Should General Mills Canada Corporation (GMCC) focus on and continue to invest in the refrigerated baked goods (RBG) category? A business case supporting the argument
The performance of RBG in the past two years has not been stellar. The net earnings and volumes of sales between 2004 and 2006 had declined. Further, household penetration has continued to decline.
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However, RBG product line was the fourth best in the company. The most profitable product in RGB category is the refrigerated-cookie product line. It represented 62 percent of sales and had over 75 percent of the product line profits.
Table 1: Statement of Earnings (figures are in millions)
|28 May, 2006||29 May, 2005||30 May, 2004|
|Total Expenses and Costs||$10,073||$9,429||$9,562|
According to study results by Market Tools, refrigerated baked goods were convenient for consumers because they were easy and quick to make (79 percent). Generally, customers prefer convenient products.
The team also learned that RGB product consumption was on the increase, especially among household with children. This implies that GMCC has a potential market niche. Therefore, it should target households with children in advertisement campaigns.
Guillen must convince the management team that RGB product line shall improve when they adopt scratch baking method since Canadian consumers prefer it. Therefore, it must promote scratch baking method in the Canadian market rather than the popular methods in the US.
The research also established that mothers preferred products, which were relatively easy, quick, practical, and attractive to children. The GMCC should consider this insight and develop brands of RGB.
The company must also develop the product because it is popular with mothers, who influence purchase decisions based on affordability, convenience, and attractiveness to children.
Despite the stagnant sales and revenues, the research established that cookie markets were growing in Canada. Therefore, GMCC should focus on the growth segment of the market. The research provided considerable insight and knowledge that enabled Guillen to understand that Canadians preferred scratch baking rather than refrigerated cookies. Therefore, the company can create the niche and revive sales.
Based on market research results, Guillen should develop product campaigns that address various challenges, which lapsed users have encountered. Therefore, it is appropriate for GMCC to segment customers based on preferences, usages, appeals, and various emotions that RGB brand creates.
The company should not focus on other consumers, who will never purchase Pillsbury products. Instead, it should develop a new niche and attract brand champions. However, it must accomplish this strategy with the right advertisement and campaign messages, which can reach most households and appeal to kids who influence purchase decisions of Pillsbury products.
How could/would you grow the RBG category? What strategic goal/s and direction would be realistic and required?
GMCC can increase the sales of RBG product line by reviewing market penetration approaches. It must market the current RBG products to existing customers. In addition, it must develop strategies to attract lapsed users and non-users.
- Guillen must focus on increasing the rate of purchase
- The company must sale to lapsed users
- Increasing the volumes of sales at every purchase occasion
- It must develop new strategies to attract non-users
He must develop new strategies to attract lapsed users and non-users of RBG product line. The RBG product line has a defined target market. As a result, the products have a clear market potential. The marketing strategies of GMCC must concentrate on potential market segments.
GMCC can enhance purchase frequencies of RBG products by running advertisement campaigns, which can attract users by highlighting products’ feature such as ease of use, quick, practical, and appeal to children. This will drive purchase frequencies from mothers.
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At the same time, the company can ensure that users increase the amount of purchase by introducing value to products. For instance, the company can introduce new methods to attract lapsed users, who have busy schedules.
According to the research conducted, brand champions, lapsed user, and non-user did not express price concerns about Pillsbury products. Therefore, GMCC should not change pricing strategy of RBG product line.
GMCC must use a product development strategy in order to adapt to the Canadian consumers, who prefer scratch baking of cookies. At the same time, it must introduce new products to attract lapsed users, who do not want to engage in scratch baking. Guillen must introduce:
- New features to RBG product line, such as convenience of baking
- New brands to appeal to older consumers
The product development concept shall ensure that segment of the markets, which include lapsed users, older consumers, and non-users buy new or improved RBG product line.
How could/ would you grow the refrigerated cookie dough (RCD) segment? What strategic goal/s and direction would be realistic and required?
The refrigerated cookies dough (RCD) is the most successful product line among all RBG products. It drives the company’s growths and profits. For instance, it represented 62 percent of the RBG sales and over 75 percent of the category’s sales. This shows why Guillen must focus on RCD.
He must make the RCD brand unique in relation to other cookies in the Canadian market. Mothers have expressed their confidence with the RCD. Therefore, Guillen must focus on his three observations:
- Increase frequency of purchases
- Increase household penetration
- Combine the two strategies
The company must create a good experience for customers who buy RCD. The experiences shall persuade them to buy RCD again. When consumers decide to buy RCD, they shall develop the RCD brand and increase the product value. As a result, this shall create brand loyalty that shall ensure that the company penetrates the market, reaches households, and increases sales volumes and market shares.
This strategy is suitable for GCMM because it has created the best brand in the Canadian cookie market. For instance, GCMM created a brand that dominated the market share.
Pillsbury remained iconic brand in Canadian households with the Pillsbury Doughboy campaign. This implies that cookies from Pillsbury have a positive association with customers, a high brand value than competitors, and a recognised name across most households.
Based on the Cookies Usage and Attitude Study Results, the company must brand RCD to reflect the market needs. It must:
- Rebrand cookies for scratch baking in Canada
- Enhance convenience and taste
- Appeal to children
- Brand for lapsed users and non-users
The research showed that the use of RCD was on the rise in households. Therefore, the company must use branding strategies to create what consumers expects from cookies based on the above results like convenience, appeal to children, and affordability. This shall turn lapsed users and non-users into customers. Such branding strategies must create credibility, consistency, and competitive pricing of RCD.
Attracting lapsed and non-users
These segments of Canadian markets appreciate convenience, affordability, and ease of RCD products. The research results indicated that brand champions and lapsed users were similar, but not in all aspects. For instance, they were all mothers who cared and worried about their kids.
Therefore, the company strategic campaigns should aims at providing a sense of security and ease of use for lapse users. The advertisement should guarantee busy mothers satisfaction through ease of use. Therefore, the company must introduce new brands to cater for this market.
The company can provide free samples for non-users and lapsed users. This shall enable potential customers to taste cookies before buying, and they are most likely to purchase Pillsbury products based on their preferences.
The company should engage in constant advertisement campaigns. This should aim at penetrating the market and reaching various households.
Brand champions should promote or refer RCD to other consumers. This can be convenient during family functions.
During the discovery workshop, Guillen noted emotional reactions, feelings and gained insights into lives of cookies’ consumers and bakers. The company can organise such events to promote cookies. In addition, it should have community-based gatherings for marketing purposes and charity works. This shall provide opportunities for non-users to taste Pillsbury products.
Compare and contrast product forms. Specifically, define the product benefit/s and competitive advantage/s
Scratch baking ingredients
- Has emotional appeal to mothers and the entire household across Canada
- Appeal to most consumers in Canada
- Appeal to pragmatic, get-it-done type of consumers
Pre-mix cookie baking products
- Requires minimal preparation
- Convenient to busy consumers
- Has nutritional value
Refrigerated cookie dough – chubs
- Has various varieties
- Are pre-mixed and require minimal preparation
- Have sharing and giving appeals to consumers
- Have nutritional value
Refrigerated cookie dough – ready-to-bake pre-formed cookies
- Convenient to busy consumers
- Are seasonal for various occasions
- Come in various varieties
All Pillsbury products invoke a sense of generosity among consumers.
Illustrate and discuss a product-positioning map including each variant. Where do you see the greatest market potential and why?
Canadian consumers prefer scratch baking Pillsbury products. The research result shows that 61 percent of consumers are scratch users. This implies that the product has a potential among mothers, who are pragmatic. On the other hand, refrigerated and pre-mix products appeal to a different segment of busy consumers.
This is an emerging market niche for the company. Therefore, the branding strategies should aim at increasing consumer preferences by highlighting the product convenience features to busy consumers.
Fig. 1: a product-positioning map
However, we have based the production-positioning map on various perceptions of consumers. For instance, various consumers have different perceptions on scratch baking products. There are mothers who consider them convenient, affordable, appealing to children, and easy to use. On the other hand, some consumers feel that scratch baking products consume most of their time.
This product-positioning map identifies potential market gaps and consumer segments, which Pillsbury can target in order to achieve an increment in sales and market shares. These products have demands based on perceptions of various customers. Therefore, Pillsbury must resort to active branding and promotion strategies.
Successful positioning shall require Guillen to use benefits of all products, which customers seek. Therefore, he must:
- Target specific segments of the market based on benefits of each product
- Communicate products’ benefits in different ways from competitors
Who is/are Pillsbury’s target consumer for RCD? How would you describe the ideal target consumer profile?
Pillsbury’s target consumers for RCD products are pragmatic mothers, households with kids, busy mothers, and people who prefer get-together events. In Canada, kids are the main purchase drivers of RCD.
Therefore, GCMM marketing strategies must focus on various segments of target markets and create relationships with these RCD consumers. The company has adequate information about these target markets. Therefore, it must develop adequate strategies to reach potential markets.
This process requires developing an ideal profile for various segments of the market. The profile shall enable GCMM to identify various needs and challenges of different segments of the Canadian market. The profile shall:
- Reduce knowledge gap about consumers
- Identify ideal consumers
- Identify both lapsed users and non-users
- Provide consumers’ insights
This shall help the company to position RCD in the market appropriately and deliver value to consumers.
The RCD customer profile includes both demographics and psychographic characteristics of the target consumers.
- Age: mothers in their 30s to 40s (kids are the purchase drivers in this category)
- Sex: female and men (who purchase for the family)
- Occupation: homemakers and working mothers
- Level of income: low and middle classes
- Geographical location: Canadian markets
- Values: some consumers consider Pillsbury products as having ‘a shared secret
- Beliefs: consumers believe that the products represent acts of generosity and are better than other products
- Buying patterns: buying in Canada is impulsive (mainly influenced by kids’ demands)
- Perception: customers believe that the products are easy to use, convenient, and affordable
- Hobbies and interests: products are ideal for sharing and giving in family events
Guillen shall use the customers’ profile to understand factors that influence purchase decisions of RCD consumers. However, he must note that consumers’ preferences change over time. This is why there are lapsed users of RCD. Therefore, scheduled market studies are necessary to understand factors that influence purchase decisions.
Both demographic and psychographic characteristics of consumers provide factors that drive purchase of RCD, consumers’ concerns, and decision-making processes. These shall assist in developing appropriate marketing strategies. Specifically, Guillen shall use such information to formulate:
- RCD description for specific markets
- Pricing strategy
- Grow the brand
Segment the RCD market in Canada based on information at hand and develop a relevant target market profile for the Pillsbury RCD marketing strategy. Who would you target and why?
The RCD market in Canada consists of pragmatic, get-it-done types of mothers and busy mothers, who have busy schedules and do not want to spend their time in scratch baking. At the same time, we have to take into account influences of kids. The company research established that these segments of the markets are large enough to drive sales and increase the market share.
These segment markets can serve market objectives of the company. In addition, the company can run active marketing campaigns to reach most households. These segments have also expressed signs of growths. However, RCD campaign and promotional strategies must focus on both existing customers and winning lapsed users.
Communicating with these segments of the market shall enable the company to understand various needs of consumers. These market segments shall meet the aspiration of the company in terms of driving sales volumes and revenues.
The company must choose the best options for the target markets. Based on the results of gathered data, Guillen must engage the marketing and sales team in all intricate stages of decision-making. The company must initiate effective promotion, advertisement, sales, and distribution strategies.
The branding strategy and branding message shall be the main concern for the target market segment. The company must recognise that customers have various perceptions on a single product. The research results showed that different mothers have different perceptions about cookies.
- Ease of use
- Good taste
- Appealing to kids
- Quick to make
- Are fun activity with kids and family members
Guillen must consider strong areas of RCD and communicate them to consumers. As a result, both existing and new customers shall realise the benefits of RCD. The company can only build brand equity and invoke emotional attachment with target markets if it can compete effectively. Therefore, the increase in market shares shall enhance the brand value of RCD.
Once RCD has established a brand value, the company shall realise increase in sales volumes and returns because consumers shall be paying for the value they receive from RCD. The company must find effective ways of communicating the brand value of RCD to target markets.
Constant studying of consumers and changes in the market
The company must engage in constant market research in order to communicate the right message to consumers.
The company must possess deep knowledge about the target markets. It must understand factors that influence their purchase decisions, what they like in the product, and what they do not like. This shall enable Guillen to develop effective message to consumers. The company must also adapt advertisement campaigns to Canadian consumers.
Promoting brand consistency
The company has been relying on advertisement message developed in the US. However, the research results showed that consumers in both regions had different characteristics, preferred methods of preparing cookies, and showed different views about purchase drivers. Therefore, controlling these factors in Canadian market is imperative for increasing purchase frequencies.
Effective channel of communication
Through studies, Guillen established that RCD consumers were on the rise across households. Therefore, he must choose the right media to reach households, especially those with kids because kids influence purchase decisions and in turn may influence frequencies of purchase.
Incorporating customers’ feedback
The company can only build strong brands, increase frequencies of purchase, and communicate effectively if it considers feedback from customers. Such feedback can help the company realise various causes of lapsed in usage and reasons for non-users.
Therefore, Guillen must realise that building RCD brand is critical for success of the company. He must follow suggestions and findings from market studies in order to increase purchase frequencies, market penetration, reach the target markets, develop appropriate brand message, use effective channel, and turn lapsed users and non-users to product consumers.