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

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

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

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

while the Zappetites¨arget a broader customer group. t 6 . The product is explicitly designed for a ¨ very limited customer group. as it involves several properties and ¨ criteria that the company has no experience with.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.Tobias Strebitzer Marketing & Sales February 16.

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