Case study: Oscar Mayer

Strategic Marketing Planning

Brand management & strategy
Author: Course of Studies: Year: Major: Tobias Strebitzer Business & Management 2009 Marketing & Sales

. . . . . . . Question 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Question 5 . . . . . . . . . . . . . . . . . . . . . . . . Question 3 . . . .Tobias Strebitzer Marketing & Sales February 16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Question 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 3 4 4 5 6 2 . Question 1 . . 2012 Contents 1 2 3 4 5 6 7 Situation . . . . . . . . . . . Question 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

making process is already done: Due to the different positions and opinions of the four managers. His challange is to to create a strategic plan for the company to face some major challenges coming up in the processed meat market. 3 . The diversity of products is not only a benefit to his customers. His four trusted managers each provide him memos. 2 Question 1 ¨ In the beginning of the case McGraw thinks he has never encountered such a complex business challenge¨ s the one he currently faces. what negative effects could this have on other departments? How can McGraw mitigate the damage? Favoring and focusing on a specific direction while neglecting the others. McGraw realized that the problem wasn’t a hard one.makers in different competitive fields. and bringing them all together. decisional range of opportunities is already widely spread and many facts. but looking closer at it. McGraw cant believe he ever thought the investment ¨ ¨ issue was going to be a hard one. Summarizing the proposals for each memo. 3 Question 2 If McGraw chooses a strategic direction that favors only one department. 2012 1 Situation Marcus McGraw is the president of Oscar Mayer Foods. Neglecting the solutions to these problems of course means ignoring them and facing them later. containing solutions on what’s best for the company. problems and benefits have been worked out from his managers. Another point is. that each memo is reacting to specific problems that the company has. this just means that a lot of work of his decision. As stated by McTiernan. struggling with four totally different solutions from very different managers seems to be a challenge. a subcompany of Kraft foods and a big player in the market of processed meat products. and each of them being quite different to the others.Tobias Strebitzer Marketing & Sales February 16. By the end of the case. he can rely on his team of managers who are eager on pushing oscar mayer back on the horse. McGraw would definitely harm all the other departments. clues.What changed the presidents perspective? What strategic decision-making process does McGraw pursue? At a first glimpse. but also strengthens his own company against competitors by providing profit. after he has read a the ideas listed in the four memos.

long run. Oscar Mayer stands for traditional products. as it 4 . as otherwise a 4% growth can be hard to achieve in a stagnating market. the high market share. Strengthening and promoting Louis Rich products to increase market share would there¨ fore transform them from question mark¨o star¨ This seems to be the best solution for the t ¨ . like the rising demand for healthier and more convenient products. convenience and health level. The investment decision should therefore account for these mechanisms. improving one or more departments. Here. Demand for white meat rises. but due to their traditional way of thinking.Tobias Strebitzer Marketing & Sales February 16. 2012 To best mitigate this damage. which has partially positive as well as negative impact: Their clients brand awareness and trust is solid. McGraw needs to find a broader strategic direction. the Oscar Mayer segment needs to consider changes in price. 4 Question 3 What effects is the change in the strengths and weaknesses of competition having on the Oscar Mayer Division? How does this impact the investment decision? Oscar Mayer’s strengths are its well-known brand. Missing this opportunity could challenge the existence of the company. its long-time experience in the branch and quite high profit margin. 5 Question 4 Absent any resource constraints. As the goal is set to achieve a growth in volume by 4%. which will take account of the various situations. it currently serves the company as a cash cow having a high market share in a market of relatively poor market growth. which of the four departmental directions do you think is the most viable? Which is the second best strategy? Which is the least viable? Neglecting initial costs. The second-best alternative is investing in the Oscar Mayer brand to provide shortrun profits. without damaging the others. competition may be able to outpace Oscar Mayer products by improving convenience and providing healthier products. which defines a high market growth. an investment in Luis Rich products seems to be the most viable solution. they were missing some important trends that are currently happening in the market. Looking at the Oscar Mayer brand from a strategical point of view. or by offering products at a lower price.

to mid-term profit. i would suggest to reinforce the Oscar Mayer brand. The important thing here is that the white meat trend must not be temporary. Looking at the Louis Rich brand. as acquisitions tend to potentially bring negative side impacts. Additionally. it still declined in revenue by 4. but instead paid off with market share. to get an idea of short.contribution. Still. I believe that first the already established departments need to be sanitized by it’s own power.and cost. First things to do from here is to forecast the development of each division over the next couple of years. as well as carefully developing the louis rich brand. As a strategic course. for long-run orientation. The idea is to line up the investment alternatives towards their contribution to the company’s goals. their rate of growth is currently high. * Louis Rich brand products cannibalize Oscar Mayer ¨ products and stealing¨t’s market share.9%. but also plan on lowering costs in the future to stay reasonable. This can have different reasons: * Continuous reduction of advertising & promotion expenses over the last years. 6 Question 5 Given the information in the case. distribution channels and marketing. OM ı products were not yet lowered in price. 5 . 2012 provides over 80% of the income. One of the major issues seems to be the 15% increase of operating income over all divisions. convenient product line. acquisition investments can be thought of. While the OM brand was developed over a long time and has a strong brand name. Making investment decisions in the product line that loses market share due to an expiring trend would be critical. as explosive investments in LR could lead to business failure in case of trend expiry. * Customer trend preferring white meat. red meat outperforms white meat by taste and convenience. which means that he needs to allocate $27 MM. the portfolio should be backed up by a new. They need to stay high in market share by investing in maintenance of their products. The least decision to make is investing in other smaller companies. it is also a game of numbers.5% over the last three years. what strategic course do you think the Division should pursue? In the end.Tobias Strebitzer Marketing & Sales February 16. his managers calculate with a decrease of 6. As seen in the McTiernan report (customer satisfaction). Currently. When the departments are in line.

while the Zappetites¨arget a broader customer group. as it involves several properties and ¨ criteria that the company has no experience with. t 6 .product is too risky. 2012 7 Question 6 Which of Jim Longstreet’s new product ideas is less likely to succeed? Why? ¨ I believe that the Lunchables. The product is explicitly designed for a ¨ very limited customer group.Tobias Strebitzer Marketing & Sales February 16.

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