Pillsbury Cookie Challenge
Rashmi Agrawal Misty Hayden Datta Koshti Sun Ah Park Pramod Rao Arthur Thomas Pat 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
They are easy to make They are quick to make Can make them at the spur of the moment Easier than baking cookies from scratch Good Value for the Price For my own indulgence Canada US Difference 4% 4% 0% 7% 1% -9%
79% 79% 68% 59%
32% 30%
75% 75% 68% 52%
31% 39%
Quantitative Analysis
Kids
The kids like to eat them As a special treat for the kids Fun thing to bake with the kids The kids like to make them Fun activity with the kids My child(ren) requests them Is an opportunity to teach the kids how to bake Canada 47% 42% 42% 42% 41% 28% 19% US 37% 34% 29% 30% 28% 20% 15% Difference 10% 8%
13% 12% 13%
8% 4%
Quantitative Analysis
Scratch/Quality
Easier than baking cookies from scratch Canada US Difference
59%
52%
7%
It's similar to homemade cookie dough
31%
36%
-5%
Is a high-quality cookie dough
29%
41%
-12%
-7%
Is like homemade cookie dough
28%
35%
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 Section
Reasoning: Eye Level placement is ideal for the impulse buy. Pros Makes Product More Accessible More noticeable for impulse buy Cons May Cost More for Premium Eye-Level Shelf-placement
Alternatives: Baking Aisle Product Placement
Reasoning: Cookie dough purchase is impulsive. 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
Alternatives: Create a Box-Top Initiative For Schools
Reasoning: Establishes a new channel for marketing brand while maintaining the target involvement of children. Pros Increase goodwill (CSR) Expands Market (Day-Care, etc.) Cons Additional Expense to promote to schools Possible Push-back from parents/teachers (nonhealthy product)
Alternatives: Right Message on Packaging for Kids & Mothers
Reasoning: To focus more on quality for mothers and attractive packaging for kids. Pros Appeals to the scratch users on quality of the product Appeals to the kids to associate Pillsbury as a fun product Cons Expense to License the Characters, e.g. Tigger Possible Increase in unit Price, Lower Sales
Alternatives: Create Rewards/Incentives for Children
Reasoning: Use Stickers/Tokens/Codes to increase the awareness, brand loyalty and attract customers with children Pros Increase brand loyalty Use influence of children to increase sales Cons Additional expenses to run the program
Alternatives: Develop New Product for Kids
Reasoning: Kids play a larger role as purchase driver in Canada than US. 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
Alternatives: Develop a New High Quality Product
Reasoning: To target scratch users. 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
Alternatives: Develop Marketing Ad-campaign
Reasoning: To target scratch users. 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
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 Regular Retail Price Required Unit Sales for ROI (Breakeven)
$200,000 $500,000 $2.99 $4.99 per package 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.
