Pillsbury Cookie Challengev7

Pillsbury Cookie Challenge

Rashmi Agr Rashmi Agraw awal al Misty Hayden Datta Datt a Kos Koshti hti Sun Ah Park Pramo Pr amod d Rao Arthur Thomas Pat Tramonte

Agenda Company Background Financial History Challenges Quantitative and Qualitative Analysis Alternative Alternativ e Solutions Recommendation Q&A

Company Background

GMCC

is the second largest of the General Mills international divisions GMCC

is a leader in the Canadian packaged foods market

Company Background Cont. RBG is the fourth largest category in GMCC Pillsbury dominates 85% of RBGs market share Pillsbury refrigerated cookie product line generates 75% of the categorys profit

Financial History

Zero volume growth for RBG between 2004 & 2006

1% annual volume growth for RB G for the last 3 years

Marketing Challenges Promotional Product Price Place

Promotional Challenges

Prior Market campaigns developed in US and adapted to Canadian market failed to generate the desired 5  7% annual growth for the RBG category

Product Challenges Household penetration reduced to 24% ONLY 15% of Canadian customers surveyed believed that the cookies were sized appropriately

Price Challenges Average retail price is 63% higher than feature price Only 32% of customers perceive value for the price of the Pillsbury refrigerated cookie product

Place Challenges No challenges related to Place  ±

Channels

 ±

Coverage

 ±

Assortment

 ±

Inventory

 ±

Transport

 ±

Locations

Q uantitative Analysis Impulse Buy 

Canada

US

Difference

They are easy to make

79%

75%

4%

They are quick to make

79%

75%

4%

Can make them at the spur of the moment

68%

68%

0%

Easier than baking cookies from scratch

59%

52%

7%

Good Value for

32%

31%

1%

30%

39%

-9%

the Price

For my own indulgence

Q uantitative Analysis Kid s

Canada

US

Difference

The kids like to eat them

47%

37%

10%

As a special treat for the kids

42%

34%

8%

Fun thing to bake with the kids

42%

29%

13%

The kids like to make them

42%

30%

12%

Fun activity with the kids

41%

28%

13%

My child(ren)

28%

20%

8%

19%

15%

4%

requests them

Is an opportunity to teach the kids how to bake

Q uantitative Analysis Scratch/Qual it   y 

Canada

US

Difference

Easier than baking cookies from scratch

59%

52%

7%

It's similar to homemade cookie dough

31%

36%

-5%

Is a high-quality cookie dough

29%

41%

-12%

Is like homemade cookie dough

28%

35%

-7%

Q ualitative Analysis Easy, Quick, Practical, Affordable, and Pleasing to Children Brings Smile, Feels Good to Make Difference Special: Sharing, Eating Cookie not Baking All Devoted Mothers Love for Pillsbury : Little Secret

Alternatives: Placement in Refrigerated Section Reasoning: Eye Level placement is ideal for the impulse buy.

Pros

Cons

Makes Product More

Accessible More

buy

noticeable for impulse

May Cost More

for Premium Eye-Level Shelf-placement

Alternatives: Baking Aisle Product Placement Reasoning: Cookie dough purchase is impulsive.

Pros

Cons

Increases the opportunity for impulse buy

Additional expense required associated with location

Greater exposure to scratch

May

buyers

not be feasible for some retailers Increased inventory expense for retailers

Alternatives: Create a Box-Top Initiative For Schools Reasoning: Establishes a new channel for marketing brand while maintaining the target involvement of children.

Pros Increase goodwill (CSR) Expands Market (Day-Care, etc.)

Cons Additional Expense to promote to schools Possible Push-back from parents/teachers (nonhealthy product)

Alternatives: Right Message on Packaging for Kids & Mothers Reasoning: To focus more on quality for mothers and attractive packaging for kids.

Pros Appeals to the scratch users on quality of the product Appeals to the kids to associate Pillsbury as a fun product

Cons Expense to License the Characters, e.g. Tigger Possible Increase in unit Price, Lower Sales

Alternatives: Create Rewards/Incentives for Children Reasoning: Use Stickers/Tokens/Codes to increase the awareness, brand loyalty and attract customers with children

Pros Increase brand loyalty Use influence of children to increase sales

Cons Additional expenses to run the program

Alternatives: Develop New Product for Kids Reasoning: Kids play a larger role as purchase driver in Canada than US.

Pros

Cons

Potential higher volume of  sales due to influence of  children

Possibility of missing the segment of target market which is scratch users

Establish brand loyalty

Negative media exposure regarding childhood obesity Specialized product development costs for Canadian market alone

Alternatives: Develop a New High Q uality Product Reasoning: To target scratch users.

Pros Quality ingredients are more in line with made from scratch cookies Higher profit margin opportunity

Cons Higher price point Cannot replicate the user experience of making a cookie from scratch Development costs for premium product for Canadian market alone

Alternatives: Develop Marketing Ad-campaign Reasoning: To target scratch users.

Pros

Cons

Increased customer value perception

Large expense of the advertisement development

Refrigerated cookie is just like homemade

Cannot compete with freshness or experience of scratch cookies

Reduced time and effort involved in baking Increased market share

Recommendations Create Target Market Campaign Restructure Product Placement Restructure Packaging Create a Rewards Program



Target Market Campaign

Television Ad Campaign Aimed at Untapped Scratch-Users Segment  ±

61% of the Canadian Market

 ±

Scratch Taste= RBG Taste

Development Expense for New TV Advertisement

TV Advertising Expense

$200,000  $500,000

Regular Retail Price

$2.99  $4.99 per package

Required Unit Sales for ROI

66,890  100,200 packages

(Breakeven)

Product Placement Eye Level Product Placement Easy Access for Impulse Buyer

Packaging Influential Message Cater to Target Market  ±

Kids(Biggest Growth Opportunity)

 ±

Mothers

Rewards Program

Catered to Children Creates Brand Awareness Sticky Customer

Q &A Thank you for your time!

We would like to welcome your questions at this time.