Oscar Mayer: Strategic Marketing Planning
Presented by : Aditi Agarwal, Akhil Datta, Bharat Mehrotra, Rohith Krishna, Sonia Sehgal
Oscar Mayer- A History
Oscar Mayer is one of the leading Meat processing companies in America and is owned by Kraft Foods Ltd. It is well known for Hot Dogs, lunch meats and bacon products. The brand has its own song and vehicle for advertising purposes
1924
First meat packers to Introduce packaged slice bacon
1929
The Brand Oscar Mayer is born
1883
Founded by a German Immigrant Oscar F. Mayer
1904
First meat packers to brand their Products
1936
Wienermobile makes a debut and continues till today
1963
The Oscar Mayer Wiener Jingle becomes a hit
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Pound Volume Produce (in Millions)
1000
886
800
916
934
971
600
400
Oscar Mayer 70%
Louis Rich 30%
200
2 Years Ago
Last Year
Current Year
Next Year (Projected)
The Produce of the company has a steady increase with a projected produce of 971 million next year Out of the current produce, Oscar Mayer accounts for 70%
Revenue Generated (In $ Millions)
2200 2000 1800 1600 1400 1200 1000
Share of Revenues - 2 Years Ago
1,883 1693 1,924
Oscar Mayer 78% Louis Rich 22%
800
600
Share of Revenues - Current Year
Louis Rich 27%
400
200
Oscar Mayer 71%
0
2 Years Ago Last Year Current Year
New Products 2%
Revenue generated by the company is growing Last Year there was a 10% increase in Revenue, the current year its 2% Another visible trend is declining share of Oscar Mayer
Case Facts
Marcus McGraw is the president of his Division for the last 4 years and has worked with Oscar Mayers for 22 years He receives a market research from McTiernan Corp. informing him about a threat to the current product portfolio Marcus receives 4 memos from his trusted managers with solutions on how to deal with the threat Marcus comes up with a Strategic Decision Making Process to help him evaluate the solution and come up with a suitable recommendation
Case Facts: Threat
McTiernans Report Change in meat consumption trend More importance given to nutrition More convenience needed Losses have been offset so far by Louis Rich line Louis Rich is running out of steam Future of the +3-4% annual lb volume growth in trouble
Meat Consumption Trend
The consumer trend shows an increase in Chicken consumption and a decrease in Beef consumption which is Oscar Mayers strength for the last 100 years
Case Facts: Solutions offered
Solution 1: Louis Rich Bet On the Winning Horse Solution 2: Acquisitions Buy Buy Buy!!!
Solution 4: Restructure Red Meat - Back to the basics Solution 3: Diversification of products -Bright ideas
Bet On the Winning Horse
The Louis Rich brand is a turkey based line of products which are nutritional as well as cheaper. Increasing advertising and launching new products under this brand can capture 50% of the market`
PROs It still has potential Its currently the highest earner in the stable More nutritional
CONs Copycats are arriving in the market It might reduce the OM brand value Not fast and easy to Use
Acquisitions Buy Buy Buy!!
The Director of finance and planning looked up 3 smaller companies with similar products which Oscar Mayer could purchase
PROs Can support further LR expansion Both healthier and convenient products can be produced Relatively low risk
CONs More expenses will be incurred Benefits can only be felt in the long run Mite lead to more devaluation of the OM brand name
Acquisitions Buy Buy Buy!!
Bad Idea
Can lead to a loss in reputation More expense are involved Will heavily rely on OM resources for support Any benefits will only be seen in the long run It may lead to a recourse imbalance for all the departments
Diversification - Bright Ideas
Jim Longstreet wants to invent a 4th major category which addresses the changing lifestyles of people. The two ideas he proposes are Zappetites and Lunchables.
PROs Provides more convenience Explores a new market Can easily be combined with other OM or LR products It builds on the explosive growth of the microwave oven
CONs Idea is still experimental Nutrition issue If the idea fails the repercussions would be terrible Stuff n burgers fiasco
Diversification - Bright Ideas
LUNCHABLES Good Idea
Explores a new market Can be combined with any of the other departments Attracts a new client base for the company Easy to produce Provides nutrition value Provides convenience Can be sold to anyone
ZAPPETITES Bad Idea
Frozen food never tastes as good as fresh Microwave food is believed by some to cause cancer Stuff n burger fiasco Nutrition issue Still in R&D stage Extra man power will be needed
Restructure Back to the Basics
Eric Stanger, VP of the OM Brand does not want to see the OM brand slip away from the processed meat industry. He points out 5-6 strategies in order to breathe life into the OM brand
PROs It gets the main business of OM back on track It reduces operation costs It can balance the Health concerns
CONs It does not consider the changing marketing scenario
Restructure Back to the Basics
Good Idea
People still like red meat Taste factor Conventional American food habits Nutrition can be provided Gets the OM flagship back into the game Reduces costs
BCG Matrix
THE STRATEGIC DECISION MAKING PROCESS
Problem Identification Situation Analysis Analysis of Solutions Measure Viability of Solutions Choose the best possible
Better planning & effective allocation will help in optimal utilization of resources Conducting customer feedback will help in penetrating the consumers psyche Analysis of each of the solutions keeping in mind the pros and cons of each and the prevailing market trends, choosing a mix of solutions and finally preparing an estimate of the future earnings from the brand by applying the chosen solution.
Opportunity Matrix
Success Probability
High Low
Opportunities
1. Louis Rich white meat products, Lunchables 2. Low fat, low salt Oscar Mayer products 3. Processed red-meats that has no nutritional value 4. Acquisitions & Mergers
Attractiveness
High
Low
Threat Matrix
Probability of Occurence
High Low
1.
Threats
Competitor catching up with similar products. Change in customer base. Lesser red-meat consumption. Advertising and Promotion budget not allocated well. Louis Rich milking Oscar Mayer. Oscar Mayer brand subdued by Louis Rich.
Seriousness
High
2.
3.
Low
4.
Competitors & Their Effects
Competitors:
Multi Billion Dollar companies who have acquired small meat packers and consolidated the meat industry. Examples are ConAgra, Sara Lee & others Strengths Products are lower on fat content and more convenient to purchase for the consumer Weakness Not much Market Experience as Oscar Mayer
Effects:
Weakening sales Reducing market share Agile competitors, i.e. they can think of new ideas in a more competitive manner, serve the customers better Increasing investment in A&P Increasing investment in R&D New price-sensitive products with relation to emerging consumer trends
Investment Decision Making
Key Questions to ask:
Volume v Profit Acquire v Develop Rebrand New Product Development
Our Recommendation-Mixed Bag
Suggestions from different Managers to be taken Boost the Switch to Rich campaign Lunchables - Combine it with the other departments Have a 10% price cut of the top 3 OM brands Increase the OM A&P budget by $25MM Reinstitute the Wienermobile program 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 plants
Why Choosing Just One is a Bad Idea
It may cause friction between the different managers The other may be discouraged form sending more ideas It may lead to fall in importance of the other divisions An increase in A&P for would lead to budget cuts for the others If one idea fails it may lead to a disastrous situation for the entire company
New Trends
As you can see in 2010, the consumption of Broilers (Chicken) was projected to surpass that of Beef and Pork (red Meats). This leads us to confirm that Oscar Mayers cannot avoid the Louis Rich brand and the idea of the Lunchables
Product Life Cycle
Louis Rich is in Growth Stage of the Product Life Cycle Oscar Mayer is reaching Maturity
