OSCAR MAYER

GROUP 6:LAVISH KHURANALOKENDRA SINGH RATHOREMEHAK KAULNAVLIKA SINHANIKITA SHARMASIMRANJEET KAURYASH KANCHANZAHID M JAMAL

SUBMITTED TO:PROF. SEMILA FERNANDES

The Oscar Mayer Company is an American meat and cold cut production company,

owned by Kraft Heinz. It is known for its hot dogs, bologna, bacon, ham and Lunchable products.

Rob GoodmanLouis Rich Category

Manager

Jane MorleyDirector of Finance and

Planning

Jim LongstreetDirect Management Team

Eric StangerVP of OM brand

Marcus McGrawBig Boss Mike McTiernan

Consultant

Increasing popularity of healthier products with lesser fat and salt content.

High Investment Cost.

More consolidated meat industry comprising companies with sophisticated manufacturing and marketing skills(Competition).

Higher Customer Expectations.(Demand for products which are more convenient to cook and easy to consume.)

Challenges

New benefits via existing products.

Diversifying by either acquiring or merging with other companies.

Develop New Products to tap new markets/ needs.

Increase Economies of Scale & Scope of the other production line.

Propositions

Strategic Marketing Planning

Strategic Marketin

g Analysis

Strategic Marketing Goal

Strategic Marketing Action

White meat products are in trend.

Recent slowdown due to competition.

Pumping more money and increasing advertisement and promotional budgets.

Compromise profits for short run and concentrate more on volumes for the long run.

R&D help to develop new products i.e. turkey bacon, great roast bacon and gravy diner line.

“Switch to Rich” campaign.

Annual Per Capita Consumption (Pounds)

Meat Current Five years ago

All meat 170.1 168.5Red 124.9 134.7White 45.2 33.8

Rob GoodmanLouis Rich Category ManagerAnalysis & Proposed Solution

Advertisement cost would increase the cost.

The consumption of meat by the rich may not be very high because of Engel’s law.

Obstacles

Expand production by either a M&A with one of the small enterprises preferably Turkey Time Ltd.

Raise money for the acquisition by borrowing money at 12%annual debt service.

Automatically increase the product line. Example: frozen sandwiches.

Merger with Turkey Time Ltd. would result in better economies of scale.

Other options for acquisition could be with Chicken Rite Inc. or Crabbies Inc.. Chicken Inc. has low calories chicken salad serve tubs and Crabbies would cover a new range of shellfish products(eg. Crabs, lobsters)

Company Name

Estimated Sales(Millions of

$)Chicken Rite

Inc. 15Turkey Times

Ltd 10 to 20Crabbies Inc. 15

Estimated Cost 15

Jane MorleyDirector of Finance and Planning

Analysis & Proposed Solution

Obstacles

A decrease in demand would tarnish the profits and further deepen the losses of the firm.

Accumulated debt may lead to insolvency.

Increase the product line by catering to consumers based on their need.

Basic Mantra- Consumer time will help you earn consumer’s money.

Automatically increase the market share and will help you position your product in a different manner.

Positioning= Target Segment+DifferentiationProduct Name Category Product Price ($)

ZappetitesPrecooked Frozen

meals Pizza slices, tacos 1.39

Lunchables Ready to cook recipesMeat, cheese, cracker,

condiment and chocolate 1.25-1.50

Jim LongstreetDirect Management Team

Analysis & Proposed Solution

Obstacles

New product will automatically attract more risk.

Success rate of new products is very low.

Concentrate on your core competencies.

Try reducing the cost of production and cost of the product.

Develop low salt and fat line of products via R&D

Remind your employee force that they have to reinvigorate the sales growth of Oscar Mayer.

Capacity Maximization

Reinstitute the Wienermobile promotional program.Pro forma profit and loss: Oscar Mayor Brand

Parameter Last year current year Next year

Pound Volume(million) 662 650 660

Advertisement(million) 245 236 250

Operating income 107 110 110

Eric StangerVP of OM brand

Analysis & Proposed

Obstacles

Advertisement depends purely on viewership and is fully written off after it has been incurred.

Very often, markets which have become obsolete would not recover even after continuous effort is taken by the company.

Strengths WeaknessConsiderate Market Share Lower Diversification

Good Brand Image Change in Consumer PreferenceWidespread Advertisement High Investment Cost

Opportunities ThreatsEconomies of Scale Competition

Developing Newer Products Increasing Consumer ExpectationsM & A Saturated Market

SWOT ANALYSIS

Core Benefit

Potential Product

Expected Product

Augmented Product

Basic ProductCustome

r

Value

Hierarchy

Oscar Mayer took over Louis Rich in the year 1979.

Concept of lunchables was launched in the year 1988.

The revenue from lunchables was $317 million in the first year and currently it is $1 billion.

Rampant Advertisement techniques were used to increase the visibility.

In the Western countries, it was considered as a staple food.

The market for red meat was already saturated.

Analysis

Thus it becomes of primary importance that we should try to discover/tap newer markets.

Based on our analysis we feel that Oscar Mayer should try to reach out to newer markets i.e. eastern countries.

The point of objection in our mind would be the high capital expenditure but we need to realize that if we use the concept of ‘Purchasing Power Parity (PPP)’ the capital expenditure would not be as high as expected.

But we need to re-design/differentiate the way we position our product in those untapped markets.

Regardless to say ‘Beef & Pork is a big no, no.’

Solutions

Advertise Oscar Mayer as a product which sells chicken, Lamb, Beef, Turkey and other products which would be consumed by the people in the Eastern countries.

Additionally, since we are trying to target Eastern countries we need to develop newer products or else we would not be successful.

For instance In India approximately 29% (31,25,00,000) individuals are vegetarians and there is a huge gamut of people who are vegetarian by choice.

Additionally, most of the elite category are also vegetarians therefore, Oscar Mayer would not be able to maximize to its full capacity unless it introduces a vegetarian diet in it’s product line i.e. Paneer, Soya, Mushroom, Aloo Tikki etc.

Solutions

Advantage of Entering Eastern Countries

Most of the Eastern countries were closed economies till the latter half of the 19th century and were slowly opening up because of various reforms initiated by their respective Governments.

Therefore we now have an underutilized market.

Targeting an under utilized market would be much easier vis a vis a fully utilized market.(Selling in Eastern countries maybe easier than the Western countries.)

Thank You