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PILLSBURY COOKIE CHALLENGE
Natalie Mauro wrote this case under the supervision of Professor Allison Johnson solely to provide material for class discussion.
The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have
disguised certain names and other identifying information to protect confidentiality.
This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
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University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.
Copyright © 2011, Richard Ivey School of Business Foundation Version: 2018-03-0
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Ivan Guillen sat at his desk in October 2006 and thought about the Pillsbury refrigerated baked goods
(RBG) business plans for the upcoming fiscal year. Guillen was the marketing manager on the RBG
category at General Mills Canada Corporation (GMCC), and he was faced with the challenge of developing
a strategy that would lead to improved business performance in his category. RBG was GMCC’s fourth-
largest category, and its performance over the past two years had been less than stellar. Volume growth
between 2004 and 2006 had been flat, and household penetration had fallen to a five-year low.
Of particular concern to Guillen was the refrigerated-cookie product line, which represented 62 per cent
of RBG’s unit sales and over 75 per cent of the category’s profit. Refrigerated cookies had always been
the anchor for the RBG business. When cookies performed well, the entire category tended to perform
well. The same could be said for those times when cookie performance was suffering. As Guillen looked
back at the performance of the cookie segment, he noted that annual volume growth was only one per
cent over the past three years, and household penetration had fallen.
Guillen had his work cut out for him. In February 2007, he and his team would have to present RBG’s new
business plans to the senior leadership team. Given the importance of this business to GMCC, it was crucial
that Guillen worked with his team to understand what could be done to profitably grow the business going
forward. Guillen believed the team should focus its efforts on the refrigerated cookie segment since it was
the most profitable segment within the category. As he filtered through historical data on the cookie
segment, Guillen wondered how the team could improve the segment’s performance. Was there a taste or
formula issue? Was the Pillsbury brand message not resonating with consumers? Was the current cookie
advertising campaign not targeting the right consumer? As Guillen thought about these questions, he knew
that he would have to generate new insights into current and potential consumers.
GENERAL MILLS INC.
General Mills Inc. was headquartered in Minneapolis, Minnesota, and was the world’s sixth largest food-
product manufacturer. The company produced and marketed food products in more than 100 countries
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1
and possessed a portfolio of iconic brands, including Betty Crocker, Progresso, Pillsbury, Green Giant
and Cheerios. General Mills competed in numerous food categories and distributed products across the
world through retail stores, such as Safeway, Wal-Mart and Costco, and through food service operators,
including restaurants and cafeterias.
General Mills Inc. was composed of three distinct operating segments: U.S. Retail, International, and
Food Service. The U.S. Retail segment was the largest of the three, representing 69 per cent of total
sales; the International segment followed with 16 per cent of total sales. Total company revenue for fiscal
2006 was $11.6 billion, with earnings of $1 billion (see Exhibit 1).
GENERAL MILLS CANADA CORPORATION
Established in 1954, General Mills Canada (GMCC) was the second largest division within the
International segment, with annual sales of US$566 million. GMCC was a leader in the Canadian
packaged foods market, holding the No. 1 or No. 2 position in virtually all of the categories in which it
competed. Many of the same brands and products that General Mills marketed in the United States could
be found in Canada.
The Canadian division was split into four business units: breakfast, baked goods, meals, and snacks.
These business units were further broken down into 12 categories. For example, baked goods separated
into the categories of into RBG, pizza snacks, mixes and frozen breakfast foods. Each category had a
dedicated marketing team that worked with cross-functional partners in finance, supply chain and sales to
manage the business and profitably grow market share.
GMCC operated autonomously from its U.S. parent, giving cross-functional business teams full
ownership over new product development, brand strategies and consumer spending. Examples of unique
products that have been developed specifically for the Canadian market include Oatmeal Crisp Maple Nut
cereal and Pizza Pops snacks. Despite having autonomy, GMCC often leveraged new products and
advertising from the United States, as development costs for these items were very high and brand
budgets were significantly lower in Canada.
THE CANADIAN REFRIGERATED BAKED GOODS CATEGORY
Refrigerated baked goods were chilled dough-based products that could go straight from the refrigerator
to the oven within minutes. Popular ready-baked goods products included cookies, breads and sweet
goods. These products came in a variety of formats, including pressurized cans, chubs and sealed trays.
Refrigerated baked goods were convenient as they were pre-mixed and required minimal, if any,
preparation.
All major grocery retailers in Canada carried RBG products, including Loblaw, Metro and Sobeys; RBG
could also be found in the grocery section of mass merchandisers and club stores. During the past five
years, the category had experienced moderate annual growth. The highly consolidated RBG category was
dominated by Pillsbury, with an 85 per cent market share. The remaining share was split among private
label players and a few regional branded ones, such as Weston Bakeries, for example.
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PILLSBURY REFRIGERATED BAKED GOODS
Following the cereal and grain snacks category, RBG was GMCC’s fourth largest, with 34 SKUs and a
full range of Pillsbury branded RBG products, including cookies, biscuits, breads, pizza, pie crust and
sweet rolls (see Exhibit 2). Pillsbury was a familiar brand in households across Canada and was
synonymous with one of the top 10 advertising icons of the century – the Pillsbury Doughboy.1 After 40
years, the Doughboy still played a key role in brand advertising and messaging.
Pillsbury RBG products were known for their convenience and family appeal. The brand’s target
consumer was a mother in her mid-30s to 40s who, along with her family, led an active and busy lifestyle.
She would be time-starved and looking for easy and convenient product solutions that her family could
enjoy together. While this description depicted the overall brand target, user profiles did vary slightly by
product. For instance, pie crust consumers tended to be slightly older than cookie consumers.
Guillen had been with General Mills for four years and had held various associate marketing manager
positions before being promoted to marketing manager. He had moved to the position of marketing
manager on the RBG category two years ago, and since that time, he and his team had worked hard to
build the Pillsbury brand. While they implemented numerous Canadian-specific marketing initiatives, all
new products and advertising were sourced from the United States and adapted for the Canadian market.
The success of these initiatives varied; however, none of them resulted in the five per cent to seven per
cent annual category growth for which the team was aiming.
Pillsbury Refrigerated Cookies
Guillen knew that if he wanted to grow the RBG business, he would have to focus on growing the
refrigerated cookie segment. Cookies were the most profitable SKUs in the RBG category and
represented 62 per cent of the category’s total unit volume. Over the past few years, volume growth had
remained nearly flat at one per cent, and household penetration had fallen to 24 per cent.
RBG cookies were available in multiple flavours and two formats: chub and ready-to-bake (see Exhibit
3). The chub format was a soft roll of cookie dough wrapped in plastic and sealed at both ends.
Consumers separated the dough, formed the cookies and placed them on a baking sheet. The ready-to-
bake format was even more convenient since the cookies were pre-formed. Consumer had only to
remove the cookies from the packaging and place them directly on a baking sheet. In addition to the core
SKUs, the RBG team offered seasonal cookie products during major holidays, including Halloween,
Easter, Valentine’s Day and Christmas. These products sold for a premium and typically featured
coloured chocolate chips and festive packaging.
The regular retail price of Pillsbury cookies was between $2.99 and $4.99 per package, and the featured
price was typically between $1.99 and $2.99. Pricing varied based on the cookie format, the type of
retailer selling the product and the region where the product was being sold.
TV advertising was the main consumer support vehicle for cookies. New advertising spots were very
expensive to develop and could range anywhere from $200,000 to $500,000. In order to optimize RBG’s
consumer budget, the team adapted U.S. ads for the Canadian market for a fraction of the cost – a practice
that was very common across the company. Aside from higher cookie household penetration (54 per cent
versus 24 per cent), the product offering and overall consumer demographics in the United States were
1 http://adage.com/century/ad_icons.html, date accessed April 2010.
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very similar to Canada, giving the team confidence that with slight modifications, U.S. creatives could be
used successfully in the Canadian market.
In the fall of 2005, the cookie commercial “Kisses” was launched. The ad was adapted from the United
States and featured the Pillsbury Doughboy blowing kisses while the narrator commented, “They’ll love
you this much when you make Pillsbury chocolate chip cookies.” An image of a freshly baked cookie
appeared on screen, while the narrator continued, “Warm, moist and loaded with delicious chocolate
chips.” Similar to past commercials, the ad was very product-focused and highlighted the taste benefits of
Pillsbury chocolate chip cookies (see Exhibit 4). Prior to its debut, the ad underwent creative testing to
measure its effectiveness in Canada. Millward Brown (MB) conducted the assessment and evaluated the
ad on three key measures: brand recognition, relevance, and likely-to-buy.’ The ad surpassed MB norms
on likely-to-buy, but it fell slightly below norms on the other two measures. Overall, the ad tested fairly
well and was given the go-ahead for the Canadian market. While baseline volume on the business was up
slightly during the period when the commercial aired, Kisses did not provide the cookie segment with the
hoped-for volume boost.
As Guillen thought about how to improve cookie performance in October 2006, he recognized that there
were three options: increase frequency of purchase, increase household penetration, or do a combination
of both. In order to develop a strategy that would enable him to achieve any of these goals, Guillen felt
that he needed to gain a better understanding of the cookie consumers. Given that the RBG team heavily
leveraged new product development and advertising from the United States, he specifically wanted to
conduct market research to understand what differences existed in the Canadian market and how he could
leverage any points of difference to improve cookie performance. Guillen called Lou Pasato, the RBG
consumer insights manager, to seek her help.
CONSUMER INSIGHTS
The consumer insights (CI) team at General Mills aims to help brand teams gain a better understanding of
the preferences, attitudes and behaviours of consumers. CI managers are assigned to each category and
work closely with both internal marketing teams and third party research firms to conduct consumer
research. Once research is conducted, results are analyzed and recommendations are provided to brand
teams to help them better align their marketing strategies with consumer needs.
There are two main types of research – quantitative and qualitative. Quantitative research is based on the
measurement and analysis of relationships between variables. The use of random sampling techniques
enables results to be generalized to a larger population. Examples of quantitative research include
questionnaires and web surveys. Qualitative research aims to gather a more in-depth understanding of
behaviour. This type of research is generally conducted with a smaller sample size; however, the time it
takes to arrange the study and conduct the actual interview tends to be lengthier than quantitative
research, mainly because it is more logistically complex to arrange studies at people’s homes or with
large groups of people, and it takes more time to determine the true meanings and motivations behind
behaviour. Examples of qualitative research include focus groups and ethnographies. Overall,
“quantitative research is generally better for confirming and clarifying, while qualitative research is
usually better for exploring, understanding, and uncovering.”
2
GMCC conducts many different types of consumer research, ranging from simple product trials with
employees at the head office, to more sophisticated forms of research. Due to its relatively low cost and
2 http://www.goodproductmanager.com/2008/01/22/understand-qualitative-vs-quantitative-research/,accessed April 2010.
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quick turnaround time, the most common type of research used at GMCC is the focus group. A focus
group is a marketing research tool where by a small group of people engage in a moderated roundtable
discussion on particular topics of interest.3 The goal of a focus group is to obtain the group’s opinions
about, or reactions to, specific products or marketing-oriented issues. Focus groups can help with a wide
range of business decisions, such as new product development, brand messaging and promotional
campaigns.
Concept tests are another popular type of research used at GMCC. Concept tests are frequently used for
new product development; however, they can also be used to help develop brand messaging. Most
concepts include an image of the product, along with pricing information, preparation instructions and a
summary of key benefits (see Exhibit 5). Concepts are presented to consumers in verbal or visual form,
and then quantitatively evaluated by consumers by indicating their degree of purchase intent. A more
accurate and expensive alternative to concept tests are evaluators. The goal of an evaluator is to
determine the expected volume, and therefore success, of a new product. Participants are sent actual
samples of the product and are asked a series of questions based on specific pricing, promotion and
consumer spending parameters. While concept tests range from $2,000 to $4,000 each, evaluators can
run upwards of $100,000. Aside from running an actual test market, evaluators are the best predictors of
product performance.
In addition to specific product tests, GMCC also conducts creative testing in order to determine the
effectiveness of ads. Oftentimes, multiple versions of an ad will be developed and tested to see which one
resonates most with consumers. Ads are tested based on their purchase intent, relevance and brand
linkage scores. Similarly, marketers also conduct packaging tests to determine which graphics and
formats are the most appealing to consumers. The goal of both types of tests is to optimize advertising
and packaging so that more consumers purchase the product.
COOKIES USAGE AND ATTITUDE STUDY
As the consumer insights manager for RBG, Lou Pasato was familiar with the business challenges in the
cookie segment and the pressure the team faced to improve performance. She agreed with Guillen that it
would be beneficial to conduct Canadian-specific research to help the team gain a better understanding of
the Canadian consumer. After assessing the various options that were available to the team, Pasato
suggested that they should conduct a usage and attitude study on cookie consumers.
Usage and attitude studies are consumer surveys that focus on the frequency of product purchase and use,
desirable attributes in products and product strengths and weaknesses. Consumers are asked about the
perceptions they hold regarding the product and the brand, and questions that will help develop a profile
of the product user. Through the analysis of this detail, one gains insight into brand strength in the
marketplace, potential new product ideas and areas where a product can be improved or repositioned.
4
The RBG team engaged the market research company MarketTools to conduct a usage and attitude study
in the fall of 2006. The specific objective of the study was to help the team understand the differences
between the Canadian and U.S. markets that could be leveraged to unlock growth in Canada. General
Mills did not collect consumer information for research purposes, so MarketTools used ‘screeners’ to
identify survey participants. “A screener is a set of questions in a script form that is used either in person
3 http://www.answers.com/topic/focus-group, accessed April 2010.
4 http://www.tns-cf.com/services/custom-usage.html, accessed April 2010.
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or over the telephone to select participants.”5 MarketTools reached out to individuals in its database and
conducted quick screener surveys to identify participants. ‘Users’ were classified as those who had
purchased refrigerated cookie dough in the past 12 months; ‘lapsed users’ were defined as those who had
purchased refrigerated cookie dough over 12 months ago; and ‘non-users’ were those who have never
purchased refrigerated cookie dough. Non-users could be scratch, mix or ready-to-eat users, although this
was not a requirement. Results were compiled and compared against a similar study that was fielded in
the United States in 2004.
Usage and Attitude Study Results
Four weeks after fielding the study, Guillen and Pasato received the results. They had a lot of work ahead
of them, and both were anxious to review the key findings, so they set up a meeting to go through the
final report.
The report confirmed the team’s hypothesis that consumer demographics and family structure were very
similar between Canada and the United States. There were, however, a couple of new learnings for the
team:
Scratch baking is the dominant method of baking cookies in Canada.
Out of the total number of households that bake cookies in Canada, 56 per cent bake only from scratch and
33 per cent bake from scratch every month. In the United States, use of refrigerated dough is the most
popular baking method, and only 22 per cent of households bake only from scratch (see Exhibit 6).
The top four purchase drivers are the same in both countries.
Convenience and taste rise to the top of both lists. Seventy-nine per cent of respondents agree that RBG
cookies are easy and quick to make. The largest gaps versus U.S. scores were on quality and kid-request
purchase drivers. The quality of cookie dough is not valued as highly in Canada, and kids play a bigger
role in driving purchases in this market (see Exhibit 7).
Both users and lapsed users perceive refrigerated cookie dough as convenient.
Lapsed users may no longer purchase the product; however, they do agree that RBG cookies are easy and
convenient. Non-users do not rate refrigerated cookie dough as convenient as the other types of users do
(see Exhibit 8).
Through the study, the team also learned that cookie dough purchases were impulsive; that the use of
refrigerated cookie dough was increasing, particularly among households with kids; and that frequency of
RBG cookie baking was similar in Canada and the United States.
Guillen had a lot of information to filter through. He was most surprised with the insight around the large
preference for scratch baking in Canada. The team had not conducted this type of research in the past and
had always assumed that the split between scratch, refrigerated and mix baking was the same for both
countries. Guillen wondered how he could use the information from the study to derive a strategy that
would lead to improved cookie performance.
5 Mary Anne Casey and Richard Krueger, Focus Groups: A Practical Guide for Applied Research, 4th ed. (Thousand Oaks:
SAGE Publications, 2009), 22.
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In-Home Immersion Visits and Discovery Workshops
In order to supplement the insights that were gained from the usage and attitude study, Pasato suggested
they should conduct qualitative research in order to gain a better understanding of consumer perceptions,
beliefs and feelings towards Pillsbury RBG cookies. The usage and attitude study shed light on key
differences between Canada and the United States; however, the team still needed to determine what
aspects of the Pillsbury baking experience resonated the most with consumers so that this information
could be leveraged for communication purposes.
The team worked with TerraNova Market Strategies Inc. to conduct two market research studies: in-home
immersions and a discovery workshop.
In-home immersions, also known as ethnography studies, aimed to move the researcher into the world of
the consumer. Often conducted in-home in the case of consumer packaged goods market research, the
goal of this study was to observe, rather than interview, in order to develop an intimate understanding of
personal motivations and actions as they related to a particular product.6 The RBG team conducted four
two-hour, in-home visits with two lapsed users and two brand champions. The mothers in the household
were asked to purchase a Pillsbury cookie product ahead of time and bake it during the visit. The studies
aimed to develop a real-life, dynamic view of the consumer-brand relationship, what surrounds it, the
environment in which it unfolds and the bigger-picture influences that come into play when baking
Pillsbury cookies (i.e., the general life of the family, the type of kitchen and the rituals associated with
this category).
The goal of the discovery workshop was similar to that of an ethnography study; however, these studies
were collaborative and took place outside the home. The discovery workshops were community-based
gatherings that brought together between 18 and 27 consumers for an active working session. They were
designed to provide a comfortable environment for naturally sharing thoughts and experiences, and for
creatively exploring issues and new avenues of opportunity. Several different techniques, including
customer experience mapping and role-playing, were used to help consumers express their innermost
feelings and examine their relationship and behaviour toward the Pillsbury brand.
Guillen and Pasato attended the discovery workshop and observed the group activities and discussions.
With 26 moms in attendance, including current and lapsed users, they were able to gain insight into the
lives of cookie bakers, their feelings towards Pillsbury cookies and the emotions that baking evoked.
After the session, TerraNova summarized the key findings from the in-home sessions and the workshop.
Mom’s practical ingenuity really shone through in the kitchen.
When it came to feeding the family, solutions had to be relatively easy, quick, practical, affordable and
pleasing to children, otherwise they were not worth consideration.
The baking experience fed the senses and fuelled memories of happy moments.
There was an immediate sense of emotional warmth and well-being associated with baking, and everyone
in the home usually felt it. In fact, moms said that baking was the one thing that was sure to put a smile on
everyone’s face, and it made the moms feel good when they sensed they had made a difference.
6 https://ipsos-na.com/dl/pdf/research/public-affairs/Ipsos_QualitativeFormats
For the exclusive use of K. Tang, 2022.
Brand Champions and lapsed users were similar but not in all ways.
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It was not so much the act of baking cookies together that was special, but rather the sharing of them.
During the in-home visits, children participated in the baking of the cookies but with varying levels of
enthusiasm and involvement. Eating the cookies, not baking them, was clearly the highlight of the process.
Cookies were particularly special because they were made for sharing and giving.
Brand Champions and lapsed users had a lot in common – they were all devoted mothers that worried
about their children’s well-being. One of the few differences found was that brand champions tended to be
slightly more pragmatic, get-it-done types, while lapsed users were somewhat less secure about decisions
and products that took them away from their commitment to scratch baking and into convenience-product
territory.
There were no concerns with the nutritional value of Pillsbury cookies.
Initially, the nutritional value of Pillsbury cookies appeared to be an issue; however, it was determined that
nutrition was actually an easy way of explaining lapsed usage, rather than a genuine concern.
Pillsbury had an integral sense of magic and was considered to be “a shared secret.”
There existed a genuine love for Pillsbury as it could easily transform an ordinary meal into something
special. While some people felt that using a Pillsbury product might have ‘cheating’ implications, others
viewed it as ‘their little secret.’ Regardless, all agreed that using a Pillsbury product was still far better
than buying a ready-made product because it involved effort and, therefore, represented an act of
generosity.
DECISION
Guillen felt confident that the studies his group had conducted provided the team with new and insightful
information that it could leverage to develop a new marketing strategy on RBG cookies. With the
presentation to the leadership team coming up in a couple of months, Guillen knew he had a lot of work
ahead of him. As he reviewed all the new insights that were gained from the consumer studies, he
wondered how he could leverage these learnings to increase the purchase frequency and/or market
penetration of cookies. What consumers should the team target? What should their brand messaging be?
How could they communicate this message in a relevant way to the consumers, in a way that would
translate into increased sales?
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Exhibit 1
GENERAL MILLS CONSOLIDATED STATEMENT OF EARNINGS
In Millions, Except per Share Data
Fiscal Year Ended
Net Sales
Costs and Expenses:
Cost of sales
Selling, general and administrative
Interest, net
Restructuring and other exit costs
Divestitures (gain)
Debt repurchase costs
Total Costs and Expenses
Earnings before Income Taxes and After-tax E
Income Taxes
After-tax Earnings from Joint Ventures
Net Earnings
Earnings per Share – Basic
Earnings per Share – Diluted
Dividends per Share
28-May-06
$11,640
6,96
6
2,678
399
30
0
0
$10,07
3
1,56
7
5
41
64
$1,090
$3.0
5
$2.90
$1.34
29-May-05
$11,244
6,834
2,418
455
84
(499)
137
$9,4
29
1,8
15
664
89
$1,240
$3.34
$3.08
$1.24
30-May-04
$11,070
6,584
2,443
508
26
0
0
$9,561
1,509
5
28
74
$1,055
$2.82
$2.60
$1.
10
Source: Company files.
Exhibit 2
PILLSBURY READY BAKED GOODS CATEGORY BY SKU
COOKIES – CHUBS TURNOVERS
Cookies – Chubs – Chocolate Chip Turnovers – Apple
Cookies – Chubs – Chocolate Chunk Turnovers – Blueberry
Cookies – Chubs – Peanut Butter Turnovers – Cherry
COOKIES – READY TO BAKE Turnovers – Raspberry
Cookies – Ready to Bake – Chocolate Chip Turnovers – Strawberry
Cookies – Ready to Bake – Chocolate Chunk & Chip OTHER SWEETGOODS
COOKIES – SEASONAL Pie Crusts
Seasonal Cookies – Ready to Bake – Heart Shapes CRESCENTS
Seasonal Cookies – Ready to Bake – Bunny Shapes Crescents – Original
Seasonal Cookies – Ready to Bake – Chick Shapes Crescents – Jumbo
Seasonal Cookies – Ready to Bake – Halloween Chocolate & Cand Crescents – Multigrain
Seasonal Cookies – Ready to Bake – Pumpkin Shapes Crescents – Garlic
Seasonal Cookies – Ready to Bake – Christmas Chocolate & Cand OTHER BREADS
Seasonal Cookies – Ready to Bake – Snowman Shapes Country Biscuits
Seasonal Cookies – Chubs – Gingerbread Flaky Rolls
Seasonal Cookies – Chubs – Sugar Wiener Wrap
CINNAMON ROLLS – BASE Breadsticks – Garlic
Cinnamon Rolls – Regular – Caramel Icing Breadsticks – Italian
Cinnamon Rolls – Regular – Icing Pizza Crust
CINNAMON ROLLS – PREMIUM
Cinnamon Rolls – Grands – Cream Cheese Icing
Cinnamon Rolls – Grands – Icing
Source: Company files.
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Exhibit 3
PILLSBURY COOKIE FORMATS
Ready to Bake Chub
Source: Company files.
Exhibit 4
KISSES TELEVISION AD
Source: Company files.
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Exhibit 5
EXAMPLE OF A PRODUCT CONCEPT
Source: Company files.
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Exhibit 6
CANADA & U.S. COOKIE METHOD USAGE
Canada – Method Usage Over the Past 12 Months (2006)
U.S. – Method Usage Over the Past 6 Months (2004)
Source: Company files.
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Exhibit 7
PURCHASE DRIVERS IN CANADA AS COMPARED TO THE U.S.
Canada * U.S. **
They are easy to make
They are quick to make
They taste good
Can make them at the spur of the moment
Easier than baking cookies from scratch
The kids like to eat them
Like the brand
As a special treat for the kids
69
68
59
47
45
42
42
42
41
33
33
32
31
31
30
29
28
28
26
23
19
19
15
5
6
13Fun thing to bake w ith the kids
The kids like to make them
13Fun activity w ith the kids
To do something special
For special occasions
Good value for the price
You like the flavours that are offered
It’s similar to homemade cookie dough
For my ow n indulgence
-12 Is a high-quality cookie dough
Is like homemade cookie dough
My child(ren) requests them
Adds fun/delight to family time
Makes the right amount of cookies
Is an opportunity to teach the kids how to bake
Helps you create a happy/w arm home
Are kid sized cookies
To use the dough in recipes
Other
79
79
4
4
-2
0
7
10
-7
8
12
-1
3
1
-9
-5
-9
-7
8
2
-10
4
-5
1
-1
0
* % of Canadians endorsing statement
** Difference in per cent of Americans versus Canadians, such that negative numbers indicate a LOWER rating on that
response for Canadians than for Americans. For example, the +4 value on the first item indicates that four per cent more
Canadians than Americans believe that the RBG products are “easy to make.” Any difference less than +/- three per cent is
non-significant.
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Exhibit 8
PERCEPTIONS OF DIFFERENT TYPES OF USERS IN CANADA*
Users Lapsed Users Non-Users
85 56Is so easy you can make them on the 92
spur of the moment
Is an easy way to make cookies 84 4889
without a mess
74 37Is good when I am in a hurry 85
4782Is easy to clean up 84
5074Can be kept on hand for when needed 82
Looks like I took the time to make 32 3348
something special
There are recipes on the 17 1417
packaging that I use
8 1912I use the dough in my own recipes
0 100 0 1000 100
* per cent of that segment endorsing statement
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PILLSBURY COOKIE CHALLENGE
GENERAL MILLS INC.
GENERAL MILLS CANADA CORPORATION
THE CANADIAN REFRIGERATED BAKED GOODS CATEGORY
PILLSBURY REFRIGERATED BAKED GOODS
CONSUMER INSIGHTS
COOKIES USAGE AND ATTITUDE STUDY
DECISION
Exhibit 1 GENERAL MILLS CONSOLIDATED STATEMENT OF EARNINGS
Exhibit 2 PILLSBURY READY BAKED GOODS CATEGORY BY SKU
Exhibit 3 PILLSBURY COOKIE FORMATS
Exhibit 4 KISSES TELEVISION AD
Exhibit 5 EXAMPLE OF A PRODUCT CONCEPT
Exhibit 6 CANADA & U.S. COOKIE METHOD USAGE
Exhibit 7 PURCHASE DRIVERS IN CANADA AS COMPARED TO THE U.S.
Exhibit 8 PERCEPTIONS OF DIFFERENT TYPES OF USERS IN CANADA*
Pillsbury – Accelerating Sales
& IMC
1
Meg Campbell () – Need promotion spending amount for 2013 or 2014.
Last Week
What is pattern advertising?
What is the consumer decision journey?
Is “increase sales” a communication objective?
What is a communication objective?
What do you need to include in a “smart” communication objective?
Why is it important to develop a communication brief?
Regarding Communication Briefs…
“Like building a house,
if the foundation is shaky, good luck.”
Lesya Lysyi
3
Steps in Communications Strategy
S, T, P
Identify most important targets for communications
Identify what target customers need to know to be more favorably disposed toward our brand
Set objectives
Develop communication brief(s) for each different marketing campaign
4
Learning Agenda
Pillsbury – Figuring out how to use communications effectively
Understanding Integrated Marketing Communications
Pillsbury
Pillsbury Chub
Scoop out with a spoon
Drop spoonful on baking sheet
Bake 12 – 15 minutes
“Kisses” Research (“creative testing”)
Brand Recognition
Relevance
Likely-to-buy
8
Usage and Attitude Study
Objectives:
Understand the differences between the Canadian and U.S. markets
ID differences that could be leveraged to increase growth in Canada
Qualitative
Objectives:
Explore, understand, uncover
Understand feelings toward different types of cookie baking
Similarities and differences between scratch and refrigerated
Gain insight into what is really driving moms’ cookie baking
Findings
Size of scratch baking is much larger in Canada than US (scratch dominant)
Kids are important
Pre-oven experience is different, and less positive
Post-oven experience is the same
Warm, fragrant cookies for close family moments where mom made a difference
Key benefits of refrigerated dough, relative to scratch, are about convenience, ease, ability to make anytime
Nonusers rate RCD lower on convenience than users and lapsed users do
11
Guillen wondered…
How could we leverage the insights to increase the purchase frequency and/or market penetration?
Which consumers should the team target?
What should the brand messaging be?
Pillsbury Assignment
What is
“Integrated Marketing Communications”?
American Association of Advertising Agencies
An approach that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines and combines them to provide clarity, consistency, and maximum
communications impact.
Based on the idea that the integration and coordination of multiple elements of the marketing communication mix results in greater success.
More focused
More consistent
More effective
More efficient
IMC to Build the Brand
Understand consumer markets
STP
Analyze to uncover needed message, i.e., specific points to be communicated
Consider stage in purchase process
Hierarchy of effects
Consider alternative tools
Strengths and weaknesses
Costs
Develop coordinated communications mix
As covered in the Integrated marketing Communications Harvard reading.
Talks about the different types of communication tools. Discusses the need to understand the customer buying process and what stage particular targets are in. We ill go over in more detail when discuss consumer processing.
Media choices. Budgeting. Measurement.
Purposes of Marcom
Inform prospective customers about products, services, terms of sale, distribution channels, etc.
Persuade as to the benefits provided
Induce action
Create the positioning that is the basis of brand equity
Brand
Equity
Communications Process
Problem Awareness
Search
Evaluation/Preference
Decision & Purchase
Post Decision
Help consumers move through
the decision stages hierarchy
This is a process.
Somewhere during the process, people gain/create an overall sense of the product — an image. The idea of comprehension can include understanding of specific attributes, but also “softer” types of understanding, e.g., personality, user imagery, etc.
Marcom is supposed to help consumers through this process.
Communication is Challenging!
High clutter and noise characterize today’s consumer environment
Consumers may lack motivation, ability or opportunity to process
Getting attention for any one message is very difficult
Gaining enough processing attention to create memory is especially difficult
The current best solution is “Integrated Marketing Communications”
4000 – 10,000 ads a day?!
Steps to Integration
Analyze
Market &
Consumers
Define
Marketing
Objectives
Develop
Comm
Objectives
Start with the customer! This is what should drive the choices.
Communication objectives drive a plan that is based on CHOICES among the specific promotion tools that you have available to develop a plan that utilizes multiple tools to communicate a consistent brand concept to the targets.
Steps to Integration
Analyze
Market &
Consumers
Define
Marketing
Objectives
Develop
Comm
Objectives
Develop
Integrated
Marketing
Communications
Program
Advertising
Interactive
PR
Promotions
Batra and Keller 2016
Marketers thus must be concerned not just with what each message can accomplish in isolation (its “main effect”) but also with what it needs to accomplish in the context of this entire sequence or stream of messages (its ”interactive effects”)
Batra and Keller
What does this mean?
Marketers thus must be concerned not just with
what each message can accomplish in isolation (its “main effect”)
but also with what it needs to accomplish in the context of this
entire sequence or stream of messages (its “interactive effects”).
22
Consistency in Integrated Communications
Key Messages
The idea that communication tools should be coordinated with each other and with the company’s marketing mix to provide maximum impact and clarity of message.
All communications do not say the SAME thing, but instead, work together to create convergence.
This sounds good, is generally what we have been discussing all term.
23
Old Way
PR
Product
Merchandising
Trade
Shows
Promotions
Direct
Marketing
Packaging
Advertising
Selling/
Proposals
Implications of the Brand Equity Approach
The manner in which a brand association is formed doesn’t matter
What matters is:
Favorability
Strength
Uniqueness
Think back to the concepts behind customer-based brand equity.
Awareness and associations. Want strong associations, and whereas there are better and worse ways of building strong associations, once an association is effectively created, it doesn’t really matter how it was formed.
Implications of the Brand Equity Approach, continued
Thus, evaluate the wide variety of marketing communication options available to create these knowledge structures in terms of:
Match with objectives
Cost
Effectiveness
Integrate all communication tools to converge on a core concept
Think back to the beginning of the class when we discussed marketing communications as “brand-customer interactions” – really, just about all marketing efforts can – and should – be considered in this light. If everything we do communicates something to the consumer, building associations in the customer’s networks, then the proper integration of all this communications is essential.
Regardless of chosen options, the entire program should be coordinated to create a consistent and cohesive brand image
Brand associations should share content and meaning
What is the CORE IDEA? Two approaches.
Two Approaches to IMC
Communications Idea
“Look and Feel”
Customer-based Brand Concept
“Meaning”
Communications: Physical Continuity
Increases motivation, opportunity, and ability to process
Builds stronger linkages in memory
“Brand element” focus
Physical Continuity…
Stronger associations may be created by explicitly linking marketing communications to the brand
Easier to recognize and link to brand
Cues to earlier communications
All forms of variation increase likelihood that consumers form and retrieve links between brand and communications
Cues can be identifiable scenes, characters, symbols, verbal phrases or slogans
Can place in or on:
Product packages, place of business, coupons or other promotions, yellow pages ads, print ads, TV ads, etc…
Increases motivation, opportunity, and ability to process
Builds stronger linkages in memory
Conceptual Continuity
Increases motivation, opportunity, and ability to process
Builds stronger linkages in memory
Develops brand meaning
Builds relationship
Strengthens response tendencies
“Customer-based brand concept” focus
Different audiences – but maintain some sense of the core brand meaning even across audiences.
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IMC – Consistency
PR
Customer-
Based Brand
Concept
Merchandising
Trade
Shows
Promotions
Direct
Marketing
Packaging
Advertising
Selling/
Proposals
Social
Media
Examples of Concepts that Drive the Brand
Nike – “Authentic athletic performance”
BMW – “The Ultimate Driving Machine”
Johnnie Walker – “We Inspire Men to Progress”
Virgin – “Genuine, fun, contemporary and innovative at a reasonable price”
Pace – “Genuine. Vibrant. Bold.”
Johnson & Johnson – “Trust and quality in OTC medicines”
Salesforce – “A Customer Company”
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IMC – Complementarity
Strengths?
Weaknesses?
Choose the best option to address each different communication objective
PR
Customer-
Based Brand
Concept
Merchandising
Trade
Shows
Promotions
Direct
Marketing
Packaging
Advertising
Selling/
Proposals
Social
Media
IMC – Cross-effects
PR
Customer-
Based Brand
Concept
Merchandising
Trade
Shows
Promotions
Direct
Marketing
Packaging
Advertising
Selling/
Proposals
Social
Media
Steps for Achieving
Integrated Marketing Communications
1. From a thorough marketing analysis of the company, the marketing situation, and the customers’ wants and needs, create a competitive advantage.
2. This should drive the definition of the role and objectives of marketing communications within the overall marketing mix.
3. The specific marketing communications tools and messages are derived from the overall marketing communications strategy.
Old Spice
Started in 1934
Women’s fragrance
Men’s shaving soap and aftershave
An Old Spice Man always gets a warm welcome, wherever he lands.
1990 P&G purchased from Shulton Co.
Expanded the product line
Old Spice
1990 P&G purchased from Shulton Co.
Expanded the product line
2008 Old Spice Classic shower gel was sold using the slogan “The original. If your grandfather hadn’t worn it, you wouldn’t exist.”
Who is the target?
Old Spice
2009 doing quite poorly
Analyzed for a new communication strategy
Big Consumer Insight: women were buying a significant percentage of men’s body wash
Target women
Core concept: you want your man to smell like a man (fits within the “manliness” brand idea)
38
Old Spice
SuperBowl Ad
Coupons
PR (targeted earned media)
Youtube videos
Media buy
Brand microsite
Social media (e.g., FB)
Second Ad
Interactive responses
Coupons
Isaiah Mustafa
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Interactive Responses (screenshot)
Personalized real time responses to comments from normal people and celebrities FB, Youtube, Instagram, twitter)
Day 1 5.9 million youtube views
Day 2 8 out 11 most popular videos on the web
Day 3 more than 20 million views
Week more than 40 million views
Twitter following increased (2700%), FB fan interaction (800$), traffic to OS webpage increase (300%)
Became all time most viewed branded channel on youtube
Sales doubled
40
Old Spice
Coupons (incentive)
PR (targeted earned media)
Youtube videos (owned media & earned)
Media buy (owned)
Brand microsite (owned earned)
Social media (e.g., FB) (owned –> earned)
Second Ad (owned)
Interactive response campaign (owned, targeted earned)
Coupons (incentive)
41
Effective – YES!
29 million viral video views between the Super Bowl and July 2010 (4 ads)
Old Spice was the #1 all-time most viewed sponsored Youtube channel
Interactive videos reached > 34 million views in a week
FB fan interaction jumped 800% after videos
Traffic to OldSpice.com increased 300%
July 2010 sales 8% higher YOY, up 4.8 share points
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Integrating Communications
Traditional, mass media communications
Broader reach and greater control
Public relations
Even broader reach, greater credibility & “news”
Experiential communications
Greater engagement and brand interaction
Social media
Greater timeliness and “real” connection
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Consistency
Complementarity
Cross-effects
Strong IMC Components
Balance between creative & message
Must attract attention and engage consumers
Must persuade consumers of the merits of the brand
Points-of-parity
Points-of-difference
Need to be well-branded
Allow, facilitate, and encourage positive interactions online and offline
Give people something positive to talk about! Product or brand news; social events; marketing activities
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Next Week
Due: Reflections Saturday, 8:00 pm
Due: Pillsbury Action Plan and Communication Brief, Sunday, 8:00 pm
Readings
Very short video on Thinking Fast and Slow
46
Week 6 Reflection:
This course is “Advertising and Sales Promotion Management”, please answer according to the content in Slide and PDF
Reflect on what you have learned this week. Consider and discuss two things that you learned that you find particularly insightful and explain why.
(You may discuss any of the learnings, whether from the case or any other content).
Two things learned, one based on case content and one based on slide content
