bowl appétit! marketing strategy brian bolten pat campbell elizabeth chang trent edwards todd...

Bowl Appétit!Marketing Strategy

Brian Bolten

Pat Campbell

Elizabeth Chang

Trent Edwards

Todd Federman

Butch Lincoln

Outline

• Data Collection & Analysis

• Strategy Development

• Concept Development

Data Collection & Analysis

Insights from Lifestyle Trends

• Insight: Shelf stable lunches need to be quick to prepare– Trend: Busy professionals and moms have less time

– Trend: Increase of take-out-food

– Average American willing to spend no more than 15 minutes preparing a meal

• Insight: Food should be balanced and nutritious as much as possible– Trend: Growing awareness of “wellness”

– Trend: Attention on organic foods and alternative medicine


Insights from Lifestyle Trends

• Insight: There exists a market for “meal preparation kits” for busy working people who enjoy some amount of preparation

– Trend: Industrial appliances and professional cookware – “must haves” for kitchens

– Trend: Home as sanctuary – People enjoy being home and like people to see their homes

• Insight: Products need to be simple to understand– Trend: Clutter – too many choices, too much info


Learnings from Retail Trends

• Learning: Convenient meal category is highly competitive but growing– 9,248 new products introduced in 2000; 550 in the

meal/meal center category

– Continued increase in private label spending (20.1% market share, 15.7% dollar share)

– Innovations increasing• Healthy ingredients such as calcium and fiber are being added

• Organic and all natural products

• Convenience foods such as meal kits



• Currently, Bowl Appetit! is not displayed in a consistent fashion across retail locations– Soup aisle, pasta aisle

– Canned dinners/boxed dinners aisle

• Insight: Optimal positioning may be in a prepared foods aisle (not currently in many stores)– GM should work with retailers to share best practices as to

display and promotion

• Additional placement option– Free-standing display only, e.g. DiGiorno’s



• Learning: Conventional grocery store has a reduced dominance. Need to reach consumers through other channels as well


Industry Insights

• The workforce:– 50% spend 15 minutes on lunch– 66% skip lunch at least twice a week– 40% eat at their desk

• Movement from meal components to finished meals

• Diet positioned brands falling


Industry Insights

• Brand extension have higher success rate and require less investment which suggests leveraging an existing brand

• Pricing Power– Mature food industry limits pricing flexibility

– Pricing power and margins enhanced by developing customer loyalty through brand awareness

– Development of multi-million products that can be sold nationally to create economies of scales


Competitor Products

Shelf-Stable Frozen

Campbell’s Soups Ready To Go

ConAgra Chef Boyardee Healthy Choice

Marie Callender’s

Hormel Chili

Dinty Moore

Kraft* Easy Mac

Mars, Inc* Uncle Ben’s

*No Financial Data Available


Competition Financials

2001 2001 2001 2000Gen Mills Campbell's ConAgra Hormel

Revenue 7,007 6,664 27,194 3,675 1 Year Growth 0.5% 6.3% 8.5% 10.8%

Net Income 665 649 682 170 1 Year Growth 13.4% -9.1% 70.4% 3.4%

Operating Cash Flow 888 915 1,275 236 1 Year Growth 11.5% -5.2% 44.9% 8.7%

3 Year vs. Industry Average ROA + 108% + 100% - 46% + 86% ROE + 1,817% + 894% - 49% + 56% ROIC + 142% + 220% - 46% + 105%

Marketing 358 1,622 2,355 292 % of Revenue 5.1% 24.3% 8.7% 7.9%Product Segment Revenue 1,719 4,427 8,681 N/A % of Revenue 24.5% 66.4% 31.9% N/A


Competitive Activity

• Feb 2000: It’s Pasta Anytime - $15.9MM

• Aug 2000: Uncle Ben’s - $20MM

• Oct 2000: Healthy Bowl - $6 MM ($14.7 MM in 1997)


Competitor - Campbell’s

• 2001 U.S. operations slumping: effect on 9% decline in overall net income

• “Ready to Serve” soups focus on convenience

• Marketing and sales were 25.9% of sales (focused on Godiva, V8 Splash, Chunky)

• CEO Johnson returns from retirement


Competitor - ConAgra

• 2001 Package food sales $8,681 account for 31% of total revenue– Includes shelf-stable, frozen, agriculture and dairy

• Acquisitions illustrate shift toward brand and value-add products

• Banquet and Healthy Choice brands suffering• Analysts bullish on Marie Callender’s

– Double digit gains called for a 12 item entrée line

• 2001 acquisitions totaling $1,107.2 MM including Chef Boyardee


Competitor - Hormel

• Increased pork and turkey business through “Fully Cooked Meal Solutions”

• Favorable historic 3 year performance:– Rev growth 149% higher than industry average– ROE is 55% higher than industry average– ROA is 86% higher than industry average

• Limited rice and pasta entrees


Strategy Development

SWOT Analysis of Bowl Appétit

• Strengths– Quick preparation

– Simple instructions

– Betty Crocker brand (trust, recognized,easy to prepare foods)

– Single serving

• Weaknesses– Quality variability– Small quantity– Limited variety

(starches only)– Dehydrated food– Betty Crocker brand

(primarily associated with baking)


SWOT Analysis of Bowl Appétit

• Opportunities– Ownership of segment

– Other segments to focus on - workplace

– Additional channels – food service & vending

– Pillsbury technology and distribution capabilities to new channels

• Threats– Comparison to frozen food

quality

– Relatively easy market entry

– High educational needs

– Cannibalizing existing brand

– Damaging Betty Crocker name

– Competitive response


Marketing Strategy

• Become product leader in shelf-stable single-serve meals category focusing on the attributes of:– On-the-go Convenience– Good Taste


Critical Success Factors

Convenience 1. Reduced preparation time (two minute target)

2. Simple preparation process

3. Include all items necessary for at work usage (utensil)

Taste 1. Must approach taste performance of consumer’s existing options (restaurant, packed lunch)

2. Packaging and promotion must convey this

Channel 1. Work with retailers to gain favorable shelf space

2. Help to create a “prepared foods” isle (optimal store positioning)

Price 1. Although conjoint analysis indicates that consumers were not sensitive to the prices provided in the survey, product would ideally be priced below frozen meal alternatives


Segment Layout

Convenience

Quality/Taste

•Bowl Appétit!

•“Flavor Meals”•“Flavor Bowls”

•Pasta Anytime


•Ready to Go

•Cup of Noodles

•Chef Boyardee

•Marie Callender’s

•Ragu Express

•Uncle Ben’s

•Easy Mac

•Home-cooked meal

•Fast Food

•Buffet restaurant

•Sit-down restaurant

•Homemade Sandwich

Target Consumer

• Primary: White collar professional worker– Prepared in the workplace– Kept in stock at home for quick meals

• Secondary: Stay-at-home mom with little time to cook


Target Consumer

• Similar to current Bowl Appetit purchaser based on Nielsen panel data

Segments with High Indexes for Bowl Appetit

Bowl Appetit - Rice

Bowl Appetit - Pasta

Female Employed Full Time 130 139Female aged - 35-44 119 142Female aged - 45-54 141 131Income over $70,000 108 139


Target Justification• Busy professionals value attributes of the quick preparation

- 40% of the workforce eat at their desk• Women growing percentage of work force (in 1999 46.5%

versus 34% in 1964)• Women buy or influence the purchase of 80% of consumer

goods so their needs must be addressed• Demand demographics – Baby boomers

– Baby boomers (37 to 55 years old) account for 30% of population– Focus on nutrition and weight maintenance– Rising average age of US residents


Surveys

• Surveys undertaken– Qualitative discussions– Competitive Analysis on four key attributes– Conjoint Analysis

• Given target consumer, selected Harris Teeter as survey location


Qualitative Discussions

Revealed two key concerns:• Overall Product Quality

– Skeptical about taste of microwaved dry noodles– Serving size may be too small

• Convenience– Some not comfortable boiling food in microwave– Not convenient for home users– “Why not just buy frozen”


Consumer Insights

• Consumers are in search of a product that is more:– Substantial

• “I need more than potatoes or rice for lunch”

– Balanced• “It would be nice if it could have chicken and

vegetables”

– Flavorful• “The taste is important to me”


Competitive Analysis

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Bowl Appetit Cup Noodles Uncle Ben's Stouffers Tortinos

Price Taste

Nutrition ConvenienceBowl Appetit VS. competitionPrice: AverageTaste: PoorNutrition: AverageConvenience: Poor

Survey asked consumers to compare Bowl Appetit to four “quick preparation” competitors based on price, taste, nutrition and convenience


Conjoint Analysis

Consider the following single-serving, shelf-stable products.

Rate each one on a scale from

1=least favorite to 10=most favorite.

Your

Rating Dry Meat Packet $1.41

Dry No Meat Packet $2.71 Wet No Meat Packet $1.41

Wet No Meat Packet $2.71

Dry No Meat Packet $1.41 Wet Meat Packet $2.71

Wet Meat Packet $1.41 Dry Meat Packet $2.71

• Sample survey form: Evaluate meat additive, wet noodles, price sensitivity


Conjoint Analysis

• Survey Results: Wet noodles are significantly preferred to dry. Price and meat packages not significant.


Regression Statistics

Multiple R R Square Adj.RSqr Std.Err. # Cases #Missing

0.915 0.838 0.773 0.353 8 0

Summary TableVariable Coeff. Std.Err. t Stat. P -value

Intercept 5.528 0.216 25.563 0.000Noodles 1.167 0.250 4.672 0.005

Price -0.500 0.250 -2.002 0.102

Pricing Analysis

$-$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50

Cup N

oodle

s

Chef B

oyar

de P

asta

Tuna

with C

rack

ers

Bowl A

ppet

it

Stouf

ers

Uncle

Ben's

Rice B

owl

DiGior

no S

mall

Pizz

a

Conjoint analysis and qualitative discussions indicate that consumers are willing to pay between $2.50 and $3.00 for a high quality shelf-stable product

Current Bowl Appetit! product is priced between other shelf-stable products and frozen foods


Key Consumer Takeaways

• Bowl Appetit compares unfavorably on three of four key attributes

• Consumers receptive to “wet” pasta option

• Must improve perceptions of taste

• Convenience for home and work use are not the same


Concept Development

Targeting Unmet Consumer Needs

- Faster prep time

- Utensil included

- Self-contained meal

Convenience

- Wet noodles

- Sauces included

- Greater variety

Quality/Taste

Concept Development

Introduction of New Brand

• Create new sub-brand and image to target “at work” segment– Leverage strength of existing GM brand equity

(such as Betty Crocker)– A focus on “on the go” convenience may

jeopardize home use if introduced under Bowl Appetit brand

• Possibility of transferring wet noodle technology to “at home” Bowl Appetit brand

Concept Development

Concept #1 – Flavor Bowls

• Bowl of wet pasta or rice or dry potatoes is packaged together with a seasoned sauce (i.e. marinara, meat sauce, cheese sauce, chicken in teriyaki sauce, gravy)– Add seasoned sauce to the bowl & heat

• Included utensil will add convenience

• The sauce and larger portion size will enhance quality and hunger satisfaction

• Improved graphic design of the product will signal convenience and quality

Concept Development

Flavor Bowl Mock-up

• Bowl would contain noodle package and seasoned sauce

Concept #2 – Flavor Meals

• A three-section bowl includes a seasoned sauce, wet pasta/rice or dry potatoes, and dry vegetable product– Sauce is a hearty blend of spices, vegetables and seasoning– Empty pouch contents, add water to vegetable & heat

• Included utensil will add convenience

• The hearty sauce and larger portion size will enhance quality and hunger satisfaction

• Improve the graphic design of the product to promote convenience and quality

Concept Development

Value Proposition

• Develop the first shelf-stable products that match the taste requirements of white collar workers, while providing the speed & convenience demanded by a growing portion of this group

Concept Development

Unique Selling & Value Proposition

• Complete understanding of competitive landscape– Provide product that consumers say they need, not one

that the company thinks they need

– Ensure that the product is truly convenient

– Ensure that the product truly tastes good

• First-to-market advantage

• Priced competitively with respect to quality of convenience and taste

Concept Development

Switching Logic

• At Work Preparers– Consumers who prepare frozen food or soup/noodles at

work (easiest target)

• Lunch Packers– Consumers who require speed and convenience, but

have been unable to find products with desired quality/taste

• Restaurant Goers– Consumers who desire speed and convenience, but go

out to lunch because they require better quality/taste (most challenging target)

Concept Development

Promotion Strategy

• Free samples in urban areas & offices to increase “word of mouth” advertising

• Celebrity chef spokesperson to promote its convenience and quality taste

• Money back guarantee to encourage first-time buyers to purchase the product

• Billboard ads on subways and buses to target the busy white-collar professional

• Trade promotions (e.g. end-of-aisle displays) during the product’s introduction phase

Concept Development

Promotion Results

• Targets busy white-collar professional

• Promotes themes of convenience and quality taste

• Encourages trial

• Achieves reach and distribution

• Builds repeat purchase and loyalty

• Increases “word of mouth” advertising

Concept Development

Distribution Strategy• Rank of importance:

– [1] Supermarkets

– [2] Mass merchandisers (multi-pack)

– [3] Drug and convenience stores

• Educate the grocer of industry “best practices”– Convince grocers to introduce a “prepared food” aisle (e.g.

“Convenience Aisle”) to improve convenience for the shopper

• Leverage supplier power

• Secondary, utilize GM Foodservice’s advantages to bring product to targeted customer’s environment:– Corporate cafeterias and vending machines

Concept Development

Distribution Results

• Own new “Prepared Food” aisle

• Achievement of favorable shelf space

• Strengthened customer relationship

• First-mover advantage

• Increased profits for customers (stores)

• Potential unique reach: cafeterias and vending

Concept Development

Pricing Strategy

• Position the product as the premium shelf-stable product in terms of quality, convenience and portion size– Set selling price higher than Bowl Appétit!

• Position the product as a convenient and less expensive alternative to frozen lunches with minimal difference in quality of taste – Set the selling price slightly lower than the

floor price for frozen foods.

Concept Development

Target Price$2.69

Pricing Results

• Not “caught in the middle”

• Charge for value: convenience & taste

• No exact competition

• Premium for brand value

• Higher margins for customers and GM

Concept Development

Concept Fit with General Mills

• Continue to leverage Betty Crocker brand

• Current Bowl Appétit! serves a base for new product (brand name, bowl concept, etc.)

• Consistent with existing consumers and distribution channels– Leverage marketing experience/expertise

• Consistent with current offerings– Leverage manufacturing experience/expertise

• Utilize Foodservice to enter unique channels

Concept Development

Potential Concept Limitations

• Technology– No similar product currently being manufactured

by General Mills– According to GM, patents for technology are

readily available

• Operations– If expertise is unavailable in house, GM can and

does outsource certain manufacturing processes

Concept Development

Impact on Competitors

• Initial market share gains likely from “at-work preparer” segment• GM’s scope defends against initial price &

promotion response• There is little long-term competitive recourse

• Secondary gains expected from converting restaurant goers and lunch packers• Significant competitive response is unlikely

Concept Development

Competitive Response

• Most likely scenario– Frozen food competitors re-emphasize quality

– Shelf-stable competitors commit to improve quality (through acquisitions or increased R&D)

– Successful introduction may attract new players

• General Mills’ strategy– Quickly attract & earn consumer loyalty in target segment

– Focus on leading taste and convenience factors

– Plan new flavors and combinations on regular basis to maintain trial & meet consumer’s changing tastes

Concept Development

Fit with Industry or Environmental Issues

• Slumping economy results in less eating out, consumers looking for cheaper alternatives– Concepts cheaper than eating out but provide similar

experience (it isn’t leftovers)

– Also less expensive than frozen competition

• Scope of GM & firm’s aggressive acquisition strategy leads to competitive advantages– Economies of scale

– Technology and R&D leadership

Concept Development

3-Year Pro Forma Revenue

• Step #1: Develop Assumptions– Identify potential buyers: Professionals & At-home moms– Determine the market size for potential buyers using

census data– Project usage rates: Trial and Repeat

• Step #2: Project Year 1 Revenue for target buyers

• Step #3: Assume an annual growth rate to project Year 2 & 3 revenue

Concept Development

Pro Forma:Model Assumptions

• Census data used to project market size for professional and at-home buyers

Concept Development

At-Home

Assumptions Women Men Women

Target Market 60% 25% 30%Trial Rate 10% 3% 10% Repeat Purchase (1x) 20% 20% 20%

Repeat Purchase (1x per month) 12% 12% 12% Repeat Purchase (1x per week) 7% 7% 7% Repeat Purchase (2x per week) 1% 1% 1%

Retail Price 2.69$ Annual Growth Rate 6%Market Size - Year 1 550,000$

Professionals

Pro Forma: Year 1 Projections for Professionals

Concept Development

Working Professionals: Year 1 Revenue

Total Population

Women (age 25-64)

Men (age 25-64)

Total Population 281,000 73,060 73,060In Labor Force 41,644 54,064

Employed 38,729 49,739

- - - - - -

Working Professionals - 22,076 28,351

Target Market - Willing to bring a prepared lunch to work 13,245 7,088

Trial Customers 1,325 213 Repeat Purchase (1x) 265 43 Repeat Purchase (1x per month) 1,907 306 Repeat Purchase (1x per week) 4,821 774 Repeat Purchase (2x per week) 1,378 221

Total Purchases 9,696 1,556Retail Price 2.69$ 2.69$ Year 1 Revenue 26,081$ 4,187$

Pro Forma: Year 1 Projections for At-home

Concept Development

At-Home Moms: Year 1 Revenue

At-Home Moms

Total Women (age 25-64) 73,060Not in Labor Force 31,416

At-home Mom: Not in Labor Force 9,425

Labor Force 41,644Unemployed 2,915

At-home Mom: In Labor Force 875

Target Market - Willing to eat a prepared lunch at home 10,299

Trial Customers 1,030 Repeat Purchase (1x) 206 Repeat Purchase (1x per month) 1,483 Repeat Purchase (1x per week) 3,749 Repeat Purchase (2x per week) 1,071

Total Purchases 7,539Retail Price 2.69$ Year 1 Revenue 20,280$

Pro Forma: Year 1Calculations for Professionals

Concept Development

Working Professionals: Calculations

Total Population

Women (age 25-64)

Men (age 25-64)

Total Population (% of total population) 100% 26% 26%In Labor Force (% of women / men) 57% 74%

Employed (% of labor force) 93% 92%

N/A - - - N/A - - -

Working Professionals (% of employed) - 57% 57%

Target Market (% of working professionals) 60% 25%

Trial Customers (% of target market) 10% 3% Repeat Purchase (% of trial customers) 1 20% 20% Repeat Purchase (% of trial customers) 12 12% 12% Repeat Purchase (% of trial customers) 52 7% 7% Repeat Purchase (% of trial customers) 104 1% 1%

Total Purchases - - - Retail Price - - - Year 1 Revenue - - -

Pro Forma: Year 1 Calculations for At-home

Concept Development

At-Home Moms: Calculations

At-Home Moms

Total Women (age 25-64) 100%Not in Labor Force (% of total women) 43%

At-home Mom (% of not in labor force) 30%

Labor Force (% of total women) 57%Unemployed (% of labor force) 7%

At-home Mom (% of unemployed in labor force) 30%

Target Market (Total at-home moms) -

Trial Customers (% of target market) 10% Repeat Purchase (% of trial customers) 1 20% Repeat Purchase (% of trial customers) 12 12% Repeat Purchase (% of trial customers) 52 7% Repeat Purchase (% of trial customers) 104 1%

Total Purchases - - Retail Price - - Year 1 Revenue - -

Pro Forma: Year 2 & 3 Revenue Projections

• Annual Growth Rate: 6%

• Year 1 Market Size: $550,000 (in MM)

Concept Development

Pro Forma Results Year 1 Year 2 Year 3

Women: Professionals 26,081$ 27,646$ 29,305$ Men: Professionals 4,187$ 4,438$ 4,704$ At-home Mom 20,280$ 21,497$ 22,787$

Total Revenue 50,548$ 53,581$ 56,796$

Market Size 550,000$ 583,000$ 617,980$ Market Share (in $) 9% 9% 9%

bowl appétit! marketing strategy brian bolten pat campbell elizabeth chang trent edwards todd...

Documents

meal insight

preparation trend

lifestyle trends insight

kitchens trend

possible trend

time trend

retail trends learning

pasta aisle