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steady growth in the long term due to possible fluctuations in the market
trends.
Although option four does look profitable, qualitative analysis for
the long term such as brand health, brand equity and brand perceptions
in the consumers minds, are not addressed properly and will hinder
the companys growth in an ever changing and constantly
fragmenting market.
As managers, we have a holistic view of the
whole context and understand that it is important to reinforce the
cash cow of the division which are the Ready to Eat Soups (option 4),
but we also understand that the leader position in the market
obliges Brannigan to invest in R&D due to the changing trends and
needs of the market (option 3).
It is important to invest in
marketing to make the RTE soups strong in the market, and to be
able to keep financing the question mark products, which will
become stars and future cash cows with the way the market is
growing.
This mix of both strategies certifies the companys short term
goals and envisions long- term profits with the investment made, since
it stretches the life cycle of the RTE soups and boosts growth in the
early stages of the new products life cycles.
Juan Manuel Restrepo
Davies M Concepcin Aragons Cabeza 7
9. IE Business School IMPLEMENTATION PLAN
Due to the context and
present situation of the company, the most important thing is to start
with the basics, go to the consumer needs, and find out what they value.
The first thing to do is to reposition Brannigan in consumers minds
by analyzing the different segments of the market.
From the
consumer information research made by Mr. DeGennaro, 38% of millenials
eat soup as a snack, 78% think of soup as being healthy and a low
calorie option for dieting, and 61% of consumers take low sodium into
account when purchasing. Even though Baby Boomers are the biggest
market and most profitable, the tendency in the future is that it will
be reduced, so targeting younger segments is important for the
long-term growth of the company.
1. Marketing Mix
Product The
branding strategy will consist of implementing an umbrella brand of
Brannigans soup division that will give emotional values to the
products and brands targeted to the different market segments. These
products will include functional benefits that will satisfy their needs.
Positioning statement:
For people who enjoy healthy, easy to cook,
savory food, Brannigan's Soup is a brand of soups that offers convenient,
varied, trustworthy, and very good quality soups that allows customers to
enjoy meals while taking care of their health and to save time at very
competitive prices based on its experience as leader in the category and
its innovative products
Based on this positioning statement, the
company must enter the 21st century with a strong argument that will
reclaim their position as leader of the market providing a better life
quality offering through their products and services. (The market research
showed they fell back on health trends, diet claims, convenient offerings,
flavors, and seasonal products, which are growing trends).
The R&D
products will be divided into the previously stated segments and will
provide Brannigan with a Diversification Strategy based on Ansoffs
Matrix since the market trends are not mature enough yet, and the
products will be introduced as new innovations.
Juan Manuel Restrepo
Davies M Concepcin Aragons Cabeza 8
10. IE Business School Packaged deli soups: Price
premium, for baby boomers and educated palates Simple healthy weight
watchers soups with dietary components: targeted to all but the
youngsters Active lifestyles soups and broths: millenials, working mothers
Convenient great meals (changing the usage of the soup into a
sauce): working mothers New flavored cold soups (E.g: chilled tomato
and avocado, swans summer soup): millennial, working mothers New
flavored teriyaki beef: millennial, working mothers Chicken Noodled Soup:
millenial, working mothers and youngsters Microwave ready soups:
millenial and working mothers Portable thermic microwave soups cold
on the hands, hot on the mouth: millenials and working mothers
Savory and tasty tomato meatballs soup: Youngsters
On the other hand,
the RTE soup category is the most profitable one and can be stated to
be the cash cow (based on the BCG matrix) of the company. The
market is very mature as well as the products, this is why based on
Ansoffs matrix, the strategy will focus on penetrating the market.
Place Distribution is a big concern for the soup division. One of its major
problems is that private labels are entering the market and gaining
a constant 5% growth due to the increasing price sensitivity. This has
created a conflict of interests between Brannigan and its retail partners in
the shelves of the supermarkets.
A 3% of shelf space has been
reduced on a yearly basis, even though it is not the major problem the
company is facing, it is a symptom that must be put into consideration.
We understand that incentives must be offered to the Retail partners
to keep shelf space for Brannigan soups, especially for the new
innovations coming up.
In order to address this issue we propose the
following actions:
Invest in an Information Technology that shares
information between retailers and Brannigan on stock keeping units
that will allow an implementation of a just in time model for stock
replenishment. This way, the stock is reduced in the retailers warehouse
and creates a positive effect on their balance sheets.
Invest in the
retailers store with promotional POS materials with special product
stands and advertising that will drive an increase in sales. Create in
store activities promoted by Brannigan to show the customers new
recipes and ways to use the soups they can find inside the stores.
We
believe this investment in the distribution channels is crucial for the
sustained relationship with the retailers since they sell a 62.9% of our
total product sales and it creates a win-win situation for both.
Juan
Manuel Restrepo Davies M Concepcin Aragons Cabeza 9
11. IE Business School
Price It is important to state that price is a
sensitive issue for Brannigan, since it is the current leader of the
market and has high brand awareness and top of mind, the new brand
positioning will reinforce this image. This is why we will not
increase nor decrease prices for the RTE soups.
Instead we are going
to introduce to the market a premium brand of packaged Deli
soups by Brannigan that will be priced higher than the RTE soups. This is
a strategy that mixes Pricing, Product and Brand Management, and
Knowing the Consumer trends, all together. Price premium will give an
image of an enhanced high quality product, it will increase the product
portfolio of the brand and it will also create what we know as a
Compromise Effect in the behavior of consumers.
This effect states
that adding a new product to the set of choices a consumer has,
can shift the consumers preferences, people tend to compromise and
choose an option that looks superior but that has an economic value
also.
When consumers arrive to the shelf, they will encounter a market
with a private label soup on the left, Brannigan RTE soup in the
middle, and Brannigan Deli Soup in the right. They will most probably
choose the RTE soup in the middle since its the safest choice. It gives
more quality than the private label at a more affordable price than
the premium deli soup.
Note that by increasing consumption of RTE
Brannigan soups, we are fostering sales and profit on the short
term to finance the innovative products introduced to the market.
Promotion Discounts, offers, and promotions will be made on mass
media and digital as a Pull Strategy to increase sales in the retail
channels of distribution. (Push strategies are stated in the Place
section of the Marketing Mix). In order to reach consumers with the right
message at the right time, an Integrated Marketing communications
campaign sketch has been outlined below using the 6Ms.
Integrated
Marketing communications Plan (6 ms) - Market: The markets
fragmentation and growing new trends, combined with a decline of
sales in Brannigan Soup division, has generated a necessity inside
Brannigan to change the marketing strategy.
- Mission: The integrated
marketing campaigns mission will be to reposition the brand as an
innovative company that owns the leadership not only for its brand but
also for increasing the life quality of its consumers.
- The key message
will be: Brannigan, the soup that cares for you, just like a mother
would, every time, everywhere.
Juan Manuel Restrepo Davies M
Concepcin Aragons Cabeza 10
12. IE Business School The tone of the message will be emotional on
an early stage, but we consider that after the first message has
had a wide coverage and frequency on Mass Media advertising. A
T.V. ad will be aired during the Superbowl, the worlds most viewed
sporting event. It is a great opportunity for people to see
Brannigans brand repositioning and the companys new communication.
A second stage of the implementation plan will include new
commercials to create brand awareness of the new products and will
show the functional benefits through a fun and humorous tone.
Also,
special promotions and offers will be made year wide depending on the
product offerings and stations to increase sales on specific products.
-
Media: The media to be used is above the line media, specially television,
to increase coverage in the campaign. Social media will also be
used to propagate campaign but it will be explained with more detail
further on.
- Money: According to the exhibits of the case, $170
million is the estimated budget for marketing expenses of year 2013.
Exhibit 5 shows the percentage of the budget devoted to each
marketing activity described in more detail.
- Measurement: The
campaign will be measured in GRPs (frequency x coverage) and impacts.
For Digital, the campaign will be measured by impressions, clicks, increase
of the website visit, and acquisitions. Social media will be measured on
amount of likes, re-posts, re-tweets, shared videos and comments.
Sales Force
Hunters vs. Farmers In order to reach an increase of a 4%
sales earnings per year, the sales force must be reorganized thoroughly.
There is a clear distinction in the sales force team between hunter
and farmers (hunters reach out for new customers acquisitions and
farmers foster relationships between the key accounts).
A 20-80
division will be made (20% farmers - 80% hunters). This will
increase the search and acquisition of new retail partners nationwide
and they will push for the new star products without leaving RTE
soups behind, which are the most important source of income.
Salaries will include a mix of fixed and an increased percentage of
the variable part. Bonuses will be provided to the sales-force teams
if they meet and surpass the year sales objectives.
Juan
Manuel Restrepo Davies M Concepcin Aragons Cabeza 11
13. IE Business School 2. Digital Marketing Strategy
It is important to
state that the way consumers behave in the stages of the buying
process has changed drastically. People now have multiple touch
points with products and brands on offline but also online
communication channels. In addition to this point is the use of
information people search online to take decisions on the market place.
This is called the Zero Moment of Truth and a few years ago it was a
trend, but it has become a reality nowadays.
We, therefore, decided
to create a special point for Digital Marketing, since it involves
strategies of all the components of the marketing mix, but that
differs in the implementation from the offline channels.
We are going
to use the three components of digital media in an integrated way.
Owned media (with the creation of the companys own website),
paid media (through the advertising and promotions that will be
made through blogs and digital magazines), and earned media
(through social networks comments, shared links and posts made by
active consumers). The key point of the website is to increase sales
of Brannigans soups and other products but also create a
community that gives value to the consumers, further empowering
the brands relationship, image, and positive awareness with the final
client.
Search Engine Optimization will be made through an organic
optimization using special keywords such as low sodium based soups,
new soup recipes, healthy soups in the market, or how to cook a fast
but tasty meal in 10 minutes. These are just examples of some of the
search words people might use on Google, Bing or Yahoo. Further
investigation is recommended to state what are the searching habits
of the consumers.
Further on, a Search Engine Marketing strategy will
be made with promotional banners posted through paid media such as
blogs of key opinion leaders in the cooking industry and specialized
cooking digital magazines. This campaign will be measured in a Cost
Per Click basis to ensure return of the investment and an increase
in volume to Brannigan soup website.
And finally, a Facebook page will
be created to generate engagement with consumers and offer them
content of value. A YouTube channel will be created with 5-minute
videos of cooking recipes using Brannigan soups. A twitter account
will be activated to tweet the recipe of the day, or products of
the day, and new interactions the brand has to further engage the
consumers. Social media will be monitored closely to protect the brand
image but will serve as a contact point to direct the consumers to
the website and generate sales.
The main benefits we see in this
strategy involve the distribution channel: Costs will decrease and
margins will be incremented because it is a direct sell that does not
have an intermediarys fee.
Juan Manuel Restrepo Davies M Concepcin
Aragons Cabeza 12
14. IE Business School Digital channel is available 24/7
Adding a
shopping cart provides full information about the consumers
preferences, making it possible to offer suggestions for cross-selling
complementary products (like the related products amazon recommends) It
serves as a communicational tool to offer relevant information of
new promotions, recipes, nutritional facts and recommendations,
flavors, and packaged innovations that consumers value
Concerning
Pricing strategies, prices will remain the same in digital to keep a
fair competition since the company does not want to hamper the
relationship with the retailers that account for more than a 60% of the
companys sales (even though this percentage wants to be lowered as
much as possible to reduce their power over Brannigan).
Promotions
will be used to increase sales offline, for example, redeemable coupons on
the retail stores. This can be negotiated with the retailer partners.
Its a great opportunity for cross promotions, and cross selling to
increase sales in other divisions of the company, not only soups.
For
further information about the total expenditure of the $170 million
budget for 2013, exhibit 5 shows the percentages for each activity in
more detail.
Exhibit 5 shows the percentage of the investment of
the activities in the marketing budget for 2013 based on the 170
million given to us in the case.
CONCLUSIONS
To wrap up the case
and its main takeaways we can conclude that:
A context analysis
using tools such as BCG product matrix, SWOT analysis, Porters five
forces, or Ansoffs matrix gives a good starting point to understand the
company and start identifying possible strategies and implementation plans
It is imperative to understand consumers desires and needs, and
try to solve them in the best way possible to create value in the
product offerings Quantitative analysis for possible solutions to problems
in a company must be made to forecast possible outcomes, yet this
analysis has to be supported with a qualitative analysis to expect
better results when implementing a strategy Short term projections are
important and profit is a need that stockholders and bosses demand,
but long term projections, that may not be profitable at the
beginning but have the potential to break through the market and
generate profit in years to come, have to be considered indispensable
strategies for the sake of the companys future.
Juan Manuel
Restrepo Davies M Concepcin Aragons Cabeza 13
15. IE Business School EXHIBIT 1
EXHIBIT 2
Red Dragon brand is going to be kept as such
Restrepo Davies M Concepcin Aragons Cabeza
Juan