SYEDA ZAUWIA RIAZ WRITEN ANALYSIS CASE PILLSBURY COOKIE CHALLENGE EXECUTIVE SUMMARY ‘The case discusses the challenges faced by the Canadian Pillsbury Refrigerated Baked Goods (RBG); the declining performance (sales) of the cookie line segment has caused the management to rethink their strategy. The marketing manager is under a lot of stress to come up with a strategic plan that could help turn around the performance of the cookie segment before a serious. problem takes hold. In order to gain useful insights about consumer attitudes, preferences and behavior towards their product, Ivan Guillen - the marketing manager, decides to conduct a market research with the help of consumer insight team. In addition to gaining an in-depth "understanding of consumer preferences and attitudes towards the category, the research was also ‘aimed at finding out the des attributes and perceived brand image of the product, What I analyzed from the ease is that the company was focusing too much on the product and Was ignoring the most important variable in the equation — the end consumer, Furthermore, 1 bel fe, they somehow missed a very important target segment ~ kids as they were targeting mothers (age 30-40) only, The company needs to redesign their marketing strategy, needs to come up with powerful ATL and BTL campaigns to attract customers, not to mention the overall marketing strategy needs to be customer-centric, New products especially made for the Canadian market should be launched with tailored advertisement campaigns, STATEMENT OF THE PROBLEM TPsSYEDA ZAUWIA RIAZ #1: What ave the challenges thar Fvan Guillen faces? ‘The largest intemational segment of the General Mills Inc; General Mills Canada Corporation (GMCC) is the market leader in packaged food market. There are four business units in the ‘Canadian division: snacks, baked goods, meal and breakfast; these business units are in turn divided into 12 categories and RBG or refrigerated baked goods is one of the most profitable product categories of GCC. ‘Challenges Faced by Ivan Guillen ‘The challenge faced by Ivan is big; he is the marketing manager of the RBG ei exory and he needs to come up with a solid strategy to tumaround the segment. Over the past $ years, the category has experienced only moderate growth. Pillsbury dominates the refrigerated baked goods category with 85% market share. Represei 1g 62% of the total unit volume (of the category), cookies are the most profitable SKU’s in the RBG category. Ivan believes that in order to turnaround the segment’s performance, he needs to focus on growing the refrigerated ‘cookie segment, Now the situation is that, this segment is experiencing issues in terms of sales performance; sales Volumes between fiscal 2004-2006 has remained almost flat at 1% and the household penetration ‘of has also decreased to 24%, In order to design a strategy that works for the segment, he needs. to understand the possible reasons of declining performance of the segment and for that he calls for a market research to gain useful consumer insights. The primary objectives of the market research were to find out: if there was an issue with the taste, the brand message, oF the target market. 2|PazeSYEDA ZAUWIA RIAZ, net See) Canada enc) RCo Reet rc orn ae} (not ‘Canadian region MARK EARCH PROBLEM MANAGEME! T PROBL ETING RI What are the underlying drivers and motives that drive | To design a mind-blowing, consumer: ‘Canadian customers to buy cookies? centric marketing strategy to turnaround The research objectives are: the segm nt's performance by boosting * To understand the product usage and attitudes of | safes volume, inereasing —househokd suipammieny tgwardy REG caphieg: penetration (oF the cookies) and to improve + To gain insights about customer preferences overall growi of the RBG towards the brand and t ¢ product * To find out the underlying cause of deetinin performance with a focus on figuring out whether the issue lies in the product formula, the brand audience and to find the arities in terms of attitudes & behavior of 'S and Canadian consumersSYEDA ZAUWIA RIAZ Short-Term ys, Long-Term Problems SHORT-TERM PROBLEMS LONG-TERM PROBLEMS Unsatisfactory perfiormanee; Mat sales volumes Hence, the short term goal was to improve volume growth by redefining the marketing mix of eookies ‘Decreasing howschold penctration ‘The long-term goal was to improve penetration (cookies) and improve the overall growth of the RBG category ($-7% annual growth) ‘The market research is done and now Ivan needs to use the findings of the research to design a strategy that effectively answers all concerns, His focus is on leveraging the research findings to- increase the purchase frequency and market penetration of RBG cookies, to define the target market, brand message, and how to communicate the message in a way that results in increased sales, 4|PageSYEDA ZAUWIA RIAZ I, CAUSES OF THE PROBLEM #2 what are consumer insights? What type of busines challenges ean benefit from consumer insights? How are consumer insights obtained? Before dis wussing the causes of the problem in detail, I'll answer the question on consumer insights based on what I've learned from class lectures. Consumer insight’, in simple words is the understanding of your customer based on their behaviors, attitudes and preferences. Few things are as complex as understanding what drives your consumer's attitudes and behavior and this is where consumer insights come in, Conducting market research activities to gain useful information about consumer attitudes and behavior is nothing new. Nevertheless, with changing demographics, consumer preferences and influx of new businesses, businesses are spending a big. ‘chunk of their marketing budget on market research activities like these, In short, consumer insight is an in-depth understanding of customer needs and wants and is essentially the interpretation of their preferences, beliefs and experiences. Businesses ean leverage the power of customer insights by making use of critical information to address issues related to the performance of their products in the market, before introducing new products, to obtain feedback about their products and services, and when designing marketing strategies to make sure they're aligned with the needs of the customers, to name only-a few. ‘Consumer insights are obtained through market research either conducted by intemal marketing, team of a company or a research agency. The research could be qualitative or quantitative and may include focus groups, in-depth interviews, surveys, product testing/usage, attitude surveys and KAP studi S|PageSYEDA ZAUWIA RIAZ Ivan engaged the consumer nsights team to conduct an in-depth research on consumer preferences and attitudes because he wanted to understand the underlying causes of the two major challenges that RBG cookies scement was facing - declining penetration and flat volume growth. From the ease, we know that RBG eategory is highly dependent on the performance of thei illsbury cookies because they constitute more than 60% of their total category sales volume. However, even though, the category held a leadership position in their sales volume remained flat at 1% ftom 2004-06 and the penetration had fallen from 24%, | believe one of the major causes of the problem is that GMCC despite being an autonomous di ion, leveraged new products & advertising campaigns from the US region, primarily due to high production costs and because of low brand budgets in Canada, ignoring the differences in ‘consumer taste, attitudes, preferences, and behaviors of Canadian and US consumers. The research also revealed that there were significant differences between the Canadian and US ‘customers, which demanded due consideration. Secondly, the company was targeting mothers aged 30-40, a very narrow target market, The values offered were taste and ease. I believe they missed out the most profitable target market when defining their target audience — kids and teens and young people. Furthermore, the value offered also needs modification like rich, luxurious ‘experience, cherishing good times — something that touches their emotions rather than talking about the physical attributes of the produets only. #3 Given the key leanings from usage & artinude study, what are the corresponding implications for what actions the team should take? ‘The primary objective of the attitude survey was; fo gain insights on the product usage behaviors and attitudes of Canadian customers and to find out the similarities and differences in the 6|P aSYEDA ZAUWIA RIAZ attitudes, preferences and behaviors of Canadian and US customers. ‘Sereeners method” was ‘employed by the research agency to screen the participants for the study by asking a set of questions, Based on their responses they were divided into three main categories: 1. Users = who had bought the Pillsburry cookies during the last 12 months 2. Lapsed users ~ who bad last purchased the Pillsburry cookies about a year ago 3. Non-users = who never bought the RBG cookies (these could be the potential customers) Canada, Serateh Canada vs, US | baking is more market popular Praduct Usage (Canada Canada — 56%, from scratch (from the very first step), This could be because they either love baking or their experience: with alternatives is not g00d enough to convince them to use alternatives oF ready to bake products, Key Findings Interpretations Implications Most Canadian people like | GMCC needs to rethink Compared to baking different things | their product proposition ‘and focus on offering something like a memorable, luxurious or a fun-filled baking experience instead of talking about ease and convenience, 71P aSYEDA ZAUWIA RIAZ "Table 1: Purchase Drivers in Canada vs. US Tnierpreiatfons Implications Canada | US “The brand is more : - The advertising strategy was not “Like the liked in the US 45% | 52% tailored according to the needs & brand” compared to Canada preferences of the Canadian market Tnaddition to advertising sirategies, ‘The flavors offered | the company is also leveraging new "You like the are also liked in the produets from the US, whieh clearly flavors that | 31% | 40% ° . US more compared to | doesn't mest the unique taste are offered" Canada preferences of the Canadian consumers Ta terms of favor & experience, the Product leveraging from the US is Canadian customers | doing the company more harm than did not like the | good, They might be able to save i 31% | 36% | cookies much and | new product development costs but cookie ‘oe only 31% thought | by ignoring the preferences & needs oul they were similarto | ofthe Canadian customers, they homemade cookie ‘were experiencing problems dough ‘The brand awareness needs to be Canadian consumers | improved; seeondly customer Formy own | xg | sane | ete lessconnected | indulgence factor is missing. indulgence” with the cookie brand | GMCC needs to incorporate both compared to the US. | these elements in their ATL and consumers ! Exhibit 7 — Casestudy BIP aSYEDA ZAUWIA RIAZ “Isa high-quality 29% [41% ‘cookie dough’ Tn Canada, the RBG cookies are not considered a quality substitute for baked goods that are made from serateh The brand message should talk about the nutritional ‘and health benefits of cook "Makes the right 23% [33% amount of cookies" ‘Canadian customers are not satisfied with the amount of cookies in the pack Demographic information of the Canadian consumers including the family size, meal size ete needs ta be employed "Helps you create a | 19% [24% happy/warm home" This value was never emphasized upon by GMCC and is reflected from the findings as well Information regarding consumer attitudes and behaviors is needed to offer a lusirions, heart-felt experience to consumers #4 Develop perceptual maps fo are the implications from these maps? 9[Page + potential targets (users, lapsed users and potential wsers). WhatSYEDA ZAUWIA RIAZ ?Table 2: Perceptions of Different User Types in Canada Findings Lapsed | Non Interpretations Implications Users: Users. | Users Users and lapsed users both agree to the They're already “Is So casy, you convenience and quick promoting can make them bake attributes offered by | convenience offered 92% | 86% | 58% in a spur of the the product. Morethan | by the cookies, so moment” 50% non-users also agree | they should continue with these attributes promoting these attributes "Is an easy way Both users & lapsed two make cookies | 89% | 82% | 46% users agree with the without a mess" In addition to benefits offered by the . “Is good when | ‘convenience, they 86% | 73% | 36% | RBG cookies, Non-users, am ina hurry" should also promote however, weren't vi "Ip casy to clean “| these benefits that are 83% 82% 45% much convinced about up" . OO) offered by the these benefits for obvious | “Can be kept in cookies reasons of course hand for when | 80% | 74% | 48% needed” > Eshibit & Cave study 10| PageSYEDA ZAUWIA RIAZ Users and non-users both ‘The company can "For making, aren't much convinced | promote the idea of something | 48% | 31% | 30% | that the product could be | making special used for making: recipes from the something special product Both users and lapsed | The company can "There are users agree that there | introduce the product recipes on aren'tany recipes | with different recipes 16% | 17% | 14% package that | mentioned onthe | printed on the use packages that they could | package to improve use ‘the product appeal Brand awareness Both users and lapsed needs to be users agree that they “Luse the dough ‘emphasized upon in don’t use the dough for inmyown | 10% | 4% | 19% addition to recipes creating th own recipes ‘communicating product usage to consumers U[PageSYEDA ZAUWIA RIAZ #5 Why did Guillen and his team conduct the in-home and discovery workshops? While the usage and attitude surveys offered useful insights on major differences between US and Canadian consumers, these didn’t answer a very important aspect of branding: does the product experience resonate with most consumers? This information was very crucial for designing a powerfull commu ication message. ‘Two research studies; in-home immersions and a discovery workshop were then conducted by cengaging a marketing agency, TerraNova Market Strategies, Ine. 1, In-home immersions — Also known as Ethnographic Research, the primary aim of in- home immersions to gain an in-depth understanding of consumer actions, motivations and preference with regard to the product. For the purpose af this research, mothers (the: target market) were asked to buy cookies beforehand and bake them when the research team vi ed them, Inshome immersions revolve around immersing yourself in the world of consumers and observing them in their environment, To gain a more realistic, dynamic view of the consumer and the consumer-brand relationship while getting to know about other important things like the kitchen type, the cooking rituals etc, in-home immersions. were conducted by Guillen, ‘house immersions, 2. Discovery Workshops — The discovery workshop is very similar to i the only difference is that these take place outside the homes of research participants, Another difference was that these workshops were collaborative in nature and for the purpose of research 18-27 were invited for a working session. The workshops were designed to provide a relaxing environment to consumers where they could comfortably share their experiences, thoughts and opinions about the product. A number of techniques. 12|PageSVEDA ZAUWIA RIAZ were used to help consumers express their honest opinions including role playing, customer-experience mapping. 13|PageSYEDA ZAUWIA RIAZ Iv. RECOMMENDED SOLUTION, IMPLEMENTATION & JUSTIFICATION 46 What actions should Guillen and his team take? | propose the following recommendations: Tailored Marketing Campaigns - GMCC needs to design their own marketing campaigns and stop leveraging the US campaigns, Campaigns from the US could be used only when products match the preferences of both markets (US and Canada) and not for every single product. Consumer-Centrie Approach — The marketing campaigns of the company are product- centric and needs to be changed, It needs to be more consumer-cent Target Market (Finding New Customer Segments) — The target market needs to be redefined, They are currently targeting mothers only, they need to include explore other target markets, such as kids, teens and young people. Promotional Campaigns — The element of fun, interest and entertainment should also be included in the advertisements for teens and kids. It is a known fact that kids are the main drivers of purchases by mothers, The clement of emotional connection is issing in the campaigns, which needs to be added. All these elements including ease of use, mul purpose, and nutritious should be efficiently communicated through their BTL and ATL. activities New Products Development ~ More products need to be offered especially for the Canadian region, with customized recipes for the market, They ean also collaborate with some cooking show ~ a sponsored cooking show that promotes the multiple uses of the product in different recipes. 14[PageSYEDA ZAUWIA RIAZ ‘The marketing campaign needs to be aimed at: 1. Promoting multiple uses of the product (market development) 2, Reach out to new consumer scaments (kids, teens, young people) ~ (market development) 3. New product development — products designed for the Canadian market keeping their preferences and needs in consideration, REFERENCES: 1. Bryman, A, and E, Bell (2003), Business Researeh Methods, Oxford, Oxford University Press 2, Sue Greener (2008). Business Research Methods, [SBN 978-87-7681-421-2 15|Page