Advanced & Applied Business Research PILLSBURY COOKIE CHALLENGE Due Date: 4th March 2013

Executive Summary:
Ivan Guillen is the Marketing Manager of the Refrigerated Bakes Good (RBG) at General Mills Canada Corporations (GMCC). GMCC is the Canadian segment of the General Mills Inc. (GMI) and is the largest division in the international segment of the GMI. GMI is the 6th largest food product manufacturing company in the world by having food products in more than 100 countries.Total revenue of the company in 2006 was $ 11.6 Billion.
Refrigerated Baked Products (RBG) is the fourth largest category of the GMCC but in the last year few years this category havent shown much progress. In the RBG cookie is the backbone of the company. Cookie product line makes the 75% profit of this category. Hence when RBG cookie performs well than this category performs well and so is the vice versa. In the last three years the annual growth of the cookies segment is just 1% which is far less than the company wants from this category. Moreover the house hold penetration has also fallen to 5-year low. The company is looking for the 5%-7% annual growth but the cookie growth in Canada is not more than 1%. In February 2007 Ivan Guillen has to present RBG new business plan to senior leadership and for this purpose he wants to know about the taste issues, marketing and the advertising campaigns of his division especially Pillsbury cookie. He wants to do a research so that he can know the consumer preferences of the Canadians and how much they are different from the US consumers as nearly all the advertising campaigns are leveraged from the US segment of the company which is GMI.

Statement of Problem:

GMCC operates autonomously from GMI and the business teams have full authority over products, brand approaches and buyer spending. But still they have to pull products advertising from the US division as brands resources were far less than that of US. In Canada the popular products of RBG are Cookies Breads Sweet Goods

Cookie is the most used product of this category. During the five years RBG category had experience very less annual growth. House hold penetration of Pillsbury cookie has fallen to 24%. Hardly any increase in annual growth of the Pillsbury cookies. Pillsbury does their advertisement through Pillsbury Doughboy which is one of the top 10 advertisement icon of the century. GMCC uses US ads for Canadian market as the brand budgets were less in Canada. New advertisement spots were expensive and they can cost anywhere from $200,000 - $ 500,000. So US ads were used in order to cut the cost. In 2005, cookie commercial Kisses was launched. Though it fell below in brand recognition and relevance norm for the Canadian market still it was used and hence didnt provide cookie category with the hoped result which the company was looking for. GMCC hasnt collected consumer info and also the consumer preferences of the Canadian market. No such research has been done in the past and they have assumed the Canadian market to be the same as the US market.

Ivan Guillen is looking to increase cookie performance and in order to do this he is thinking to do the following Increase frequency of purchase Increase house hold penetration Do combination of above two

Causes of the Problem:

Ivan Guillen wanted to gain better understanding of the cookies, so he decided to do researches to find the difference that exist between the US market and the Canadian market. He wanted to have better understanding of preferences, attitudes and the behavior of consumerso he called Lau Pasto RBG consumer Insight Manager to help him.Lau Pasto suggested that they should conduct a usage and attitude study on cookie costumer. For this purpose the consulted MartetTool a well renowned research firm. The findings of the Usage and attitude research are as follows Scratch baking is dominant method of baking in Canada while in US refrigerated baking dough is the most used one. In Canada 56% bake only from scratch while in US only 22%. Quality and the kids request are the two purchase drivers that are in high numbers in Canada than in US.

Though scratch baking is the dominant baking method among Canadians still they perceive refrigerated cookie dough as more convenient method of cooking than the US users.

Ivan Guillen and Lau Pasto still wanted to gain better understanding of consumers beliefs and feeling so they carried out 2 more researches with Terra Nova Market Strategies INC. The two researches were In Home Immersions & Discovery Workshops. The findings in the two researches were Baking and eating Cookies were particularly special as they were the mode of sharing happiness especially with kids. Pillsbury cookies were still better than other ready made products as they can transform ordinary meals into special ones. There was no concern with nutritional values of Pillsbury. Initially it was but later it was found that its not a real concern among users. The above researches showed that although the demographic and the society structure were very much the same between US and Canada but still there are slightly different from each other. The marketing team of GMCC in the Canada didnt did these types of researches in past to know the split that was there in the two markets. They always assumed the Canadian market and the behaviors and the consumer preferences of Canadians same as the US consumers.

KEY LEARNING

IMPLICATION

ACTION

Baking Method

In Canada scratch baking is preferred in baking cookies

Product should be designed to prepare cookie from scratch. Kids should be target market and they should be satisfied with the product. Ads should be designed showing the high quality of the product. Ads and marketing techniques should be designed to satisfy Canadian consumers Teams should be provided with enough budgets to carry out their own marketing strategies.

Kids

Kids request and the kid involvement in Canada are much higher

Quality

For Canadians quality of the cookies is very important

Marketing

Canadian market is different from the US market

Brand Budgets

Brand budgets are low in Canada

Decision Criteria and Alternative Solutions:

Most of the hindrances that the RBG category is facing in their annual growth are due to the fact that they are leveraging marketing strategies and ads from the US parent company. They are assuming that the Canadian and US market are the same and hence whatever is working in the US will be acceptable to Canadian consumers as well.But the researches showed that though the two markets are pretty much similar but still there is a split between the two markets and for this purpose Canadian market should be considered separately. GMCC should develop its own marketing strategies to satisfy the needs and the preferences of the Canadian users. They should develop new products and brand strategies that are particularly for the Canadian market and should bring in new ideas to support their products.Scratch Baking is very dominant method of baking cookies in the Canada nearly half of

the cookies made in country are through this method so they can try to focus on this and develop products that are made from scratch.Kids involvement in the cookies is pretty high in Canada so they must be targeted and they must be encouraged and satisfied in the marketing techniques. Quality should be another aspect on which they have to work. If they can increase the quality of the RBG cookies and show cast this in their ads than they can have more penetration in the market. The negative aspect of the special marketing techniques and the ads particularly for the Canadian market is that it can increase the cost of the product. With the higher prices consumers may fell less tempted to buy the Pillsbury cookies. Still the positives that can be drawn are much better than the negative ones. This can help them penetrate in the market more and that can help them in increasing their annual growth which they are looking for

Recommended Solution, Implementation and Justification:

The recommended plan of action should be to include Canadian consumer preference in the product and the marketing techniques.New product should be designed that allows baking cookies from the scratch. Ads of the product should be designed to encourage kids to bake it and it will be enough to satisfy them. If that doesnt work than they can put gifts for kid in the rappers of the product to encourage them to influence their parents to buy the Pillsbury cookies.