Pillsbury Cookie Challenge Essay

Ivan Guillen, the marketing manager for Pillsbury’s refrigerated baked goods (RBG) business at General Mills Canada, is faced with a number of challenges. Volume growth for the RBG business had been flat for the last 2 years. Household penetration had fallen to a five year low. Annual growth of the refrigerated cookie product line had been flat with only 1% annual sales growth over the last three years – well below the 5% to 7% growth that Ivan’s team aimed for. Household penetration had also fallen to 24%.

Refrigerated cookie performance was important as the product was the anchor of the RBC business. Refrigerated cookies made up 62% of RBG’s unit sales and over 75% of RBG’s profit. When refrigerated cookies performed well so did the entire category, and when refrigerated cookies did not perform well the entire category tended to follow suit. In four months, Ivan Guillen must present a strategy to the senior leadership team that will improve the RBG business performance.

In 2006, TV advertising was the main consumer support vehicle for refrigerated cookies. Because of the high cost to develop new advertising spots and the significantly lower brand budgets in Canada compared to General Mills’ U.S. businesses, Ivan’s team adapted U.S. ads for the Canadian market. The Pillsbury Doughboy played a key role in brand advertising and messaging. The marketing team targeted mothers in their mid-30s to 40s who led active lifestyles and thus starved for time. These mothers desired convenient and easy product solutions that the whole family would enjoy.

Ivan partnered with Lou Pasato, the RBG consumer insights manager, in the fall of 2006 to hire MarketTools to conduct a usage and attitude study. The purpose of this study was to unearth the differences between the U.S. and Canadian markets and understand how those differences could be leveraged to spur growth in Canada. The key learnings from this study were the following:

• From-scratch baking was the dominant baking method in Canada; this was not true in the U.S.;

• Convenience and taste are the top purchase drivers in both countries;

• Users and lapsed users perceive RBG cookies as easy and convenient;

• Cookie dough purchases were impulsive and increasing the most in households with kids.

The biggest implication of the study is that the RBG division can continue to use U.S. ads in the Canadian market, as the consumer demographics and family structure are very similar between Canada and the U.S. However, the ads will need to be tweaked to better resonate with Canadian consumers that bake from scratch. While the use of refrigerated dough was the most popular baking method in the U.S., from-scratch baking was the most popular method in Canada.

The team also hired TerraNova Market Strategies Inc. to conduct qualitative research in the form of in-home immersions and a discovery workshop. The key findings from the qualitative research were:

• Food products had to be practical to warrant Mom’s consideration;

• Baking spurred an emotional response felt by everyone in the home;

• Cookies were particularly special because they could be shared easily;

• Brand champions were more pragmatic while lapsed users were less secure about decisions that took them away from scratch baking;

• Nutritional value of Pillsbury cookies were not a concern;

• Pillsbury had a sense of magic in that its products could transform an ordinary meal into something special.

Based on the consumer research conducted, Ivan and his team should focus on two consumer segments: 1) mothers that bake from scratch, and 2) kids. Given the much lower percentage of from-scratch bakers in the U.S., it is no surprise that household penetration in the U.S. is more than double that in Canada. The RBG marketing team cannot rely on those already using refrigerated dough to increase sales, like their U.S. counterparts can. Rather, they must focus on resonating with scratch bakers.

They should not spend time and resources promoting the convenience of refrigerated cookies. The usage and attitude study showed that both users and lapsed users already view RBG products as easy, quick and convenient. The high percentage of from-scratch bakers in Canada suggests that consumers have more time to devote to baking, meaning they are less concerned with the convenience of RBG products, and that they value the baking experience. The marketing strategy should play up the baking experience.

This is supported by the findings from the in-home sessions and workshop. Advertising should evoke an emotional response or warmth and well-being, and themes should include putting a smile on the consumer’s family’s faces and sharing cookies with those the consumer loves. Positioning RBG products in this way will help mitigate lapsed consumers’ concern that buying refrigerated dough somehow detracts from the labor of love that is baking. If Ivan and his team can increase customer value perception in the scratch segment, they can increase market share.

The new marketing strategy should also focus on appealing to kids. The usage and attitude study found that kids played a bigger role in driving purchases in the Canadian market, and that the use of refrigerated dough was increasing especially in households with kids. Ads geared towards children should feature the Pillsbury Doughboy, considered one of the top 10 advertising icons of the century. The Pillsbury Doughboy’s cartoon-like character especially resonates with children.

These ads should play in the morning when children are most likely to watch TV. Children will ask Mom to make cookies with them and Mom will add cookie dough to her grocery list. The marketing team should also focus on making the packaging more appealing to children.

Moms often take their kids grocery shopping, so by making the packaging more colorful or using popular children’s characters on packing, the cookie dough will “pop” off the shelf in the eyes of kids. Consumer insights showed that cookie dough was considered an impulse purchase. If cookie dough packaging catches the eyes of kids at the grocery store, mothers will likely agree to purchase the product.

By focusing on mothers that bake from scratch and on kids, and taking the actions outlined above to reach these market segments, Ivan will present a marketing strategy supported by sound data when he meets with the leadership team.

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