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MARKETING STRATEGY 468: General Mills -- Project Bowl Appétit!

MARKETING STRATEGY 468: General Mills -- Project Bowl Appétit!. Final Project Report Team 11 (Section 201)  Lillian Lilly Jorge Tessey Gabriel Michalup Hide Tomita Amrit Shergill Zoya Trofimenko. Contents. Our Goal Two Product Solutions & Descriptions

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MARKETING STRATEGY 468: General Mills -- Project Bowl Appétit!

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  1. MARKETING STRATEGY 468: General Mills -- Project Bowl Appétit! Final Project Report Team 11 (Section 201)  Lillian Lilly Jorge Tessey Gabriel Michalup Hide Tomita Amrit Shergill Zoya Trofimenko

  2. Contents • Our Goal • Two Product Solutions & Descriptions • Contextual Analysis: Industry, Category, Consumer Trends, and Company • Competitive Analysis: Porter’s Five Forces, • Product and Brand Specific evaluations – Bowl Appetit, Betty Crocker, Progresso • Concept Testing • Marketing Strategy & Competitive Positioning • Revenue Projections • Conclusion • Bibliography & Appendices

  3. Goal Generate the maximum level of sustainable growth in single serve, shelf stable food products for General Mills. + =

  4. Progresso Chili & Chips Progresso Lunch-to-go! Two Product Solutions

  5. Product 1: Progresso Chili & Chips NEED/VALUE PROPOSITION Men and other hearty eaters need a quick, healthy, easy-to-prepare meal, all in one package. OFFERING 15oz. Progresso Bean Chili + Tortilla Chips (each part in self-contained bowl – snaps together as one package) Price: $2.89

  6. Product 1: Progresso Chili & Chips STRATEGIC PLATFORM Hearty and healthy mealkit TARGET CONSUMER By Demographics: Men (25 – 44 yrs) By Usage (Moment-in-Time): Hungry in a hurry. Don’t want to waste time cooking or bother with cleaning up dirty dishes. Want hot & filling, but healthy.

  7. Product 1: Progresso Chili & Chips

  8. Product 2: Progresso Lunch-to-Go NEED/VALUE PROPOSITION Busy women need a quick, healthy, easy-to-prepare lunch, all in one package. OFFERING 12 oz. Progresso 99% Fat Free soup in a bowl + 2 breadsticks + plastic spoon and napkin already in package Price: $2.49.

  9. Product 2: Progresso Lunch-to-Go STRATEGIC PLATFORM Portable and healthy meal kit TARGET CONSUMER By Demographics: Women (25 – 44 yrs) By Usage (Moment-in-Time): In a hurry. Need to eat something filling yet healthy. No time or suitable place for washing dishes.

  10. Product 2: Progresso Lunch-to-Go

  11. Ready-to-Eat Meal Industry • Total market in 1999 - $14.5 B • 40% of the US population carries a meal or snack from home at least once in a two week period. • Four categories – canned ($ 3.2 B), dried ($ 1.8B), frozen($ 8.9B) and chilled ($ 0.7B) • Fragmented market -- one third of total sales come from the top 24 players Source: Euromonitor

  12. Ready-to-Eat Distribution • Category fragmented by product type (canned, dried, frozen) – ready-to-eat not grouped together in grocery store (see photo slide, next) • No consistent product placement from store to store • Result: Consumers confused, their favorites are hard to find • General Mills can use distribution strength to place new products in most appropriate locations – Chili for Progresso Chili & Chips, and Soup for Progresso Lunch-to-go!

  13. Ready-to-Eat Distribution Chef Boyardee Kraft Mac Hamburger Helper Bowl Appétit! Ragu Express

  14. Product Analysis Ready-to-Eat Meals We analyzed five popular “meal solutions”: Kraft Mac ‘n’ Cheese, Stouffer’s Lean Cuisine, Uncle Ben’s Rice Bowl, Maruchan Instant Lunch, and Bowl Appetit. These products have a wide range of prices and serving sizes. We checked nutrition information on the packages Analyzed • taste, • brand awareness • packaging and • promotion.

  15. Product Analysis Ready-to-Eat Meals * Harris Teeter

  16. Product Analysis Ready-to-Eat Meals

  17. Product Analysis Ready-to-Eat Meals

  18. Soup Industry • Overall 4% decline in soup market forecast, but three segments are growing: • “Soups away from home” • Ready-to-serve soups (more likely to be premium soups) • Menu items in restaurants. • Biggest concerns are time, convenience, and ease of preparation

  19. Chili Industry • 85% of consumers surveyed in 1999 considered Chili as a meal. • Sales revenue growth 25% over last 3 years • New products introduced cater to adults, oriented around nutrition, eg chili ready meals (cans, dried in a pouch). • Most popular type is “regular” chili with beans.

  20. Consumer Trends • Work + Family = Home Cooking • Result? Higher Willingness to Pay for convenient and easy-to-prepare meals. • More two-income and single-parent families – dual convenience & nutrition focus • More whole mealspurchased at stores rather than in restaurants(54.2% vs 45.8% of family budget). • Microwaves almost universal (86% of households)

  21. Our Consumer Survey 52 Respondents queried about ready-to-eat meals. Result? • Women are more concerned about nutrition than men. 50% of Male respondents “didn’t care” vs 24% of women. • However, nutrition is trumped by convenience in reason for purchase ready-to-eat meals. • Top nutritional concerns are fat, calories, with sodium distant 3d.

  22. More Survey Results • Campbell’s soup is the product most frequently purchased by women in the last 6 months (55%) • 50% of married respondents eat ready-to-eat food for lunch while 77% of singles eat it for dinner. • General Mills brands associated with ready-to-eat: Hamburger Helper & Progresso (Text of Survey - Appendix 1)

  23. Consumer Survey Results

  24. Choose to purchase because of: Average Mode Median Stdev Convenience 4.51 5 5 1.07 Taste 3.73 5 4 1.25 Price 3.10 4 3 1.17 Nutrition 2.90 3 3 1.36 No response 0.02 0 0 0.14 Scale 1 to 5, 1 is lowest Consumer Survey Results

  25. How often do you eat ready-to-serve per week? 60% 40% 20% 0% 0 <1 >5 1 to 2 3 to 4 No response Consumer Survey Results

  26. Company • General Mills recently acquired Pillsbury • Appropriate time to expand the Progresso and Pillsbury lines • Take advantage of synergies between General Mills and Pillsbury • Strong distribution and retailing relationships • New products should fit with combined firms’ capabilities and strengths

  27. General Mills SWOT Analysis

  28. Porter’s Five Forces- Ready-to-Eat Industry • Buyer Power: • General Mills distributes the majority of its products directly, through its own sales organization, to retailers, co-operatives and wholesalers. • Targets alternative distribution channels, particularly convenience stores, vending and non-grocery outlets as well as foodservice outlets. • Due to its size and huge range of offerings, the company is able to command strong representation through these channels. • Supplier Power: • Power is low; brand manufacturers are in a good position to negotiate with suppliers since ingredients are commodities.

  29. Porter’s Five Forces- Ready-to-Eat Industry • Threat of Entrants: • Market is so segmented than new entrants can always come in to target niche segments. • However, its does require a moderate to heavy investment in production and distribution facilities. • Threat of Substitutes: • Many substitutes including soups, delis, home food, frozen foods, power bars, pizzas, noodles, canned, chilled and frozen meals. • Competitive Rivalry: • High rivalry; many major players like Kraft, ConAgra, Hormel, Campbell’s Soups, Nestle,Maruchan and private labels offer products that are close substitutes for the Progresso range.

  30. Entry Barriers: high Buyer Power: low Competitive Rivalry: high Supplier Power: low Substitute Threats:high Porter’s Five Forces- Ready-to-Eat Industry

  31. Bowl Appétit! Marketing Mix Product: • Variety: Bowl Appétit! comes in 10 different flavors of pasta, rice and potatoes • Quality: Low quality of ingredients. No nutritional value. High calories. • Packaging: Medium size plastic bowl covered by an appealing carton box. A thin plastic film protects the content. • Sizes: Single-serve portions that range from 57g to 88g

  32. Bowl Appétit! Marketing Mix Price: • Bowl Appétit! rice, pasta and potato bowls are priced $1.89 at local grocery stores. There is no price difference among the 10 varieties despite the fact that they contain different ingredients. Place • Bowl Appétit! products are located in the packaged dinner aisle, and are widely available in grocery stores, retail stores, clubs, and mass merchandisers

  33. Bowl Appétit! Marketing Mix Promotion Advertising: The target audience is working women and the message is that Bowl Apettit! is a fast, convenient and easy to prepare meal. Web Site: Customers can sign up to receive an email newsletter from Betty Crocker with information about their products and recipes as well as other useful information such as dinner planners.

  34. Bowl Appétit SWOT Analysis

  35. Bowl Appetit Market share ($): • Fast penetration /Among all major products, Bowl Appétit!Pasta ranks 7th, Rice ranks 12th, and Potato ranks 40th. (Nielsen Data)

  36. Bowl Appetit (Nielsen Data)

  37. Bowl Appetit Pasta • Ranks 3rd in this category. • Easy Mac and Classico are major competitors (Nielsen Data) (Nielsen Data)

  38. Bowl Appetit Rice • Ranks 4th in this category. • A total of Uncle Ben’s rice products sells about six times as much as Bowl Appétit!does. (Nielsen Data) (Nielsen Data)

  39. Consumer Profile Bowl Appétit! • Age: Female Head over 55 is the biggest segment (30%). FH between 45-54 is the second (28%) . • Family Size: 69% of consumers has the size between 2-4. • Gender: No Female Head counts 6% (Uncle Ben’s:10%). • Life Style: Middle Aged Childless couples (21%) and Empty Nesters (23%). • Repeat purchase rate is not yet impressive (Pasta: 28.6% / Rice: 19.2%) compared with other brands (Easy Mac: 43.7%) (Panel Data)

  40. Consumer Profile (Panel Data)

  41. Consumer Profile (Panel Data)

  42. Limitations of the Betty Crocker Brand ·      There is an increase in demand for healthy food, and Betty Crocker is not associated with healthy food. We would like to use a brand that can support a healthy product. ·      Betty Crocker has no experience with neither soup nor chili products, making it harder to use this brand for launching these types of food products.

  43. Limitations of Bowl Appétit! Products • Dried value meals have seen a decrease in sales. The most popular Betty Crocker products are dried and thus have a risk in future. Therefore we need another brand focused on the growth category. • Evidence: Over the last year there is negative growth tendency with BA even though they launched the potato flavor. • Primary consumer of Betty Crocker products are white women over 55 years old. We would like to go beyond this niche market by using a brand that is not solely related to older women, but also other target segments. • Evidence: BA is very seasonal – not purchased as much in summer or Xmas – confirms older “cook” woman as key customer.

  44. Bowl Appétit! vs. Progresso Consumer Profiles (Panel Data & 98 MRI data)

  45. Our Preference: Progresso • Progresso appeals to a younger consumer – Female head of Household (FH) under 35 Progresso (31%) vs. Bowl Appétit! (10%). • Progresso appeals to families (especially with kids) - Progresso (39%) vs. Bowl Appétit! (30%). • Progresso associated with quality soups and beans, favored brand name for chili in concept test.

  46. Progresso’s Market-Based Assets • Reputational: Enjoys customer loyalty and brand awareness, perceived as having innovative new flavors • Relational: Strong relationships with retailers allows wide distribution and nationwide coverage • Knowledge: Extensive knowledge about customer profiles, suppliers and channels

  47. Progresso Brand Personality: Excitement – daring, spirited, imaginative, up to-date Description: • High-quality Progresso soups, sauces, beans, bread crumbs, tomato products, olive oils and vinegars • Tradition of creating fine Italian and Italian-influenced foods and bean and tomato based recipes like Chili • Convenient: Ready-to-serve NOT condensed • Big chunks, seasoned, hearty, fresh-from-the-garden • Flavorful

  48. Progresso’s Brand Report Card

  49. Progresso’s Strengths and Weaknesses

  50. Competition for New Products SOUPS: • Campbell Soups, Knorr soups (Unilever), Healthy Choice, Advantage/10 Soups (light soups from ConAgra). • Campbell’s Soup Co ranked as the number one manufacturer overall in 1999, with a market value share of 54.8%. CHILIS: • Hormel, Armour Star Chili, Wolf & Stagg. • Hormel is the leader with 39.1% of the market share

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