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Oscar Mayer: Strategic Marketing PlanningQ 3: What effects is the change in the strengths and weaknesses of competition having on the Oscar Mayer division? How does this impact the investment decision?I - Strength of the Competitors

The competitors produce products low in fat content

Have agility to invent products which will suit the changing customer preferences

Competitors coming up with copycat products ready to eat and packaged food which offer convenience to customers as they are easy to make and have a minimal preparation time

Effects on the Oscar Mayer division:

Oscar Mayer division started devising strategies to develop products with low salt content & lower fat content. They also look at the white meat market as a viable option

The division started thinking of different ways to innovate so as to be able to offer convenience to customers with respect to ready to eat products

Contd..II - Weaknesses of the Competitors

Oscar Mayer has been in the market for about 100 years & has a customer base no matter which stage of Life Cycle the product is.

Effects on Oscar Mayer brand: Encouraged innovative thinking to develop new variants in order to be better and different from the exact duplicate brands

III - Effects on Investment decision: Thinking of investing in lower fat content and convenience products Acquiring companies producing similar products

Invest more in Research & Development as well as on Advertising and Promotion

Manufacture products in new category as the current category of red meat has reached the saturation levelWithout any resource constraints which of the four departmental directions do you think is the most viable? Which is the second best strategy? Which is the least viable? The strategy suggested by Jim Longstreet of inventing a 4th category within the processed meats which suggests bringing in Lunchables- which are prepackaged, ready to eat lunch meats. They solve the following problems:

o Offer convenience to consumers as its easy to prepare

o Its a healthier option as compared to traditional red meat

o The idea falls in line with the contemporary thinking that providing packed lunches with different varieties suits the requirements of working moms (easy to pack, minimal preparation time and a variety of options to choose from)

o This strategy is aimed at the mass market which includes all the working mothers who have no time to prepare food for themselves or their family members. This means selling mass volumes of meat, earning huge profits & success.

The second viable option is the 4th strategy suggested by Eric Stanger of restructuring the basic Oscar Mayer brand of red meat:

o Its mainly because the basic Oscar Mayer red meat market accounted for 82% of the total profits of the company and had been in the market over a century. Even though it had reached its saturation level, in the absence of resource constraints, the brand can be restructured to achieve the target profits

Contd..This can be done in the following ways:

Invest in Research & Development to formulate low fat and low salt versions of the product

This is in line with the increasing concern of consumers of high fat content in products (low salt reduces fat content). In addition to that, customers are satisfied in terms of taste

Investment in Advertising and Promotion to develop new and consumer oriented campaigns

To come up with innovative advertisements to attract the loyal customers who might temporarily be diverted to other brands by playing on the nostalgia sweeping the USA

Recruitment of new marketing personnel who use new marketing techniques such as face to face interaction with customers, taking customer feedback, etc). Also recruiting people for formulating an invention teams whose main job is to come up with viable product options in line with prevailing consumer trends

The least viable option is the 3rd strategy suggested by Jane Morely of acquiring smaller companies offering products to their existing product line/portfolio Louis Rich. This is because:

If the acquired company does not do well, image of the parent company will be tainted

It is a risky proposition as there could be a wasted investment. The money being spent here can easily be spent on improving a falling line or R&D.

Given the information in the case, what strategic course do you think the division should pursue?Which of Jim Longstreets new product ideas is less likely to succeed? Why?Our Recommendation for the Oscar Mayer:

Boost the Switch to Rich campaign-RESTUCTURE THE BASICS TO BOOST THE RED MEAT CAMPAIGN.

Lunchables - Combine it with the other departments-4TH CATEGORY IN THE CURRENT LINE OF PRODUCTS AS IT IS A HEALTHIER AND MORE CONVENIENT OPTION.

Have a 10 cent price cut of the top 3 OM brands

Reinstitute the Wienermobile program

Allot A&P as per each solutions request

Get enough R&D recourses to formulate a low fat & salt red meat line

Analyse whats need to increase utilization and cover additional price reductions in OM plantsContd..Jim Longstreets idea that is less likely to succeed is zappetites. Since it is based on a previous idea already introduced by Oscar Mayer earlier which had failed as the consumers were unhappy with the taste and texture of frozen foods. Also the food has to be heated in microwaves which give out harmful rays. Also the food is served in plastic tray which on heating may give release carcinogenic elements which are bad for health. Not only this, if we still invest in Zappetites then we may end up burning our fingers again as Oscar Mayer key strength is not Frozen food.