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Bowl Appètit!

Bowl Appètit!. Section 1 Team 5 Julie Biederman Brenna Copeland Tina Bacon Krebs Abigail Pachon Nancy Roman Laurie Streitmatter. Return to Locker #521. Agenda. Situation Analysis New Product Growth Strategy Product Concept: Betty Crocker Lunch Pail

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Bowl Appètit!

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  1. Bowl Appètit! Section 1 Team 5 Julie Biederman Brenna Copeland Tina Bacon Krebs Abigail Pachon Nancy Roman Laurie Streitmatter Return to Locker #521

  2. Agenda • Situation Analysis • New Product Growth Strategy • Product Concept: Betty Crocker Lunch Pail • Product Concept:Snack Bowl Appetit • Appendix

  3. General Mills • Revenue for quarter ending 8/01/01 = $1,771,200,000 (consistent with previous quarters) • Complementary resources gained from Pillsbury acquisition • Company focus on innovation, consumer convenience and expanded production & distribution • Strong earnings growth over past 5 years

  4. General Mills Brand Equity • Betty Crocker – Since 1920, Americans have trusted Betty Crocker for quality, good taste and value. • Fruit Roll-Ups, Fruit By the Foot: Brands successfully targeting kids since 1982 by incorporating fun, interaction, innovative shapes, flavors, colors and packaging. • 90-95% household penetration • Pillsbury Doughboy – Global icon whose smile and cheery disposition transcend language and cultural barriers. • Nature Valley Granola Bars- Brand associated with being a 100% natural source of energy, popular with adult and kid consumers as both a light meal and a snack.

  5. General Mills Partner Relationships • Cereal partnership with Nestle-Cereal Partners Worldwide • #2 cereal company worldwide • 75 international markets • Joint Venture with Pepsico-Snack Ventures Europe • #1 Snack company in continental Europe • Joint Ventures represented 10.66% of 2000 sales source: General Mills annual report

  6. General Mills Consumer Relationships • Strong brand loyalty aids market penetration • Number 1 or 2 market positions in virtually every category in which it competes • 2001 Betty Crocker Meals sales: $841.9 million • Consumers are willing to pay a premium • For Bowl Appetit, high indices apply to consumers with incomes of over $40,000 in most cases *source: Nielsen Panel Data

  7. Bowl Appetit Positioning • Target Market/Customers • Psychographic target is a busy adult (men and women, parent, professional, etc…) • Advertising and promotional target seems to focus more specifically on busy moms/homemakers with school-aged children • “Single serve convenient lunch bowl”

  8. Current Bowl Appetit Competitors • Shelf stable • Chef Boyardee, Maruchan, Kraft Easy Mac, Ragu, Hormel, Spice Hunter etc. • Frozen • Healthy Choice, Stouffers, Lean Cuisine etc. • Fast Food • Chain restaurants • Work/school cafeterias • Home cooking/fresh foods

  9. SWOTBowl Appetit Strengths • Convenient • No refrigeration required • Disposable and self-contained • Strong Brand Equity (through Betty Crocker & through Bowl Appetit) • Attractive packaging • Consumers like product name 1 • Supported by full General Mills resources 1 Source: Depth interviews with consumers. See Exhibits 1 & 2.

  10. SWOTBowl Appetit Weaknesses • High sodium content • Inconsistent consumer preparation • “too runny” or “too dry” • Complicated preparation instructions • Fill-line difficult to see • Confusion over pre-heating the water • Serving size inadequate for larger appetites (men, dinner portions, etc) • No meat and few veggies/fruit Source: Depth interviews with consumers. See Exhibits 1 & 2.

  11. SWOTBowl Appetit Opportunities • Expand target consumer base • To include children and/or men • To include meals other than lunch • Enhance and clarify brand image • Emphasize healthy aspects of product • Improve quality/taste of product • Introduce more spicy and/or ethnic flavors • Capitalize on partnerships and other complementary General Mills products • Clarify store placement • Specific aisles, move up on shelf, etc.

  12. SWOTBowl Appetit Threats • Consumer preference shifts • Consumers may refuse to pay premium for convenience • Introduction of more appetizing shelf-stable meat product could grab share • Tele-commuting trend may reduce size of target market

  13. Agenda  • Situation Analysis • New Product Growth Strategy • Product Concept: Betty Crocker Lunch Pail • Product Concept:Snack Bowl Appetit • Appendix

  14. Focus on SWOT Opportunities • Expand target to include children • Large market for lunch products • Based on National School Lunch Program statistics, this market is  $17 bil (including school lunches) in 2000 1 • Lunchables revenue estimated at $800 mil in 2000 • Lunchables dominates the lunch kit category = room for market entry with alternative • Improve healthy brand image • Consumer data suggests nutrition for kids meals is growing in importance through 2005 (see next slide) • Press indicates that nutritionists question Lunchables high sodium content (75% of daily allowance) 2 1 Source: USDA.gov fact sheet: National School Lunch Program 2 Source: CNN.com Health Line story dated March 16, 1997. “Lunchables may be munchable – but study warns of salt”.

  15. Importance of Health – Kids Consumer Preferences Source: mad.co.uk web-site. Reuters Reports: “Children Exert Greater Influence Over Purchasing Decisions in the Food & Drinks Market”.

  16. Interpretation of Consumer Data • Novelty and Convenience were rated the most important of 5 key trends driving NPD in children’s products • Bowl Appetit has convenience • Fun (from a kids’ perspective) could involve box activities, entertaining packaging, etc. • 3 attributes (all health related) are increasing in importance • Low fat/sugar content • Natural and organic • Functional & fortified • Both kids and parents must find the product desirable

  17. Why Target Kids? • Emergence of a highly brand literate younger age • Increasing amount of economic influence exerted by kids • Establishment of brand loyalty early in life • Ready to eat meals’ contribution to a child’s sense of independence • Current gap in General Mills portfolio - no meal product for kids

  18. Product Growth Strategy • Bowl Appetit will grow to include healthy and easy meal solutions for the whole family • Short term: • Introduce two new products targeted at kids • Improve and emphasize healthy, wholesome image of Bowl Appetit • Long term: • Build a portfolio of meals to serve the entire family

  19. Agenda  • Situation Analysis • New Product Growth Strategy • Product Concept: Betty Crocker Lunch Pail • Product Concept:Snack Bowl Appetit • Appendix 

  20. Product Concept 1 Betty Crocker Lunch Pail • Know what your kids are eating when you send them off to school! Betty Crocker Lunch Pail is a fun & educational disposable lunch box containing everything your child needs for a healthy lunch: • Betty Crocker Lil’ Bowl Appètit • General Mills Fruit by the Foot or Del Monte Fruit-to-Go • Nature Valley Granola Bar or Pillsbury cookie • Betty Crocker Squeezit juice box * • Lil’ Bowl Appètit is even easier to prepare: • Unwrap & detach the pre-packaged water • Pull the slide to let water into the bowl • Microwave for 3 minutes * We recommend that GM fortify the Squeezit juice to contain 50% calcium

  21. Product Concept 1 Betty Crocker Lunch Pail • Lil’ Bowl Appetit flavors: • Nacho Pasta • Pizza Spaghetti Pie • Macaroni & Cheese • Just $2.29 (suggested retail) for the Betty Crocker Lunch Pail containing the 8 ounce Lil’ Bowl Appetit, fruit, dessert and juice!

  22. Product Concept 1 - Lunch PailProduct Specifications • Develop 8 ounce Lil’ Bowl Appetit with water in attached container, pre-measured and ready to add • Reduce the sodium content in Lil’ Bowl Appetit • Reduce microwave time to 3 minutes • Develop new kid friendly flavors • Include a 200 mL Betty Crocker Squeezit juice box • Fortify Squeezit with 50% RDA calcium and 100% Vitamin C • The Lunch Pail will be decorated with pictures, games and puzzles • Multi-packs will be produced for club stores

  23. Lunch Pail for Kids Scenario A: Balanced Lunch Lil’ + + + = Scenario B: Balanced Lunch Lil’ + + + =

  24. Concept Target MarketBetty Crocker Lunch Pail • Kids ages 7-11 in grades 2nd through 6th • Who bring lunch to school • Who enjoy the interactive fun packaging • Who already eat products like Pillsbury Cookies, Fruit by the Foot, etc. • Whose schools have microwaves • Parents who value nutrition for their kids and want to be sure that kids are eating a complete meal • Parents who value convenience

  25. Customer Switching LogicBetty Crocker Lunch Pail • Healthy complete meal • Nutritional analysis shows strength of this option • School lunches can be healthy, but kids can choose more fattening & less healthy options • Convenience • Complete meal is ready-to-go (including drink) • Kid appeal • Themes like Harry Potter to entice kids • Puzzles and word searches offer added amusement • Component foods are “tradeable” in the lunch room (see Cafeteria Observations in the Appendix) • Box Tops for Education

  26. Lunch Pail Nutrition Scenario A Lunchables sodium content is 1240mg with 15 g of fat/ 8g of saturated fat.

  27. Lunch Pail Nutrition Scenario B Lunchables sodium content is 1240mg with 15 g of fat/ 8g of saturated fat.

  28. Nutrition Notes • Based on an interview with a pediatric physician, our Lunch Pail product is preferable to Lunchables in the following areas: • Lower Sodium content • Lower fat and saturated fat content • Higher fiber • Higher Calcium • Higher Vitamin C • Higher Iron Source: Depth interview with Pediatrician, 11/15/2001.

  29. Lunch Pail Fun & Education • Themes could include: • Harry Potter • James & the Giant Peach • Madeline • Lunch pail is functional and provides activities for kids • Crossword puzzles • Word Search • Q&A • Parents can collect Box Tops for Education points towards the purchase of future books

  30. Relevant Competitors Betty Crocker Lunch Pail • Refrigerated lunch kits • Kraft Lunchables • Current market leader with 70% market share • Priced at $2.79 (suggested retail) for complete lunch kit • Shelf stable lunch kits • Starkist Tuna kits with: • StarKist Flavor Fresh Pouch, crackers, low-fat mayo, pickle relish, a spoon, napkin and mint (no juice) • Priced at $1.75 (suggested retail) • Lack of shelf stable lunch kits targeting kids • Shelf stable entrees (Chef Boyardee & Hormel) • Homemade lunches 1 • School cafeteria 1 source: Lunch Room observation data in exhibit 4

  31. Promotion StrategyBetty Crocker Lunch Pail • Back to School Launch 8/1/02 • Coupons for awareness and trial • “Guerilla Promotions” • Mannequins at Gap Kids, Limited Too, Hollister and department stores will hold the Betty Crocker Lunch Pail • Magazine ads in Working Mother, Southern Living, Redbook and Cooking Light • TV commercial in 1/03 • Partner with Target on color-themed ads

  32. DistributionBetty Crocker Lunch Pail • Grocery stores • Best case scenario: dual placement • Shelf-stable placement near Chef Boyardee and Hormel Kids’ Kitchen • Free-standing display near refrigerated Lunchables • Consistent placement in every store • Club stores • Variety 10-packs featuring multiple storybooks

  33. Fit with General MillsBetty Crocker Lunch Pail • Brand equity fit • Betty Crocker symbolizes wholesome, trustworthy family meals • Strong brand awareness for Fruit by the Foot, Del Monte fruit and Nature Valley • Build lifetime loyal customers through Lil’ Bowl Appetit • Marketing fit • General Mills already markets very effectively to kids (Cheerios, Lucky Charms, Fruit Roll-ups) • Distribution • No new resources required to distribute Lunch Pails to stores already receiving deliveries

  34. Consumer BaseBetty Crocker Lunch Pail • Category: Lunch Combination Kits • 17,859 homemakers have purchased in the last 6 months • Per month frequency varies between zero and over 11 units Source: MRI Data for 1998

  35. Revenue ProjectionsBetty Crocker Lunch Pail • GM revenue per unit: $1.99 • Based on suggested retail of $2.59 and Peter MacDonald’s comment that stores mark-up items by 30% on average • 2% to 6% market share at introduction and 23% to 27% share at maturity • Current market leader has 70% share • Revenue of $55 million in year one; $344 million at maturity Source: MRI Data for 1998

  36. Agenda  • Situation Analysis • New Product Growth Strategy • Product Concept: Betty Crocker Lunch Pail • Product Concept:Snack Bowl Appetit • Appendix  

  37. Product Concept 2 Snack Bowl Appetit • Let your kids be the chefs! Kids can whip up their own hot, healthy, after-school snack by simply adding water and microwaving. Snack Bowl Appètit is a convenient, nutrient-rich solution for your kids’ cravings.

  38. Product Concept 2 Snack Bowl Appetit • Snack Bowl Appetit flavors: • Nacho Pasta • Pizza Spaghetti Pie • Macaroni & Cheese • Bacon Cheddar Mashed Potatoes • Just $1.60 (suggested retail) for the 8 ounce Snack Bowl Appètit.

  39. Snack Bowl Appetit Product Specifications • 8 ounce Bowl Appetit with water in attached container for the child to add • Same design and size as Lil’ Bowl Appetit – just a different name • Add a new mashed potato flavor • Reduce the sodium content in Snack Bowl Appetit • Packaging will be same as regular Bowl Appetit, except with brighter colors and the word “Snack” added to the name

  40. Concept Target Market Snack Bowl Appetit • Kids (ages 7-16) whose eating habits include an after school snack • Kids who need extra energy before sports or after school activities • Parents looking for a healthy alternative to junk food for their kids’ snacks • Parents who may not be home after school and want a snack in the house that is kid-friendly in terms of preparation

  41. Customer Switching LogicSnack Bowl Appetit • Healthy snack • More nutritious (and filling) than chips, pretzels and snack cakes • Less fattening than frozen hot snacks (e.g., pizza rolls) • Convenience • Shelf stable (in comparison to frozen or refrigerated snacks) • Continuity with Lunch Pail • Kids who like Lunch Pail will want to continue eating Bowl Appetit • Box Tops for Education

  42. Relevant CompetitorsSnack Bowl Appetit • Shelf Stable • Chef Boyardee, Hormel Kid’s Kitchen, Kraft Easy Mac, Ragu • Frozen • Uncle Ben’s Mini Bowls, Hot Pockets, frozen pizza • Home cooked snacks/fresh fruit • Miscellaneous • Kraft Handi-snacks, candy bars, popcorn, cookies, chips etc.

  43. Promotion StrategySnack Bowl Appetit • Back to School Launch 8/1/02 • Coupons for awareness and trial • Event marketing at theme parks and sporting events • TV commercial in 1/03

  44. DistributionSnack Bowl Appetit • Grocery stores • Placement near Chef Boyardee, Hormel Kids’ Kitchen and other competitors • Club stores • Variety 10-pack offerings

  45. Fit with General MillsSnack Bowl Appetit • Brand equity fit • Extends the Bowl Appetit brand to kids and teenagers by providing a smaller portion • Betty Crocker symbolizes wholesome, nutritious family foods • Marketing fit • General Mills markets effectively in key snack categories (granola bars, popcorn, snack mix) • Distribution • No new resources required to distribute Snack Bowl Appetit to stores already receiving deliveries

  46. Consumer BaseSnack Bowl Appetit • Category: Multiple Snack Foods • Low Comparability: Crackers, Rice Cakes, Potato Chips, Pretzels, Corn & Tortilla Chips, Multi-Grain Snacks, Snack Mixes and Snack Cakes • Medium Comparability: Popcorn • High Comparability: Frozen Hot Snacks and Packaged & Prepared Dishes • Each category evaluated separately Source: MRI Data for 1998

  47. Revenue ProjectionsSnack Bowl Appetit • GM revenue per unit: $1.25 • 0.5% to 3% market share (unit volume) at introduction and 1% to 10% share at maturity • Marketsharebench-marked Source: MRI Data for 1998

  48. Agenda  • Situation Analysis • New Product Growth Strategy • Product Concept: Betty Crocker Lunch Pail • Product Concept:Snack Bowl Appetit • Appendix   

  49. Appendix Exhibit 1 Comments from in-depth interviews Exhibit 2 Improvements from in-depth interviews Exhibit 3 Findings from Product Concept Survey Exhibit 4 Findings from cafeteria observation

  50. Exhibit 1: Comments from In-Depth Interviews How would you improve it? Would you buy it again?

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