BPMM 6013 Marketing Management

Group 2 Case Study Pillsbury Cookie Challenge

BPMM 6013 MARKETING MANAGEMENT

Proff: Nor Pujawati Binti Md Said

Group 2 Assignment Case Study & Report 2/5

Case Study No.2 Pillsbury Cookie Challenge

Sharanya Ramasamy 822484

Sharmila Devi Subramaniam 822511
Shri Brindashini A/P Thanapal 822512

1
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

Table of Contents

No Contents Page

.
1.0 Executive Summary 3
2.0 Introduction 4-5
3.0 Situational Analysis 6
4.0 Proposed Marketing Objectives 11-13
5.0 Proposed Marketing Mix, Strategy and Tactics 13-15
6.0 Financial Forecast 15
7.0 Controls 16
8.0 Conclusion 16
9.0 References 17

1.0 Executive Summary

Ivan Guillen is the Marketing Manager of the Refrigerated Bakes Good (RBG) at General
Mills Canada Corporations (GMCC). GMCC is the Canadian segment of the General Mills
Inc. (GMI) and is the largest division in the international segment of the GMI. GMI is the 6 th
largest food product manufacturing company in the world by having food products in more

2
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

than 100countries.Total revenue of the company in 2006 was $ 11.6 Billion. Refrigerated Baked
Products (RBG) is the fourth largest category of the GMCC but in the last year few years this category
havent shown much progress. In the RBG cookie is the backbone of the company. Cookie product
line makes the 75% profit of this category. Hence when RBG cookie performs well than this category
performs well and so is the vice versa. In the last three years the annual growth of the cookies
segment is just 1% which is far less than the company wants from this category. Moreover
the house hold penetration has also fallen to 5-year low. The company is looking for the 5%-
7% annual growth but the cookie growth in Canada is not more than 1%. In February 2007,
Ivan Guillen has to present RBG new business plan to senior leadership and for this purpose
he wants to know about the taste issues, marketing and the advertising campaigns of his division
especially Pillsbury cookie. He wants to do a research so that he can know the consumer
preferences of the Canadians and how much they are different from the US consumers as nearly all
the advertising campaigns are leveraged from the US segment of the company which is GMI.

2.0 Introduction

The Canadian Pillsbury RBG (Ready-Baked Goods) line is experiencing disappointing

performance, and the marketing manager at GMCC (General Mills Canada Corporation) is under

pressure to make a strategic decisions that will help turn around the segment. The marketing

manager has engaged the help of the consumer insights team to conduct market research studies

3
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

that will shed light on consumers and their attitudes, behaviours, and preferences towards the

product. One of the world's leading food companies, General Mills operates in more than 100

countries and markets more than 100 consumer brands, such as Yoplait, Pillsbury, Haagen-Dazs,

Nature Valley Green Giant, and more. Headquartered in Minneapolis, Minnesota, the company

operates in three segments: US Retail, International and Food service Representing 69 per cent

of total sales, the US Retail segment is the largest of the three. General Mills Canada Corporation

(GMCC) is a subsidiary of General Mills. With annual sales of 566 million US$, GMCC is a

leader in the Canadian packaged foods market and the second largest division within the

International segments. The Canadian division is split into four business units: breakfast, baked

goods, meals and snacks. The Canadian Refrigerated Baked Goods Category is one of the fourth

largest division of GMCC is The Refrigerated Baked Goods (RBG). The convenience and family

appeal makes the RBG products to be so appreciated. Pillsbury brand is part of the General Mills

portfolio and the leader in the RBG category including a full range of products, such as biscuits,

cookies, sweet rolls, and pizza and pie crusts. Canadian market doesnt have a specific marketing

strategy, using an adapted US advertising. In terms of the market, Pillsbury was the most

profitable segment of General Mills Canada, with refrigerated cookie dough owning 62% of

ready-baked-goods sales and yielding 75% category profit. Pillsbury held 85% of the market

share and was carried by all major Canadian retailers. However, volume growth, household

penetration, and cookie segment growth were all flat.

4
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

3.0 Situational Analysis

The Canadian experience Pillsbury ready pastry cookie performing less than stellar

performance, and the marketing manager is under pressure to contribute to strategic decisions

that will turn around the segment. Refrigerated Baked Goods (RBGs) performance has not

been promising over the past two years. The volume growth between year 2004 and 2006 had

remained nearly flat at 1%. Household penetration had fallen to 24% from the previous years.

5
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

Hence, improving the business performance of this category was the biggest challenge that

confronts Ivan, the marketing manager.

Guillens goal is to understand the differences between the Canadian and U.S. consumers,

in order to understand how to reach the Canadian market effectively. GMC employed market

research company Market Tools to conduct a Usage and Attitude Study of the customer

regarding the RBG Cookies and to understanding the brand and product perceptions in the mind

of customers. Also to understand whether the Pillsbury Baking Experience vibrated with the

customers or not. Market Strategies to conduct are In-Home Immersions and Discovery

workshop. The results and insights can be used to help GMCC to increase both purchase

frequency and market penetration of RBG in Canadian households.

The In-Home immersions were aimed to understand the consumer preferences, actions

and motivations related to the particular product. In the research the mothers in houses were

asked to purchase the Pillsbury cookie ahead of time and bake it during the visit. The main theme

of this activity is to understand the real life view of the relationship of consumer and brand by

looking at the family, kitchen type and the rituals associated with the product.

The Discovery Workshop is being conducted outside the houses and collaborative in

nature. The research was designed to give a natural comfortable environment to the customers so

that they can share their thoughts, experiences and issues about the product. Several techniques

of customer experience, mapping and role-playing is used in order to understand the customers

relationship and behavior towards the Pillsbury Brand.

Consumer insight (CI) team help to better understand the preferences, attitudes, and

behaviors of customers and find new or better ways to satisfy their needs. CI team must work

6
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

closely with internal marketing teams and 3 rd party research firms to conduct consumer research.

Once research is conducted, results are analyzed and recommendations are provided to the brand

team.

As the research revealed later in the case, that there were some significant differences

between the USA and Canadian customer behaviour which the company never took into

consideration before designing a marketing program or product offering. The consumers in

Canada like to do their baking from scratch and hence it makes the target market a bit different

compared to that in US. The target market in Canada should be mothers who are working, where

it helps them save a lot of time and also personalize the cookies till a point. Another target should

be the kids, whom play a major role in purchase decision in Canada. Hence, they should be one

of the main targets.

3.1 ASSESSMENT TOOLS

According to the case study, we had discussed that the suitable assessment tools to be used is

the SWOT analysis & Porters five basic forces. This tool would able to identify and evaluate the

various alternatives available in order to decide what action to take regarding the marketing plan

for Pillsbury.

SWOT Analysis

Strengths

Known as innovative.
Quick & Easy to make.
Brand awareness is high
Great Taste.
Strong R&D department
Established products
Convenient, especially when value/price factor added.

7
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

Weaknesses

In Canada the majority of households prefer to bake cookies from scratch and

Pillsbury is perceived as "cheating" Product commonly out of stock

Product awareness not increasing through advertising

Opportunities

Complementary product
Kid requests is a major purchase driver in Canada. Kids should be the primary

target
Canadian moms should be the secondary target
Ability to move to higher visibility

Threats

Help firms understand how customers view their products

Help a firm identify gaps or a niche in the market
Extend the brand into new uses and new segments
Mothers who bake from scratch. For her, using Pillsbury has a "cheating"

implication

PORTERs Five Forces

Threat of new entrants
The threat of new entrants porter created affects the competitive environment for

Pillsbury. A high threat of entry means new competitors are likely to be attracted to the

profits of the industry and can enter the industry with ease. New competitors entering the

marketplace can threaten or decrease the market share and profitability of Pillsbury and

may result in changes to existing product quality or price levels. Threat of new entrants

porter devised when there is very low barriers to entry.

Rivalry among existing competitors

8
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

High intensity of rivalry means competitors are aggressively targeting each others

markets and aggressively pricing products. This represents potential costs to all

competitors within the industry. High intensity of competitive rivalry can make an

industry more competitive and decrease profit potential for Pillsbury. On the other hand,

low intensity of competitive rivalry makes an industry less competitive and increases

profit potential for Pillsbury.

Bargaining power of suppliers

The idea is that the bargaining power of the supplier in an industry affects the

competitive environment of Pillsbury and influences its ability to achieve profitability.

Strong suppliers can pressure Pillsbury by raising prices, lowering product quality, and

reducing product availability. All of these things represent costs to Pillsbury. A strong

supplier can make an industry more competitive and decrease profit potential of

Pillsbury. On the other hand, a weak supplier, one who is at the mercy of the buyer in

terms of quality and price, makes an industry less competitive and increases profit

potential for the buyer.

Bargaining power of buyer

Buyer bargaining power refers to the pressure consumers can exert on businesses

to get them to provide higher quality products, better customer service, and lower prices.

Strong buyers can pressure Pillsbury to lower prices, improve product quality, and offer

more and better services. A strong buyer can make an industry more competitive and

decrease profit potential of Pillsbury.

Threat of substitutes
The availability of a product that the consumer can purchase instead of the

industrys product. A substitute product is a product from another industry that offers

9
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

similar benefits to the consumer as the product produced by the firms within the industry.

The availability of a substitution threat effects the profitability of Pillsbury because

consumers can choose to purchase the substitute instead of the Pillsburys product. The

availability of close substitute products can make an industry more competitive and

decrease profit potential for the firms in the industry.

4.0 MARKETING OBJECTIVES

The proposed marketing objective in entering the Canadian market to enhance the business can

be by building brand awareness to the Canadian market, having an extraordinary launching

sensation to attract Canadian consumers, attract the targeted customers, improvise the

stakeholder relationships, enhancing customer relationship, and improve internal

communications using the smart method such as be specific to the Canadian market, measurable

on the targeted customer, achieve the goal in increasing sales towards pointing the targeted

market.

5.0 Proposed Marketing Mix Strategy and Tactics

5(i). Product

To improvise the business, Pillsbury should expand the idea by introducing healthy and

different flavors own baked cookies dough using the demography of targeted Canadian

market. Selecting the right target market will help them to enhance their businesses in further.

As cookies are the most favorite item for kids hence, they can narrow towards Canadian kids.

10
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

When time is the limitation, Pillsbury can be the tool of assistant, to help the Canadian

market to try the new product enhancement. No artificial preservative, gluten free cookies

dough with multiple flavor based on customers preference can be introduced to the Canadian

market as their likelihood of the product is low. Design of the product should be attractive

and follow the Canadian market culture in order to capture the business goal in foreign

market.

5(ii) Place

Pillsbury must determine the specific location to reach their targeted market in

allowing them to reach the product easily. Availability of the product in all places is the

major part of marketing and product should be available in all grocery chain, leading

retailers including in the kiosks in airports, terminals and online purchasing site in

Canadian market. These places are most convenient and easy for anyone to consume the

products. Even the targeted people will also be able to identify the availability of the

product.

5(iii) Promotion

Upon failure from the first attempt, Pillsbury should hire some advertising agency in

Canadian market to design the ads according to Canadian market culture. This will help

them to reach the targeted consumer easily. Telecast those ads during prime time, which

will attract more people to consume the product. Do a live demo on the bake cookies in

hypermarket & supermarkets and let them taste immediately. This will help to realize the

efficiency of the product and Pillsbury can sell that item on the spot. Have attracting

11
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

packaging to pull their attention as it will help them to do self promote among family

members and peers.

5(iv) Pricing

Before introducing the item in Canadian market, the marketing unit of Pillsbury

should do a research of pricing method practiced here. At the beginning, Pillsbury should

give a reasonable pricing as this involves kids and they should be able to afford it. Apart

from that, have discounts during festive season or sell for a promo/ combo price for

purchases in bulk happens. This will help them to grow a reputable remark on Pillsbury

product. or sell for a promo/ combo price for purchases in bulk happens. This will help

them to grow a reputable remark on Pillsbury product.

6.0 Financial Forecast

Exhibit 1
GENERAL MILLS CONSOLIDATED STATEMENT OF EARNINGS

In Millions, Except per Share Data

Fiscal Year Ended 28-May-06 29-May-05 30- May
-04
Net Sales $11,640 $11,244 $11,070
Costs and Expenses:
Cost of sales 6,966 6,834 6,584
Selling, general and administrative 2,678 2,418 2,443
Interest, net 399 455 508
Restructuring and other exit costs 30 84 26
Divestitures (gain) 0 (499) 0
Debt repurchase costs 0 137 0
Total Costs and Expenses $10,073 $9,429 $9,561
Earnings before Income Taxes and After-tax E 1,567 1,815 1,509
Income Taxes 541 664 528
After-tax Earnings from Joint Ventures 64 89 74
Net Earnings $1,090 $1,240 $1,055

12
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

Earnings per Share Basic $3.05 $3.34 $2.82

Earnings per Share Diluted $2.90 $3.08 $2.60
Dividends per Share $1.34 $1.24 $1.10
Source: Company files.
Exhibit 2
PILLSBURY READY BAKED GOODS CATEGORY BY SKU
COOKIES CHUBS TURNOVERS
Cookies Chubs Chocolate Chip Turnovers Apple
Cookies Chubs Chocolate Chunk Turnovers Blueberry
Cookies Chubs Peanut Butter Turnovers Cherry
COOKIES READY TO BAKE Turnovers Raspberry
Cookies Ready to Bake Chocolate Chip Turnovers Strawberry
Cookies Ready to Bake Chocolate Chunk & Chip OTHER SWEETGOODS
COOKIES SEASONAL Pie Crusts
Seasonal Cookies Ready to Bake Heart Shapes CRESCENTS
Seasonal Cookies Ready to Bake Bunny Shapes Crescents Original
Seasonal Cookies Ready to Bake Chick Shapes Crescents Jumbo
Seasonal Cookies Ready to Bake Halloween Chocolate dCrescents Multigrain
& C an
Seasonal Cookies Ready to Bake Pumpkin Shapes Crescents Garlic
Seasonal Cookies Ready to Bake Christmas Chocolate OTHER BREADS
& C and
Seasonal Cookies Ready to Bake Snowman Shapes Country Biscuits
Seasonal Cookies Chubs Gingerbread Flaky Rolls

Seasonal Cookies Chubs Sugar Wiener Wrap

CINNAMON ROLLS BASE Breadsticks Garlic
Cinnamon Rolls Regular Caramel Icing Breadsticks Italian
Cinnamon Rolls Regular Icing Pizza Crust
CINNAMON ROLLS PREMIUM
Cinnamon Rolls Grands Cream Cheese Icing
Cinnamon Rolls Grands Icing
Source: Company files.

From the consolidated record, the cookie segments annual volume growth was only 1% over the

past 3 years and household penetration had fallen. Besides that, we can also see there is an

increase in the selling, general and administrative expenses where most probably it is due to

heavy campaigning and advertising Kisses. From here, we can say that the baking habits of

Canadian and U.S. consumer market that U.S. consumers use more refrigerated baking, (54%

compared to24%) and mix baking (32% compared to 16%). In order to increase the refrigerated

13
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

cookie product sale, RBG need to invest in some R&D to really get to know consumers taste

and needs

7.0 Controls

After analyzing these case studies, we can advise GMCC to look into some of the controls so that

it may result favor to GMCC:

1. GMCC should come out with a product that fits Canadian taste and preferences instead of

using the same type of product that have been introduced to USA market.

2. In order to attract the emotional point of the mothers, GMCC should also design an

advertisement that also involves kids. This kind of ads can give a sensitive and emotional

touch to mothers and also families.

3. GMCC should focus in delivering the quality, benefits and the ease in using when

introducing or advertising the products. This can help to being a better reach among

consumers.

4. On of that, GMCC can induce more customized recipes option for consumers. This is to

encourage the consumers to buy more and try new recipes using the products.

5. GMCC can also look into designing some attractive packaging for the product that can

pull consumers towards the products when it is displayed in shops.

Recommendations

14
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

The recommended plan of action should be to include Canadian consumer preference in

the product and the marketing techniques. The team could create a new version of the

product (innovations) that require additional ingredients to create or enhance standard

mix that fits Canadian consumers. New product should be designed that allows baking

cookies from the scratch. This way the Pillsbury cookies can appeal non users the ones

who prefer bake from scratch because they feel it more authentic. Besides that, adding

recipes to the packaging can give the bakers a change to customize their own end result.

Ads of the product should be designed to encourage kids to bake it and it will be enough

to satisfy them. They will be the key factor in attracting their mother to get one or bake

something for them. If that doesnt work than they can put gifts for kid in the rappers of

the product to encourage them to influence their parents to buy the Pillsbury cookies.

8.0 Conclusions

GMCC must implement new marketing plan and strategies in order to have an advantage

on the competitors and also in order to achieve the profit targeted. In accordance with the market

analysis outcomes, GMCC should concentrate on the techniques which will help to obtain the

interest and loyalty of the kids and working mothers as they are the purchasing power of the

market. Moreover, a great brand message and a strategy to communicate such as add campaign

will always add in extra point to meet the requirement of consumer satisfaction.

9.0 References

Baumans Frozen Custard Retrieved from http://www.bplans.com/frozen_custard_shop_business_plan

Sanjeev Prashar.(2016)Kaps Ice Cream: Should it enter the premium segment? W16559 Ivey Publishing,
Richard Ivey School of Business (2016)

15
 BPMM 6013 Marketing Management
Group 2 Case Study Pillsbury Cookie Challenge

Ice Cream Market in India Retrieved from www.indiaretaining.com (2014,February 6.)

1. Kotler, P., Keller, K. L., Koshy, A., & Jha, M. (2009). Marketing Management, A South

Asian Perspective (13th ed.). Delhi, India: Pearson Prentice Hall.

2. Malhotra, N. K., & Dash, S. (2010). Marketing Research, An Applied Orientation. (6th

ed.). Pearson Prentice Hall.

16