Bowl Appetit Strategy

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Bowl AppetitStrategy Concept Development

• Scott Kaufman
• Bruce Kember
• Beth Landy

Erik Michielsen Charles Persinger Sam Pfohl
2
Agenda

• Objective
• Situation Analysis
• Bowl Appetit consumer profile
• Competitive consumer profile
• Strategy
• Concept 1
• Concept 2
• Financials
• Conclusion

3
Project Objective

• To generate the maximum level of sustainable
  growth in Bowl Appetit branded shelf-stable,
  single-serve food product revenues for the next
  three years.

4
Situation Analysis Section Bowl Appetit
consumer profile

• Nielsen Panel Data analysis of
• Over-index
• Rice Pasta
• Rice vs. Pasta
• Typical user profile
• Under-index
• Rice Pasta
• Rice vs. Pasta
• Typical non-user profile

Situation Analysis - Consumer
5
Areas where Bowl Appetit Rice Pasta both
over-index (120)

• Female head of household 45 54
• Kids 13-17 (especially high in pasta)
• Lifestyle
• Young singles
• Middle aged childless couples
• Female head employed full-time
• East region

Situation Analysis - Consumer
6
Over Index (120) Rice vs. Pasta

• Rice
• income 40,000 - 49,999
• 5 family members
• Lifestyle
• young singles (LS)

• Pasta
• Income 70,000
• Families 3- 4 members
• Female head of household 35 44
• Lifestyle
• Childless, younger couples (LS)
• Mature fam. Comf-aff.
• Established families

Situation Analysis - Consumer
7
Typical Bowl Appetit user profile

• Mostly Caucasians
• Employed female head of household
• Younger, with or without families
• More affluent consumer (esp. pasta)
• White-collar jobs

Situation Analysis - Consumer
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Under index (lt85) in both Rice and Pasta

• Female head 55
• No female head of household
• Kids lt 6
• Older singles
• Non-caucasian category
• African American
• Hispanic
• Rural (ACN D)
• Southern US

Situation Analysis - Consumer
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Under index (lt85) Rice vs. Pasta

• Rice
• New families
• Asians

• Pasta
• 1 member households
• Lifestyle
• Mature families poor/getting by
• Middle-aged singles
• Female head unemployed
• Female head lt HS education
• Not in the workforce

Situation Analysis - Consumer
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General non-user profile

• Non Caucasian/ethnic
• Non-employed female head of household
• No female head of household
• Age 55
• Poor

Situation Analysis - Consumer
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Situation Analysis SectionCompetitive consumer
profile

• Competitive landscape
• Competitors list ranking
• Share of market
• Competitive analysis
• Uncle Bens
• Kraft Easy Mac
• Ragu Express
• Maruchan
• Stouffers
• Healthy Choice Bowls

Situation Analysis Competitive
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Competitive Landscape
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Competitors

• Primary
• Uncle Bens Bowl products (frozen)
• Ragu Express (dry)
• Kraft Easy Mac (dry)
• Healthy Choice bowls
• Secondary
• Stouffers Lean Cuisine Lunch Express
• Maruchan
• All frozen meals
• All shelf stable meals, snacks, cups, soups
  etc.
• Tertiary
• Home-made lunches
• Lunches/snacks purchased from café, grocery,
  restaurant, etc.

Situation Analysis Competitive
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Situation Analysis Competitive
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Uncle Bens

• Demographics
• Affluent
• Middle-aged
• Very strong with singles
• Younger couples
• New families
• With kids 13-17
• Men
• Some ethnic success
• Popular in West

• Sales
• 190 million
• 60 million units
• Market share
• 12.9 of units
• 31.0 of dollars

Situation Analysis Competitive
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Kraft Easy Mac

• Demographics
• 3 family members
• Age 44 and under
• Extremely strong if HH has kids lt 6
• New families maturing families
• Comfortable affluent
• Low ethnic usage
• FH employed full or part time
• Blue collar

• Sales
• 19 million units
• 52 million
• Market share
• 4.0 units
• 8.3 dollars

Situation Analysis Competitive
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Ragu Express

• Demographics
• Comfortable Affluent
• New maturing families
• With kids lt 18
• Low ethnic penetration
• Larger families

• Sales
• 2.3 million units
• 7 million
• Market share
• 0.5 units
• 1.1 dollars

Situation Analysis Competitive
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Maruchan

• Demographics
• Varied income levels
• Larger family sizes
• Families with children
• Maturing established families
• High ethnic use
• No HS education or college ed.
• West coast

• Sales
• 237 million units
• 98 million
• Market share
• 50.9 units
• 15.7 units

Situation Analysis Competitive
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Stouffers

• Demographics
• High variation between varieties
• Older singles
• No female head
• Middle age childless couples
• No kids lt 18
• Comfortable affluent
• Caucasian

Situation Analysis Competitive
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Healthy Choice Bowls

• Demographics
• Childless singles couples
• Affluent
• College grad
• Caucasian
• White collar/managerial

• Sales
• 31 million units
• 74 million
• Market share
• 6.6 units
• 11.90 dollars

Situation Analysis Competitive
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Strategy Formulation Section

• Perceptual mapping
• SWOT
• Kotler Market Opportunity
• Ansoffs
• Strategy
• Build revenue through expanded usage by current
  demographic solidifying consistent market
  positioning
• Concepts
• Strengthen base business
• Increase flavor variety

Strategy Formulation
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Opportunity Assessment Convenience vs. Age
AGE
Middle-Age Adults
Kids / Teens
High
Noodle Cups
Chef Boyardee Cups
BOWL APPETIT
Kraft EasyMac
Ragu Express
Its Pasta Anytime
Uncle Bens Frozen Rice and Noodle Bowls
CONVENIENCE
Healthy Choice Bowls
Stouffers Skillet Sensations
Low
Strategy Formulation
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Opportunity Assessment Map Meal Occasion vs.
Convenience
MEAL OCCASION
Lunch
Dinner
Snack
High
Noodle Cups
Chef Boyardee Cups
BOWL APPETIT
Its Pasta Anytime
Kraft EasyMac
Ragu Express
Uncle Bens Frozen Rice Noodle Bowls
CONVENIENCE
Healthy Choice Bowls
Stouffers Skillet Sensations
Low
Strategy Formulation
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Opportunity Assessment Map Perceived Quality vs.
Convenience
High
PERCEIVED QUALITY
Low
High
BOWL APPETIT
Noodle Cups
Chef Boyardee Cups
Kraft EasyMac
Its Pasta Anytime
Uncle Bens Frozen Rice Noodle Bowls
Ragu Express
CONVENIENCE
Healthy Choice Bowls
Stouffers Skillet Sensations
Low
Strategy Formulation
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Analysis of Perceptual Maps

• Bowl Appetit is uniquely positioned offering high
  perceived quality and high convenience
• Bowl Appetit is positioned with active working
  adults many competitors are focusing on
  kids/teen market
• Bowl Appetit is positioned more in the
  lunch/snack offering many competitors in the
  lunch/snack arena

Strategy Formulation
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SWOT
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Market Opportunity (Kotler)

• Target audience
• Single adults couples with working female
• Time constrained, active lifestyle
• Needs of the target audience
• Convenience
• Portability
• Simplicity
• Quality
• Means to satisfy buyer needs
• Clearly articulate convenience benefits of Bowl
  Appetit
• Ensure buyer requirements met with offering

Strategy Formulation
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Ansoffs Product / Market Expansion Grid

• Market penetration strategy allows for further
  development of customer base to ensure product
  success
• Concept 1 Further communicate customer
  benefits (convenience, portability) through
  distribution, consumer education, product
  placement and packaging

Strategy Formulation
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Ansoffs Product / Market Expansion Grid

• Product development strategy reinforces market
  penetration strategy by further developing the
  market base
• Concept 2 Increase product offerings to
  increase repeat usage and customer options by
  introducing ethnic varieties

Strategy Formulation
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Concept Development Section

• Concept 1 strengthen base business
• Description
• Rationale
• Implementation
• Package redesign, advertising, distribution,
  merchandising
• Concept 2 increase flavor variety
• Description
• Rationale

Concepts
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Concept 1

• Improved and consistent in-store placement
• Improved and expanded distribution (especially to
  mass)
• Package update to
• Better convey ease and convenience of product
  and short preparation time.
• Better define usage occasions
• Improve communications with consumer

Concepts
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Rationale for Concept 1

• Current display/store location inconsistency
• Current product benefits and usage situations not
  clearly defined
• Opportunity for expanded distribution to mass and
  club/warehouse
• Capitalize on shelf-stability

Concepts
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• Ready, Set, EAT!
• New product group identity
• Clear convenient connection
• Create future opportunity to add new Ready, Set,
  EAT! product lines

Ready, Set, EAT!
Concepts
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Package Redesign

• Clearly convey Bowl Appetit benefits
• quick, convenient, simple!
• Align Bowl Appetit with category benefits of
  convenience
• Ready, Set, EAT!
• Creates future opportunity to add product lines
  with convenience attributes to the group

Concepts
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Advertising

• Target
• Active, busy people who value convenience and
  want variety
• Message
• Define the occasion
• When - lunch or snack
• Where home, work, anywhere theres a microwave
• Its easy, its portable
• Media Vehicles
• TV
• Outdoor i.e. billboards and subway cars

Concepts
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Distribution Outlets

• Increase distribution to mass, particularly
  non-superstore mass outlets
• Capitalize on shelf-stability
• Explore opportunities in warehouse/club channel
  with multi-pak product.

Concepts
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Merchandising

• Billboard style
• 5 in a row with Bowl facing outwards on shelf
• Placement next to cup of soups to ensure
  consistent placement
• Manage consistency within and between retailers

Concepts
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Plan-o-gram
Concepts
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Concept 2 - Ethnic Varieties

• Asian
• Teriyaki Noodle
• Lo Mein Noodle
• Mexican
• Mexican Rice
• Saffron/Spanish Rice

Concepts
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Rationale for Concept 2

• Offer more variety to increase consumer options
• Variety leads to increased consumption by repeat
  users
• Product variety increases diversity of users
• Current marketplace trend towards Asian flavors

Concepts
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Additional Marketing Activities

• Promotion
• Pricing

Marketing Activities
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Promotion

• Scale back promo over the next 3 years from the
  current level assume current SKUs have ended
  trial phase
• Promote new flavors at introductory (current)
  level year 1 and scale back over 3 years
• Change nature of promotions to encourage multiple
  purchases/trip, and sampling of new flavors,
  rather than to encourage trial

Marketing Activities
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Pricing

• Maintain current premium pricing
• Average price will increase as promotional
  activity is scaled back.
• Assume no change to basic product price unless
  there is an extreme shift in competitive pricing.

Marketing Activities
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Financial Analysis Section

• Revenue Drivers
• Driver Goals
• Assumptions
• Basic
• Growth
• Revenue Forecast
• Sensitivity Analysis

Financial Analysis
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Potential Revenue Drivers

• Repeat rate
• Penetration
• Overall market growth rate
• Product cost price
• Percent of product on promotion
• Items purchase per trip
• Trips per year

Financial Analysis
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Driver Goals

• Increase retention
• Repeat rate
• Draw new users fitting current Nielsen profile
• Channel expansion
• Decrease promotion level
• Leads to increase in average price
• Increase purchase frequency
• Expand usage occasions

Financial Analysis
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Basic Assumptions

• Households 100 mil, no growth
• Penetration stable
• Decreased trial in grocery, countered by
  increased distribution (build mass club
  channels)
• Items purchased/trip remains constant for one
  time buyers
• Current (year 0) items/trip for one-time buyers
  items/trip for repeat purchasers
• Cumulative potato product sales 20 of rice
  pasta dollars

Financial Analysis
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Growth Assumptions years 1 to 3

• Repeat rate increases 5 semi-annually over
  previous period
• Average product price increases
• Items/trip for repeat purchasers increases 5
  over previous period
• Trips/year for repeat purchasers increases 5
  over previous period

Financial Analysis
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Financial Analysis
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Financial Calculations
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Financial Analysis
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Potential Future Expansion

• Develop Ready, Set, EAT! as a Betty Crocker
  product group with Ready, Set, EAT! branded
  convenience foods of all types,
• Potential for frozen Ready, Set, EAT! bowls
  using Pillsbury frozen technology
• Improve appeal across ages and sexes with
  increased size and ingredient flexibility
• Expand to men
• Hearty portions
• Other types of shelf-stable meals including
• Kid focused products
• wet products/sauces

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Conclusion

• Currently the product and category are not fully
  established in the marketplace or fully
  understood by the target consumer
• There is potential to capture the market and to
  define the category
• Therefore
• It is crucial to strengthen the base first and
  expand usage among the current base before
  targeting new groups, or drastically changing the
  basic product