General Mills New Product Introduction Marketing Plan

1. General MillsNew Product IntroductionMarketing Plan Locker Number 632 Section 202 Team4 Jay Curran James Gaskin G.T. Hollett Steve Holley Kurt Knaub Marty Wick

2. Project Objective To create and initiate market planning for two shelf-stable, single-serve product lines or product line extensions that will generate substantial incremental revenue over a three-year sales period

3. Concept Creation Concept Evaluation Positioning Gap Analysis Concept Creation and Evaluation Successful Product Launch Sales Projections Positioning 2 Concepts Chosen } } } } • Consumer Feedback • Consumer Focus • Packaging • Price • Marketing • Potential Buyers • Market Analysis • Market Influencers • Purchase Estimation • Revenue Projection • New Segments • Existing Concepts • Attribute Importance • New Market Space • Brainstorming • Concept Selection • Psychographics • Asset Compatibility • Gap Analysis • Profitability Process Outline Phase I Phase III Phase IV Phase II Gap Analysis Gap Analysis

4. Macroeconomic Trends

5. Macroeconomic DataU.S. Age Demographics • Average age of population is increasing • Over 65 group grew by 14.7M people from 1990 to 1999 Kids and the baby boomer generation form two of the fastest growing segments. Source: 2000 Census Bureau Report

6. Macroeconomic TrendsU.S. Ethnic Demographics • Hispanic and Asian-American ethnic groups have the highest growth rates in the nation • Hispanic: 34.5% • Asian-American: 35.9% • Despite the fact that Hispanics are only 11% of population and Asian Americans are 4%, the growth of these ethnic populations influences U.S. culture Total Pop: 270M Asian-American and Hispanic foods represent a fast growing segment due to both population and cultural influence Source: 2000 Census Bureau Report

7. Macroeconomic TrendsU.S. Labor & Households • Almost 2/3 of U.S. Households do not have a “stay at home” adult to allocate their time to meal preparation • Women account for 46.5% of current workforce Total U.S. HH: 105M Total U.S. HH: 105M Asian-American and Hispanic foods are a growing segment due to both population and cultural influence Source: 2000 Census Bureau Report

8. Macroeconomic TrendsU.S. Labor & Households • Fast growing segment of food marketplace. • Analysts currently estimate nutraceutical market at $15 Billion.1 • Currently, “nutrionally-improved” foods account for more than 78% of growth in 35 food categories.2 • Growth attributed to large population of aging baby boomers and awareness of “age” disorders (e.g., osteoporosis) • Popular in the following forms: • Beverages (OJ, fruit juice, smoothies, spritzers, etc.) • Cereal • “Meal-replacements” (shakes, snacks, etc.) • www.cnn.com/2000/food; January 1, 2000 “On your plate,: top food issues for your meals.” • http://www.opta-food.com/trends/3tds-ptctpt.html

9. Macroeconomic TrendsSummary Statistical Trends and Observations Takeaways • Dual income and single person households are increasing and now account for 2/3 of all U.S. households There are fewer households who have a “dedicated” family member for meal preparation • Hispanics and Asian-Americans are the fastest growing segment of the U.S. and now account for 15% of the total population Opportunities exist in the fastest growing ethnic segments • The average age of the population is increasing (baby boomers). The “kid” segment is also one of the fastest growing. There is a potential need for products which target specific food attributes of the baby boomers and kids • Women now account for 46.5% of the workforce and is increasing An opportunity may exist for lunch meals which target working women.

10. Microeconomic Data

11. Microeconomic DataU.S. Food Expenditure Trends • U.S. consumers are spending less of their disposable income on food during the late 1990’s • In the past 10 years, supermarkets have experienced a two-fold increase in shoppers who consider a grocery store the primary source for a pre-made dinner (18% of total population) Supermarkets are increasingly the primary source for pre-made, inexpensive dinners. Source: “Meal Solutions”, Food Marketing Institute, 2000

12. Microeconomic DataU.S. Food Consumption – Lunch at Work • Workplace lunch facts: Bring Lunch from home 45% At least once per week 20% Everyday Skip Lunch completely 31% Sometimes 11% At least once per week Nearly half of American workers are looking for lunch solution to take to work Source: “Brown Baggin’ It”, American Demographics, January, 2001

13. Microeconomic DataMeal Preparation Time • As consumers’ lives have become increasingly hectic, the length of time dedicated to meal preparation has decreased • Time dedicated to lunch (both preparation and consumption) has decreased to only 15 minutes Americans have less time to spend on meal preparation with lunch being particularly hectic for consumers Source: “Changing Cooking & Dining Habits”, www.globalgourment.com, 2000

14. Microeconomic DataU.S. Food Attribute Importance • Surveys indicate the top four food attributes for making a purchase are taste, nutrition, product safety, and price. These attributes serve as potential drivers for consumer purchase behavior Source: “Nutrition”, Food Marketing Institute, 2000

15. Microeconomic DataU.S. Food Attribute Importance • Further research indicates health importance for consumers is typically fleeting • The food industry is known to take advantage of this fact through loose nutritional claims of low fat or low sodium products • A Food Marketing Institute (FMI) survey found the most definitive health changes were additions to their diet in the form of fruits and vegetables rather than eliminating certain unhealthy aspects in their current meal purchases While nutrition was identified as a potential driver for food consumption, consumers often don’t make their purchase decisions based on this attribute Source: “Nutrition”, Food Marketing Institute, 2000

16. Microeconomic DataU.S. Food Consumption - Snacks • A significant percentage of Americans snack: 93% 50% 40% Snack food sales continue to grow. Sales topped $30 billion in 1999 1 Source: “What’s in Store”, International Dairy Deli Bakery Association, September, 19981 Press Release, Snack Food Association, July 19, 2000 (most recent available data)

17. Microeconomic DataNutraceutical Trends • Fast growing segment of food marketplace • Analysts currently estimate nutraceutical market at $15 billion • Currently, “nutritionally-improved” foods account for more than 78% of growth in 35 food categories • Growth attributed to large population of aging baby boomers and awareness of “age” disorders (e.g., osteoporosis) • Popular in the following forms • Beverages (OJ, fruit juice, smoothies, spritzers, etc.) • Cereal • “Meal-replacements” (shakes, snacks, etc.) Source: www.cnn.com/2000/food; January 1, 2000 “On your plate,: top food issues for your meals.” http://www.opta-food.com/trends/3tds-ptctpt.html

18. Microeconomic DataSummary Statistical Trends and Observations Takeaways • Supermarkets are a primary source for shoppers who are looking for a pre-made dinner The market for single serve, shelf-stable products should expand • A significant percentage of American workers skip lunch or eat out regularly American workers have a need for a quality tasting, convenient prepared lunch meal • Time spent for lunch (and other meals) has become increasingly short Lunch convenience • Nutrition is identified by consumers as an important food attribute, but has less impact in their actual purchasing decision Health attributes for meals can be subtle. Taste is a true driver for food consumption • Snacks food sales are growing a represent a significant portion of a typical consumer’s consumption Snacks represents a robust and growing segment of the market

19. Consumer Needs Analysis

20. Psychographics Survey Output

21. Consumer Needs AnalysisMoment-In-Time Decisions - Summary • Convenience is a key factor if the consideration set includes any single serving meals • Meal & snack sizes away from the home tend to be small due to hectic schedules • After convenience is evaluated, taste drives a meal or snack decision • Heath was an important consideration, but was often neglected at the time of purchase, in favor of convenience & taste • Price will always influence meal & snack purchases Source: These takeaways are derived from consumer interactions. These include surveys and discussions about general and eating behaviors. The survey is included in the Appendix.

22. Current Portfolio Analysis

23. General Mills PortfolioEvaluation Process

24. Portfolio OverviewCore Demographics and Dayparts Served Adults BacOs Chex Mix Bugles Pop Secret Nature Valley Yoplait Progresso Haagen Dazs RTE Cereals Bowl Appetit Lloyd’s BBQ Old El Paso Green Giant Pillsbury B.C. dessert mixes Pillsbury Morning Noon Night B.C. Helpers Ginos/Totinos Family Fruit Snacks Dunkaroos Squeezits Time of day and lifestage factors, while not drivers, help isolate drivers Go-Gurt Kids UNDERSERVED Lunch hour generally underserved by existing offerings

25. Needs AnalysisTaste, Flavors and Nutrition * For the senses (taste) BacOs Chex Mix Bugles Pop Secret Haagen Dazs B.C. dessert mixes Ginos/Totinos RTE Cereals Bowl Appetit Dunkaroos Squeezits Lloyd’s BBQ Old El Paso Pillsbury B.C. Helpers Standard Ethnic Progresso Fruit Snacks Go-Gurt Nature Valley Yoplait Green Giant For the body (nutrition) UNDERSERVED General Mills delivers very little ethnic flavor * Critical drivers when holding price and convenience constant

26. Brand ReviewLeverage Opportunities General Occasions Numerous opportunities to leverage powerful brand names in various formats

27. Competitive Analysis

28. Competitive AnalysisBrands Grocery Deli Frozen Foods Fast Food

29. Competitive AnalysisConsideration Set • Broad Options • Consumers’ meal consideration sets include traditional restaurants and fast food outlets. • More Narrow Options • Consumers narrow their options to include only items available in the supermarket. • Specific Options • For shelf-stable products consumers are choosing from options within the category. Restaurants Shelf- Stable Grocery Deli Frozen Foods Fast Food Consideration sets allow marketers to analyze competitive options and segment consumers based on purchase behaviors

30. It’s Pasta Anytime • Kid’s Kitchen • Ragu Express Competitive AnalysisGrocery Store Competitor Characteristics • Cup o’ Noodles • Top Ramen } • Limited Variety • Water Based • Less Expensive • Limited Kids Options Dry Shelf-Stable } • Largely Soups and Italian Dishes • More Kids Options Wet Shelf-Stable } • Large Variety • Oil Based • Better Tasting • Targets Dinner • More Expensive • Uncle Ben’s Rice Bowls • Marie Callendar • Lean Cuisine Frozen Products launched in the grocery store require positioning against the specific attributes of its competitive consideration set

31. Competitive AnalysisLunch, Dinner and Snack Offerings For the senses (taste) Michelina’s Snacks Stouffer’s Marie Callender’s Bowls EZ Mac Kid’s Kitchen Swanson It’s Pasta Anytime Michelina’s Ragu Express Standard Ethnic Chef Boyardee Cup Noodles Top Ramen Smart Ones Bowls Uncle Ben’s Rice & Noodle Bowls Lean Cuisine Healthly Choice Bowl Creations For the body (nutrition) Very few ethnic products; Very few premium snack products * Critical drivers when holding price and convenience constant

32. Marketplace is not meeting the growing demand for ethnic flavors More competitive Italian segment will offer lower profits and smaller growth opportunities Single-serve snacks baked fresh is under developed segment; large growth potential Shelf-stable products geared towards men and children is an under developed segment; large growth potential Competitive AnalysisSummary Statistical Trends Statistical Trends and Observations Takeaways • Few ethnic offerings available: Chinese, Indian, Mexican, Thai • Many competitors already offer shelf-stable Italian products • Minimal single-serve, quick-bake products available as shelf-stable • Few products targeted towards children and men in shelf-stable category

33. Concept Creation

34. LogicFilter Metric Filter Concept CreationMethodology Unbiased Brainstorming Driven By Collected Data Filtered Concepts Winning Concepts Winning Concepts Sample output: Nutraceuticals – senior-oriented foods, woman-oriented foods Convenience – Cereal bars, drinkable meals, lunch-on-a-stick Ethnic fare – Chinese bowls, Mexican meals, Italian pastas, “Around-the-world” dishes for kids Snack consumption – cereal treats, time-of-day sustenance (numerous small snacks which replace meals), popcorn treats Lunch at work – refreshing fruit and yogurt, energy bars, room-temperature meals • Concepts: • Progresso Pronto • Silver Servings • Fiesta Ench-a-lottas • Betty Crocker • Single Bakes • Pillsbury Shepherds Pie • Oriental Express Betty Crocker Single Bakes Fiesta Ench-a-lottas Logic and detailed analytics used to filter concepts in timely fashion

35. Concept CreationConcept Ideas Progresso Pronto Oriental Express Fiesta Ench-a-lottas Pillsbury Shepherd’s Pie Betty Crocker’s Silver Servings Betty Crocker Single Bakes

36. Progresso Pronto • Concept • You have enjoyed Progresso Italian soups for years. Now, in addition to the world’s best soups, Progresso brings you a number of quick, hearty meal bowls to warm your heart and satisfy your hunger with the tastes of Tuscany. • Features • Personal microwave-able bowl • Ready to heat meals • Italian favorites as Roasted Herb Chicken Pasta and Arrabiatta Spicy Pasta Casserole. • Old country herbs and spices that you have come to expect from Progresso. • Includes a packet of parmesan cheese to be sprinkled over the top of the meal before serving- adding a delightful addition to the old style recipes.

37. Progresso Pronto • Potential Line Extensions • Extend the Progresso soup lines to create the following meals: • Hearty Home style Tomato Pasta, Tomato Basil Pasta Pasta Dinner, Roasted Chicken Italiano with Rice. • Brand • The Progresso brand represents “great food, simply prepared,” and is the perfect image to develop a line of hearty Italian-influenced shelf-stable meals. • The existing following of the Progresso brand will provide an immediate launch pad for Progresso Pronto. It is important to note that the Progresso line successfully markets quality shelf-stable meats in their products. This will be critical in helping consumers bridge the gap to shelf-stable meats.

38. Progresso Pronto • Needs Addressed The primary needs addressed with this product offering are the following: • General Mills offers a variety of dry cereals, snack bars, and other packaged goods designed for morning or evening consumption. However, with the exception of “Bowl Appetit,” GM does not have a lunchtime offering. • The idea behind this product allows for General Mills to tap into the “Lunch-time-on-the-go” arena and also to leverage the core competencies of General Mills in a new area. • Competitors already have an Italian segment developed in the shelf-stable (e.g. Classico and Chef-Boyardee,) ready to eat category, but GM does not currently have an offering. • Progresso Pronto gives GM the opportunity to expand the existing consumer perception of the Progresso brand from quality soups with an Italian flair to mean “Homestyle Italian” products. As such, Progresso Pronto segment (shelf-stable Italian) represents a premium product while the competition focuses mainly on the children’s market. (e.g. Chef-Boyardee)

39. Progresso Pronto • Communication • The promotion behind Progresso Pronto will differentiate the product from Progresso Soups by showing how they are a meal in a ready-to-eat bowl and compete with the other ready-to-eat, microwave-able products such as Stouffer’s frozen offerings and Campbell’s Chunky. However, the advertisements will note that Progresso Pronto is sold in a ready-to-heat and eat container, as opposed to the traditional tin can.  • Barriers to Competition • While there are few options available to adult customers in the wet shelf-stable segment, the Progresso brand brings an element of superb quality and taste that is difficult for other companies (even Campbell’s) to achieve. • Concerns/Challenges • Cannibalization of existing Progresso soups. Progresso Pronto will have to be differentiated in recipe, serving size and presentation from the existing cans of Progresso soup. Additionally, as noted above, competition from companies such as Campbell’s could come in the form of their soup lines or new “Supper Bakes.” • Potential to damage existing Progresso brand equity. • The Progresso brand is a strong insulator that will allow General Mills a defense from much of the competition.

40. Oriental Express • Concept • The dynamic flavors of Oriental Express will take you back to the storied history of the ancient Asian Continent. General Mills brings Asian cuisine to your table in a convenient, ready-to-heat and eat single serving package. You enjoy all of the international flavor that you love with the added convenience of not having to leave your desk or home. • Features • Through this channel, product offerings will come in a “wet” form such as noodle or rice with vegetables and meat. Also, there could be a small container of crunchy noodles to serve as a topping encased on the top of the package. • The offering will come in packaging with a plastic lid for aesthetic purposes that will cover the true “canned” top, which will be removed for the microwave process.

41. Oriental Express • Potential Line Extensions • Some of the possible offerings would be the following: • Chicken Lo-Mein, Pepper steak and rice, Orange Chicken and noodles, Thai Spring Noodles with Chicken, etc. • Complimentary products such as Asian noodles, garnishes and teas. • Brand • “Oriental Express” will be a new brand. It wouldn’t be appropriate to have this concept fall under the Betty Crocker brand or other existing brand umbrellas. As opposed to leveraging an existing brand, creating the “Oriental Express” brand will be expensive. However, in light of the fast-growing popularity of Asian food, the long-term benefits of developing a new brand can be significant.

42. Oriental Express • Needs Addressed The primary needs addressed with this product offering are the following: • General Mills offers a variety of dry cereals, snack bars, and other packaged goods designed for morning or evening consumption. However, with the exception of “Bowl Appetit,” GM does not have a lunchtime offering. • The idea behind this product allows for General Mills to tap into the “Lunch-time-on-the-go” arena and also to leverage the core competencies of General Mills in a new area. • With consumer preferences trending toward Asian food (Chinese, Thai, etc.), General Mills can capitalize on the trend with this new product. • Communication • The promotion behind Oriental Express will introduce full-flavored, Asian food into the shelf-stable market. The advertising will show how the individual servings are a meal in a microwave-able, ready-to-heat bowl. • The advertising will differentiate Oriental Express from the already available and popular noodle-based dry products in this category. (e.g. Nissin, Cup-o-Noodles) • There is a possibility of co-marketing with the “Iron Chef” television program as a way of tapping into the popularity of this Asian Cooking program. For example, using the “Iron Chef” show to advertise the concept and generate interest

43. Oriental Express • Barriers to Competitors • There is little opportunity for GM to quickly erect barriers. The best opportunity exists only if GM can spend substantially to create strong consumer associations between the brand and “quality” Oriental food. • Concerns/Challenges • We look at this offering to encounter the following barriers: • The cost of creating and marketing a new brand instead of marketing under the Betty Crocker name, or Pillsbury name. • Encountering brands such as “La Choy” and “Chun King” which already have a head start on GM. • Other frozen food product offerings from Healthy Choice, Lean Cuisine, Uncle Ben’s that feature “oriental-style” entrees that, again, have a lead over GM concerning products in the market. • Other wet offerings that exist (Chef Boyardee, Campbell’s, etc.)

44. Fiesta Ench-a-lottas • Concept – • Your kids will love these delicious bites of flour tortillas, filled with meats and cheeses and surrounded by Old El Paso’s rich enchilada sauce. These single-serve meals bring the flavors of Mexico to your school home with the great taste you’ve come to expect from Old El Paso. Just pop them in the microwave and enjoy your meal. • Features – • Single-serving ready-to-heat bowls of enchiladas style meals. • Bite-sized flour tortilla pockets surrounded by Old El Paso’s popular enchilada sauces. • Pockets contain one of three fillings: beef, chicken or cheese. • Ench-a-lottas are packaged in a plastic bowl with a vacuum-sealed pull-top lid and a plastic cover to be used while heating in the microwave. • Served in 7.50 oz. bowls to appeal to children or light eaters. (Potential future packaging:15 oz packages for adults seeking full meal.)

45. Fiesta Ench-a-lottas • Potential Line Extensions • New flavors can be established to address different consumer segments/needs: a.  Spicy/ Hot- to appeal to adult customers b.  Green Chili- rich sweet flavor c.  Taquitos- similar concept with crunchy taco chips to add after cooking • Brand • The Old El Paso brand is perfect for launching this new line of Mexican specialty meals. Families love Old El Paso as evidenced by the fact that it is the number one selling brand of Mexican foods. The Ench-a-lotta name will allow GM to enter a childrens’ market, thereby growing the existing customer base to include a whole new group of lifetime customers.

46. Fiesta Ench-a-lottas • Needs Addressed The primary needs addressed with this product offering are the following: • Allows GM to meet growing demand for ethnic flavors in children’s markets • Shelf-stable, single-serve products are convenient for storage and quick and easy to prepare. • Consumer demand for meat flavors and sustenance in shelf-stable, single-serve products • Communication • The promotion behind Fiesta Ench-a-lottas will target the childrens’ market with catchy cartoon-based fun advertisements. Additionally, a web-site will be created allowing kids to join (with parental approval) the “Wanna-lotta” kid’s club! • The advertising will show how the individual servings are a meal in a microwave-able, ready-to-heat bowl.

47. Fiesta Ench-a-lottas •  Barriers to Competition • Leveraging the brand of Old El Paso, with the marketing and distribution of General Mills, gives GM an excellent opportunity to create barriers within consumers minds’ similar to those established by ConAgra with the Chef Boyardee offerings. • ConAgra does not currently have a strong Mexican brand. • Old El Paso’s brand serves as an initial barrier to competitors like ConAgra, with the ability to deliver a wet, shelf-stable offering. Heinz, with the acquisition of Delimex, holds knowledge of Mexican frozen food market and distributes what is considered by some to be a higher-quality product. However, no competitor currently offers a shelf-stable, single-serve Mexican product.   • Concerns/Challenges • The primary challenge with delivering on market needs and delivering a successful offering will be in effectively selling the quality, flavor and safety of shelf-stable meat products. As noted, Con Agra has been extremely successful with the Chef-Boyardee line of pasta-based wet meat products. A principal goal we have is to educate the customers as to the Fiesta Ench-a-lotta offering as a substitute for current incumbent offerings in the children’s wet shelf-stable category.

48. Pillsbury Sheppard’s Pie • Concept • This delicious stew of premium vegetables and hearty beef is a meal-in-itself. Pillsbury Sheppard’s Pie is great for lunch or dinner. Either way, it is sure to satisfy your hunger. Topped off with a flaky Pillsbury crust just like grandma used to make, our Sheppard’s Pie is sure to be just right when you need a quick, yet wholesome meal. • Features • Single-serving ready-to-heat bowls of Sheppard’s Pie. • Pillsbury Sheppard’s Pies are packaged in a plastic bowl with a vacuum-sealed pull-top lid and a plastic cover to be used while heating in the microwave. • Served in 15 oz packages for adults seeking satisfying lunch or light dinner.

49. Pillsbury Sheppard’s Pie • Potential Line Extensions • New flavors can be established to address different consumer segments/needs: a.Spicy – using curry powder to satisfy those seeking variation available in England b.Chicken and Dumplings – Pillsbury dumplings and chicken within thick gravy c.Beef Stew – Beef, vegetables, and potatoes sans crust • Brand • This product will be marketed under the well-established Pillsbury brand name which most American households associate with fine breads and crust brought to them by the Pillsbury. Pillsbury is well known and will help to reduce education costs and reduce customer’s concerns over quality.

50. Pillsbury Sheppard’s Pie • Needs Addressed The primary needs addressed with this product offering are the following: • There is a market opportunity for bold, masculine flavors in the shelf-stable, single-serve category. Additionally, there is consumer demand for meat flavors and sustenance in shelf-stable, single-serve products • General Mills offers a variety of dry cereals, snack bars, and other packaged goods designed for morning or evening consumption. However, with the exception of “Bowl Appetit,” GM does not have a lunchtime offering- Pillsbury Sheppard’s Pie satisfies that need. • The idea behind this product allows for General Mills to tap into the “Lunch-time-on-the-go” arena and also to leverage the core competencies of General Mills in a new area. • Communication • Focus on “food like grandma made” and Pillsbury dough boy. • Pillsbury Sheppard’s Pie will be communicated to males looking for easy meals to prepare. A satisfying meal with meat, potatoes, and crust will be stressed to garner interest.