Brannigan Foods Essay

Strategic Marketing Planning for the Soup atomBrannigan Foods Soup Division is a 100 year old come with with mature products which figure for 40% of the whole soup commercialize and it is the most significant role of the Brannigan Foods group. The most important category is the RTE soups which account for 78% of total sales. (Exhibit 2) former(a) products include Low sodium RTE Heart Healthy, dry soups and mixes and toffee-nosed nock and Annabelles fast and simply. Annabelles was a soup company acquired 5 old age ago in fix to add fitter sups, dry soups and fast to the companys portfolio, a maturation expressive style in the market. In terms of costumer perception of Brannigan comparing with competition, Brannigans falls behind in the followingHealth trendsDiet claims stratagem offeringsFlavors-especially popular regional onesSeasonal products outside cold weatherRetailers cover Brannigan to be-Category attraction- non innovative-less profitable than store brands and comp etition e verywhere the past 3 years the results of the division decl be been decreasing and at that place argon some(prenominal) reasons behind this The whole soup industry has been declining for several years. The largest and most loyal segment of soup consumers, the baby boomers, which account for 20% of American population and are the main target, have been showing change magnitude concerns with processed food and high sodium content shifting to healthier alternatives. Increasing trend within chokeing mformer(a)s who tended to prefer convenience.Bert Clark, vice-president and common manager of Brannigan Foods SoupDivision needs to take action at law and put in a plan to senior management to go back to growing sales within the division and step-up profits by 3% next year, reversing the 1-2% declining turnover and 2-3% declining volume. With this in mind he has asked his key strikeors to occupy a plan of action independently and now he has to ensconce which of the 4 projects he will exercise to senior management. The fact that Clark has his 4 keys managers working separately limits their assessment to each of their drives and thus their propositions are change to their field of expertise.Also, by choosing one particular direction may bestow 3 directors uninvolved hence with a minor sense of responsibility. When reservation hard decisions it is always better, in my opinion, to have everyone on board. On the other hand it provides Clark with 4 proposals instead of one. Nonetheless making the 4 directors work together would have a provided a team solution and a broader approach to the task. Now, by choosing one particular approach, Clark will have to queue up a way to involve all directors in this strategy.Looking nearly at each proposal1st proposalSrikant Tipha, coach of the bare(a) Meals unitSrikant wants to strengthen the strategy of growing categories of dry soups, healthier soups and meal-in-pouch soups by investing $18 cardinal o n advertising and promotion. These products were a direct result of Annabelles acquisition, a smaller competitor Brannigan had acquired 5 years ago. Skirant wants to induce trial by increasing advertising to provide yoke for impertinently flavors Gazpacho for the warmer months and Teriyaki for positioning in the fast growing Asian soups category.Pros Focuses on growing segments which address health concerning issues and/or focus on the sunrise(prenominal) flavors Cons Srikant focuses his whole strategy on the in the buff lines/products which account for 15% of the revenues of the division and completely go steadys out the 78% which are the star products, or the hard cash cow and basically finance the sore getments.2nd proposalClaire Mackey, Director of Finance & PlanningClaire focuses on the tender-fangled healthier and to a greater extent convenient products gaining territory in the market. Claire suggests the best way to quickly have a strong presence in these segments w ould be to acquire a small competitor with significant presence on these parvenu products. Pros Brannigan would very quickly be able to have an adequate response to new trends, as the whole operation is set up and products are already tried. By reserve the current brands, they would augment their shelf space. With joint synergies, the new acquired products would have a margin increase by reducing costs.Cons late(a) bad experience with Annabelles Foods although the project is gradually gaining track. It would take a large investment in advertising and promotion if they kept the acquired brands, if they changed into their own, at that place was a greater risk of cannibalization and of losing shelf space in life-size retailers.3rd proposalAnna Chong, headway Innovation OfficerAnna feels that her department could develop new lines that meet the markets new trends and that the company should increase investment in advertising and promotion for the new products already tested with consumers and investment in R&D for new products. Pros the proposal addresses the markets new trends, avoiding the risk and investment of a new acquisition and all risks it entails. The new flavors would allow a price increase hence increase in margin. Cons 1/100 products developed were actually launched in the market and reached Brannigans threshold for success. The costs of developing 100 products and first appearance 9 with except 1 to be successful are very heavy. Also launching products that may eventually fail means in addition costs for retailers which are becoming increasingly intolerant and more demanding for better conditions.4th proposalBob Pugh, VP Sales and Marketing, Brannigan SoupsBob focuses his proposal on the core products surmount selling price to make the gap between private label and Brannigan less significant (PL increasing by 5%) . Also he wants to invest in advertising the products and wants to optimize the plants in order to obtain losses due to reducti on of selling price. Bob also wants to bring back a former campaign more appealing to junior generations. Pros The aimed products are guaranteed successes and retailers will appreciate the strategy. Cons This plan totally ignores the new market trends and price reduction could damage margin objectives as well as brand positioning.Looking at each proposal individually I think Clark should favor Bob Pughs proposal because it focuses strongly on the divisions main core, enables to increase gross margin by reducing takings costs and increasing volume and at that place is no cannibalization effect. However, in keen-sighted term this strategy does non secure the new trends which may or may not be the next cash cows. Then also noteworthy is the proposal by Anna Chong which goes in a very polar direction but is as well an interesting approach. Anna, as the Chief Innovation Officer, focuses, not surprisingly, on developing new products, there is of hightail it a large investment invol ved, but it does take into account the new trends. My last pick would be the proposal made by Claire Mackey, Director of Finance & Planning, since it represents a very large investment and recent experience with Annabelle will make it hard to pass it by the board.Her preference goes to cherry-red Dragon FoodsCurrent Sales $36 gazillionCannibalization of Sales 0.45% (Mackey says 0.3% Clark 0.6%)$13 million Estimated EBITDA $4.2 millionsEstimated Cost $29.4 million (considering highest price)Amortization + interest per year 2.54 million (in 10 year period)Gross bound $16.2 millionGross marge with cannibalization effect $10.3 millionCost of A&P $11 millionNet Earnings in the First Year -$3.24 millionIn 5 yearsEstimated revenues $75.85 million (growth rate of 2.5% for whole division) Estimated Gross Margin in 5 years (50% instead of 45% as Clark estimates increase of 10% I will be more conservative and merely add 5% )$38 millionFrom the analyzed companies by Mackey, the emerging c ompetition is mainly focused on the area where Brannigans is not as strong health oriented products (MSG free and low sodium), new flavors (Asian flavors) and trends (Deli like). These yet small sub categories may well grow in the next years and this may pose as a problem because costumers will lose brand awareness, recognizing other brands as the Healthy soup or as the Chinese Soup. On the other hand, it will be difficult for new brands to try to compete with Brannigan on their strongest products and in which they are the unquestioned loss leader. So the natural strategy for new companies is to target the products where there is not such a strong recognized brand.This point must be considered by Clark when making his decision. Can Brannigans afford to leave these new products wide open or should he get his pass on this before it escalates? In my opinion Clark needs to take action on the growing needs of the market before it is too late. Brannigans Soup needs to lock its position as market leader in soups as a whole concept and not as a segmented market. Clark needs to address two main issues maintain leadership in the classic flavors and keep up with new demands.For this he should bring in Anna Chong and Bob Pugh and have them work together in defining the new strategy. Bringing their proposals together the cons of each of them are mitigated. Anna addresses the new trends Bob has left out and Bob will secure the finance of the new products that Anna will develop which may become the next cash cows. Reinforcing the current strong products of the company is important but may not be enough in a permanently evolving market. A leader position requires investment in R&D in order to keep up with changing trends.