Strategic Marketing: Goody’s Ice Cream

1. Strategic Marketing: Goody’s Ice Cream Tricia Coppola David Wertheimer Strategic Marketing & Implementation April 17, 2004

2. Strategic Marketing: Goody’s Ice Cream Positioning/Place • Recognized that we must have our own plan/strategy – can not follow others • Made long-term decisions/plans early • Scrutinized opportunity costs i.e. cost of advertising and sales support versus market potential/growth • Consistently pushed consumer perceptions of product to position our brand appropriately – create demand • Entered markets where our product was appropriate to demand rather than push into the largest segments • Negative – financial strains and market risks of product or market diversification (pulled out of one market that we invested in for one year)

3. Strategic Marketing: Goody’s Ice Cream Price • Used R&D investment to drive down internal costs in mature markets with heavy competition • Reduced retail prices in mature markets to gain a competitive edge without reducing margin • Maintained or raised prices in markets were we had superior product, less competition and high purchase intention = better margins

4. Strategic Marketing: Goody’s Ice Cream Promotion • Used consistent amounts of promotion to maintain leadership position in country segments where we had no competition • Heavy investment in new markets to support product launches & create brand awareness; used both advertising and sales support • Through investment and strengthening of consumer experience curves we maintained consumer purchase intentions

5. Strategic Marketing: Goody’s Ice Cream Product • Placed a premium on having the right product portfolio for each of our markets • Continuous R&D improvements to address dynamic market environments • Focus on market trends/understanding customer needs to supply appropriate product benefits • Said “No” to markets that were too competitive or where our product benefits were not an asset

6. Strategic Marketing: Goody’s Ice Cream 3C’s • Corporation • maintained strong markets while trying to push into new ones • continual R&D to lower costs and revise formulas • Customer • launched in segments where product would match demand • used revised formulas to maintain interest levels • Competition • tried to predict spending levels and plans, and adjusted our expenditures accordingly • avoided markets where multiple players were already battling (tried once, got burned) • In competitive markets, unable to establish product differentiation; battle fought on price and perception

7. Strategic Marketing: Goody’s Ice Cream Market Position and Market Share • Held sole-provider status in two markets • Increased margins and kept prices high to maximize profit • Continued R&D to maintain hold on each market • Had single competitor in three markets • Matched price and spending to keep 50% market share, which provided strong profits ($72-120MM Year 7) in each segment • Pushed R&D so price cuts would not hurt profit margin • Would have benefited from added expenditure to take market share from competition • Value in pricing • In our first sole-provider segment, raised prices while increasing ad expenditures and saw good returns

8. Strategic Marketing: Goody’s Ice Cream BCG Map (I forget the real name) Glace (C4 S2) Glace (C1 S2) Shardje (C3 S2) *** ??? Glace (C2 S1) Shardje (C1 S1) Year 5 Glace (C3 S1) $$$

9. Strategic Marketing: Goody’s Ice Cream How We Operated • Division of labor and strengths • Tricia: market assessment, sales and advertising allotment • David: perceptions, competitor tracking, R&D • Comfortable push and pull • Tricia: mass-market and expansion • David: core strengths and positioning • Plotting data proved key

10. Strategic Marketing: Goody’s Ice Cream Charting: brand formulations

11. Strategic Marketing: Goody’s Ice Cream Charting: perceptual maps

12. Strategic Marketing: Goody’s Ice Cream Charting: purchase intentions

13. Strategic Marketing: Goody’s Ice Cream Lessons Learned • Balance • Value in both large and small markets • Maintain profitable products to help launch new ones • Focus • Don’t try to do too much too fast • Continue marketing and developing products for core markets

14. Strategic Marketing: Goody’s Ice Cream Lessons Learned • Competitiveness • Great to have markets where no one else competes • Surprised that the other teams ceded two markets to us • Saw the impact of ceding markets first-hand: went into and then withdrew from C1 S1 and our withdrawal gave Grateful Fed its biggest gains • Diving into mature markets unwise unless substantial capital (and patience) is available • The first-place team gets no concessions