Brannigan Foods: Strategic Marketing Planning

Group Members:Group Members:Kamalanathan Perisamy 820330Kamalanathan Perisamy 820330

Rajendiraperasad Muniam 820309Rajendiraperasad Muniam 820309Shubashini Mathyalingam 820283Shubashini Mathyalingam 820283

Lilambikha Raja Vikraman Varman 820275Lilambikha Raja Vikraman Varman 820275

BPMM6013 MARKETING MANAGEMENT

OverviewCharacters:-•Bert Clark (Vice President & General Manager)•Srikant Thipa (Director of Simple Meal Unit)•Claire Mackey, (Director of Finance and Planning)•Anna Chong (Chief Innovation Officer)•Bob Pugh (Director of Sales & Marketing)

Introduction • Brannigan Foods Soup Division - 40% of the firm’s revenue. • Steady decline (3 years) - divisions of sales, market share, and profitability • Reverse the decline - increase the growth back to 3-4%. • Each Managers suggest different plan

1. Investing in the growing sectors

2. Acquiring product lines, 3. Investing in organic

growth, 4. Invest in the core

Situational Analysis

5 C’s Analysis

COMPANY•100 year legacy•RTE(71%), Dry Soups, Healthy Soups, Fast and simple meals•Cash cow- 40% of total sales•Acquiring & integrating Anabelle’s products into Brannigans product line•Increasing market share by brand awareness

COMPETITOR•Major competitors - General Mills •Small competitors - Roaring Cajun Food

- Red Dragon Food - Brothers Gourmet

•Other competitors - Private labelled soups which increases the sales to 5%•Less shelf space for Brannigan products

CUSTOMER•Current market: Baby boomers•Targeted group: Young generation, young & working mothers•Trends: Innovation of new flavours•Quick meals and healthier product or food

COLLABORATORS•Decrease of 3% in Brannigan’s Shelf Space•Must ensure that retailer goodwill doesn’t fall•Retailers would appreciate price cuts that may boost sales•Supermarkets sold 62.9% of the categoryCONTEXT•Micro: 1) Political and regulations environment 2) Economics environment 3) Social and cultural environment 4) Technological environment•Baby boomers generation is becoming older•Society, trend, fashion: Healthy eating and prevent obesity trends•Technology environment: Food R&D for healthier and active lifestyles

SWOT Analysis

STRENGTH-100 years in line: market leader in high market share- high brand awareness with 14% of sales-RTE soups are still considered as staple food in the United States

WEAKNESS-Sales decline in past 3 years-Failure in identifying society behavior and trend-No integration between teams( Finance, Marketing& Sales, R&D, Simple Meal Unit) due to lack of communicationOPPORTUNITY

-New product innovation to increase sales-Liaise with retailers to generate continuous solution to obtain a win-win situation

THREAT-Private labelled products grows, which reduces Brannigan’s shelf space availability-New product from various competitors-Gap between product offered and consumer needs

Objective

To increase the profit and market share back to 3-4%

Enhance existing product with innovative healthy concept

Attract new customer & increase customer lifecycle of the brand

Suggestion

1. Invest in Growing SectorsReinforce former strategy but increase investments in the dry soup, fast meal and healthier soups category. PROS:•Categories’ demand is growing supported by trend towards fast but healthy meals•Canned soup category is declining•Potential rapid market share growth due to retailer and consumer market strength •Focused on long term growth 

CONS: •Categories are not nearly as large as the canned soups categoryStrong competition in the segmentsBranningan Foods is behind due to competitors’ first mover advantages

Earning Projection as per Tipha’s recommendation (in $ million)

Year 2011 2012 2013 Forecast 2013 Tipha

Net Sales of Brannigan Food WW 7330 7979 8230 8230

Net sales of US Subdivision 3034 2973 2913 2954

Less:        

Cost of Good Sold 1669 1635 1602 1625

Marketing, R&D and Selling Expenses 425 416 408 426

Other Expenses 625 627 600 620

Net Earning 315 295 303 283

Broken out marketing and selling expenses

       

Advertising and Promotion 189 178 178 188*

With this strategy Brannigan’s Net earning wouldn't increase, but will reduce by 4%

2. Acquire product lines to complement the core in growing

sectorsHealthier and convenient segments that have new flavors

PROs:•Acquisitions represent being present in the new flavour & healthier category•Potential market share growth due to retailer and consumer market strength•Potential increase in sales around 1.5-3.5% to sales within 5 years •House of brands? Advantage- get more self space, different brands.

CONs:•Healthy & Asian category demands could also be targeted by using existing lines•Cannibalization on existing lines (0.3-0.6%) •Branningan would have to take on debt •Breakeven might be later than expected 

Year 2011 2012 2013 2014 2015 2016Net Sales of Brannigan Food WW 7330 7979 8230      Net Sales of US Subdivision 3034 2973 2913 2856 2799 2743Less:            Cost of Good Sold 1669 1635 1602 1570 1539 1509Marketing, R&D and selling expenses 425 416 408 422 422 423Other Expenses 625 627 600 600 588 576Net Earning 315 295 311 273 260 247Broken out of marketing and selling expenses

           

Advertising and Promotion 189 178 184 184 184 185

Earning Projection as per Claire Mackey recommendation (in $ million)

This strategy isn’t profitable either since Brannigan ‘s net earning decreasing by average 7% per year

3. Invest in organic growth from internally developed new productsTo milk the “cash cows” and subsidize the investment of the “star products”New flavors, Innovative packages & New usages

PROs:•Brannigan’s Traditional strengths are reinforced (new products build on Brannigans most popular soups).•Consumers’ changing needs would be addressed and consumer desire for innovation in the category could be served.

CONs:•Cannibalization on existing lines due to 90% chance of Brannigan having to take out core product to place product in shelf. •Increasing intolerance of retailers to bring in products with short-term life-cycles failing to meet sales and profit expectations, possible stocking fees, returns etc (apprx. $1000 per failed product)

Year 2011 2012 2013 2014 2015Net Sales of Brannigan Food WW 7330 7979 8230    

Net Sales of US Subdivision 3034 2973 2913 2856 2799

Less:          

Cost of Good Sold 1669 1635 1602 1570 1539

Marketing, R&D and selling expenses 425 416 427 423 419

Other Expenses 625 627 612 600 588

Net Earning 315 295 287 287 281

Broken out of marketing and selling expenses          

Advertising and Promotion 189 178 189 185 181

With this alternative, Brannigan’s net profit wouldn’t increase but instead decrease 2% on average per year

Earning Projection as per Anna Chong recommendation (in $ million)

4. Invest in the Core

+ $20MM marketing to increase brand awareness. Decrease prices of the Ready to Eat soups by 5 cents

PROs:• Decline in operating income can be stopped while sales volume and recapture of market share could be increased• Favorable in retailer’s view due to increased sales expectations

CONs:• Uncertainty about possibly higher sales• Cutting price might lower the perceived value of Brannigan products

Earning Projection as per Bob Pugh recommendation (in $ million)

Year 2011 2012 2013 2014 2015

Net Sales of Brannigan Food WW 7330 7979 8230    

Net Sales of US Subdivision 3034 2973 3211 3398 3596

Less:          

Cost of Good Sold 1669 1635 1766 1869 1978

Marketing, R&D and selling expenses 425 416 447 447 447

Other Expenses 625 627 642 714 755

Net Earning 315 295 356 369 416

Broken out of marketing and selling expenses          

Advertising and Promotion 189 178 209 209 209

In this case, this alternative seems profitable; Brannigan’s earning will be increase during the next 3 years

Option 3

-The leader position in the market obliges Brannigan to invest in R&D due to the changing trends and needs of the market.-to invest in marketing to make the RTE soups strong in the market.

Option 4-reinforce the “cash cow” of the division which are the Ready to Eat Soups.-keep financing the “question mark” products, which will become stars and future “cash cows” with the way the market is growing. This mix of both strategies certifies the company´s

short term goals and envisions long-term profits with the investment made, since it stretches the life cycle of the RTE soups and boosts growth in the early stages of

the new products life cycles.

Implementation• Increase R&D budget from $14M to $19M to develop

prototypes• Invest heavily in Marketing testing and launch new

products • Launch Deluxe Gourmet Deli line with few flavors • Launch Dry Soup line with Advertising few flavors • Raise Retailer margin for new lines by 5% to gain shelf

space for new products• Invest in “Heart Healthy” Promotion

Marketing Mix

4 P’sPRODUCT•Implementation of Umbrella brand of Brannigan’s soups division which gives emotional values to the products and brands targeted different market segment•Various product range that provides various benefits

Positioning Statement:“ For people who enjoy health, easy to cook, Savoury food, Brannigan’s soup is a brand of soups that offers convenient varied, trustworthy and very good quality soups that loves customers to enjoy meals while taking care of their health and to save time at very competitive prices based on its experience as leader in the category and its innovative products.”

PLACE•Distribution are major concern •Entries of private labelled soups with constant growth of 5% due to price increase•3% shelf space reduced

PRICE•Maintain the price of RTE soups•Tag higher price for Deli soups, this will create a “ Compromise Effect” to consumers by building an impression of high quality products•Shift consumers preference by giving superiority of Deli soup.

PROMOTION-Pull strategy is used on Mass Media and Digital for discounts, offers and promotions-Sales Force: :- must be reorganized to increase 4% sales earnings per year1)A 20-80 division( 20% farmers-80% hunters) to increase the search and acquisition of new retail partnersSalaries: 1)Mix of fixed and increased percentage of the variable part2) Sales force teams will be given bonuses if they meet and surpass the sales objective of the year

MARKETFragmentation and growing new trends has caused a change in the strategyMISSIONReposition the brand as an innovation company that owns the leadership by increasing the life quality of its consumers.MEASUREMENTDigital marketing impacts

MEDIATV ad and social media

MONEY$170 million budget for marketing expenses of year 2013

MESSAGECreate emotional value

Objective• Increase Sales• Engage Consumers• Offer Value• Improve Brand

Image

Company website Adv & promotion-

digital sites Social network-

Facebook. Twitter, Youtube

Conclusion• If investment is done in core segments of Brannigan Foods as

suggested by Bob Pugh, net earnings increase up to 399 million or 3.05% growth year on year. The sales would increase up to 3186 million by 2014.

• Being market leader in Ready to Eat (RTE) segment Brannigan should look forward to maximize profit on maturing product.

• Clark also has to decide on a long term strategy. Look to cater to customer preferences by developing new products internally.

• Additional expenditure of around 5 million in R & D and also additional promotional costs for the new products, the costs can be met by the increased profits due to the increased investment in the core products.

• This would also reinforce Brannigan’s image as an innovator and help increase its brand equity among customers. As such, Clark would need to adopt both Option 3 and Option 4 to successfully satisfy all of his decision criteria.

Thank You