Marketing Strategy General Mills Project Professor Christine Moorman Monday, November 19, 2001 Team 6, Section 202

1. Marketing StrategyGeneral Mills ProjectProfessor Christine Moorman Monday, November 19, 2001Team 6, Section 202 James Aschberger Federico Cánepa Julio Cubillán Javier Dominguez Mikael Granstrom Aqualyn Laury

2. Agenda • Market Trends • Product Concept 1 Modular Product • Product Concept 2 ‘MILKBUDS’

3. M A R K E T T R E N D S2 0 0 1 – 2 0 0 5

4. Global Trends in Food and Drinks

5. The Modular Product

6. Targeting a consumer profile characterized by specific socioeconomic variables with a high regard for flexibility and variety. The customer in this particular niche values these attributes the most over others such as taste and quality. Typically, we would expect to find among our target group a young, childless couple with little or no college education. Both members of the households would be employed in blue-collar or white-collar positions. Strategy

7. Product Concept • The product consists on an extension of the brand “Bowl Appetite”. Our preliminary studies show that such a product would satisfy a currently unfulfilled need of consumers. • The main dish is bundled with a three-compartments recipient, and plastic wear. • The recipient and plastic wear are made of plastic resistant to the heating power of a microwave oven. • Salsa is also bundled with the main dish. • The consumer can chose two side dishes among a number of side dishes in display. • Variety is measured as the number of alternative meals that the consumer can choose from: • For 3 main dishes, 2 sauces, and 6 side dishes, the number of alternatives are 36 Concept Attributes • Variety: The product will give consumers a high variety of options for their meals. This attribute is key to achieve a high frequency weekly repurchase and to get consumers to have the product in their minds for every meal either at home or at workplace. • Convenience. Consumer response shows this attribute is of extremely importance. All interaction with the product (pre-serving, post-serving and disposal) should require the least effort from the consumer. • Low price. Consumers demand this option be price lower than the total price they would pay for their meals in a take-out restaurant or deli. Maximum price would therefore be significantly lower than $5, in the range of $1.5 to $3.5.

8. After the Focus Group and the Survey… • Full time employee men and women, single or part empty-nest families, aged from 18 to 35, with an income from USD 20,000 to USD 65,000 Target Customer Results…

9. Marketing Strategy

10. Revenues

11. Revenues

12. ‘Milkbuds’

13. Definition of Nutraceuticals ‘Functional foods and drinks that provide benefits beyond basic nutrition by way of added components and may prevent disease or promote health. These benefits can range from the prevention of osteoporosis through calcium fortification, to the use of omega-3 in fats and spreads to lower cholesterol levels and added ingredients in soft drinks that stimulate or promote muscle growth.’ Neil Broome, Datamonitor Consumer Markets Practice Area, 2000

14. Product Strategy • Leveraging General Mills’ business knowledge into a high-growth market • Process knowledge of Yoplait (milk, yogurt, fruits) • Distribution knowledge of General Mills’ subsidiaries • Brand equity (track record, General Mills #1 position in the U.S. yogurt market) • Introduction of a new, innovative multifunctional drink, based on milk, yogurt and fresh fruit chunks to meet various customer needs • Health and prevention • bone support, digestion, immune system • Increased mental fitness • Quality and taste (no artificial flavors) • Flexibility

15. Product Concept • Name of the Product • Milkbuds by Yoplait • Unique Selling Proposition • Nutraceutical-enriched, shelf stable milk-yogurt-mix smoothie • Premium Positioning • All natural, real fruit drink • Room temperature or cold consumption satisfaction • Description • One size: 10.5 oz • 10.5 oz: $1.39 single, $7.29 six-pack, $ 13.99 twelve-pack • Food/Drug/Mass/Club retailers, convenience stores, drink machines, K-12 schools

16. Our Product • Refreshing milk-yogurt-mix drink • Creamy and smooth • No artificial flavoring • Contains real fruit chunks to boost flavor sensation • New technology allows shelf stable positioning • Three flavors to start (Strawberry, Banana, Blueberry) • Four specific targets • Mental power • Bone support • Improve immune system (prevention) • Improve digestion • Use of a branded bacteria ingredient (positioning)

17. Distribution Analysis • Have to identify the consumers’ needs and make the product available to them • Two different consumer needs: • Impulsive – high availability, e.g. convenience stores and drink machines • Planned – part of every supermarket’s offering and available for home shopping • Leverage the superior GM sales force’s relationship with retailers

18. Communication Strategy • Address the health conscious part of the population • Stress convenience, preventive health care and improved life style • Target women since they are the main decision makers at home • Reach her by lifestyle magazines, television advertisements and in-store promotion

19. Revenue Projections • Launch in 2002 • Target to reach 5% of US households the first year (2002) • A successful product is usually tested by 10% of the US households, and Milkbuds will target 50% of these households • Repetition ratio of 40%, but loss in volume will be offset by international expansion. • Europe and Asia are two fast-growing markets that are able to offset the decline of US sales • Assumes that every household, on average, consumes 1 Milkbud per day • Assume to sell six 1-packs for every one 12-pack and 6-pack sold • This makes the average price $1.234 • Since it is a new product, we assume that the competitors will apply a “wait and see”-tactic • Leads to low competition the first year • Due to first mover advantages and the strong Yoplait brand name, we assume the switching rate to be low

20. Revenues 2002-2004