
• Makes it easier to keep product organized on shelves1
• Improves shoppers’ perception of the brand▫ 79% of consumers say it
makes shopping for soup easier2
▫ Reduces shopping time from 58 seconds to 8 seconds3
▫ Improves soup sales by 3.5 - 7% in any store in which it is installed4
1 Supermarket Displays '05, http://www.creativemag.com/supermktdisp1105.html2 Forum for Consumer Products and Retail Leadership, Vol. 7, No. 4, http://www.gmabrands.com/awardssurvey/campbellcpgaward.pdf3 Supermarket Displays '05, http://www.creativemag.com/supermktdisp1105.html4 Campbell’s Comes Out, http://www.strategymag.com/articles/magazine/20060701/biz.html5 Image Source Campbell’s Soup Display, http://www.retailpowerhouse.com/gallery/main.php?g2_itemId=673
5
How Progresso Can Compete23
• Contract with outside firm to produce our own plan-o-gram, the SoupServer
• Introduce SoupServers at a rate of 500 stores per year
SKUs
Cost per SoupServer
SKUs per SoupServer
SoupServers per Store
Estimated Cost
2009
74 $501 61 13 $325,000
1The CanSolidator: http://www.shelfreliance.com/product/view/p79#Image: Margaret Gentile
SoupServer in Action24
Images: Margaret Gentile
25•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
Advertising Plan26
•Goal: ▫Persuade customers to buy on brand
•Action:▫Increase 2009 advertising budget to $50
million (20% over 2007) 1
▫Annual 10% increases to budget (2010 – 2013)▫Balance advertising mix
•Expectation:▫Estimated 2009 sales increase $80.3 million
1 Facenda, Vanessa L. "General Mills Outlook 'Healthy' with New Products, Increased Ad Spend." Brandweek, 2/22/2008Primary research by Team Six Sigmas, soup survey conducted October 17 – 25 Soups – US – September 2008, via Mintel
Getting Customers to Buy on Brand27
Purchase Intent/ Consideration
Brand Favorability
-1 1 3 5 7 9 11 13 15
3.5
2.6
2.5
2
6.6
7.1TVOnlineMagazines
1MPA “Accountability II: How the Media Drive Results and Impact Online Success,” p. 24.
•Magazine advertisements are more effective at:▫Building brand favorability▫Increasing purchase intentions
Effect of Medium on CPG Brand Metrics – Average Percentage Point Increase
(Exposed/Controlled)1
Advertising Mix Reallocation28
1Estimated from data by TNSMI Multi-Media Service and Facenda, Vanessa L. "General Mills Outlook 'Healthy' with New Products, Increased Ad Spend." Brandweek, 2/22/2008MPA “Accountability II: How the Media Drive Results and Impact Online Success,” p. 24.
Tele-vision56%
Online22%
Magazine22%
Proposed Reallocation
Tele-vision69%
Online16%
Magazine15%
Current Allocation
•We will rebalance our mix to emphasize▫Magazine advertising▫Online advertising
1
Expected Return on Investment29
1The DMA 2004 Response Report, p. 256.2Estimated using data fromThe DMA 2004 Response Report, p. 256 and MPA “Accountability II: How the Media Drive Results and Impact Online Success,” p. 24.3Estimated using data from TNSMI Multi-Media Service and Facenda, Vanessa L. "General Mills Outlook 'Healthy' with New Products, Increased Ad Spend." Brandweek, 2/22/2008
Medium Budget3 ROI IndexIncrease in
Sales (in $M)
TV1 $28.0 1.0 $28.0
Magazines1 $11.0 3.7 $40.7
Online2 $11.0 1.1 $11.6
Total $50.0 1.6 $80.3
Marketing Mix30
1 “Chef Michael Chiarello,” http://progressofoods.com/?View=CelebrityChef/ChefMichael2 “Semi-homemade Cooking with Sandra Lee,” http://www.foodnetwork.com/3 Websites of respective magazines4 MRI database5 Soup – US -- September 2008, via Mintel6 Commercial Weight Loss Programs – US – November 2005,‖ via Mintel
Position Taste Health
Target Audience Men and Women5 Women Primarily6
Television• Food Network
−Easy Entertaining with Michael Chiarello1
• Food Network−Semi-Homemade with
Sandra Lee2
Magazine 3,4
• Gourmet• Newsweek• Time
• Weight Watcher’s• Self• Shape
InternetCorresponding websites of networks and magazines above
Corresponding websites of networks and magazines above
“All in Good Taste” Campaign31
1 http://www.students.sbc.edu/kitchin04/artandexpression/contemporary%20art.html2 http://avline.abacusline.co.uk/pictures/jpeg/pics/mona.jpgProgresso logos: General Mills website
Taste1,2 Health
32•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
33
Progresso Light: Opportunity
“CPG manufacturers and retailers will at worst successfully weather today’s difficult economic environment. At best, these companies will both reinforce their relationships with shoppers as well as implement price increase strategies that stick.”
- Thom BlischokPresident, Consulting and Innovation
Information Resources, Inc. (IRI)1
1 Blischok, “Successful Pricing Strategies: A Strategic Look Through the Affordability Lens”Emphasis added
Pricing Plan34
•Goal: ▫Build on success of recommendations to achieve
a net increase in prices in a flat-growth industry
•Action:▫2009: Lower average retail price to $1.70/can▫2010-2011: 6% total increase to $1.80/can
•Expectation:▫Increase contribution 3X in conjunction with
other recommendations
2009 Plan35
Realize $20.6 million – 15.4% – increase in profits through strategic pricing1
Price: $1.70Volume: 49 million cansMargin: $20.6 million
1 Data from AC Nielsen used to conduct sensitivity analysis
Going-Forward Plan36
Leverage success of other initiatives to increase prices 6% total to $1.80 and maximize contribution
Year Price Volume1 Contribution Margin
2010 $1.75 95.4 M $41.9 M
2011 $1.80 133.8 M $58.9 M
2012 $1.80 133.8 M $58.9 M
2013 $1.80 133.8 M $58.9 M
1 Data from AC Nielsen used to estimate volume responsiveness
37•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
Timeframe for Execution38
Implementation Process39
Strategy1
Establish a Sense of Urgency2
• Opportunity to gain market share and connect with consumers
Planning for and Creating Short-term Wins2
• Implementation of Balanced Scorecard
Structure1
Forming a Powerful Guiding Coalition2
• Executive buy-in to vision and opportunity
Empowering Others to Act on the Vision2
• Two-way communication with customers
Shared Values1
Creating a Vision2
• Customer-centric thinking and action
Institutionalizing New Approaches2
• Co-branding work with other GIS brands
Systems1
Communicating the vision2
• Use of online community
Improvements and Producing More Change2
• Enhancements to online community
1 Johnson, Leonard. “A Note on the 7-S Model”2 Kotter, John P. “Leading Change: Why Transformation Efforts Fail”
Measuring with the Balanced Scorecard1
40
Area Metric Goal
Financial
ROI on online community
Establish and then increase number of blogger promoters
ROI on advertisingMeet ROI Index of 1.6 or higher
ROI on SoupServersImprove channel relationships and sales 5%
Customer
10% improvement on Net Promoter Score
Build brand equity and increase loyalty
Implementation of customer-requested feature enhancements to online community
Create and foster dialogue with customers and increase utility of community
Internal Processes
Increase revenues from new products
Cross-functional reliance on insights from community and introduction of demanded products
Improve time to introduce new products
Gain first-mover advantage in market and increase perception of responsive brand
Learning & Growth
Quality suggestions per employee
Engage employees in dialogue with customers and increase attentiveness to voice of customer
1 Kaplan and Norton, “Using the Balanced Scorecard as a Strategic Management System”
Competitive Responses41
Recommendation Campbell’s Private LabelProgresso’s
Counter Response
Online Community
Initiative would be viewed as unoriginal
Lacks funding and brand-backing
Continue with strategy
Increased Number of Light SKUs
Expand Select Harvest Healthy Request Line
Lacks funding and resources
Continue with strategy
SoupServers Legal actionPrepare and align legal resources
Advertising – Women’s Health
May attempt to partner with diet organization
Continue with strategy
Strategic Pricing
Bottom-line driven strategy of company will inhibit response
Offer lower prices
Leverage community and new product offerings to support increases
42•E
xecutive Summary & Overview
•Online Community
•Product Line Expansion
•The Progresso SoupServer
•Advertising
•Strategic Pricing
•Implementation
•Conclusion
Agenda
Conclusion43
•NPV of Progresso soup brand: $2.7 billion− Increase of $454 million, or 19%
•Recommendations are within the capabilities of both General Mills and Progresso to execute successfully
•Performance will be measured regularly using the Balanced Scorecard
Appendix
NPV Analysis45
46
Corporate Social Responsibility1
2
1 http://www.yoplait.com2 http://www.progressofoods.com
Works Cited and Referenced47
AC Nielsen Database - Soup
AP Digital, “General Mills finds winning recipe for stock gains,” BusinessWeek, October 17, 2008, http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-200810171647APDIGITLFINANCE__General_Mills_Gainers-1LLC76J4A2RLTJP6O0AHLJ9LQ5¶ms=timestamp||10/17/2008%204:47%20PM%20ET||headline||General%20Mills%20finds%20winning%20recipe%20for%20stock%20gains||docSource||AP%20Digital||provider||ACQUIREMEDIA||realtedsyms||%7CUS%3BGIS%7CUS%3BKFT%7CUS%3BHNZ&symbol=GIS, accessed December 2008
Barletta, Marti, “The Real Story Behind the Success of Dove’s Campaign for Real Beauty,” MarketingProfs, http://www.marketingprofs.com/7/dove-pro-age-primetime-women-barletta.asp, accessed December 2008.
Betty Crocker Website, http://www.bettycrocker.com/products/progresso/progresso-low-sodium.htm, accessed October 2008
Blischok, Tom, “Successful Pricing Strategies: A Strategic Look Through the Affordability Lens,” Information Resources Inc (Chicago, IL: 2008).
Burrit, Chris, “Campbell’s Soup savors Wal-mart Deal,” Edmonton Jounal, December, 5 2007, http://www.canada.com/edmontonjournal/news/business/story.html?id=736315f6-4723-4b4c-a284-fbf49732f629, accessed October 2008
Campbell’s Soup Company, “Campbell’s Welcome – Campbell’s Select Harvest”, Campbell’s Soup Company Website, http://www.campbellsoup.com/select.aspx, accessed October 2008.
Campbell’s Soup Company, “Campbell’s Chunky Soup – Soup that Eats Like a Meal.” Chunky Soup Website, http://www.chunky.com/, accessed October 2008.
Campbell’s Soup Company, “Campbell’s Welcome – Campbell’s Smart Solutions: Homepage,” Campbell’s Soup Company Website, http://www.campbellsoup.com/starttasting.aspx, accessed October 2008.
Conant, Douglas, R., Campbell’s Soup Company, “Campbell’s Soup Company 2008 Annual Review: Letter to Shareholders 1,” Campbell’s Soup Company, http://www.campbellsoupcompany.com/annualreport2008/letter.asp, accessed October 2008.
CPG Grand Award Winner: Campbell Soup Company – Center Store Category Turnaround (2005), FORUM for Consumer Products and Retail Leadership, Vol 7, No 4 (Q3 2005): p. 84,
Creative, the Magazine of Promotion and Advertising “Supermarket Displays ’05,” http://www.creativemag.com/supermktdisp1105.html, accessed October 2008
D’Innocenzon, Lisa, “Campbell’s Comes Out,” Strategy Magazine, July 2006 http://www.strategymag.com/articles/magazine/20060701/biz.html, accessed October 2008
Works Cited and Referenced48
Facenda, Vanessa L. “General Mills Outlook ‘Healthy’ with New Products, Increased Ad Spend.” Brandweek, February 22, 2008, http://www.brandweek.com/bw/esearch/article_display.jsp?vnu_content_id=1003712829, accessed October 2008.
Fredrix, Emily, “General Mills to Keep Expanding International Unit” WTOP.com, Associated Press, September 22, 2008, http://www.wtopnews.com/?nid=111&sid=1483005, accessed October 2008.
General Mills, “General Mills: Technology Submission” General Mills Website, http://www.generalmills.com/corporate/open_innovation/index.aspx, accessed October 2008.
General Mills, “CMO and His Imaginary Friends,” Knowledge@Wharton, November 20, 2008, http://knowledge.wharton.upenn.edu/article.cfm?articleid=2097
General Mills, “General Mills: Values,” General Mills Corporate Website. http:://www.generalmills.com/corporate/commitment/values.aspx, accessed November 2008
General Mills, Inc. May 25, 2008 Form 10-K (Filed July 11, 2008), via SEC EDGAR Database, accessed October 2008
General Mills Company, “Light”, Betty Crocker Website, http://www.bettycrocker.com/products/progresso/Progresso-light-landing-page.htm, accessed October 2008
General Mills Company, “100 Calorie”, Betty Crocker Website, http://www.bettycrocker.com/products/progresso/progresso-low-calorie-soups.htm, accessed October 2008
Johnson, Leonard. “A Note on the 7-S Model.” BU SMG No. 97-03 (Boston University School of Management, 1997).
Kaplan and Norton, “Using the Balanced Scorecard as a Strategic Management System”
Kotter, John P, “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review (March – April 1995): 3 – 10.
Learned, Andrea, “The Six Costliest Mistakes You Can Make in Marketing to Women,” Inc Magazine, January 2003, http://www.inc.com/articles/2003/01/25019.html, accessed October 2008.
Magazine Publishers of America, “Accountability II: How the Media Drive Results and Impact Online Success”, Magazine Publishers of America website, http://www.magazine.org/content/Files/AccountabilityII.pdf, p. 24, accessed December 2008.
Works Cited and Referenced49
Mahoney, Sarah, “As Supercenters Gain, Wal-mart Still Attracts the Affluent,” Marketing Daily, August 13, 2008 http://www.mediapost.com/publications/?fa=Articles.showArticleHomePage&art_aid=88412, accessed October 2008.
Mediamark Reporter, Fall 2007 Product, Household Products – Food Products, Category: Canned or Jarred Soup/Broth, Base: Principal Shoppers, Target, Used in Last 6 Months, via MRI database.
Mediamark Reporter, Fall 2008, Household Products – Food Products, Category: Canned or Jarred Soup/Broth, Base: Principle Shoppers, Target: Used in Last 6 Months, Progresso, Homemakers via MRI, accessed November 2008.
Michman, Ronald D., et al., The Food Industry: Marketing Triumphs and Blunders, (Westport, CT: Greenwood Publishing Group, 1998), p. 97-100.
Mintel - Soup – US – September 2008. Accessed October 2008.
Mintel – Attitudes of Women - Age 18-34 July 2008. Accessed October 2008.
Mintel - Commercial Weight Loss Programs – US – November 2005, via Mintel. Accessed October 2008.
Mintel – Marketing Healthy to Women – US – July 2007, via Mintel. Accessed November 2008.
Progressive Grocer, “Center Store” Nov. 2006 Progressive Grocer Issue: 10, via LexisNexis, accessed October 2008.
Rolls,B.J., Bel, E,A,, Thorwart ML, American Journal of Clinical Nutrition, 1999, 70, 448-55.
Simpson, Steven, “Campbell Soup on the Simmer (CPB),” Investopedia Community, September 16, 2008, community.investopedia.com/news/ia/2008/campbell_soup_on_simmer_cpb.aspx, accessed November 2008.
Super Market News , “G-Win Forges Hundreds of Ideas for Innovation,” Supermarket News, May 20 , 2008, http://supermarketnews.com/news/g_win_0520/, accessed October 2008.
Works Cited and Referenced50
Susan G. Komen for the Cure website Susan G. Komen for the Cure, “Susan G. Komen for the Cure | Partners & Sponsors | General Mills’ Pink Together”, Susan G. Komen for the Cure website, http://ww5.komen.org/Content.aspx?id=14302, accessed October 2008.
The DMA 2004 Response Report, The Direct Marketing Association (New York: 2004): 256
Tietell, Beth, “Interest in Dieting Slims Down; More Accepting the Extra Pounds,” The Boston Globe, September 21, 2008, http://www.boston.com/news/nation/articles/2008/09/21/interest_in_dieting_slims_down/, accessed October 2008.
TNSMI Multi-Media Service, Company/Brand $. Ad $ Summary, 2007, TNS-MI and Magazine Publishers of America, New York, NY
US Census Bureau, “Projections of the Population by Sex, Race, and Hispanic Origin for the United States: 2010 to 2050”, US Census Bureau website, http://www.census.gov/population/www/projections/files/nation/summary/np2008-t4.xls, accessed October 2008.
Team Six Sigmas, Primary soup survey conducted October 17 – 25.
Wong, Elaine, Brandweek “Soup War Continues, Progresso Strikes Back” October 8, 2008 http://www.brandweek.com/bw/content_display/esearch/e3i7e19cce243eb21aaa2048c8982be98f9?pn=1, accessed October 2008
Zuniac, Pablo, “US Food: A Review of the Latest RTS Soup Trends,” JP Morgan, January 8, 2008, p. 1, via Infotrac/Investext Plus, accessed October 2008
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