General Mills Bowl Appetit Project

1
General Mills Bowl Appetit Project

• Lindsay Biggers
• Kate Bostock
• Sarah Carignan
• Allison Jones
• Tiffany Koch
• David Thornton
• Section 2
• Team 5
• Locker 535

2
Goal

• Generate the maximum level of sustainable growth
  in shelf-stable, single-serve food product
  revenues for the next three years.

3
Recommended Strategy

• Increase customer base by leveraging existing
  market leadership, brand equity and superior
  technology of General Mills
• Betty Crockers Hearty Bowl
• Betty Crockers Breakfast Bowl

Just like Mom used to make.
4
Agenda

• Goal
• Recommendation
• Market analysis
• Product ideas
• Competitive Response
• Appendix

5
Market Analysis

• Company
• Market leadership
• Superior technology
• High brand equity
• Customer
• Segments we are/are not reaching
• Unmet needs for convenient breakfast and hearty
  lunch
• Competition
• Intense across and within categories
• Mapped against customer perceptions

6
Company

• Combination of core competencies creates a unique
  and sustainable advantage
• Existing market leadership across a spectrum of
  market segments
• full coverage market selection pattern
• differentiated marketing
• Technology for prepared foods in multiple
  categories
• Superior brand equity
• Strong position in both shelf stable and
  breakfast category

7
Company Market Leadership

• General Mills selects target markets based on a
  full coverage pattern
• Attempts to serve all customer groups with wide
  variety of offerings
• Within full coverage General Mills follows a
  strategy of differentiated marketing
• Operates in several segments
• Customizes offerings for each segment
• Results in higher sales higher costs

8
Customer

• Panel Data
• Who are we reaching?
• Who arent we reaching?
• Focus Group
• What are the unmet needs?
• What hurdles exist?

9
Areas where Bowl Appetit over-indexes

• Income gt 70,000
• Family size gt5 members
• Age 35-54
• Families with and without kids
• East coast census region
• White collar job- clerical or sales
• Female head employed full time

See appendix slides
10
Areas where Bowl Appetit meets the population
index

• Income 20,000-70,000
• Family size 2-4
• Age lt35 and 55-64
• Empty nesters
• Caucasian race
• Central and Western U.S.

See appendix slides
11
Areas where Bowl Appetit under-indexes

• 1 member families
• Age gt65
• Male-only families
• All non-Caucasian races and ethnicities
• The South

See appendix slides
12
Buyers/ Population with no female head of
household
Chef Boyardee Stew
Uncle Bens
Stouffers
Hormel Beef Stew
Spice Hunter
Bowl Appetit
13
Focus Group Logistics

• Age 25-40
• Income Bracket 50,000
• Education College or higher education
• Ethnicity White
• Family size 1-5 members
• Lifestyle varied
• Employment varied

14
Focus Group Logistics

• Discussion of meal occasions and brand
  associations
• Open ended questions about typical occasion
• Direct questions to probe unmet needs and
  barriers to purchase
• Evaluation of wide variety of single serve
  offerings including Bowl Appetit

15
Focus Group Findings

• Unmet need for convenient on-the-go breakfast
• I left my instant oatmeal in the microwave this
  morning because I couldnt take it with me.
• Current portable lunch offerings not satisfying
  for heartier appetites
• None of these would fill me up. Id need to have
  something else with it.

16
Focus Group Findings

• Customization is important
• A sandwich is great you can make a sandwich
  however you want.
• Nutrition is more important to women
• I watch calories and fat.
• Most of these have so much sodium I couldnt
  imagine eating them.
• I try to make sure Im getting enough protein.

17
Focus Group Findings

• Taste dominates buying decision
• I buy Stouffers first, even if its not healthy
  because I know its going to taste good.
• I buy frozen dinners because I think theyll be
  convenient and healthy, but then they sit in my
  freezer because I just dont think theyre going
  to taste very good.

18
Unmet Needs...

• Heartier portions of convenient, great-tasting
  meals for male population
• Hot, portable breakfast for all segments

19
Competition

• Who is our competition?
• Hearty Bowl Stouffers, Uncle Bens Super Bowl,
  Kraft Easy Mac, Chef Boyardee
• Breakfast Bowl cereal, cereal bars, instant
  oatmeal, yogurt, skipping breakfast, fast food
• How do we compare?

20
Competitive Perceptual Map Hearty Bowl
Uncle Bens Super Bowl
Brand Equity
High
Stouffers
Hearty Bowl
Bowl Appetit
Kraft Easy Mac
Convenience
High
Low
Chef Boyardee
Low
Size of circle depicts portion size
Source focus group
21
Competitive Perceptual Map Breakfast Bowl
Portability
Morning Bowl
Cereal bars
High
Fast Food
Yogurt
Preparation
Frozen Breakfast Sandwiches
Low
High
RTE cereal
Instant Oatmeal
Bacon and Eggs
Low
Size of circle depicts quality of taste
Source focus group
22
Opportunities for expansion

• What General Mills is not doing well
• Reaching men
• Our product ideas will enable success in full
  coverage market selection with differentiated
  marketing in shelf-stable market
• What General Mills is doing well
• Breakfast
• Our product ideas will invigorate stagnant
  breakfast category

23
Agenda

• Goal
• Recommendation
• Market analysis
• Product ideas
• Competitive Response
• Appendix

24
Product One

• Betty Crockers Hearty Bowl
• Target Men, Women who buy for men, All heartier
  appetites
• Price 1.89
• Approximately 25 higher than Bowl Appetit launch
  price
• Offering convenient hot lunch or dinner for
  heartier appetites
• Positioning Like mom used to make Appealing to
  women who make 80 of grocery store purchases
  Taking care of your mans appetite

25
Hearty Bowl Varieties

• Relative to Bowl Appetit offering
• Single serving size 10 ounces larger
• Placement in store with Bowl Appetit
• Side serving of bread to satisfy appetite, and
  leverage Betty Crocker association with baking
• Customizable flavor packets with some varieties
• Fewer hurdles to appeal to male target
• Varieties
• Chicken and dumplings with biscuit and butter
  packet
• Fettuccini with garlic bread
• Jambalaya with cornbread
• Taco bowl with tortillas and salsa packet

26
Framework Products as Satisfaction-Generation
Systems (Capel)
Hearty Bowl
Physical Reality Plastic Bowl and Side Bowl of
Bread
Experience Meal like mom used to make (moment)
Offering Meal of Rice/Potatoes/Meat for men
Satisfaction Large home-cooked meal
Technology Shelf Stable
Hearty Bowl
Investment New Product Launch
Symbol I care about myself and what I eat
Causal Promise Quick, high quality meal that
will satisfy
Hearty Bowl by Betty Crocker generates
satisfaction for men that want a meal like mom
used to make. Perfect for that moment when you
need the comfort of home.
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Potential Male Market

• Total men 18 and over in US, 1999 95.9 million
• Unmarried 36.8 million
• White unmarried 29.2 million
• White total 80.9 million
• Betty Crocker Bowl Appetit falls in average range
  for Caucasian race and below average for all
  other races and ethnicities ( buyer/ population)

28
What We Eat in America

• Opportunity to target high income men outside the
  home
• Males more likely than females to eat away from
  home
• White Americans eat away from home more often
  than African Americans
• Individuals with high incomes more likely to eat
  away from home than those with low incomes

Source Dept of Agriculture, 1996
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Projected Revenues Hearty Bowl
Hyperlink to spreadsheets
30
Product Two

• Betty Crockers Breakfast Bowl
• Target Entire population over age 18
• Price 1.09
• Similar price to fast-food and existing breakfast
  items
• Offering Quick, convenient, and hot breakfast
  for people on-the-go
• Positioning As good as mom used to make

31
Breakfast Bowl Varieties

• Relative to Bowl Appetit offering
• Same single serving size
• Placement in breakfast aisle
• Serving container travel ready, cup size with lid
• Customizable flavor packets with some varieties
• Varieties
• Oatmeal bowl with fruit or cinnamon packet
• Cinnamon bun bowl with icing packet
• Biscuit bowl with honey, jelly or butter packet
• Muffin bowl with berry or chocolate chip packet
• Grits bowl with honey, cheese or salsa packet

32
Framework Products as Satisfaction-Generation
Systems (Capel)
Breakfast Bowl
Physical Reality Plastic Bowl
Offering Breakfast of muffin, roll, oatmeal,
biscuit, or grits
Experience a sit down Breakfast that took
time to make
Satisfaction Hot breakfast, Fills me up
Technology Shelf Stable
Breakfast Bowl
Investment New Product Launch
Symbol I am busy, but still Want a good start to
my day
Causal Promise Quick, breakfast you can take on
the go
Breakfast Bowl generates satisfaction for people
that want a good-tasting, hot breakfast but dont
have the time. Perfect for busy people on the go
who want a good start to the day.
33
Breakfast

• 35-40 of Americans skip breakfast
• Ohio State University
• Average person skips about 1 breakfast meal per
  week
• NPD Group
• On-the-go and skipped meals accounted for 21 of
  all breakfasts in 1999
• NPD Group
• USDA suggestions build breakfast around foods
  that are ready to eat or take little prep time

34
Breakfast Market

• General Mills earned at least 3.5 billion in
  2001 in the breakfast category
• With individuals skipping breakfast, want to
  protect its interest
• 27 of total company revenues
• Breakfast category is at risk of stagnation
• Opportunity to use Pillsbury brand and technology

35
Breakfast Facts

• 15 of Americans take breakfast to go
• 1996 Gallup Survey
• Pillsbury Dough Boy receives the highest
  awareness and likeability ratings for
  food/beverage brand characters
• Marketing Evaluations, Inc. 1997
• Americans with more education and higher incomes
  are more likely to eat breakfast.
• U.S. News and World Report 1997
• Source www.burgerking.com

36
Breakfast Facts, continued

• Older people and Southerners are more likely to
  eat breakfast.
• U.S. News and World Report 1997
• From 1988-1997 there was a 25 increase in
  Americans consumption of sweet rolls and sweet
  muffins
• Food Institute Report, June 1997
• Number of breakfasts eaten at the office doubled
  between 1990 and 1996
• NPD Group

37
Top 10 Carried Breakfast Foods
Food
Fruit 24
Breakfast/Snack Bars 6
Cookies/Brownies 6
Yogurt 5
Bagels 4
RTE Cereal 4
Sandwiches 4
Toaster Pastries 1
Donuts 1
Muffins 1
Source NPD Group, 2000
38
Projected Revenues Breakfast
Hyperlink to spreadsheets
39
Forecast Methodology

• Simulated test market to forecast trial and
  repeat rates
• Carry over is repeat for multiple years
• ACV assumes General Mills will get same
  distribution for new brands as it does for
  current brands

40
Forecast Population

• Adults at least 18 years old
• Usage profiles for
• Eat at home (50 US population)
• Breakfast skippers (35 US population)
• On-the-go (15 US population)
• Diminishing trial and repeat rates

Source NPD Group, 2000
41
Revenue Projections
Hyperlink to spreadsheets
42
Revenue Benchmark

• Overall three-year revenue lift from two products
• 758.8million (best case)
• 257.61million (worst case)
• Compare to 28.8 million for Bowl Appetit in
  first six months

43
Sensitivity Analysis

• We generated best and worst case revenue
  scenarios by varying
• Trial rate
• Repeat rate
• Annual carry-over rate

44
Agenda

• Goal
• Recommendation
• Market analysis
• Product ideas
• Competitive Response
• Appendix

45
Competitive Response

• Biggest threat from firms with comparable
• Scale
• Market presence
• Brand equity
• Technology
• Defensive strategies
• Leverage collective brand equity
• Bring news to General Mills products through
  co-branding
• Unleash power of RTE cereal brands into
  shelf-stable category
• Leverage operational scale and efficiencies
• Invest in technology
• Taste
• Convenience

46
Agenda

• Goal
• Recommendation
• Market analysis
• Product ideas
• Competitive Response
• Appendix

47
Over-index
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Over-index
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Over-index
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Over-index
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Over-index
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Over-index
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Over-index
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Over-index
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Meet Population Index
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Meet Population Index
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Meet Population Index
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Meet Population Index
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Meet Population Index
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Meet Population Index
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Under-index
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Under-index
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Under-index
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Under-index