Oscar

Mayer:
Strategic
Marketing
Planning

Group 1
Ashish | Devansh | Ishwar | Pratik | Preeti | Vaibhav
Scenario

• Change in consumer preference: Product portfolio out of alignment with consumer trends
• Decrease sales in red meat
• Louis Rich Inc. acquisition
• Turkey based line of product, low in fat & Price
• Increase in the sales of white meat
• Consumer concerned with notorious and convenient food option
• Thus long term strategy required

AI & Content Marketing
Alternative-1: Introduction of a New Product line Associated with
Healthy Foods and Beverages
Pros:
• Ability to target large
number of customers i.e.
health mindful customers
• Satisfaction of the social
responsibility by settlement
of the harmful items with
healthy items.
• Might be carried out within
few years i.e. 3 to 5 years..
Cons:
• Danger of failure of the new
items in the market i.e.
customers might not like the
taste and may decline the
much healthier products due
to the addictive nature of
hazardous items.
• Substantial expense of
research study and
advancement needed to build
new healthy products.
Pros & Cons
Alternative-2: High level Acquisition of Health related Companies
Pros:
• Saving of huge quantity of research study and advancement
costs for new product development.
• Incorporation of new items within 2 years.
• Capability to target large number of consumers i.e. health
conscious consumers.
Alternative-3: Replacement of Hazardous Products with Healthy Products in the Portfolio
Pros:
• Ability to target a great deal of
customers i.e. health conscious
customers.
• Fulfilment of the social responsibility
Cons:
• Requirement of substantial quantity of capital.
• Threat of failure of the brand-new products in the market
i.e. customers may not like the taste and may not accept the
healthier items due to the addictive nature of dangerous
products.
Cons:
• Risk of failure of the brand-new items in the market
i.e. customers may not like the taste and may decline
the much healthier products due to the addictive nature
of hazardous products.
• Big expense of research and development required to
build new healthy items.
• Number of years needed for the execution.
• Shift of focus from the core competencies.
What changed the
president’s
perspective?
• He had competent and passionate team so they gave good
recommendation as per their area of expertise.

• Instead of choosing one solution, by combining the most

profitable suggestions, he could increase profit while holding
on to the Oscar Mayer brand image.
 Problem
identification from
McTiernan report
What strategic
decision-
making Selection of mixed Took managers
process does solution input

McGraw
pursue?
Analyse the
proposed solution
If McGraw chooses a strategic direction that favors only one department, what
negative effects could this have on other departments? How can McGraw mitigate the
damage?
• Favoring one department over other might increase the risk of loosing customers of the other department

• It will be against the emerging trends and preferences of customers

Favoring OM • Pumping resources in the category with declining trends since last few years might not
provide adequate returns

• It will cannibalize the main product category OM

Favoring LM • It will result in ignoring major revenue generating segment with 82% share in total profits
• Highly risky as redirecting investments from OM to LM will result in loss of revenue
generating channel if Louis Rich fails to capture the market

• It may also have some serious impact on the functioning of other departments
• Each department manager has proposed the solution that best favors their own department be it in terms of budget or sales
• If McGraw decides to go for the solution proposed by one manager say LR, it might create a perception in other departments that LR
is prime brand of the company

How to mitigate the Damage:

• It should be a balanced decision in favor of both the departments as one business is in maturity stage and acting as cash cow, while other is
in growing stage with potential in coming years
• It might also create distrust among two organizations of same company
• McGraw needs a mix solution that not only favors one department or one division of the company but the company. He needs to combine
all four proposed solutions and then produce a strategy that is not only best for the company but also it does not negatively affect
functioning of any department
What effects is the change in the strengths and weaknesses of
competition having on Oscar Mayer? How does this impact the
investment decision?
First of all, let’s list the Strengths and Weaknesses.
Strengths: Well-known Brand, technology Skills in R&D, Strong Distribution Channels, Relatively High Market Share, High Profit Margin,
Successful History and Product Diversification.
Weaknesses: Relatively High Price, Not Healthy (High fat content).
Oscar Mayer has a relatively high market share already, and a relatively low market growth. Due to its strengths, it already has a high market
share and due to its weakness and the new trend in the market which is looking for products with lower fat (healthier), and lower prices, Oscar
Mayer is losing its market growth. This is obviously a great threat to Oscar Mayer in terms of competition since the consumers are now looking
for lower prices in those products, as well as healthier meats. This is detrimental to the firm on its entirety as fewer products sold would mean
fewer sales which mean less profit.
The competition also affects the “second brand” since the decrease in sale of the Oscar Mayer products also affects Louis Rich as it is looked as
a total, thus Louis Rich revenues are compensating for the loss in Oscar Mayer. The investment decision then will change.
The objectives are to increase annual production growth over the next three years by 4% in volume. Products will need to be reduced due to
the competition this affects how much to invest in quality and on the outstanding strength on Louis Rich in order to keep up the good record.
There is much advertising and promotion to do; therefore they might have to lower the budget figures for this expense if sales decrease. They
need to advertise on the already existing products, such as the health aspect of it, as well as on new products that will be produced. Therefore
Oscar Mayer needs to ensure that they can prosper in the competition with all the expense that waits.
Most viable: Eric
Stranger Proposal to
reinvigorate the Oscar
Mayer Brand

Reasons:
• Powerful brand reputation with retailers and
consumers
• 82% of the company profit is from Oscar Mayer
division
• Prices should be cut to bring the brand back into
the competition and to gain the customer's trust
• Enough R&D to formulate new products with
low fat and salt line to counter the increasing
trends of staying healthy
• A&P budget should be increase to restore fair
share for the brand
2nd most viable strategy: Jane Morely strategy Least viable strategy: Jim Longstreet for new product
launch
Reasons:
Reasons:
• Acquiring new plants which produce convenient and
healthier products • Risk of failure of new product line is higher in the
market
• Acquiring Chicken Rite Inc. and Crabbies Inc. can help
in expanding new products with more nutritional and • Customers may not like the taste of the new product
conventional value as per trends
• The failure of new product may also reduce the brand
• Turkey Time ltd. Can work as extension of LR. reputation in the market which is high risk
• Most viable acquiring would be of Turkey Time ltd. As • Competitive environment is higher than ever before
it is highly related to LR and company could capitalize
on the experience of LR
• Also LR could fully use the plant capacity in Turkey
Time ltd.
What strategic course
They should upsurge the OM Brand to increase the market
should the division A
share and should promote LR as flanker brand
of OM. It will assist them to introduce better ideas for

pursue? packaging and positioning their product lines. It will also

strengthen the distribution of their products and will
create a superior brand image;

OM have passed through the steps of

growth and created a best brand image
among the readymade food industry.
Having complete understanding of its past, B Invest more in A&P for LR products as
it shows great potential for growth;
present and future position will led OM to
the successful market strategies. But still
there is some room for improvement.

C Increase investment in R&D to formulate low fat

and salt line of OM products;

OM must reduce the prices because of the increasing

D threats from US imports of consumer ready food

products and also given their product details. They
can increase their efficiency to offset price cuts;
Which of the Jim Longstreet’s new product
ideas is likely to succeed? Why?

01 Zappetite brand can have

growth of 18.75% as this
segment of white meat is
This is ready to
eat food. It 02
requires only 60
growing at faster rate seconds to
than the Lunchable white prepare the food.
meat segment which
grows at 14.5%

Penetration of
06 So there is more
chance that
microwaves is
more in the
03
Zappetite is market. Hence
more likely to Zappetite is
succeed. more likely to
succeed

Lunchable involves
plastic trays with some Market launch
lunch recipes. This will will be within 6
add up to the overall to 8 months for

05 cost and will require

more investment.
Zappetite.
04

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