Pillsbury Instant Gravy

Pillsbury Marketing Plan

Marketing Strategy for Pillsbury Instant Gravy

Michael Lipton Anand Gautam Jacques Sahyoun Sheetal Jadhav

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

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

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

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

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

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

TEST MARKET – 4P’sProduct: 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

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).

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

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

TRACKING SUCCESS/METRICS

Continuously track product salesMonitor retailer product stock levels

Adjust production accordinglyObserve competition’s reactions

Competitors are likely to retaliate.Survey present consumer preferences

Expand flavor offerings if necessary

Marketing Strategy for Pillsbury Instant Gravy

QUESTIONS

Thank you for joining us today.

Marketing Strategy for Pillsbury Instant Gravy