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OSCAR MAYER(OM) :

STRATEGIC MARKETING PLANNING

Prepared By:

Goutham

MohitNishu

Rohit

Tanvi

Pratik

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It is a well known meat producing company

Established in 1883 by Mr. Oscar F. Mayer

1919- a meat packing plant was purchased

1970- C. F. Claussen & Sons was purchased( packedand distributed frozen products)

1979- OM acquired LOUIS RICH(Manufactured RedMeat)

1981- General Food acquired OM

1985- Philip Morris Companies, Inc., (Parent of Kraft'sFood) Purchased General Foods

Brief History

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PRODUCT LINES

OSCAR

MAYER(OM)

Lunch Meat Hot Dogs Bacon

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CASE FACTS

Targets in front of OSCAR MAYER Division

15% operating margins

4% Y-O-Y growth in volume

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Major Challenges1) Shift in consumer inclination.

2) Increased demand for fast and easy touse products.

3) Competition.

4) High expenses.

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Outcomes Of McTiernan Report

Core red meat brand of Oscar Mayer is

suffering share losses

The white meat solution-Louis Rich is

slowing down

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Meat Consumption

0

20

40

60

80

100

120

140

160

180

All meat Red White

Current year

5 years ago

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Outcomes Of McTiernan

Report(contd.)

New product attempts havent delivered on

the greater convenience that consumers are

demanding

Competitive environment is much tougher

than before

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Market Share

0

5

10

15

20

25

Lunch- oscar mayerLunch- louis richHot dog- oscar mayerHot dog- Louis RichBacon- Oscar Mayer

current year

prior year

2 years ago

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% CHANGE in Pound Volume

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

OSCAR MAYOR LOUIS RICH TOTAL DIVISION

CURRENT YEAR

LAST YEAR

TWO YEAR

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POUND VOLUME

0

100

200

300

400

500

600700

800

900

1000

OSCAR MAYO LOUS RICH TOTAL DIVISION

CURRENT YEAR

LAST YEAR

TWO YEARS

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REVENUE

0

200

400

600

800

1000

12001400

1600

1800

2000

OSCAR MAYOR LOUIS RICH TOTAL DIVISION

CURRENT YEAR

LAST YEAR

TWO YEARS

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ROB GOODMAN- Louis Rich Category Mgr.

White meat products are on trend; pump

more money to stay in the lead.

Rob proposes two initiatives:Boost brand awareness by increasing advertisement

and demonstrating the advantages of white meat over

red.

Introduce new products that R&D has developed

including LR Turkey Bacon and great Roast Turkey and

Gravy dinner line.

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CURRENT YEAR NEXT YEAR

POUND VOLUME* 272 305

% CHANGE V/S LAST YEAR 10.9% 12%

ADVERTISING ANDPROMOTION

$133 $155

OPERATING INCOME $29 $27

Estimated Profit & Loss : Louis Rich

*Figures in millions.

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Chicken Rite Inc. :

Location: Savannah

Sales: $15MM

Product: Low CalorieChicken Salad in Single

Serve Tubs

Turkey Time Ltd. :

Location: West CoatSales: $10-20 MN

Product: Similar toLouie Rich and alsoReady Made Frozen

Sandwiches

Crabbies, Inc. :

Location: HeadQuartered in Maine

Sales: $15 MM

Products: Shell Fish

Products ( Crabs,Lobster)

Small companies of interest to Acquire

Jane Morley-Director F&P

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Advantages of Acquiring

Turkey Time has almost same product line as of Louie Rich., Which can

support further LR expansion

Chicken Rite and Crabbies, Inc give us a chance to venture into some new

protien sources and convenience products at low risk

All the companies being small can be bought for $15-25MM each without

much annual debt

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Eric Stanger-VP OM Brand

Problems

o Ignoring OM at the stake of Louis Rich.

o High product cost for y-o-y growth.

o Reduced A&P budget.

o Slippage in value and Trust.

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Get BACK TO THE BASICS

10% Price cut on top 3 brand.

Increase A&P budget by $25 MM.

Create nostalgia.Get enough R&D to get nutritional

products.

Update analyses on capacityutilization

Rejuvenating Brand Oscar Mayer.

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Results

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McGraws ObservationsROB: Wants to spread awareness for White meat, andincrease A&P Budget to $22 M.

JANE: Wants me to purchase TURKEY TIME LtdCOST=$10-20M

1) We would get frozen food technology,

2) And Excess production and storage capacity.

BUT its Profits and Market Cap. are both unknown.

JIM: Wants me to expand to 4th category of products.ZAPATITES LUNCHABLES

Easy, fast to eat, Useful for working moms

Health Values Easy to carry.

Still in nascent stage Less in health andhygiene

6-8 months required High cost & low profits.

ERIC: wants to improve OM brand value!

Increase sales growth!

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TO DO LIST

Invest in R&D to formulate a low fat and salt line

of OM products.

Add a fourth category to the existing product line

keeping the white meat demand in mind.. Appropriate allocation of resources on both red

and white meat product lines

A&P budgets should be increased.

Special focus on health conscious market.

Acquire well performing companies ->Turkey time

ltd.

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POSSIBLE SOLUTIONS

1) Purchase Turkey Time Ltd. And start R&D onZAPPETITE Products to increase growth of OM

Division.

2) Spend on A&P of OM and LR division and start R&Don ZAPPETITE products to increase growth of OMdivision.

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THANK YOU!!!