The Times 100 Business Case Studies Edition 15

1. The Times 100 Business Case StudiesEdition 15 The marketing mix in the food industry McCain Foods

2. Introduction to McCain Foods • The largest chip producer in the world • Market share 33% • 57 locations worldwide;20,000 employees • UK operations in Scarborough, North Yorkshire • A B2B organisation • McCain Food’s brand ethos – ‘It’s all good’ - • Reflected in quality of food • Relationships with suppliers, community and customers • McCain aims for sustainable business • Using alternative energy sources (wind turbines) • Supporting local charitable causes and national projects

3. The marketing mix at McCain • The right mix needed to achieve objectives and customer satisfaction • Balance of 4Ps different for each product • Product – wholesome ingredients • Price – attractive to customers, but profitable • Place – positioned to compete for market share • Promotion – in line with company philosophy and objectives

4. Product • McCain protects quality of product throughout the supply chain • Works closely with selected farmers to ensure high standards of production • Selects specific seeds for the crops • Uses sunflower oil in production • Products developed to meet healthy options as well as for taste

5. Product portfolio • McCain offers wide range of frozen potato products • E.g. Oven Chips, McCain Home Roasts, McCain Wedges • Some products are best sellers from the start, e.g. Oven Chips • Others are adapted or have variations, e.g., Curly Fries • Product changes driven by different factors • Customer demand, e.g. healthier eating • Changing lifestyles, e.g. microwaveable options • Product portfolio analysed with the Boston Matrix

6. Identifies categories of products Enables the business to develop strategies for each ‘Cash cows’ generate income with little investment ‘Stars’ may incur costs of promotion but should generate income in return ‘Question marks’ incur costs; may turn into ‘Cash cows’ or ‘Dogs’ ‘Dogs’ may need to be discarded Boston Matrix

7. Pricing addresses four key issues Achieving business objectives, e.g. Maximise profits Achieve return on investment Attain market share Cover all costs, including overheads Be acceptable to customers Fit with competitors McCain pricing strategies give value for money Extra-fill packs More weight for no extra cost Rewards regular customers Promotional pricing Special price marked packs Attracts new customers to try the product Price

8. Channels to position a product McCain is B2B organisation – no direct relationship with customers Sales through wholesalers and retailers (e.g. supermarkets) Secures key positions for point-of-sale Distribution is outsourced Products delivered directly to retailers or wholesalers McCain reduces environmental impact Use of local farmers to save food miles Double-decker trucks to save lorry journeys Lorries have solar panels to generate additional power Place

9. Promotion • Above-the-line • McCain takes part in paid-for advertising to wide audiences • TV and press advertising • Advertising on supermarket trolleys • Displays in supermarkets • Below-the-line • A combination of direct methods of promotion also used • Direct mail, e.g. door-to-door leaflet drops • Events • Customer email newsletter – creates relationship unusual for a B2B company • Public Relations, including sponsorship of TV programmes and UK Athletics