Pillsbury Marketing Plan
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The goal of this project was to develop a marketing strategy that will increase sales by 15% and yield a profit growth of 10% for Pillsbury Instant Gravy product.
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Pillsbury Marketing Plan
- 2. Pillsbury Marketing Plan Marketing Strategy for Pillsbury Instant Gravy Michael Lipton Anand Gautam Jacques Sahyoun Sheetal Jadhav
- 3. OBJECTIVE Develop a Marketing Strategy that will increase sales by 15% and yield a profit growth of 10%. Identify Key Issues SWOT Analysis Analyze the Market Market Research Test Market Tracking Success Marketing Strategy for Pillsbury Instant Gravy
- 4. Background Marketing Strategy for Pillsbury Instant Gravy Previously successful with Instant Potato (IP) product $10M market, 25% share Established contracts with suppliers Large consumer base Small sample packs of IP: Came from large contract leading to excess supply Sold as a 4-serving $0.10 packet Wide distribution Highly successful in terms of volume Pricing was at cost, break-even
- 5. Instant Gravy Issues Initial attempts at entering the Gravy market was highly unsuccessful. Sales were below expectations and just below trade acceptable levels. Causes: Sales force is smaller than necessary/usual Moderate level of TV ads failed to increase awareness Lack of stock Bad shelf location / visibility Despite taste, lumpy consistency and difficulty of dissolving made the product undesirable Marketing Strategy for Pillsbury Instant Gravy
- 6. Strengths • Known as innovative • Larger Sales-force • Brand Awareness is high • Taste is good • Strong R&D department • Established products Weaknesses • Quality is lumpy and hard to dissolve • Product commonly out of stock • No shelf dominance hence low awareness • Product awareness not increasing through advertising Opportunities • Complementary product • Competition is spread thin • Market is growing • Ability to move to higher visibility Threats • Product awareness low • Large competition • Variety of options/flavors already exist • Preconception of poor quality Marketing Strategy for Pillsbury Instant Gravy SWOT Analysis
- 7. Assumptions Marketing Strategy for Pillsbury Instant Gravy With reasonable R&D efforts, the lumpiness problem can be resolved. Packaging changes are easy; use pre- established methods. Standard cost of packaging. R&D costs will lead to a Cost of Goods (COG) increase by 25% Pre-mixed cans removes lumpiness concerns Have access to competition's sales figures Pricing is at 5 servings
- 8. MARKET RESEARCH Blind taste test Standing vs. Competitors Find reasonable price point Determine most popular flavor Pre-mixed can vs. instant box Contact established research firms Gather consumer data Target market Retailer research Bundled package placement Test Market Marketing Strategy for Pillsbury Instant Gravy
- 9. TEST MARKET – 4P’s Product: Instant potatoes with single serving instant gravy packet bundled inside Place: Grocery store at the Instant Potato shelf, eye level Promotion: Promotional sample sized serving Price: 1 serving List Price of Instant Gravy – $0.03 added to Instant Potato List Price (5-serving Gravy package list price - $0.15) Reasoning: Determine if there is interest in consuming our brand of Instant Gravy. If this provides positive feedback, then move on to the next marketing plan phase. Marketing Strategy for Pillsbury Instant Gravy
- 10. Bundled Pricing Adjustments Marketing Strategy for Pillsbury Instant Gravy R&D increases Cost of Goods by 25% -COGs - Originally $0.04 to $0.05 Gross Margin (IG) raised from $0.09 to $0.10 This increases List Price of IG from $0.12 to $0.15 (5 servings).
- 11. Research/Test Market Results Marketing Strategy for Pillsbury Instant Gravy No preference between instant and pre-mixed gravy Tastes comparable to mid-range gravies Market will accept various flavors Target market is middle and lower income families (housewife is main purchaser) Increase of Instant Potato market share with bundled packaging by 5% of total market (30% total). Bundled package placed amongst Instant Potatoes
- 12. Reactive 4 P’s Marketing Strategy for Pillsbury Instant Gravy Product: Instant Gravy in a box Instant Potatoes bundled (Keep due to IP market share increase) Place: Bundled is at eye-level in the Instant Potato section Box is still at the same location (above eye-level) Promotion: Maintain Moderate levels of T.V. support Utilize our vast sales force New packaging -Catered towards housewives (special recipes on the back) -Help consumers overlook cost increase of IG in a box Price: 1 serving list price of Instant Gravy – $0.03 added to Instant Potato list price (5-serving Gravy package list price - $0.15) Instant Gravy in a box price increased from $0.19 to $0.22
- 13. TRACKING SUCCESS/METRICS Continuously track product sales Monitor retailer product stock levels Adjust production accordingly Observe competition’s reactions Competitors are likely to retaliate. Survey present consumer preferences Expand flavor offerings if necessary Marketing Strategy for Pillsbury Instant Gravy
- 14. QUESTIONS Thank you for joining us today. Marketing Strategy for Pillsbury Instant Gravy
Notes de l'éditeur
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- Anand
- Anand Blind Taste test: Standing vs. Competitors: How our product tastes versus the pouch and can. Find reasonable price point: A blind taste test can reveal whether our products taste is comparable to Low, Med, or premium competitors. A blind taste test comparing an assortment of flavors can be used to determine if our existing flavor is marketable Comparing the taste difference between pre-mixed cans and instant boxes can help us decide if the instant gravy mix can generate sales against premixed cans/pouches. Contact established research firms We can utilize market research firms to determine who our primary consumers will be so that the future product can be tailored to the appropriate market. Retailer Research Contact Store retailers to find out where the new bundle pack will be placed. Will it sit at eye-level in the instant potato section? Test Market To test if there is consumer demand and in an effort to promote market awareness, the existing Instant Gravy Supplies will be bundled with Instant Potatoes.
- Jacques Product We chose to release a sample sized (single serving) IG because of the success seen with the Instant Potatoes sample. This sample is now bundled to gain exposure to IP vast market share and to place it on eye-level. A bundle will also provide a measure of how viable the product is. Are consumers willing to accept a small price increase in IP to get our gravy? Place Bundled. See above. Promotion See slide Price The new pricing of the bundle pack will cost $.03 more than the stand alone IP. This $.03 represents the List Price of a 1 serving of IG. This will be further discussed in the following slide.
- Jacques R&D increase: As stated previously, the R&D used to eliminate lumpiness resulted in a 25% increase in Cost of Goods. This means that the original value of $.04 is now $.05. Gross Margin: Since Corporate desired a %10 profit growth Gross Margin was increased from $.09 (error in handout, should be .08) to $.10. List Price: The increase in COGs to $.05 and GM to $.10 has resulted in a new list price of $.15 for 5 servings.
- Jacques This slide is pretty straight foreword. It represents the outcome of our previous market research. We also added that the bundle also benefited our IP’s market share.
- Michael Our marketing strategy represents a Reactive approach. This plan was developed based on the results of our bundle pack and market research. Product: We decided to continue with the IG in a box along with keeping the Bundle pack. This bundle pack managed to benefit both SBU’s (Strategic Business Units) so getting rid of it wouldn’t make sense. Also: Given the fact that the IG is still in a Box the bundle pack will continue to function as a means of getting our product placed at eye-level. Place See slide Promotion We plan to keep T.V. support at the same levels because we are primarily relying on the previous success of our bundle pack. With a vast sales force available and due to the lack of use previously, we plan to increase the sales force. New packaging: With a price increase from $.19 to $.22 a new packaging focused on housewives will be released. This will help attract more consumers and also help buyers overlook the price increase. Price The bundle pack will remain at the same amount as it was previously. (shown on slide) The IG will increase from $.19 to $.22
- Michael