Oscar Meyer: Strategic Marketing Planning

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Oscar Meyer: Strategic Marketing Planning
Note from McTiernan consultant: * Market for processed meats is changing threaten OM profit growth in next 3-5 years targets of +3-4% annual lb. volume growth and +15% operating income threatened * 85% of current volume from lines sold for 100 years (mature categories) * Consumer trends: * Nutrition: Red meat products too high in fat and salt decrease in sales, slowing growth rate, substitution for white meat * Convenience: Working moms (55%) needing fast and easy products (target audience): boost convenience but with decent flavor and texture * Competitive Environment: consolidated meat industry with better options * Has achieved short-term solution to offset losses: recent acquisition of Louis Rich Inc. (turkey-based line with lower fat and cheaper) leader of white meat segment but investment costs high, attempts at launching really new lines unsuccessful * Slowing growth rate * Entry of copy-cat brands * Strengths: powerful brand reputation with retailers and consumers, technology skills in R&D, unmatched sales force, history as a “get-it-done” organization
SUGGESTION: add new benefits to OM/LR products, strengthen/diversify lines via another acquisition, and internally develop new products that tap the new needs. Hard investment choices (profit margins narrowed by need to invest in new business systems, processes, and technology to compete in frozen foods channel)

Note from Louis Rich Inc. Category Manager: * Add more money to LR (still in early growth stage of life cycle) due to nutrition/white meat trend. Slowdown is due to competitors catching on, can be combatted with higher investment in LR * White meat lines can capture 50% of the market over time: * Boost brand awareness by increasing advertising behind “Switch to Rich” campaign because it’s tested well and will add share if aggressive enough * Introduce new products developed by R&D: LR turkey bacon, roast turkey, gravy dinner line
SUGGESTION: Increase advertising