Five recommendations for Progresso soup to attain market leadership position and financial impact of implementation

1. Progressing Progresso:5 Year Consumer-Focused Strategy for Market Leadership December 17, 2008 Team C6: Margaret Gentile Satoko Hirai Christopher Powers Matthew Redmond Alex Sirkin Steven Wang

2. 2 Agenda

3. 3 Agenda

4. 4 Executive Summary Implementation of our recommendations will increase our Net Present Value 19% to $2.7 billion

6. 6 Industry Overview Progresso is a strong #2 competitor in $1.6 B Ready-to-Serve (RTS) wet soup industry1 2 Progresso Soup Sales by Product Line3 4 weeks ending 12/01/07 RTS Sales by Brand2 1 Calculated with equivalent unit data from AC Nielsen 2 Mintel Report: Soups – US – 2008 3JP Morgan Analyst Report from Jan 08, 2008

8. Product innovation

9. Good turn-over on booked sales1

10. Brand indifference of consumer

12. Continue exploring healthy eating options targeted towards women

13. Targeted ethnic-based marketing programs

14. Campbell’s push into healthy offerings through Select Harvest brand (Healthy Request line)2

15. Private label growth

16. Commodities prices and effects on inventory1 AC710 Presentation by Six Sigmas on General Mills; GIS: Financial Ratios. investing.businessweek.com 2 Campbell’s Select Harvest Website URL: http://www.campbellsoup.com/select.aspx

17. 8 Agenda

18. 9 What Are Our Touch Points? “Each branding campaign should seek to identify ‘touch points’ — the media or location where it makes the most sense to locate and contact the target consumer.” Mark Addicks CMO, General Mills1 1 Knowledge@Wharton, November 20, 2008, http://knowledge.wharton.upenn.edu/article.cfm?articleid=2097 Emphasis added

19. 10 Online Community Plan Goal: Engage Progresso consumers in two-way communication via the launch of an online community Action: Introduce integrated marketing Provide a space for promoters to celebrate the brand Expectation: Increase Net Promoter Score Build brand preference

20. 11 Importance of Women on RTS Purchases Diet Programs Generation Z Decider Approver Buyer Baby Boomers Generation X Generation Y Generation Z

21. 12 Integrated Marketing Open Brand Engage consumers Two-way communication PRODUCT PACKAGING DISTRIBUTION CRM ADVERTISING CONSUMER Chart from Professor Melvyn Menezes‘s Course Materials

22. 13 Engage Promoters Small groups of enthusiasts dominate online conversations1 New community website will include: Recipe forum for including Progresso as part of a home-cooked meal Weight-loss community Customer feedback on new product introductions 1 Marketing VOX Magazine

23. 14 Agenda

24. 15 Progresso Light: Opportunity “The sharp increase in those claiming to be watching their weight suggests a cultural shift to more awareness of food and relationship to overall health. There is a great opportunity for marketers, food retailers, and restaurants to focus on healthy eating—for the sake of overall health.”1 Mintel – Marketing Health to Women 1 Mintel – Marketing Health to Women – US July 2007 Emphasis Added

25. 16 Progresso Light Product Plan Goal: Expand into the women’s Weight Watchers and self-designed diet markets Action: Increase number of SKUs by 10 each in 2010 and 2011 Expectation: Gain 42% of diet segment by 2013 Win over early adopters and early majority New product lines account for $342 million per year in additional retail sales

26. 17 Current Diet Demographic Share Progresso Light Adoption Curve Current4 Innovators Early Majority Early Adopters 1 & 2 Estimated through “Interest in Dieting Slims Down; More Accepting the Extra Pounds,” The Boston Globe & http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&- 3 Estimated through Mintel - Soup - US – September 2008 , and 1 & 2 4 Estimated through http://www.quickmba.com/marketing/product/diffusion/

27. 18 Entrance into Early Majority Progresso Light Adoption Curve Projected 20133 Innovators Early Majority Early Adopters 1 http://www.progressofoods.com 2 Findings through primary survey data 3 Estimated through http://www.quickmba.com/marketing/product/diffusion/

28. 19 Agenda

29. 20 Which Do You Prefer? Images: Margaret Gentile

30. 21 SoupServer Plan Goal: Improve relationships with both retailers and consumers Action: Introduce SoupServers to 500 stores per year Expectation: Increase in sales of 5% in each store that installs the SoupServers1 1 Campbell’s Comes Out, http://www.strategymag.com/articles/magazine/20060701/biz.html

31. 22 Campbell’s IQ Maximizer Represents a shift in advertising philosophy Makes it easier to keep product organized on shelves1 Improves shoppers’ perception of the brand 79% of consumers say it makes shopping for soup easier2 Reduces shopping time from 58 seconds to 8 seconds3 Improves soup sales by 3.5 - 7% in any store in which it is installed4 5 1 Supermarket Displays '05, http://www.creativemag.com/supermktdisp1105.html 2 Forum for Consumer Products and Retail Leadership, Vol. 7, No. 4, http://www.gmabrands.com/awardssurvey/campbellcpgaward.pdf 3 Supermarket Displays '05, http://www.creativemag.com/supermktdisp1105.html 4 Campbell’s Comes Out, http://www.strategymag.com/articles/magazine/20060701/biz.html 5 Image Source Campbell’s Soup Display, http://www.retailpowerhouse.com/gallery/main.php?g2_itemId=673

32. 23 How Progresso Can Compete Contract with outside firm to produce our own plan-o-gram, the SoupServer Introduce SoupServers at a rate of 500 stores per year 1The CanSolidator: http://www.shelfreliance.com/product/view/p79# Image: Margaret Gentile

33. 24 SoupServer in Action Images: Margaret Gentile

34. 25 Agenda

35. 26 Advertising Plan Goal: Persuade customers to buy on brand Action: Increase 2009 advertising budget to $50 million (20% over 2007) 1 Annual 10% increases to budget (2010 – 2013) Balance advertising mix Expectation: Estimated 2009 sales increase $80.3 million 1 Facenda, Vanessa L. "General Mills Outlook 'Healthy' with New Products, Increased Ad Spend." Brandweek, 2/22/2008 Primary research by Team Six Sigmas, soup survey conducted October 17 – 25 Soups – US – September 2008, via Mintel

36. 27 Getting Customers to Buy on Brand Magazine advertisements are more effective at: Building brand favorability Increasing purchase intentions Effect of Medium on CPG Brand Metrics – Average Percentage Point Increase (Exposed/Controlled)1 1MPA “Accountability II: How the Media Drive Results and Impact Online Success,” p. 24.

37. 28 Advertising Mix Reallocation We will rebalance our mix to emphasize Magazine advertising Online advertising 1 1Estimated from data by TNSMI Multi-Media Service andFacenda, Vanessa L. "General Mills Outlook 'Healthy' with New Products, Increased Ad Spend." Brandweek, 2/22/2008 MPA “Accountability II: How the Media Drive Results and Impact Online Success,” p. 24.

38. 29 Expected Return on Investment 1The DMA 2004 Response Report, p. 256. 2Estimated using data fromThe DMA 2004 Response Report, p. 256 andMPA “Accountability II: How the Media Drive Results and Impact Online Success,” p. 24. 3Estimated using data from TNSMI Multi-Media Service andFacenda, Vanessa L. "General Mills Outlook 'Healthy' with New Products, Increased Ad Spend." Brandweek, 2/22/2008

39. 30 Marketing Mix 1 “Chef Michael Chiarello,” http://progressofoods.com/?View=CelebrityChef/ChefMichael 2 “Semi-homemade Cooking with Sandra Lee,” http://www.foodnetwork.com/ 3 Websites of respective magazines 4 MRI database 5 Soup – US -- September 2008, via Mintel 6 Commercial Weight Loss Programs – US – November 2005,‖ via Mintel

40. 31 “All in Good Taste” Campaign Taste1,2 Health 1 http://www.students.sbc.edu/kitchin04/artandexpression/contemporary%20art.html 2 http://avline.abacusline.co.uk/pictures/jpeg/pics/mona.jpg Progresso logos: General Mills website

41. 32 Agenda

42. 33 Macro and Micro Pricing Impact “CPG manufacturers and retailers will at worst successfully weather today’s difficult economic environment. At best, these companies will both reinforce their relationships with shoppers as well as implement price increase strategies that stick.” - Thom Blischok President, Consulting and Innovation Information Resources, Inc. (IRI)1 1 Blischok, “Successful Pricing Strategies: A Strategic Look Through the Affordability Lens” Emphasis added

43. 34 Pricing Plan Goal: Build on success of recommendations to achieve a net increase in prices in a flat-growth industry Action: 2009: Lower average retail price to $1.70/can 2010-2011: 6% total increase to $1.80/can Expectation: Increase contribution 3X in conjunction with other recommendations

44. 35 2009 Plan Realize $20.6 million – 15.4% – increase in profits through strategic pricing1 Price: $1.70 Volume: 49 million cans Margin: $20.6 million 1 Data from AC Nielsen used to conduct sensitivity analysis

45. 36 Going-Forward Plan Leverage success of other initiatives to increase prices 6% total to $1.80 and maximize contribution 1 Data from AC Nielsen used to estimate volume responsiveness

46. 37 Agenda

47. 38 Timeframe for Execution

49. 40 Measuring with the Balanced Scorecard1 1 Kaplan and Norton, “Using the Balanced Scorecard as a Strategic Management System”

50. 41 Competitive Responses

51. 42 Agenda

53. Appendix

54. 45 NPV Analysis

55. 46 Corporate Social Responsibility 1 2 1 http://www.yoplait.com 2 http://www.progressofoods.com

57. Net Promoter Scores for major labels/brands demonstrate consumer’s “brand agnostic” selection criteria-57 -62 -85 1Mintel Report: Soups – US -- 2008

58. 48 Works Cited and Referenced AC Nielsen Database - Soup AP Digital, “General Mills finds winning recipe for stock gains,” BusinessWeek, October 17, 2008, http://investing.businessweek.com/research/stocks/news/article.asp?docKey=600-200810171647APDIGITLFINANCE__General_Mills_Gainers-1LLC76J4A2RLTJP6O0AHLJ9LQ5&params=timestamp||10/17/2008%204:47%20PM%20ET||headline||General%20Mills%20finds%20winning%20recipe%20for%20stock%20gains||docSource||AP%20Digital||provider||ACQUIREMEDIA||realtedsyms||%7CUS%3BGIS%7CUS%3BKFT%7CUS%3BHNZ&symbol=GIS, accessed December 2008 Barletta, Marti, “The Real Story Behind the Success of Dove’s Campaign for Real Beauty,” MarketingProfs, http://www.marketingprofs.com/7/dove-pro-age-primetime-women-barletta.asp, accessed December 2008. Betty Crocker Website, http://www.bettycrocker.com/products/progresso/progresso-low-sodium.htm, accessed October 2008 Blischok, Tom, “Successful Pricing Strategies: A Strategic Look Through the Affordability Lens,” Information Resources Inc (Chicago, IL: 2008). Burrit, Chris, “Campbell’s Soup savors Wal-mart Deal,” Edmonton Jounal, December, 5 2007, http://www.canada.com/edmontonjournal/news/business/story.html?id=736315f6-4723-4b4c-a284-fbf49732f629, accessed October 2008 Campbell’s Soup Company, “Campbell’s Welcome – Campbell’s Select Harvest”, Campbell’s Soup Company Website, http://www.campbellsoup.com/select.aspx, accessed October 2008. Campbell’s Soup Company, “Campbell’s Chunky Soup – Soup that Eats Like a Meal.” Chunky Soup Website, http://www.chunky.com/, accessed October 2008. Campbell’s Soup Company, “Campbell’s Welcome – Campbell’s Smart Solutions: Homepage,” Campbell’s Soup Company Website, http://www.campbellsoup.com/starttasting.aspx, accessed October 2008. Conant, Douglas, R., Campbell’s Soup Company, “Campbell’s Soup Company 2008 Annual Review: Letter to Shareholders 1,” Campbell’s Soup Company, http://www.campbellsoupcompany.com/annualreport2008/letter.asp, accessed October 2008. CPG Grand Award Winner: Campbell Soup Company – Center Store Category Turnaround (2005), FORUM for Consumer Products and Retail Leadership, Vol 7, No 4 (Q3 2005): p. 84, Creative, the Magazine of Promotion and Advertising “Supermarket Displays ’05,” http://www.creativemag.com/supermktdisp1105.html, accessed October 2008 D’Innocenzon, Lisa, “Campbell’s Comes Out,” Strategy Magazine, July 2006 http://www.strategymag.com/articles/magazine/20060701/biz.html, accessed October 2008

59. 49 Works Cited and Referenced Facenda, Vanessa L. “General Mills Outlook ‘Healthy’ with New Products, Increased Ad Spend.” Brandweek, February 22, 2008, http://www.brandweek.com/bw/esearch/article_display.jsp?vnu_content_id=1003712829, accessed October 2008. Fredrix, Emily, “General Mills to Keep Expanding International Unit” WTOP.com, Associated Press, September 22, 2008, http://www.wtopnews.com/?nid=111&sid=1483005, accessed October 2008. General Mills, “General Mills: Technology Submission” General Mills Website, http://www.generalmills.com/corporate/open_innovation/index.aspx, accessed October 2008. General Mills, “CMO and His Imaginary Friends,” Knowledge@Wharton, November 20, 2008, http://knowledge.wharton.upenn.edu/article.cfm?articleid=2097 General Mills, “General Mills: Values,” General Mills Corporate Website. http:://www.generalmills.com/corporate/commitment/values.aspx, accessed November 2008 General Mills, Inc. May 25, 2008 Form 10-K (Filed July 11, 2008), via SEC EDGAR Database, accessed October 2008 General Mills Company, “Light”, Betty Crocker Website, http://www.bettycrocker.com/products/progresso/Progresso-light-landing-page.htm, accessed October 2008 General Mills Company, “100 Calorie”, Betty Crocker Website, http://www.bettycrocker.com/products/progresso/progresso-low-calorie-soups.htm, accessed October 2008 Johnson, Leonard. “A Note on the 7-S Model.” BU SMG No. 97-03 (Boston University School of Management, 1997). Kaplan and Norton, “Using the Balanced Scorecard as a Strategic Management System” Kotter, John P, “Leading Change: Why Transformation Efforts Fail.” Harvard Business Review (March – April 1995): 3 – 10. Learned, Andrea, “The Six Costliest Mistakes You Can Make in Marketing to Women,” Inc Magazine, January 2003, http://www.inc.com/articles/2003/01/25019.html, accessed October 2008. Magazine Publishers of America, “Accountability II: How the Media Drive Results and Impact Online Success”, Magazine Publishers of America website, http://www.magazine.org/content/Files/AccountabilityII.pdf, p. 24, accessed December 2008.

60. 50 Works Cited and Referenced Mahoney, Sarah, “As Supercenters Gain, Wal-mart Still Attracts the Affluent,” Marketing Daily, August 13, 2008 http://www.mediapost.com/publications/?fa=Articles.showArticleHomePage&art_aid=88412, accessed October 2008. Mediamark Reporter, Fall 2007 Product, Household Products – Food Products, Category: Canned or Jarred Soup/Broth, Base: Principal Shoppers, Target, Used in Last 6 Months, via MRI database. Mediamark Reporter, Fall 2008, Household Products – Food Products, Category: Canned or Jarred Soup/Broth, Base: Principle Shoppers, Target: Used in Last 6 Months, Progresso, Homemakers via MRI, accessed November 2008. Michman, Ronald D., et al., The Food Industry: Marketing Triumphs and Blunders, (Westport, CT: Greenwood Publishing Group, 1998), p. 97-100. Mintel - Soup – US – September 2008. Accessed October 2008. Mintel – Attitudes of Women - Age 18-34 July 2008. Accessed October 2008. Mintel - Commercial Weight Loss Programs – US – November 2005, via Mintel. Accessed October 2008. Mintel – Marketing Healthy to Women – US – July 2007, via Mintel. Accessed November 2008. Progressive Grocer, “Center Store” Nov. 2006 Progressive Grocer Issue: 10, via LexisNexis, accessed October 2008. Rolls,B.J., Bel, E,A,, Thorwart ML, American Journal of Clinical Nutrition, 1999, 70, 448-55. Simpson, Steven, “Campbell Soup on the Simmer (CPB),” Investopedia Community, September 16, 2008, community.investopedia.com/news/ia/2008/campbell_soup_on_simmer_cpb.aspx, accessed November 2008. Super Market News , “G-Win Forges Hundreds of Ideas for Innovation,” Supermarket News, May 20 , 2008, http://supermarketnews.com/news/g_win_0520/, accessed October 2008.

61. 51 Works Cited and Referenced Susan G. Komen for the Cure websiteSusan G. Komen for the Cure, “Susan G. Komen for the Cure | Partners & Sponsors | General Mills’ Pink Together”, Susan G. Komen for the Cure website, http://ww5.komen.org/Content.aspx?id=14302, accessed October 2008. The DMA 2004 Response Report, The Direct Marketing Association (New York: 2004): 256 Tietell, Beth, “Interest in Dieting Slims Down; More Accepting the Extra Pounds,” The Boston Globe, September 21, 2008, http://www.boston.com/news/nation/articles/2008/09/21/interest_in_dieting_slims_down/, accessed October 2008. TNSMI Multi-Media Service, Company/Brand $. Ad $ Summary, 2007, TNS-MI and Magazine Publishers of America, New York, NY US Census Bureau, “Projections of the Population by Sex, Race, and Hispanic Origin for the United States: 2010 to 2050”, US Census Bureau website, http://www.census.gov/population/www/projections/files/nation/summary/np2008-t4.xls, accessed October 2008. Team Six Sigmas, Primary soup survey conducted October 17 – 25. Wong, Elaine, Brandweek “Soup War Continues, Progresso Strikes Back” October 8, 2008 http://www.brandweek.com/bw/content_display/esearch/e3i7e19cce243eb21aaa2048c8982be98f9?pn=1, accessed October 2008 Zuniac, Pablo, “US Food: A Review of the Latest RTS Soup Trends,” JP Morgan, January 8, 2008, p. 1, via Infotrac/Investext Plus, accessed October 2008