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IE Business School
Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza

IE Business School


Bert Clark, vice-president and general manager of Brannigan Food Soups Division, has
to decide which of the four alternative plans his team members have proposed should
be implemented in order to reverse the industrys steady decline as well as the
divisions sales, market share, and profitability decrease for the last three years. He has
to move the divisions growth back to a 3-4% at the end of the fiscal year.


Company: Brannigan is a company that has been operating for over 100 years. It has a
Soup Division which has experienced a decrease in its profitability and needs to create
a new strategy to stop the declining sales and market share it has been experiencing. It
is important to highlight that the soup division is the cash cow (according to the
Boston Consulting Group product matrix) of Brannigan Foods, reaching up to 40% of
the companys total sales.

The most profitable product category this division has is the Ready to Eat Soups (RTE),
which accounts for a total of 71% of the total revenues, ($210MM in total). The Soup
Division has other product and brand segments such as: Dry Soups, Healthier Soups
and the Fast & Simple Meals.

Five years ago, a soup company named Anabelle was acquired to broaden the range of
products offered by introducing the Fast Meal category, and the strategy that has been
followed during the past few years has been to strongly invest in Dry Soups, Healthier
Soups and the mentioned Fast Meals.

Regarding brand awareness and value perceived by customers, Brannigan is behind
competitors in the following aspects:
Health trends
Diet claims
Convenience offerings
Flavors specially popular regional ones
Seasonal products outside of cold weather
For retailers the company doesnt seem innovative nor profitable.

Customers: A fact to point out is that Baby Boomers are the larger and most loyal
segment but they are getting older and their preferences are evolving into living
healthier lifestyles and consuming, in the case of the soup division, more salubrious,
low-sodium based products. As a counter part, this added value is not perceived by
younger target segments of the population, which look out for other incentives.

In general terms, consumers are seeking for innovations in the sector and new flavors
as well.

Juan Manuel Restrepo Davies

M Concepcin Aragons Cabeza

IE Business School
Competitors: New small competitors are entering the market with more convenient,
healthier soups and new flavors, which are gaining popularity among customers,
specially the Mexican and Asian tastes.

Some of the small competitors that represent an opportunity for acquisition and
increase of the brand portfolio of Brannigan are Roarin Cajun Foods, Brothers
Gourmet and Red Dragon Foods, which is the option the company is strongly

Furthermore, other important competitors, which represent a clear threat to the
company, are the Private Labeled soups, which have been increasing their sales by 5%
over the past several years. It is important to state that another drawback for
Brannigan is that retailers are decreasing the companys shelf space by 3% on a yearly
basis in order to provide extra space to their own private labeled products.

Collaborators: Retailers are a very important part for the strategic marketing decisions
of Brannigan; they provide the adequate channels to reach the end consumers.
Retailers and Brannigan must work hand in hand in order to increase net profits. The
disjunctive is that the relationship is becoming eroded since Brannigan intends to have
more shelf space for new products and retailers are decreasing the shelf space
availability to introduce their private labeled products.

The advertising strategy has been focused mostly on pull tactics, investing in
generating brand awareness. Yet, the push tactics, when it comes to the direct
relationship with retailers, are not efficient and can be a good point to emphasize on,
for future negotiations.

Context: As stated before, sales from the sector have been decreasing. The loyal
population (baby boomers) is becoming older and the new generations of consumers,
like the millennial generation, have not been targeted yet. In addition there is an
increasing concern in society for eating healthy and preventing obesity.

There has also been an incremental shift of demand for fast and simple meals that can
be cooked without taking too much time since peoples lifestyles are becoming more
focused on work and on an efficient use of spare time. It is important to note that
working mothers are a new segment that has increased over the past year and still
cook their food for their children.

Now, in order to take a closer look into the Processed Food industry, in which
Brannigan operates, we used Porters five forces tool to analyze the microenvironment
and the competitiveness that Brannigan is facing.

Rivalry among existing soup sellers: Based in our knowledge and taking as a reference
the real market, rivalry in the Processed Food industry is quite high since there are
many companies competing on price, quality, taste, health factors, product innovation,

Juan Manuel Restrepo Davies

M Concepcin Aragons Cabeza

IE Business School
and product usages and benefits. The main challenge is the fact that all the
competitors provide the market with almost the same product range.

In addition, private labels are also starting to represent a threat for Brannigan since
retailers are offering cheaper brands and products. The only way the company seems
to be competing with retailers is by offering higher quality and probably taking
advantage of economies of scale.

Threat of new entrants: The threat of new entrants is relatively low since most of the
companies of this industry are large and account for an important part of the market
share. The main barrier entries are:
High levels of advertising and promotion investment in order to generate brand
Difficulties obtaining shelf space. Retailers prefer known brands since they are
the ones that can afford intensive communication campaigns as well as point-
of-sale promotions in order to generate demand and hence, sales volume.

Threat of substitute products: This threat is relatively high since there are many fast
food restaurants that sell this type of products, which are even increasing due to a
shift in societys values, which are becoming more occupied with work and want to
invest the smaller amount of spare time they have in things other than cooking.
Furthermore, there are other products that satisfy the same need of a quick, tasty and
cheap course.

Bargaining power of buyers: Customers power is high since they are demanding more
innovative products and new flavors. In addition, due to the recession, they also seek
for cheaper prices, which fosters competition among producers.

Bargaining power of suppliers: We assume that suppliers have some power since they
can vary the quality of the raw materials. Another factor to take into consideration is
the prices that suppliers charge; due to inflation they would probably raise their prices
unless Brannigan builds win-win relationships with them.

And finally we made a SWOT analysis to take a closer look at Brannigan strengths,
weaknesses, opportunities and threats to identify possible new strategies and
implementation plans.

Brannigan is the current market leader with a high market share.
It has high brand awareness and withholds very good results in the top of mind.
Condensed and Ready to Eat soups are a part of the American culture and is
consistent in the all-around American diet.

Decrease in sales over the past three years.
Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza

IE Business School

A poor job in targeting new segments of the market derived from changes in
societys behaviors and values.
Internal teams of Finance, Marketing and Sales, R&D, and Simple Meals units
are not integrated with each other; this might derive form a lack of
communication between the teams.

Innovate with new products that are in line with consumers needs and that will
boost sales up to a 3-4% increase.
Generate creative solutions with retailers to create win-win situations.

Private labels grow steadily 5% per year and retailers seek new shelf space for
their products, reducing the shelf space availability for Brannigan.
New competition is entering the market with disruptive and incremental
innovations that threat Brannigans leader position and that have eroded its
A lack of coherent targeting, segmentation and positioning has created a gap
between the product offerings and what consumers really want.

The case states that four members of different departments of the soup division
proposed possible solutions to stop the decline in sales and market share of
Brannigans soup division. We stated their pros and cons and made a quantitative
analysis of the net earnings forecasts and cash flows to take the best possible decision
for the company.


1. Invest in the growing sectors
Srikant Tipha, director of the Simple Meal Units, proposes to emphasize the companys
efforts in the Simple Meals, Heart Healthy Soups and Dry Soups, by increasing an 18%
the investment in advertising.

Pros: The strategy focuses on products and brand that target growing segments of the
market. The consumers are beginning to shift into healthy lifestyles and easy to
prepare meals due to time constrains in their working schedules, and it works perfect
with Srikants division. (It is important to understand the personal motivations when
analyzing all the possibilities).

Cons: The strategy focuses on star products but leaves the cash cow (ready to eat
soups) behind. This is a mistake often made because star products want to be
promoted but if the cash cow, which finances the star products, loses profit, the
subsidy cannot continue. In addition, previous experience with Annabelles acquisition
process was slowly picking up but did not meet the expected growth forecasts.

Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza

IE Business School
In the chart shown below we can see that with this strategy Brannigans net earning
wouldnt increase, indeed they would be reduced by a 4%. This is why this alternative
is not a good one regarding the goal of increasing 3-4% the net earnings. (Exhibit 1
shows the calculations done in order to do this forecast)

2. Acquire product lines to complement the core growing sectors
Claire Mackey, director of Finance and Planning, proposition is to buy out small
companies to enter healthier and convenient segments that have new flavors and that
Brannigans product portfolio does not have. It is important to understand the
situation of the soup division, these new initiatives might be growing in market share
but their future is uncertain.

Pros: The acquisition might seem positive since the investment in R&D is literally null.
If the brands that are acquired are kept, there is an important reduction in
cannibalization effects.

Cons: A mayor investment has to be made in order to acquire a new company.
Sometimes the synergies between the companies are not stable enough and miscues
in the lines of production could occur. The past acquisition of Annabelles did not meet
the expectations, so the board of directors might not look at it with enthusiastic eyes.

In the calculations carried out we observed that this strategy wasnt profitable either
since Brannigans net earning would be decreased by an average of 7% per year.
(Exhibit 2 shows the calculations done in order to do this forecast)

Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza

IE Business School
3. Invest in organic growth from internally developed new products
Anna Chong, Chief Innovation Officer, shows an alternative by investing in R&D and
advertising and promoting new product entries. She outlines that it is important to
milk the cash-cows and subsidize the investment of the star products. She
proposes very original ideas, like new flavors that are appealing to the growing
demands of the public, new innovative packages and new usages of the soups.

Pros: Original ideas, and no need to invest heavily on acquiring a small company, which
avoids the risk of miscues in the production lines. The new innovations target different
segments for the soup division, specially the growing categories for healthy meals and
active lifestyles. One important innovation is to add new products for the Ready to Eat
category, which is the most profitable of the company.

Cons: Only one out of ten innovative products actually succeeds in the market and
becomes an established product in the companys portfolio; the remaining nine do not
last longer than two years. It is very difficult to assign exact costs to the products that
were created from inside the company. Moreover, adding new products with the
diminishing shelf space in the retailer stores represented another challenge for this
plan since new products would need a reduction of the shelf space from the Ready to
Eat soups.

With this alternative we can see that once again Brannigans net earnings wouldnt be
increased but instead decreased a 2% on average per year. (Exhibit 3 shows the
calculations done in order to do this forecast)

4. Invest in the core
Bob Pugh, director of Marketing and Sales, focuses his strategy on an increase in the
marketing expenditure by $20MM to increase brand awareness and restore it to
previous numbers. He also states a price decrease of the Ready to Eat soups by 5 cents
and proposes a $22MM investment in capital to enhance the manufacturing plants
efficiency and cut production costs.

Pros: The risk of introducing new products, that might not be effective in the market, is
reduced by 100% since it focuses on core products, primarily the Ready to Eat
products, which are the most successful products of the soup division.

Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza

IE Business School
Cons: Price reduction would harm the premium brand image Brannigan already has.
The investment in the manufacturing plants and in marketing adds up to $42 million, a
heavy investment that does not provide added value to the current strategy, which is
clearly failing.

In this case this alternative seems profitable, we can see that Brannigans net earnings
will be increasing during the next 3 years. (Exhibit 4 shows the calculations done in
order to do this forecast)


Based on the investigation and data analyzed for all the alternatives, we think that the
best alternative is a mix of the option three and option four. It is important to
understand that these options alone may not generate a stable and 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

IE Business School


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

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

Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza

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
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.

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

IE Business School

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

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


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


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

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

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


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

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.


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


IE Business School


Assuming that the Red Dragon brand is going to be kept as such

Juan Manuel Restrepo Davies
M Concepcin Aragons Cabeza


IE Business School



Juan Manuel Restrepo Davies

M Concepcin Aragons Cabeza