Case study: Oscar Mayer

Strategic Marketing Planning

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

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

a subcompany of Kraft foods and a big player in the market of processed meat products. Summarizing the proposals for each memo. 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 Question 2 If McGraw chooses a strategic direction that favors only one department.making process is already done: Due to the different positions and opinions of the four managers. 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. Neglecting the solutions to these problems of course means ignoring them and facing them later. struggling with four totally different solutions from very different managers seems to be a challenge.Tobias Strebitzer Marketing & Sales February 16. His four trusted managers each provide him memos. but also strengthens his own company against competitors by providing profit.makers in different competitive fields. McGraw cant believe he ever thought the investment ¨ ¨ issue was going to be a hard one. this just means that a lot of work of his decision. 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. that each memo is reacting to specific problems that the company has. containing solutions on what’s best for the company. As stated by McTiernan. decisional range of opportunities is already widely spread and many facts.What changed the presidents perspective? What strategic decision-making process does McGraw pursue? At a first glimpse. he can rely on his team of managers who are eager on pushing oscar mayer back on the horse. By the end of the case. 3 . problems and benefits have been worked out from his managers. McGraw realized that the problem wasn’t a hard one. and bringing them all together. after he has read a the ideas listed in the four memos. and each of them being quite different to the others. clues. but looking closer at it. McGraw would definitely harm all the other departments. The diversity of products is not only a benefit to his customers. Another point is. 2012 1 Situation Marcus McGraw is the president of Oscar Mayer Foods.

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 ¨ . convenience and health level. Looking at the Oscar Mayer brand from a strategical point of view. The investment decision should therefore account for these mechanisms. its long-time experience in the branch and quite high profit margin. 5 Question 4 Absent any resource constraints. long run. which defines a high market growth. but due to their traditional way of thinking. Here. like the rising demand for healthier and more convenient products. 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. As the goal is set to achieve a growth in volume by 4%. competition may be able to outpace Oscar Mayer products by improving convenience and providing healthier products. as it 4 . 2012 To best mitigate this damage. improving one or more departments. the high market share. an investment in Luis Rich products seems to be the most viable solution. which has partially positive as well as negative impact: Their clients brand awareness and trust is solid. without damaging the others. Missing this opportunity could challenge the existence of the company. 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. McGraw needs to find a broader strategic direction. or by offering products at a lower price. it currently serves the company as a cash cow having a high market share in a market of relatively poor market growth. they were missing some important trends that are currently happening in the market. the Oscar Mayer segment needs to consider changes in price. as otherwise a 4% growth can be hard to achieve in a stagnating market. Demand for white meat rises. The second-best alternative is investing in the Oscar Mayer brand to provide shortrun profits. which will take account of the various situations.Tobias Strebitzer Marketing & Sales February 16. Oscar Mayer stands for traditional products.

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

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

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