Case 2 - Case studies PDF

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MARKETING CASE STUDY 2 The Pillsbury Challenge Group Members Erica Kuzmicz Rafael Borges Margaret Clarke Ryan Malas Tenzing Namdhak

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Introduction: Most Canadians are familiar with the Pillsbury brand and their wide variety of products such as pie crusts, crescents, turnovers, and the most popular, cookies. All these products are categorized at Pillsbury as refrigerated baked goods (RBG) and the 4 th largest category at General Mills Canada Corporation. The refrigerated-cookie product line are responsible for the largest percentage of unit sales (62%) and represent over 75% of the category profit. In 2006, Ivan Guillen, RBG Marketing Manager at General Mills Canada Corporation, had to think of a new strategy that would improve business performance for RBG’s, specifically cookies.

Quick Value Analysis: Consumers

Retailers

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Quick and Convenient food products

- Strong and loyal brand familiarity

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Can go straight from the fridge to the oven

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Not risky to have in aisles

with minimal or no preparation

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Creates revenue

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Wide variety, not just sweets, such as breads

Issues That Lead to the Problem and Market Research: The company had been borrowing and adapting ideas, secondary research, and advertisements from their United States of America parent company, General Mills, and found that their marketing efforts were falling flat. Guillen suggested that to grow the segment, they needed to increase frequency of purchase, increase household penetration, or both. This lead to seeking help from a consumer insight manager, Lou Pasato, who would help Guillen gain a better understanding of Pillsbury cookie consumers, to develop a better marketing strategy. Guillen decided it would be best to research their Canadian consumers to find out what would resonate with them. Although Canadian and American cultures are very similar, the values are different. This is exactly what Guillen found through the primary research Pillsbury did.

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Pillsbury did various types of research, such as in-home immersion and discovery workshops, to collect their data. The studies showed that 56% of Canadian households used from scratch baking as their dominant method for baking cookies, compared to only 22% in America. Convenience and taste were at the top of the purchase drive list in both countries. The study also showed that the purchase of cookie dough was impulsive and generally fuelled by children’s requests. Households with kids were the primary buyers of these products; this fit in with the target market of busy women in their 30’s and 40’s with children. They also found that the baking experience was a crucial component to the sales of their products; Pillsbury allowed memories to be made, happy moments to be shared.

Something highly valued by their

consumers.

Quick SWOT Analysis: Strengths: -

Extremely familiar and popular brand

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Industry leaders

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One of the top 10 advertising icons: Pillsbury Doughboy

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Profitable

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Created a convenient and affordable product

Weaknesses: -

Low growth margin

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Using some marketing strategies from the USA due to how expensive creating new marketing strategies are

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Advertising strategies not providing good return-on-investment

Opportunities -

Due to brand familiarity, introducing new products would be a smoother and more adoptable process

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Ability to target different markets easily with same products

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Can market products as a “little secret” instead of being seen as “cheating”

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Ability to change product packaging easily 3

Threats: -

Some may see RBG’s as “cheating”

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Canadian market prefers to bake from scratch

Luckily for Guillen, the studies provided new and insightful consumer information that could influence new marketing strategies. Keeping all the learning’s in mind, Guillen must also think about possibly creating a new target market, a new brand message, and new promotional efforts that will effectively resonate with Canadian consumers to translate into increased sales.

Main Problems: General Mills’ main problem was that their refrigerated-cookie line was not preforming in the market as well as they would like. The cookies were underperforming, and being General Mills’ main product (they represent 75% of the refrigerated baked goods), they had to make a change in order increase revenue and overall business performance. The household penetration for RBG had even dropped 1% in a year, proving that a change had to be made. This major problem that General Mills faced is due to the secondary information from the United States that they used to market to their Canadian buyers. They were treating the Canadian market same as the US market without doing further researches. They were using the same advertisement they did in US in Canada with some little changes. The American numbers don’t match up with Canada’s. For example, after Guillen and his team conducted research within Canadian households, the studies showed that 56% of Canadians prefer to produce cookies from scratch instead of buying premade. The American studies were much different in that only 22% of Americans preferred to bake cookies from scratch. And also kids played an important role in the Canadian market. General mills were inefficient with them in home products throughout North America and now have to find a way to incentivize the Canadian public to used premade cookies.

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Alternate Solutions: The main problem that general mills was facing was the performance of their refrigerated cookie line, it was discovered that the problem stemmed from secondary information obtained by market research in the USA. The numbers were just too different from Canada and the ads and campaigns could not just be adjusted to fit Canada, there needed to be market research performed in Canada. This is exactly what general mills did, with different tests being done both qualitative and quantitative, in home and over the phone, and with different groups of people general mills got the info they needed to start to bring back the market share they had lost and successfully sell their products in Canada. What general mills needed to do with this new found information is to create brand awareness and try and get back the market share it was losing. There are three possible solutions that could be used to help solve this problem. They could try different ad campaigns using a combination of TV, radio, and print, they could try and get the products out into Canadian markets with street level teams both in stores and at popular events, as well as try new product lines that would have more appeal in the Canadian market. One of the very first issues that was discovered by general mills was that the information they were receiving about who and why there products were being enjoyed, they got US information and it was discovered that the ads could not just be tweaked for Canada but had to be changed all together. The best of going about this would be to run Canadian ads on Canadian numbers highlighting why Canadians should enjoy this product line. A few key differences in the market were discovered and that what general mills has to focus on. The focus should not have been on fast and easy like in the American ads but marketed as a time to spend with family, get the kids involved in cooking, and wasn't "cheating" on making cookies from scratch but just a little faster and a little easier with no loss of traditional cooking or nutrition value. With these core ideas being at the center off all their Canadian ads general mills could bring the product line back to where it was before and maybe even higher capturing the market share they had lost. General mills may seem like a household name but perhaps that isn't the case as much anymore epically in Canadian houses, it would appear as though the dough boy was a popular television character featured in most ads the products were being past by in grocery stores. One

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way to get the products noticed is to get the products out there in person. If general mills sent out marketing teams to major events and grocery store location perhaps they could gain some of that market share by back by showing the customers that although easy and quick to make its would also be a fun family activity even for the busiest of families. With the products in the hands of the customers it may sway some of those customers who were not buying into buying again, showing how fast, easy, and most importantly tasty the products were would help get those items off the shelves and into the cart of shopping Canadians. If the teams could open a package and have the items in the oven in just a few minutes’ people would see that even the busiest of people could enjoy home baking and spend some family time together. When conduction the market research for Canada general mills noticed that more Canadians prefer baking from scratch than buying readymade items. One way to gain more market share would be to create a product or product line that was less readymade and more from scratch. Although a little more difficult and expensive if this new line was geared toward people who baked from scratch and found using general mills products as cheating, than the company would open up a whole new market of people who previously had no interest in their products and had never bought one. With a few adjustments to their current line of products to make it so it wasn't so fast and easy but more like an easier way to make from scratch than this whole new market would open up for the taking. With so many Canadians preferring to bake from scratch this new product line would be perfect and well accepted in the Canadian market place. Selling alongside their readymade items this new line of products would bring new customers and even maybe appeal to those customers that liked cookies but didn't feel they had the skill to make cookies from scratch. This product line would also appeal to those who like to bake from scratch but didn't bake often and were turned off from it because if the recipe called for a small amount of an ingredient they would have to buy a lot and never use it again, which is both a waste of money and food.

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Recommendations and Justifications: The best solution to General Mill’s issue of making up lost market share would be to create a new product line specifically for Canadians. This is because Canadians respond well to brands that are purposely for them, the company needs to rebrand themselves anyways, and this way General Mills would be responding to their research in an innovative way. Firstly, although General Mills wouldn’t be the first to identify at least part of their brand as “just for Canadians”, they may be one of the biggest companies to do so. To brand a new product line for Canadians would open many doors. Not only would Canadians feel looked after, but Americans may even travel up north for the novelty items. In case General Mills was weary of advertising just to Canadians for this line, they can look to brands like Canadian Tire or Tim Hortons. Canadian Tire is obvious about their devotion to the country, but the country has remained devoted to the company as well, seeing as the first Canadian Tire was founded in 1922. Tim Hortons may be considered even more popular, and it even has several shops open in the USA. The company consistently draws on classic Canadian for its advertising, mostly showing off the wide open spaces in the country and early morning hockey practices. This is why many Canadians prefer Tim Hortons over Starbucks, because they feel like Tim Hortons means tradition. General Mills could have the same type of success if they started to do target marketing for Canadians. Segmentation is dividing a market into distinct groups based on needs, characteristics and behaviours. Targeting is the process of evaluating the segments and deciding what segments to pursue. General Mills can segment based on geographic location (ex. Canada vs. US) and then pursue the Canadian region by utilizing the secondary information gathered from the primary research. In this case, the secondary data stated that the primary data proved that the differences between the Canadian and US markets were too different. Therefore, the primary data already partially segmented the market, and now General Mills has the choice to target the Canadian market. Based on the success of other Canadian-targeted companies, General Mills should be confident in targeting Canadians with their new product line as well.

Another reason for General Mills to create a new product line for Canadians is because they can use this as a re-branding opportunity for their company. A few years ago, every kid

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knew who the Pillsbury Dough Boy was. Now, partially because of the decline in TV watchers, kids don’t know who the happy fluffy figure is. If General Mills were to come into Canada with a new product line, they would already have everyone’s attention, so it’s also the prime opportunity to remind everyone what Pillsbury is all about, and what it stand for. They have the chance to make their brand what it once was, especially if they market themselves as Canadians want them to; family-friendly, old-fashioned and fun. By bringing in a new product, they can also bring back the old brand image. The final reason for General Mills to create new Canadian products is because of the research aspect. When analyzing that data differences between the US and Canada, it was found that Canadians wanted a different image from the company; not the “fast, fun, and cheap” method that had worked with the US. Canadians want Pillsbury cooking to mean “family, kids, authentic, and tradition”. It seems that if Canadians have a different set of values than Americans, that Canadians should also have different products to meet their different needs. Instead of casting aside this information, they should use it to fill a niche market. Popular American company Target came to Canada a few years ago, and Canadians had high hopes because of the low prices in the US. When Target came to Canada however, they didn’t provide the same competitive prices, and Canadians took notice. Canadians were offended and turned their backs on the company, and Target was forced to close their doors less than a year into the big move. If General Mills doesn’t want to make the same mistake, they should look at and analyze their data to realize that the USA and Canada aren’t all that similar in what they want, and they’ll need to put in effort into the consumer-marketer relationship to get out value from the Canadian consumers. Overall, it’s clear that to solve General Mills’ problem of making up market share in Canada, they’ll have to create new products to create a relationship with Canadians. Other companies have succeeded in doing this, it will help improve their current branding situation, and their data supports the fact that Canadians want something different than their US neighbors.

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Conclusion: So what we learned in this case of Pillsbury cookie challenge is that before we come to an conclusion we must test if what we concluded are true or not and this is what happened in the Pillsbury cookie challenge case. Ivan Guillen, who was a marketing manager on the RBG (refrigerated baking goods) category at General Mills Canada Corporation (GMCC) and he was faced with the challenge of developing a first class strategy that would lead to improved business performances on his side (Canada). But the problem was that he cannot come with a good strategy, he used many strategies but they did not have any impact on sales of RBGs in Canada. What was he doing wrong? He realised that in order to improve RBGs performances he had three options increase frequency of purchase, increase household penetration or do a combination of both. So to develop the perfect strategy he had to understand the Canadian consumers. He had to find out what makes the Canadian consumer different from the American consumers. Later with the help of Lao Pasato, the RBG consumer insights manager they did some consumer insight researches and found Canadians liked scratch backings while the Americans preferred ready made, US and Canada share same top four purchase drivers with convenience and taste at the top but in Canada the quality of cookie dough was not valued highly and kids had an important role in driving purchases. And RBG were more popular in households with kids. Then the team collaborated with TerraNova Market Strategies Inc. to conduct market research studies in home immersions and a discovery workshop. The research resulted in findings like, all the moms liked easy, quick, practical and affordable food when it comes to feeding the family and also pleasing to kids, baking played a really important role in the bonding of families with happy moments and smiles on everyone’s face once the baking was done, cookies were very special as it were made for sharing and giving, well being of the family (nutrition from the RBGs) and lastly everyone loved Pillsbury cookies. So with all the findings and researches, Guillen was filled with rich information and knowledge that would surely help create an acing strategy.

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