Giant Consumer Products, INC: The sales promotion Resource allocation decision

1. Group 5: Giant Consumer Products, INC:The sales promotion Resource allocation decision Andrei Grechko Shane Johnston NakiaLape Kyle McDaniel Kevin Niehaus

2. How should Giant Consumer Products (GCP) structure a sales promotion so that it is a “win” for all parties involved? Primary Question for GCP

3. What environmental forces are at work? What’s going on in the cookware industry? Who is Giant Consumer Products? What are GCP’s objectives? What are FFD’s current constraints? What are the key metrics? Who is the target market? What are the strengths and weaknesses of FFD’s marketing strategy? What is their current market position? What are the current market trends? What is affecting GCP’s decision? How should FFD implement the selected alternative? Secondary Questions

4. Giant Consumer Products Company Overview

5. Organizational Structure

6. Organizational Structure Divisional Structure

7. Management Philosophy In general fairly conservative management practices and approach in every division/business unit

8. Organizational Culture • Pride. The most customer-centric management team in the frozen food industry. Premium product quality, strong relationship and support from retailers • Helps company stay on top of consumer behavior trends • Promotes long-term thinking • Built on brand equity. Company is striving to take into account the preservation of GCP’s brand name and image in every decision that it makes • Promotes long-term thinking • Consumer oriented

9. What are GCP’s objectives? Secondary Questions

10. Objectives • Company Priorities in second half of 2008 • Generate much needed demand in the Frozen Foods Division (FFD) without undermining the long-term health of GCP's brands • Increase GCP's revenues to a point where they at least reach the low end of Wall Street's expectations

11. Most Important Objectives

12. Secondary Questions What are FFD’s current constraints?

13. Constraints • Consumer Buying habits • Pressure from GCP and Wall Street • Possible implications from a sales promotion: • Cannibalization • Brand equity erosion • Forward buying • Stock piling • Brand switching

14. Secondary Questions What are the key metrics?

15. Key Metrics for FFD

16. Secondary Questions Who is the Target Market?

17. Dinardo’s Target Market • Families • Conventional palate • Price conscious but will not accept sub-par quality

18. Natural Meals Target Market • Health conscious consumers • Sophisticated palate • Willing to pay premium pricing

19. What are the Strengths and Weaknesses of FFD’s marketing strategy? Secondary Questions

20. Potential Resource Strengths and Competitive Capabilities • Short-term objectives are well defined. • Strong brand image for the Dinardo’s brand. • Better quality product than competitors. • Efficiency gains for Natural Meals brand due to scale economies. • Natural brands has untapped growth potential in a developing market. • 43% of national market share (by revenues) for sub-category.

21. Potential Resource Weaknesses and Competitive Deficiencies • No clear long-term strategic direction for marketing. • Weak brand image and reputation for the Natural Meals brand. • Overall weak advertising and promotion. • Threat of cross-brand cannibalization • Shifting consumer habits.

22. What will affect GCP’s decision? Secondary Questions

23. Potential Resource Strengths and Competitive Capabilities • Short-term marketing strategy objectives are well defined. • Strong brand image for the Dinardo’s brand. • Better quality product than competitors. • Efficiency gains for Natural Meals brand due to scale economies. • Natural brands has untapped growth potential in a developing market. • 43% of national market share (by revenues) for sub-category.

26. Strategic Alternatives • Traditional sales promotion for Dinardo Brands (based on math) • National sales promotion for Natural Foods • Drop Dinardo’s single servings and offer a new 32 ounce family size to Natural Meals brands

27. The Sizes • 32 ounces – Families • 16 ounces* – Two people • 6-8 ounces – Single servings *Natural Meals brands are only offered in a 16 ounce size.

28. How should FFD implement the selected alternative? Secondary Questions

29. Implementation • Sales Promotion • In- Store Product Placement • Retailer Performance • Product Changes • Price

30. What’s going on in the Frozen Food industry? Secondary Questions

31. Industry Overview Frozen Food Production Industry • NAICS code: 311412 • GCP is one of 411 American players • For 2009, Industry was approximately $16 Billion • With an estimated profit of %32.38

32. Industry Profitability • Product Mix: more product variety, the more their products will appeal to different markets • Efficient Operations: The company model must be one of best practices • Bulk Packaging: Products offered in bulk or bulk style packaging are easier to distribute to different channels • Economies of Scale: The more channels a producers can distribute through the lower their over all costs

33. Major Competitors • Daft • The Schwann Food Company • Argilink Foods Vegetable Company • Arden International Food Company

34. Industry Overview Porter’s five forces: Threat of substitute products HIGH Rivalry among existing competitors Intense Bargaining power of buyers MID Bargaining power of suppliers HIGH Threat of new entrants LOW

35. Porter’s Five Forces