Pillsbury Case

What are the key facts about this case?

In the Pillsbury Cookie Challenge case, General Mills Canada Corporation (GMCC) faces the task of improving the performance of its Pillsbury
refrigerated baked goods (RBG) category, with a particular focus on refrigerated cookies. Despite Pillsbury's dominance in the RBG category, the cookie
segment has experienced flat growth and declining household penetration. To address this challenge, GMCC conducted market research to gain insights
into Canadian consumers' preferences and behaviors related to Pillsbury RBG cookies. They found that Canadian consumers prefer scratch baking, value
convenience and taste, and associate baking Pillsbury cookies with creating happy family moments. To revitalize the cookie segment, potential strategies
include targeting convenience-seeking moms, positioning Pillsbury cookies as a special treat, educating consumers on their versatility, engaging children in
the baking process, and leveraging the brand's "shared secret" perception. Customized messaging for different consumer segments and continuous
monitoring of consumer responses are also part of the plan. GMCC is preparing to present their new business plans for RBG to the senior leadership team
in February 2007, with the aim of revitalizing the refrigerated cookie segment and improving the overall RBG category's performance.

What is the main problem?

Since the Canadian market hasn't historically produced much growth, all of the new product commercials that were used had to be modified for it (page
3).To enhance cookie performance in Canada, further market research was required to determine how the Canadian market differs from the American
market and how it is comparable (pp. 4). The team had to keep within a budget, which required that money be used as efficiently as possible. As a result,
some possibilities were eliminated, such as the extremely expensive TV advertising that could not be created (pp. 3). Marketers are slow to examine
demographic and consumer behaviour studies, thus tension was mounting upon the team.

- Boost volume grown/profit

- See the difference between consumer market of canada and us to design market strategy according to it
- Improve the refrigerated cookie segments performance by presenting RGB’S new business plan

Three alternatives are:

- Repositioning products in the market

- Modify product to create an appealing branding message
- Develop new marketing strategies focusing in Canada
Evaluation Critieria are:
- Repositioning products in the market

- Modify products to create an appealing branding message

In Canada, children have a significant influence on purchasing choices. One strategy was to alter the packaging to make it more kid-friendly.

It's important to use the proper terminology while communicating a brand to differentiate it from competitors. As a result, "When you don't have enough
time, Pillsbury will help to give you homemade experience" would be the best brand message for Pillsbury to use.

The phrase "Mom's choice with love for kids" is another possible option.

Have a marketing campaign that demonstrates to mothers how quick and simple baking is. Install billboards close to all supermarkets and in the heavily
inhabited regions of mother between the mid-30s and 40s.

- Develop new marketing strategies focusing in Canada

SWOT ANALYSIS

Strengths

The sixth-largest producer of food goods in the world Food products in more than 100 nations
Convenience and family appeal are well-known.
High return on investment, profitability (11.6 billions in 2006), and cost effectiveness
Effective research team (Consumer Insight)
held 85% of the market share in the RBG category.

Weaknesses
Volume growth was 1%, almost same.
Household penetration was now only 24%.
Adapted recent American advertisements and goods
Opportunities
moms and children are greatly influenced by persuasive TV advertisements
Unlock Canadian growth that may be accessed by future investment
The rise in "time-poverty" families or households is a result of the rise in RBG demand.
Strongly pessimistic opinions from both current and former users

Threats
stagnant expansion
Outstanding RBG rivals include regional brands and private label firms.
dramatic shifts in consumer and market behaviour

Key takeaway

While General Mills and Pillsbury have a number of advantages, such as a global presence, great brand awareness, and a commanding market share, they
also confront difficulties like stagnating growth, diminishing household penetration, and competition from players that sell their products under private
labels.

General Mills should concentrate on correcting weaknesses, such as flat volume growth and dependency on U.S. marketing techniques, in order to take
advantage of opportunities, such as successful TV advertising, unlocking growth in Canada, and adapting to changing lifestyles. To sustain their
competitive position and continue to meet consumer desires for convenience and family appeal, they also need to adapt to changing consumer behaviour
and market conditions.

Porters 5 forces

Threat of Entrants:
High obstacles to entrance: Because it costs a lot of money to set up production facilities and distribution networks, the RBG sector in Canada has high
obstacles to entrance. With an 85% market share, General Mills enjoys economies of scale that new competitors would find difficult to match.
c. Strong Brand Loyalty: In the Canadian market, Pillsbury has a reputable and well-established brand. For new entrants who would need time and
resources to develop a similar degree of consumer trust, this great brand recognition poses a barrier.
c. Regulatory Obstacles: Both regulatory regulations and quality standards apply to the production of food. Starting from scratch is less appealing since
complying with these requirements increases complexity and expense for new entrants.

Bargaining Power of Suppliers:

Dependence on suppliers: As a major participant in the RBG market, General Mills probably has a lot of negotiating influence with its suppliers. General
Mills may be the source of a sizable part of business for suppliers.
b. Bulk Purchasing: Because General Mills needs so many ingredients for RBG products, it can bargain with suppliers for better prices.
c. Alternative Suppliers: To lessen supplier influence, General Mills might expand its network of suppliers and build connections with several of them for
essential ingredients, minimizing reliance on any one supplier.

Bargaining Power of Buyers:

Pillsbury's target consumers, who are predominantly women and families, have a strong brand loyalty. This devotion provides Pillsbury some sway over
customers' decisions.
Cost of Switching: Although consumers have other options, such as handmade cookies, Pillsbury cookies have a certain level of switching costs because to
their ease and emotional appeal.
c. Consumer Preferences: By offering distinctive value, Pillsbury can strengthen its position with customers by focusing on their needs and preferences.

Threat of Substitutes:
a. Homemade Cookies: Homemade cookies represent a primary substitute for Pillsbury cookies. This option appeals to consumers seeking a more personal
and potentially healthier baking experience.
b. Ready-Made Alternatives: Consumers can also choose ready-made cookies from other brands or private label options as substitutes for Pillsbury
cookies.
c. Product Differentiation: To mitigate the threat of substitutes, Pillsbury should continue to differentiate its products by emphasizing convenience, taste,
and the emotional aspects of baking Pillsbury cookies.

Competitive Rivalry Within the Industry:

a. Market Dominance: General Mills, through its Pillsbury brand, holds a dominant market share of 85% in the RBG category in Canada, giving it a strong
competitive advantage.
b. Regional Competitors: While Pillsbury dominates, there are regional branded competitors like Weston Bakeries, and some private label players compete
in the market, creating moderate competitive rivalry.
c. Differentiation: To maintain its competitive edge, General Mills should focus on product differentiation, advertising, and promotions to continually
attract and retain consumers.
Key takeaway
General Mills, through Pillsbury, holds an 85% market share in Canada's refrigerated baked goods (RBG) category, indicating significant barriers to entry
due to capital requirements and brand loyalty. Pillsbury benefits from loyal consumers, primarily mothers and families, granting some power in influencing
buyer choices and mitigating substitutes. General Mills likely has strong bargaining power over suppliers due to its volume and supplier dependence,
enabling cost control. While Pillsbury dominates, regional competitors and private labels result in moderate competitive rivalry, emphasizing the need for
differentiation and effective marketing. Substitutes like homemade cookies exist, but Pillsbury can counter this threat by emphasizing convenience and
emotional appeal.
Heat Map

High Importance (Red):

Understanding the company (General Mills Canada Corporation) and the product category (Pillsbury refrigerated baked goods) is crucial as they set the
stage for the business challenge. The primary challenge of boosting the performance of the refrigerated cookie segment is of high importance as it's the
focus of the case. Insights gained from the usage and attitude study, such as Canadian preferences for scratch baking and the emotional connection with
Pillsbury cookies, are highly relevant and significant for solving the challenge. Potential strategies, including targeting convenience-seeking moms,
positioning Pillsbury as a special treat, and engaging children in the baking process, are vital for addressing the challenge.

Moderate Importance (Yellow):

Pillsbury's dominant market share in the RBG category is relevant but not as critical as other elements. The presence of competition from private label
brands and regional products is significant but falls into the moderate importance category. The plan for continuous monitoring of consumer responses and
tracking sales is relevant for strategy evaluation but is not as crucial as the primary challenge.

Low Importance (Green):

The mention of conducting market research is important for context, but the specifics of the research process can be considered of lower importance. The
fact that there's an upcoming presentation to the senior leadership team is mentioned but is less important compared to the other elements. While
customization of messaging is relevant, it is discussed briefly and doesn't carry the same weight as the primary strategies.

Key takeaway

The heat map helps stakeholders focus their attention and efforts on the most critical aspects of the case, ensuring that the strategies developed to address
the challenge are well-informed and prioritized based on their potential impact.

Target Convenience-Seeking Moms: Focus marketing efforts on moms looking for convenient baking solutions.
Position as a Special Treat: Position Pillsbury cookies as a special treat for families.
.
Educate on Versatility: Educate consumers on the versatility of Pillsbury cookie dough for various occasions.

Engage Children in Baking: Develop marketing campaigns that encourage children to participate in the baking process.

Leverage "Shared Secret" Perception: Emphasize the idea that using Pillsbury is a shared secret for creating special moments.

Decision Matrix:

Target Versatility of Shared secret

convenience Special treat for pillsbury cookie Engage children that creates
Criteria seeking moms families dough in baking special moments

Impact on Sales High Moderate Moderate Moderate High

Consumer Alignment High High High Moderate High

Cost-Efficiency Moderate Moderate High High Moderate

 Feasibility High High High Moderate High

Total Score 15 14 17 12 17

Conclusion:
In conclusion we would recommend General Mills Canada (GMCC) to choose option Both (1) & (2) as it will boost the sale volume and help the
company to show up as the brand new face. The Pillsbury refrigerated baked goods (RBG) category, particularly refrigerated cookies, has faced challenges
in terms of flat growth and declining household penetration. Consumer insights reveal that Canadian consumers prefer scratch baking, value convenience
and taste, and have an emotional connection with Pillsbury cookies. Pillsbury is perceived as a brand that can transform ordinary moments into something
special, creating an emotional bond with consumers. Continue targeting busy mothers who seek convenience in baking for their families. Emphasize the
ease of using Pillsbury dough while delivering great taste. Promote Pillsbury cookies as a special treat that brings joy and togetherness to families.
Highlight the emotional aspect of baking and sharing these cookies. Showcase the versatility of Pillsbury cookie dough by offering customization options.
Encourage consumers to add their unique touches to the cookies. Create promotions and bundles that incentivize consumers to purchase Pillsbury cookie
dough alongside complementary products, such as ice cream or toppings. Acknowledge the influence of children in driving purchases. Develop marketing
initiatives that involve children in the baking process or encourage them to request Pillsbury cookies. Consider introducing healthier variations of Pillsbury
cookies to cater to health-conscious consumers without compromising taste. Emphasize that using Pillsbury is a way to create something special and share
delightful moments with loved ones. Tailor marketing messages to different consumer segments, addressing their specific needs and concerns. Collaborate
with retailers on in-store displays, promotions, or exclusive offerings to boost sales and visibility. Continuously monitor consumer responses and sales to
evaluate the effectiveness of new strategies.

Works Cited

Ivey Publishing - Ivey Business School, www.iveypublishing.ca/s/product/pillsbury-cookie-challenge/01t5c00000Cwr5jAAB. Accessed 20

Sept. 2023.