Pillsbury Cookie Challenge

Executive Summary

Pillsbury refrigerated baked goods (“RBG”) business is the fourth largest category on General Mills Corporation (“GMCC”). Established in 1954, GMCC was the second largest division within the international segment of its parent company, General Mills Inc., the sixth largest food product manufacture of the world, which was headquarter in Minneapolis, Minnesota. GMCC was a leader in the Canadian package foods market with annul sale of US$566 million.

In the past a few years, the performance of RBG had been less than stellar volume growth between 2004 and 2006 and household penetration had fallen to a five year low. The key product refrigerated cookies which represented 62% of RBG’s unit sales and over 75% of the category’s profit had only 1% annual volume growth over past three years and household penetration had fallen to 24%.

RBG’s objective is to develop a new business plan and marketing strategy to profitably grow the business; especially to improve the performance of Pillsbury refrigerated cookies to achieve the goal of 5% to 7% annual growth of whole category.

RBG conducted in-home immersion visits and discovery workshops survey regarding cookie usage and attitude of consumers. The key findings help the marketing team had a better understanding of Canadian consumers.

In order to achieve this goal, RBG will need to increase frequency of purchase, increase household penetration, or do both. There are 5 alternatives:

1. Increasing scratch baking products and innovating new RBG products with healthier choices
2. Implementing new advertising strategies to target Canadian consumers
3. Redesigning new packaging for RBG products
4. Offering coupons and free samples
5. Improving brand recognition by connecting with consumers through social media

Alternative 1 and alternative 2 are not recommended at the current stage because with GMCC’s current available resources, it might not be able to reach the targeted results in the short term. Both alternatives requires large investment upfront and GMCC’s brand budgeting is very low. It is something for GMCC to consider in the long run.

Alternative 3 can be implemented if the increased sales outweigh the costs of redesigning the packaging. GMCC should consult with the marketing and packaging departments first. A cost and benefit analysis should be conducted before implementing. This alternative can be used as the contingency plan if alternative 4 didn’t meet the expectation.

Alternative 4 might be the best option for GMCC to implement at this point. It is mainly designed to target the non-users group, which will lead to increase sales in the potential customers and achieve market penetration target.

Alternative 5 is not recommended, it takes long time and great investment build the strong relationship through social media and the result might not be significant in the short term. It would be reasonable to believe that it would generate a more positive result if these alternatives can be implemented at the corporate level.