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.

1. Pillsbury Instant
Gravy

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