oscar mayer(om)
TRANSCRIPT
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OSCAR MAYER(OM) :
STRATEGIC MARKETING PLANNING
Prepared By:
Goutham
MohitNishu
Rohit
Tanvi
Pratik
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It is a well known meat producing company
Established in 1883 by Mr. Oscar F. Mayer
1919- a meat packing plant was purchased
1970- C. F. Claussen & Sons was purchased( packedand distributed frozen products)
1979- OM acquired LOUIS RICH(Manufactured RedMeat)
1981- General Food acquired OM
1985- Philip Morris Companies, Inc., (Parent of Kraft'sFood) Purchased General Foods
Brief History
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PRODUCT LINES
OSCAR
MAYER(OM)
Lunch Meat Hot Dogs Bacon
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CASE FACTS
Targets in front of OSCAR MAYER Division
15% operating margins
4% Y-O-Y growth in volume
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Major Challenges1) Shift in consumer inclination.
2) Increased demand for fast and easy touse products.
3) Competition.
4) High expenses.
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Outcomes Of McTiernan Report
Core red meat brand of Oscar Mayer is
suffering share losses
The white meat solution-Louis Rich is
slowing down
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Meat Consumption
0
20
40
60
80
100
120
140
160
180
All meat Red White
Current year
5 years ago
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Outcomes Of McTiernan
Report(contd.)
New product attempts havent delivered on
the greater convenience that consumers are
demanding
Competitive environment is much tougher
than before
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Market Share
0
5
10
15
20
25
Lunch- oscar mayerLunch- louis richHot dog- oscar mayerHot dog- Louis RichBacon- Oscar Mayer
current year
prior year
2 years ago
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% CHANGE in Pound Volume
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
OSCAR MAYOR LOUIS RICH TOTAL DIVISION
CURRENT YEAR
LAST YEAR
TWO YEAR
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POUND VOLUME
0
100
200
300
400
500
600700
800
900
1000
OSCAR MAYO LOUS RICH TOTAL DIVISION
CURRENT YEAR
LAST YEAR
TWO YEARS
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REVENUE
0
200
400
600
800
1000
12001400
1600
1800
2000
OSCAR MAYOR LOUIS RICH TOTAL DIVISION
CURRENT YEAR
LAST YEAR
TWO YEARS
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ROB GOODMAN- Louis Rich Category Mgr.
White meat products are on trend; pump
more money to stay in the lead.
Rob proposes two initiatives:Boost brand awareness by increasing advertisement
and demonstrating the advantages of white meat over
red.
Introduce new products that R&D has developed
including LR Turkey Bacon and great Roast Turkey and
Gravy dinner line.
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CURRENT YEAR NEXT YEAR
POUND VOLUME* 272 305
% CHANGE V/S LAST YEAR 10.9% 12%
ADVERTISING ANDPROMOTION
$133 $155
OPERATING INCOME $29 $27
Estimated Profit & Loss : Louis Rich
*Figures in millions.
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Chicken Rite Inc. :
Location: Savannah
Sales: $15MM
Product: Low CalorieChicken Salad in Single
Serve Tubs
Turkey Time Ltd. :
Location: West CoatSales: $10-20 MN
Product: Similar toLouie Rich and alsoReady Made Frozen
Sandwiches
Crabbies, Inc. :
Location: HeadQuartered in Maine
Sales: $15 MM
Products: Shell Fish
Products ( Crabs,Lobster)
Small companies of interest to Acquire
Jane Morley-Director F&P
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Advantages of Acquiring
Turkey Time has almost same product line as of Louie Rich., Which can
support further LR expansion
Chicken Rite and Crabbies, Inc give us a chance to venture into some new
protien sources and convenience products at low risk
All the companies being small can be bought for $15-25MM each without
much annual debt
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Eric Stanger-VP OM Brand
Problems
o Ignoring OM at the stake of Louis Rich.
o High product cost for y-o-y growth.
o Reduced A&P budget.
o Slippage in value and Trust.
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Get BACK TO THE BASICS
10% Price cut on top 3 brand.
Increase A&P budget by $25 MM.
Create nostalgia.Get enough R&D to get nutritional
products.
Update analyses on capacityutilization
Rejuvenating Brand Oscar Mayer.
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Results
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McGraws ObservationsROB: Wants to spread awareness for White meat, andincrease A&P Budget to $22 M.
JANE: Wants me to purchase TURKEY TIME LtdCOST=$10-20M
1) We would get frozen food technology,
2) And Excess production and storage capacity.
BUT its Profits and Market Cap. are both unknown.
JIM: Wants me to expand to 4th category of products.ZAPATITES LUNCHABLES
Easy, fast to eat, Useful for working moms
Health Values Easy to carry.
Still in nascent stage Less in health andhygiene
6-8 months required High cost & low profits.
ERIC: wants to improve OM brand value!
Increase sales growth!
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TO DO LIST
Invest in R&D to formulate a low fat and salt line
of OM products.
Add a fourth category to the existing product line
keeping the white meat demand in mind.. Appropriate allocation of resources on both red
and white meat product lines
A&P budgets should be increased.
Special focus on health conscious market.
Acquire well performing companies ->Turkey time
ltd.
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POSSIBLE SOLUTIONS
1) Purchase Turkey Time Ltd. And start R&D onZAPPETITE Products to increase growth of OM
Division.
2) Spend on A&P of OM and LR division and start R&Don ZAPPETITE products to increase growth of OMdivision.
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THANK YOU!!!