PRINCIPLES OF MARKETING

Case: November 6,2019

Feinschmecker Sauce: Pricey 'n' Spicy
Verena M. Priemer*

UNCLE BEN'S RICE is THE market leader in the Austrian market for part boiled rice. According to a survey, 75 percent of the Austrian households
knew the brand, a figure that increased to 95 percent for the aided recall. Seventy-eight percent of all households had used the brand at
least once, 36 percent bought it most of the time, and 50 percent of them claimed that Uncle Ben's was their preferred brand.

Consumers saw Uncle Ben's Rice as having superior quality and taste, and being easy to prepare, modern, wholesome and nutritious. It was
seen as a relatively expensive brand, but consumers thought the brand's outstanding quality made it worth the high price. Uncle Ben's many
brand strengths made its owner, Master Foods Austria (MFA), think it was the ideal vehicle for brand extension. However, care was needed.
The brand extension had to meet the high quality of Uncle Ben's Rice to avoid damaging the reputation of the mother brand.

MFA's first task was to find out from customers the kinds of product that would sell with Uncle Ben's Rice. A survey of consumers' associations
was carried out regarding Uncle Ben's, which revealed some potential product fields (see Exhibit 11.1). The general trend towards international
eating encouraged MFA to extend Uncle Ben's umbrella to ready-to-serve sauces with exotic tastes. Both Uncle Ben's rice and sauce would
be fast and easy to cook, and so could be used together. To enhance its image of' high quality and naturalness, the product would contain
whole pieces of vegetables. MFA produced Uncle Ben's sauces in 350 g glass jars rather than in the usual can. Users needed to add about
200 g of their own meat to the sauce to make a meal. The chosen name, Uncle Ben's Feinschmecker (gourmet) Sauce, focused on the
quality and refinement of the product.

EXHIBIT 11.1 POTENTIAL PRODUCT FIELDS FOR AN EXPANSION OF THE UNCLE BEN'S BRAND
ASSOCIATIONS WITH UNCLE BEN'S POTENTIAL PRODUCT FIELDS
Rice - different kinds of rice —» rice plus sauce, rice plus vegetables, rice meals, rice pudding
Rice - cereals, flour, grain —* wholesome nutrition
Garnishing —> different garnishes, noodles
American —» fast food, prepared food
Helpful, prepared —» ready-to-serve meals, mixed spices
Quality, cooking -» ready-to-serve meals, frozen food

The 350 g jars fitted the needs of two-person households, which were the main target market. These would be typically women between the
ages of 20 and 40 years who were interested in food and variety. Being well educated, the target segment would be open-minded towards
new and foreign ideas. The target group also had the necessary high income to match the pricey sauce. A selling price of nearly Sch30 was
needed to cover high production costs and import duties.

Feinschmeeker Sauces had varieties to suit the tastes of different market segments. For example, adults, who wanted exotic and spicy dishes,
were expected to buy flavours such as 'Karibiseh', while children would prefer the mild 'Chinesisch', a taste that they already know from
restaurant food. The latter variety was viewed as a 'gateway sauce' for consumers who are unused to more exotic dishes. Concept tests
showed that people were attracted to the more exotic sauces: 55 percent of the informants said that they were interested in 'Karibiseh', 45
percent in 'Mexikanisch', 45 percent in 'Indisch', but only 5 percent in 'Italienisch'. The range of Feinschmeeker Sauces would satisfy a variety
of consumers' needs, thus increasing the buying frequency. The main reasons for purchasing Uncle Ben's Sauces would be quality, comfort,
confidence in the product and the attraction of a foreign flavour that would be hard to find elsewhere. Meals would be easy to prepare
with the sauces, so that even non-expert cooks could produce exotic food at home. The sauces also gave people the chance to try foreign
meals without buying numerous unfamiliar ingredients.

Some opposition was expected from some consumers to using the sauces. Certain people disapproved of ready-to-eat meals or disliked
exotic flavours, for instance, while the high price would deter others. The danger of spoiling the meat when adding the sauce would be seen
by some as a further obstacle.

In September 1992 MFA launched six varieties of Uncle Ben's Feinschmecker Sauce in Austria and two more varieties were later added (see
Exhibit 11.2), Uncle Ben's sauces were launched in other European countries too, but because of the divergent tastes across Europe, the
varieties, recipes and brand name varied from country to country. The advertising concentrated on creating awareness and interest, a task
simplified by the strength of Uncle Ben's brand reputation. It emphasized the link between Uncle Ben's Feinschmecker Sauce and Uncle Ben's
Rice, and aimed to transfer the quality image from the rice to the sauce, while at the same time strengthening Uncle Ben's position in the
saturated rice market. Point-of-sales promotions gave consumers a chance to try the product.

EXHIBIT 11.2 VARIETIES OF UNCLE BEN'S FEINSCHMECKER SAUCE

VARIANT NAME TRANSLATION
Chinesisch sufi-sauer Chinese sweet and sour
Provenzalisch mit feinen Krautern Provencal with fine herbs
Indisch Curry Indian curry
Karibiseh exotisch fruchtig Caribbean exotic fruity
Mexikanisch Chili Mexican chilli
Neapolitanisch raffiniert gewiirzt Neapolitan sophisticated seasoned
Chinesisch Szeclnian Chinese Szeehuan
Stroganoff Stroganoff

The launch of Uncle Ben's Feinschmecker Sauce was successful. By November 1993, 6 percent of Austrian households had bought the product
once and 7 percent had bought it more often. The repurchase rate by the GfK panel of households after the first six months of 1993 was 32
percent . Of the varieties, 8 percent of purchasers had tried 'Mexikaniseh Chili', 7 percent 'Chinesisch siifi-saucr', 5 percent 'Indisuh Curry'. 3
percent 'Neapolitanisch raffiniert gewiirzt', 2 percent 'Provenzalisch mit feinen Krautern', and 1 percent 'Karibiseh exotisch fnichtig'.

Purchase frequencies of Uncle Ben's Feinschmecker Sauce varied from group to group. Younger women (up to 34 years old) had bought
Feinschmecker Sauce disproportionately often: a survey showed that their share of purchase (33 percent ) was higher than the sample
average (20 percent ). Thirty percent of the buyers came from the highest social class, although they accounted for only ] 4 percent of the
sample. The survey also showed variations in the products consumed. Households with children bought mainly 'Neapolitanisch raffiniert
gewiirzt' (50 per eent), but seldom the spicy variety 'Mexikanisch Chili' (16 percent ). Higher-Income consumers bought spicy 'Karibiseh exotisch
fruchtig' more often than the more familiar 'Chinesisch siift-sauer' (19 percent).

The popularity of the sauces contrasted sharply with what the concept test had suggested. The mild 'Chinesisch siiiA-sauer' was the most
popular variety (40 percent of purchases), 'Mexikanisch Chili' and 'Provenzalisch mit feinen Krautern' each had only 10 percent of purchases,
while 'Karibiseh' - the most popular flavour during the concept tests - was the least popular of the range!

Consumer research showed that people mainly bought Feinschmecker Sauce in order to prepare meals quickly and easily, particularly when
coming home late in the evening or when short of time. In contrast to readyto-serve meals, consumers still added their own seasoning to
create a meal to their liking - they wanted to remove the trouble of preparing a meal, but still wanted the dish served to be essentially their
own. Although pre-prepared, Feinschmecker Sauce appeared wholesome, so consumers had no qualms about enjoying it.

The sauce was convenient to transport and store, and was also easy to open and reclose for later use. Uncle Ben's Feinschmecker Sauce
gained the same reputation for high quality, security and modernity as Uncle Ben's Rice. Consumers prepared the sauces in various ways:
with or without meat, and with rice or noodles. They perceived the product as special and quite different from other dried and frozen sauces.

QUESTIONS

1. What internal or external stimuli may start the buyer decision process for Uncle Ben's Feinschmecker Sauce?

2. Compare the buyer decision process of an initial purchase and a repeat purchase. What is the type of buying decision behaviour in each
case and how does the brand name Uncle Ben's influence the decision?

3. What explains the big difference between the concept test results and eventual buyer behaviour? Does the difference in the results matter?

4. Several stores sell the product below the price of Sch30. Why should they do that and could it harm Uncle Ben's reputation?

5. How can MFA influence the level of customer satisfaction achieved and how does MFA's targeting help achieve customer satisfaction?

6. Does this brand extension endanger the standing of Uncle Ben's Rice?