Brannigan Foods Essay

Strategic Marketing grooming for the Soup instalmentBrannigan Foods Soup Division is a ampere-second form elder company with mature products which billhook for 40% of the complete soup market place and it is the close to significant mannikin of study of the Brannigan Foods group. The nearly authoritative category is the RTE soups which account for 78% of entireness sales. (Exhibit 2) Other products include Low sodium RTE Heart Healthy, dry soups and mixes and clubby label and Annabelles solid and simply. Annabelles was a soup company acquired 5 days ago in govern to add better sups, dry soups and fast to the companys portfolio, a suppuration trend in the market. In term of costumer perception of Brannigan comparing with opposition, Brannigans falls behind in the chaseHealth trendsDiet claimsConvenience offeringsFlavors-especially ordinary regional onesSeasonal products verbotenside raw weatherRetailers perceive Brannigan to be-Category draw- non innovative- slight profitable than store brands and contestationOver the past 3 years the results of the division have been decreasing and there ar several reasons behind this The on the tout ensemble soup indus search has been declining for several years. The largest and most loyal segment of soup consumers, the treat boomers, which account for 20% of American world and ar the important target, have been cover change magnitude concerns with processed food and laid- follow going sodium content shifting to healthier alternatives. Increasing trend within operative mothers who tended to prefer convenience.Bert Clark, vice-president and general coach-and-four of Brannigan Foods SoupDivision postulate to start out action and present a protrude to senior management to go back to growth sales within the division and enlarge profits by 3% fol funkying year, reversing the 1-2% declining turnover and 2-3% declining volume. With this in head teacher he has asked his key directors t o shademit a plan of action independently and straight bearing he has to decide which of the 4 marriage offers he go out contract to senior management. The detail that Clark has his 4 keys managers recreateing separately limits their appraisal to each of their experiences and thus their proposals be narrow to their field of expertise.Also, by choosing one peculiar(prenominal) direction whitethorn leave 3 directors uninvolved therefore with a secondary sense of responsibility. When making fleshy decisions it is incessantly better, in my eyeshot, to have everyone on board. On the other hand it provides Clark with 4 proposals kind of of one. Nonetheless making the 4 directors work unitedly would have a provided a team solution and a broader coming to the problem. Now, by choosing one particular approach, Clark allow have to find a way to involve all directors in this strategy. feeling closely at each proposal1st proposalSrikant Tipha, conductor of the dim-witted Me als unitSrikant wants to strengthen the strategy of growing categories of dry soups, healthier soups and meal-in-pouch soups by drop $18 gazillion on advertising and promotion. These products were a direct result of Annabelles acquisition, a smaller competitor Brannigan had acquired 5 years ago. Skirant wants to induce trial by increasing advertising to provide brotherhood for sensitive flavors Gazpacho for the warmer months and Teriyaki for positioning in the fast growing Asian soups category.Pros Focuses on growing segments which comprehend health concerning issues and/or focus on the impudent flavors Cons Srikant focuses his upstanding strategy on the youthful lines/products which account for 15% of the revenues of the division and completely leaves out the 78% which be the star products, or the cash cow and basically pay the tender developments.2nd proposalClaire Mackey, Director of Finance & PlanningClaire focuses on the modernistic healthier and more convenient p roducts gaining territory in the market. Claire suggests the best way to chop-chop have a knockout armorial bearing in these segments would be to acquire a small competitor with significant presence on these red-hot products. Pros Brannigan would very quick be able to have an fitted response to cutting trends, as the whole operation is set up and products are already tested. By maintain the on-line(prenominal) brands, they would increase their shelf space. With joint synergies, the brisk acquired products would have a margin increase by reducing costs.Cons Recent unhealthful experience with Annabelles Foods although the project is bit by bit gaining track. It would take a large enthronisation in advertising and promotion if they unplowed the acquired brands, if they changed into their own, there was a greater risk of cannibalization and of losing shelf space in great(p) retailers.3rd proposalAnna Chong, Chief creative activity OfficerAnna feels that her department c ould develop new lines that meet the markets new trends and that the company should increase investment in advertising and promotion for the new products already tested with consumers and investment in R&D for new products. Pros the proposal addresses the markets new trends, avoiding the risk and investment of a new acquisition and all risks it entails. The new flavors would leave behind a price increase hence increase in margin. Cons 1/100 products developed were actually launched in the market and reached Brannigans threshold for success. The costs of evolution 100 products and launching 9 with unaccompanied 1 to be successful are very heavy. Also launching products that may eventually fail means similarly costs for retailers which are becoming increasingly intolerant and more demanding for better conditions. fourth proposal curtsey Pugh, VP Sales and Marketing, Brannigan Soups shilling focuses his proposal on the core products let down selling price to make the breakout bet ween private label and Brannigan less significant (PL increasing by 5%) . Also he wants to invest in advertising the products and wants to optimize the plants in tack to recover losses due to reducing of selling price. Bob also wants to bring back a former bowel movement more appealing to younger generations. Pros The aimed products are guaranteed successes and retailers go away appreciate the strategy. Cons This plan totally ignores the new market trends and price simplification could damage margin objectives as considerably as brand positioning.Looking at each proposal individually I think Clark should favor Bob Pughs proposal because it focuses cockeyedly on the divisions main core, enables to increase gross margin by reducing production costs and increasing volume and there is no cannibalization effect. However, in long term this strategy does not secure the new trends which may or may not be the next cash cows. Then also celebrated is the proposal by Anna Chong which goes in a very different direction exclusively is as well an affairing approach. Anna, as the Chief Innovation Officer, focuses, not surprisingly, on developing new products, there is of course a large investment involved, alone it does take into account the new trends. My uttermost pick would be the proposal do by Claire Mackey, Director of Finance & Planning, since it represents a very large investment and modern experience with Annabelle go out make it hard to pass it by the board.Her preference goes to chromatic Dragon FoodsCurrent Sales $36 millionCannibalization of Sales 0.45% (Mackey says 0.3% Clark 0.6%)$13 million Estimated EBITDA $4.2 millionsEstimated salute $29.4 million (considering highest price)Amortization + interest per year 2.54 million (in 10 year period) swinish Margin $16.2 millionGross Margin with cannibalization effect $10.3 millionCost of A&P $11 millionNet Earnings in the offset printing Year -$3.24 millionIn 5 yearsEstimated revenues $75.85 million ( growth rate of 2.5% for whole division) Estimated Gross Margin in 5 years (50% instead of 45% as Clark estimates increase of 10% I will be more conservative and exactly add 5% )$38 millionFrom the analyzed companies by Mackey, the emerging competition is mainly focused on the airfield where Brannigans is not as strong health oriented products (MSG free and low sodium), new flavors (Asian flavors) and trends (Deli like). These yet small sub categories may well grow in the next years and this may idiosyncrasy as a problem because costumers will lose brand awareness, recognizing other brands as the Healthy soup or as the Chinese Soup. On the other hand, it will be difficult for new brands to try to compete with Brannigan on their strongest products and in which they are the unquestioned loss leader. So the natural strategy for new companies is to target the products where there is not such a strong acknowledge brand.This point must be considered by Clark when making his decision. Can Brannigans render to leave these new products wide clean or should he get his transfer on this in front it escalates? In my opinion Clark needs to take action on the growing needs of the market before it is too late. Brannigans Soup needs to lock its position as market leader in soups as a whole concept and not as a segmented market. Clark needs to address two main issues maintain leading in the classic flavors and keep up with new demands.For this he should bring in Anna Chong and Bob Pugh and have them work together in defining the new strategy. manner of speaking their proposals together the cons of each of them are mitigated. Anna addresses the new trends Bob has left out and Bob will secure the financing of the new products that Anna will develop which may twist the next cash cows. Reinforcing the current strong products of the company is important but may not be enough in a permanently evolving market. A leader position requires investment in R&D in order to keep up with changing trends.