Cracker Jack Report

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Transcript of Cracker Jack Report

  • BMGT450

    Prof. Bob fiddler

  • I.EXECUTIVESUMMARY

    CrackerJack,oneofAmericasmosticonicbrands,hasbeeninasteadydeclineforthe

    past10years,withstagnantsalesandgrowthwithinthesnackfoodindustry.AlthoughCracker

    Jackisthemarketleaderofcaramelflavoredpopcorn,thebrandhasbeensufferingduetoalack

    innovationforadvertising.Inrecentyears,theonlynewCrackerJackadvertisementswerefora

    newproductlinecalledCrackerJackdwhichputanewtwistonthetraditionalflavorof

    CrackerJack.Witharelativelystableandunprofitabletargetmarket,CrackerJackhasallowed

    itselftoremaininthedeclinestageoftheproductlifecycle.Unfortunately,thelackofinclusion

    onPepsiCosannualreportfurtherclaimsCrackerJacksdireneedtoinnovateitsmarketing

    strategybeforethebranddisappearsforgood.

    OurmarketingobjectiveforCrackerJackistoincreaseannualsalesfrom$33millionto

    $38millionbyreaching15%ofanewmarketinthenextthreeyears.Wewillaccomplishthis

    goalbyrepositioningtheiconicbrandfromAfricanAmericanwomentoMillennials,witha

    specificfocusonthosewhoutilizesocialmedia(roughly66million).SinceMillennialsarea

    highconsumerofconveniencegoods,specificallysnackfoods,webelieveitisappropriateto

    reviveCrackerJackwiththeupandcomingmembersoftheworkingclass.Wewillreachthese

    Millennialsthroughsocialmediaadvertisingaswellassamplingsotheymaynotonlytry

    CrackerJackbutengagewiththebrand.

    Wewillbeimplementinganewadvertisingcampaignacrossanassortmentofsocial

    mediaplatformsincludingFacebook,Instagram,andBuzzFeed.BackedbyourLegendsNever

    Diecampaign,consumerswilllearntherich,iconichistoryofCrackerJackwhileembracing

    thelegendwithinthrougheachpurchase.Throughstrategicpartnershipswithlocalretailersin

  • urbancities,wewillbeabletoseeapositiveincreaseinawarenessandconsumptionofCracker

    Jack.WeintendtoutilizetelevisionandspotifyadsastoreachallmembersoftheMillennial

    demographic.

    Attheendofyearone,CrackerJackshouldseea$1millionincreaseintheirROIalone.

    Netsalesshouldincreaseby15%to$38millionduetoourrepositionandintensifieddistribution

    acrosstheUnitedStates.WefirmlybelievethatembracingthelegendinsideeachMillennialwill

    createacallforactiontopurchaseandconsumeCrackerJack.TheprideofAmericasfavorite

    snackwillreturntoglory,oneMillennialatatime.

    II.SITUATIONANALYSIS

    CurrentlyFritoLayisdoingverylittleadvertisingforCrackerJack,thussalesare

    presumablystagnant.ForthepastthreeyearsPepsiCohasnotincludedCrackerJackinits

    annualreportthusitcanbeconcludedthatCrackerJackisneithergainingnorlosing

    significantrevenue.CrackerJackhasbeengivensmalladvertisingbudgetsinthepastfewyears

    in2012therewasnoadvertisingbudgetandin2013CrackerJackwasonlyallotted$62,000.

    (Newman).TherehavebeenafewattemptsatadvertisingCrackerJackinrecentmonths.During

    summer2014CrackerJackhadasummerlongTheSurpriseInsidecampaignwhichfocused

    onencouragingfamiliestodosmallactsofkindnessforeachother.Mostnotably,thispast

    NovemberintheannualMacysThanksgivingDayParadeinNewYorkCityCrackerJack

    createdafloatthatcelebratedthebrandsconnectiontobaseball.

    CrackerJacksmostdirectcompetitorsaretwobrandsofprepopped,sweetened

    popcorn:CrunchnMunchandPoppycock.CrunchnMunchandPoppycockprovidesimilar

  • productstoCrackerJackcaramelsweetenedpopcorn.Thetwocompetitors,bothofwhichare

    ownedbyConagra,alsodolittletonoadvertisingfortheirproducts.Becauseofthislackof

    advertisingwecanalsoassumethatCrunchnMunchandPoppycockhavestableenoughsales.

    AlthoughCrackerJackanditscompetitorsarenotdoingverymuchadvertising,the

    popcornmarkethasbeengrowing.Currently,popcornaccountsfor9.2%ofsnackssold(MRI+

    MediaMark),butthepopcornindustryisgrowing.WearetargetingMillennialsbecauseoftheir

    highratesofsocialmediaandtheirhighratesofsnacking.Millennialsarethemostlikelypeople

    topurchasesnacks(Mintel).Millennialmenaremorelikelytopurchasesaltysnackswhile

    Millennialwomenaremoreliketopurchasesnacksingeneral(Mintel).Thisprovesthat

    Millennialsaretheultimatesnackerstheyvalueconvenient,quick,tasty,snacksthatprovidea

    goodvalue.Webelievethisaffinityforsnackingcouldalignwellwithourproduct.

    CrackerJack,incomparisontoCrunchnMunchandPoppycock,isamucholder,iconic

    snack.CrackerJackhasastrongassociationwithbaseballandadeephistorybehindit.Crunchn

    MunchandPoppycockareparityproductsthatlackthehistoryandbackstorythatmakesCracker

    Jackaniconicbrand.InthepopcornsnackindustryCrackerJackhas24%ofthemarketshare,

    whereasCrunchnMunchandPoppycockcontrol21%and16%,respectively(MRI+

    MediaMark).CrackerJackcontrolsmoreofthemarketthanitscompetitors,butthereisstill

    definitelyroomforgrowth.

    Ourmarketingplanismultifaceted.AmongMillennials,CrackerJackhasahighrecall

    rate,butlowintenttopurchase.Weseektostimulatetrialusetogettheproductintothehands

    ofourtargetmarket,andthenchangetheirbrandperceptions.CrackerJackhasastrong

    relationshipwithbaseball,thusmanypeopleassociateourproductwithmemoriesofsports,

  • familyoutings,andconnectionswithpeople.Thesearegoodmemories,buttheyarenot

    necessarilyinspirationalenoughtopushconsumerstobuytheproduct.WewantMillennialsto

    recognizethedeep,iconichistorybehindCrackerJack.Wewanttoemphasizetothemthatour

    productismuchmorethananoldsnack,butratheritisalegendarysnackwithadeephistory.

    CrackerJackisalegendinitsownright,andifsomeoneeatsittheyhavethechancetobeapart

    ofthelegendaswell.

    III.OBJECTIVES

    MarketingObjectiveIncreaseannualCrackerJacksalesfrom$33millionto$38million

    byreaching15%ofnewlypositionedtargetmarketoverthenextthreeyears.

    Currently,CrackerJacksprimaryconsumersareAfricanAmericanwomenbetweenthe

    agesof45and54.Theircurrentincomeisunder$20,000duetotheirlowincomeoccupationas

    aresultofminimalschooling.Thesewomenaresinglewithtwochildrenlivinginsuburban/

    ruralcommunitiesintheSouthernregionoftheUnitedStates.Wearechoosingtostrayaway

    fromthiscurrentmarketbecausethebrandisnowpastmaturityandinthedeclinestageofthe

    productlifecycle.ThatshowedusthatCrackerJackhadtwooptionsforbusiness:continueon

    theirdownwardstrendorrepositiontoanewmarkettoreinvigoratethebranditself.Overthe

    past5years,PepsiCohaswithheldCrackerJackexpensesandrevenuesfromtheirAnnual

    Report,meaningthebrandhashadinsignificantimpactontheentirecompany.

    Asof2009,CrackerJackwasthemarketleaderofCaramelPopcornsnackswith24%

    marketshare.WebelievewiththeiriconicbrandandwellestablishedpresenceasanAmerican

    snack(referenceTakeMeOuttotheBallgame)willserveinstrumentallyforrepositioningto

  • ournewtargetmarket:Millennials.WhenanalyzingMintelonsaltysnackconsumption,wesaw

    thatconsumersbetweentheagesof2544arethemostlikelytopurchaseandconsumesalty

    snacks,specificallymen.Specifically,theyoungerdemographicofconsumers(1824)arethe

    mostlikelytopurchasesnackswhenprovidedatconveniencestores,whichiswhereCracker

    Jacktendstobedistributed.Asaresult,wehaveswitchedourtargetmarkettoMillennials

    betweentheagesof1834,withamajorityoffocusonmalesbecausemenaremorelikelyto

    consumesaltysnacksthanwomen(Mintel).

    BytransitioningourtargetmarketfromAfricanAmericanwomentoMillennials,we

    believeCrackerJackwillbeabletoincreasesalesrevenueby$5million,alittleover15%from

    itscurrentsalestrend.ReachingabrandnewsetofconsumerswillallowCrackerJackto

    recreateitsiconicadvertisinginamoderntwistinordertoengageyoungergenerationswiththe

    brand.Weareconfidentitscurrentsaleswillnotbecannibalizedbyitsrepositioninginyearone

    becauseAfricanAmericanwomeninlowincomehouseholdswillstillfindtheproductattheir

    localconveniencestorestobuy.

    IMCObjective1RepositionthebrandtoMillennialsages1834thatutilizesocialmediato

    increasesalesby15%overoneyear.

    Throughourresearch,wehavefoundthatconsumersbetweentheagesof1824aremost

    likelytosnackthroughoutthedayandMillennialsaged1834aremostlikelytosnackwhileon

    thego(Mintel).SinceCrackerJackitselfisindividuallypackagedandhighlyportable,wesee

    theproductastheperfectsnacktocomplementthelifestyleofMillennials.TheMintelreport

    alsoindicatesthatMillennialsplacethehighestimportanceongettingthemostvaluefortheir

  • moneywhenmakingpurchasedecisions.SinceCrackerJackisalowpricedsnackthatsatisfies

    hungeraswellastwodifferentkindsofcravings(sweetandsalty),ithastheopportunitytobe

    theproductthatgivesMillennialsthemostvaluefortheirpurchases.

    IMCObjective2Stimulatetrialusetoachieve10%ofMillennials,whousesocialmedia,in

    yearone.

    AccordingtoaMintelreport,89%ofconsumersengagewithsometypeofsocialmedia

    platform.Thiscorrelatestoroughly66.13millionMillennialsbetweentheagesof18and34in

    theUnitedStates.Asaresult,CrackerJackhastheopportunitytoreachover66millionpeople

    byproperlyincentivizingtrialuseviasocialmediaadvertisements,asaforementioned.Itisour

    goaltofirstengagewithconsumersthroughsocialmediaplatformstocreateapositivebrand

    imageofCrackerJack.Throughthisstrategy,weareconfidentconsumerswillhaveanewdesire

    totryCrackerJackwhenexposedinthevastassortmentofretailerswewillbedistributingto.

    IMCObjective3Convert15%ofonetimebuyersintorepeatpurchasesduringyearone.

    Aswestimulatetrialusewealsowanttoencourageourcustomerstocontinueto

    purchaseCrackerJack.Arecentstudystatedthetopreasonswhyconsumersengagewith

    companiesafterpurchasewerebecauseofdiscountoffers,67%,andcontests/giveaways,41%

    (Staff).Asaresult.wewanttoincentivizearepeatpurchasebygivingawayacouponwithevery

    sample.ThecustomerwillhopefullysampleCrackerJackandthenwanttousethecouponto

    buytheirownbox.Ifthecustomerenjoyedtheirpurchaseenough,thenhopefullythenexttime

    theywenttothegrocerystoretheywouldbewillingtopayfullpricefortheproduct.This