Oscar mayer

Group – 1RachitSarthak SahniShubham BhardwajShwetaYash Mittal

The Oscar Mayer Story

• Founded over 125 years ago by Oscar F. Mayer and his brother, Gottfried.• An American meat and cold cut production company .• Acquired Kraft's Food Group .• Known for its Hot Dogs,Bologna,Bacon,Ham and Lunchables products.• It is also famous for their Wienermobile , which has toured the United

States for over 70 years. The first Wienermobile was created in 1936

timeline

1989:Merger with Kraft

Food, Inc.

1979:Louis Rich Inc. was acquired

1971:Oscar Mayer

Company went public & was

listed on Newyork stock

exchange.

1883:Oscar F. Mayer & Gottfried Mayer

founded the company in

Chicago.

1936:WienerMobile

makes its debut.

Main leads in the case

Marcus McGraw:

22 years career with Oscar Mayer Foods

President for the last 4 years.

Mike McTiernan:

Founder of McTiernan Consulatation Firm.

Rob Goodman:

Category Manager at Louis Rich

Jane Morely:

Director of Finance & Planning.

Jim Longstreet:

New member of Direct Management Team.

Brought into new product hit rate.

Eric Stanger:

Vice President of Oscar Mayer brand.

Marcus Mcgraw’s strategy

• Relied on McTiernan Corp. for planning advice and market research for many years.

• Easy vertical chain of command.• Planning the future actions.• Consider every option available and analyzing the reports and memos.

Challenges faced by the Management

• Preference of people for less fat products and that to which are lower in price.

• Demand for the products which are easier to prepare and cook for fast-forward pace of our lives.

• Increasing demand for white meat and overall fall in the demand of red meat consumption.

• Carefully investing for short-run and long-run profits.

Memo -1

•Rob Goodman (Category Manager) Louis Rich- White Meat Product Line

Suggestions:

•“Switch to Rich Campaign”• Boosting up our brand awareness by heavy advertising.• Emphasis on advantages of white meat over red.

•2. Introducing the string of new products.

Memo - 2

• Jane Morely (Director of Finance & Planning)

• Suggestions:

• Healthy and convenient products• Acquisition of small companies

• Chicken Rite Inc. – Low cal. Chicken salad• Turkey Time Ltd. – Readymade frozen Sandwiches• Crabbies, Inc. – Simulated Shell fish products.

Memo - 3• Jim Longstreet (Newest member of Direct Management team)

• Suggestions:• Zappetites

• Meeting consumer trends of :• The change in trend from sit-down meals to on-the –go handheld portable meals.• With the explosive growth of microwave ovens, the associated need of the products that

fit “frozen food” category.

• 2. Lunchables

• In substitution to the same homemade meals 5 days a week.• Will include sliced lunch meats, cheese & crackers, condiments, and a chocolate treat.

Memo - 4

• Eric Stanger (VP of OM Brand)

• Suggestions:

• Six Urgent Actions

• Price cut by 10 cent per package on lead top 3 OM products.• Increase the advertising budget by $25m.• Re-institute the Wienermobile promotional campaign.• Formulate a low fat & salt line.• Focus on rationalizing & capacity utilization in OM brand.• Enliven Oscar Mayer Brand.

Question & answer

QUESTION -1

• In the beginning of the case McGraw thinks he has “ Never encountered such a complex business challenge” as the one he currently faces. By the end of the case, after he has read the ideas listed in the four memos, McGraw can’t believe he ever thought the investment issue was “ Going to be hard one”. What changed the president’s perspective? What strategic decision making process does McGraw pursue?

ANSWER - 1

• Marcus McGraw has given his 22 years to Oscar Mayer foods including the last four years as president of the division. He never encountered such a complex matter. McGraw changed his perspective soon when he looked into Mike McTiernan note and all the memos. He gradually brought down all the points and linked all the need full strategies to achieve his goal which he targeted at the first place. He knew Once a thorough environmental scan is complete, a plan can be constructed to identify alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. Then Marcus would create a marketing strategy to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.

• Marcus McGraw knew very well that the Marketing strategies serve as the fundamental of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year.

QUESTION - 2• If McGraw chooses a strategic direction that favors only one department, what negative effects could this have on other departments? How can McGraw mitigate the damage? ANSWER:•McGraw truly believed in the solutions provided by his managers were for the best of the company. He considered them to be his best men on the job.•If Mcgraw would have gone with a single solution then he would have risked his faith on other managers, so in order to find an optimal solution , he gathered inputs from all of them and came to an optimal solution.•It would have sent wrong signals about the company’s belief in the diversity of their products and created distrust among the two organizations of the same parent company.

Question - 3

• Oscar mayer is facing many challenges and competition from multi billion dollar competitors(conagra,sara lee, hormel etc)

STRENGTHS: -• strong financial position• Market Share• more specialized manufacturing and marketing skills• Focus on building value added brands

• WEAKNESS• Reduced brand strength• Longevity relative to oscar mayer

• These have encouraged the OM division to start devising strategies to develop healthier red meat products, invest in white meat, create new convenience products, and innovate in order to differentiate themselves.

• Impact in Investment decision• OM is increasing investment in Research & Development, Advertising

& Promotions and new human resources and acquiring new firm.

Question - 4

• Absent any resource constraints, which of the four departmental directions do you think is the most viable? Which is the second best strategy? Which is the least viable?

Answer - 4

• The most viable strategy is the strategy suggested by Eric stanger , vice president of OM brand. Like 10 per cent price cut on top 3 OM branded items. Increasing the A&P budget by 25 million, enough R&D to develop low fat and salt line product.

• Second most viable alternative is suggested by Rob goodman Louis rich category manager , he believes that white meat can capture 50 per cent of market . His folks have put together aggressive plan centered on two initiatives.

• Boosting the brand awareness and trial heaving up their advertising behind switch to rich campaign.

• Introducing the string of new product that r&d has introduced.

• The least viable strategy is being suggested by Jim Longstreet in order to achieve 4 per cent volume growth rate they believed that they need to come up with 4th category within processed meat that will address change in consumer lifestyle . he came up with two ideas to offer which have come out of work of cross functional teams

• Zappitities• Lunchables

Question - 5

• Given the information in the case, what strategic course do you think the Division should pursue?

Answer - 5

• There are basically 4 lines given • Boosting brand value and increasing advertaising along with the new brand of

bacon and roast turkey and • Taking over other healthier products like chicken rite ,turkey time or crabbies• New products like zappities or lunchables• There are basically 4 lines given • Boosting brand value and increasing advertaising along with the new brand of

bacon and roast turkey and • Taking over other healthier products like chicken rite ,turkey time or crabbies• New products like zappities or lunchables

Question - 6

• Which of Jim Longstreet’s new product ideas is less likely to succeed? Why?

• ANSWER :• The second one or the lunch box idea is the one more likely to fail as the

self-life of bread is low and small treats like chocolate ,cheese or crackers are not really filling for kids and they are not really healthy in the long run so moms are not accepting it