pillsbury cookie challengev7
TRANSCRIPT
Pillsbury Cookie
Challenge
Rashmi AgrawalMisty HaydenDatta KoshtiSun Ah ParkPramod Rao
Arthur ThomasPat Tramonte
Agenda
• Company Background• Financial History• Challenges• Quantitative and Qualitative Analysis• Alternative 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 RBG’s market share
• Pillsbury refrigerated cookie product line generates 75% of the category’s profit
Financial History
• Zero volume growth for RBG between 2004 & 2006
• 1% annual volume growth for RBG 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
Quantitative 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 the Price 32% 31% 1%
For my own indulgence 30% 39% -9%
Quantitative AnalysisKids 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) requests them 28% 20% 8%
Is an opportunity to teach the kids how to bake 19% 15% 4%
Quantitative Analysis
Scratch/Quality 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%
Qualitative 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 SectionReasoning: Eye Level placement is ideal for the impulse buy.
• Makes Product More Accessible
• More noticeable for impulse buy
• May Cost More for Premium Eye-Level Shelf-placement
Pros Cons
Alternatives:Baking Aisle Product Placement
Pros• Increases the opportunity
for impulse buy• Greater exposure to scratch
buyers
Cons• Additional expense required
associated with location• May not be feasible for
some retailers• Increased inventory
expense for retailers
Reasoning: Cookie dough purchase is impulsive.
Alternatives: Create a Box-Top Initiative For SchoolsReasoning: Establishes a new channel for marketing brand while maintaining the target involvement of children.
• Increase goodwill (CSR)• Expands Market (Day-Care,
etc.)
• Additional Expense to promote to schools
• Possible Push-back from parents/teachers (non-healthy product)
Pros Cons
Alternatives: Right Message on Packaging for Kids & MothersReasoning: To focus more on “quality” for mothers and attractive packaging for kids.
• Appeals to the scratch users on quality of the product
• Appeals to the kids to associate Pillsbury as a fun product
• Expense to License the Characters, e.g. Tigger
• Possible Increase in unit Price, Lower Sales
Pros Cons
Alternatives: Create Rewards/Incentives for ChildrenReasoning: Use Stickers/Tokens/Codes to increase the awareness, brand loyalty and attract customers with children
• Increase brand loyalty• Use influence of children to
increase sales
• Additional expenses to run the program
Pros Cons
Alternatives:Develop New Product for Kids
Pros
• Potential higher volume of sales due to influence of children
• Establish brand loyalty
Cons
• Possibility of missing the segment of target market which is scratch users
• Negative media exposure regarding childhood obesity
• Specialized product development costs for Canadian market alone
Reasoning: Kids play a larger role as purchase driver in Canada than US.
Alternatives: Develop a New High Quality Product
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
Reasoning: To target scratch users.
Alternatives:Develop Marketing Ad-campaign
Pros• Increased customer value
perception• Refrigerated cookie is just
like homemade• Reduced time and effort
involved in baking• Increased market share
Cons• Large expense of the
advertisement development• Cannot compete with
“freshness” or experience of scratch cookies
Reasoning: To target scratch users.
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– 61% of the Canadian Market– Scratch Taste= RBG Taste
Development Expense for New TV Advertisement
TV Advertising Expense $200,000 $500,000Regular Retail Price $2.99 $4.99 per packageRequired Unit Sales for ROI (Breakeven)
66,890 100,200 packages
Product Placement
• Eye Level Product Placement• Easy Access for Impulse Buyer
Packaging
• Influential Message• Cater to Target Market– Kids(Biggest Growth Opportunity)– Mothers
Rewards Program
• Catered to Children• Creates Brand Awareness• Sticky Customer
Q&A
Thank you for your time!
We would like to welcome your questions at this time.