Brannigan Foods Essay

Strategic Marketing Planning for the dope up sectionalisationBrannigan Foods Soup Division is a 100 stratum old go with with mature products which account for 40% of the whole soup market and it is the close significant division of the Brannigan Foods group. The most important category is the RTE soups which account for 78% of total sales. (Exhibit 2) Other products include Low sodium RTE Heart estimable, wry soups and mixes and private label and Annabelles agile and simply. Annabelles was a soup company acquired 5 years ago in hostel to chalk up healthier sups, dry soups and fast to the companys portfolio, a growing trend in the market. In terms of costumer comprehension of Brannigan comparing with contention, Brannigans falls behind in the followingwellness trendsDiet claimsConvenience offeringsFlavors-especially popular regional onesSeasonal products outside iciness weatherRetailers perceive Brannigan to be-Category leader- non innovative-less profitable than install b rands and competitionOver the past 3 years the results of the division brook been decreasing and there be several reasons behind this The whole soup industry has been declining for several years. The largest and most loyal segment of soup consumers, the treat boomers, which account for 20% of American population and are the main target, adopt been showing increase concerns with processed food and high sodium surfeit shifting to healthier alternatives. Increasing trend within working mothers who tended to select convenience.Bert Clark, vice-president and general manager of Brannigan Foods SoupDivision needs to recall action and present a plan to old management to go back to growing sales within the division and adjoin cabbage by 3% abutting year, reversing the 1-2% declining turnover and 2-3% declining loudness. With this in mind he has asked his key directors to submit a plan of action independently and today he has to decide which of the 4 objects he ordain pass on to senior management. The fact that Clark has his 4 keys managers working separately limits their assessment to each of their experiences and thusly their proposals are narrowed to their field of expertise.Also, by choosing one particular counsel may leave 3 directors uninvolved hence with a pip-squeak sense of responsibility. When fashioning hard decisions it is always better, in my opinion, to beat everyone on board. On the other hand it provides Clark with 4 proposals instead of one. Nonetheless making the 4 directors work together would have a provided a group solution and a broader approach to the problem. Now, by choosing one particular approach, Clark ordain have to find a way to involve all directors in this strategy.Looking closely at each proposal1st proposalSrikant Tipha, Director of the Simple Meals unitSrikant wants to strengthen the strategy of growing categories of dry soups, healthier soups and meal-in-pouch soups by investing $18 million on advert and publi city. These products were a direct result of Annabelles acquisition, a smaller contention Brannigan had acquired 5 years ago. Skirant wants to induce trial by increasing advertisement to provide coupling for late flavors Gazpacho for the warmer months and Teriyaki for sicing in the fast growing Asian soups category.Pros Focuses on growing segments which address health concerning issues and/or focus on the invigorated flavors Cons Srikant focuses his whole strategy on the novel lines/products which account for 15% of the revenues of the division and completely leaves out the 78% which are the star products, or the cash cow and basically finance the modernistic developments.2nd proposalClaire Mackey, Director of Finance & international ampere PlanningClaire focuses on the new healthier and more convenient products gaining territory in the market. Claire suggests the beat out way to quickly have a strong armorial bearing in these segments would be to acquire a small competitor with significant presence on these new products. Pros Brannigan would very quickly be able to have an adequate response to new trends, as the whole operation is raft up and products are already tested. By maintain the original brands, they would development their shelf space. With joint synergies, the new acquired products would have a margin increase by reducing costs.Cons Recent bad experience with Annabelles Foods although the take care is gradually gaining track. It would take a large enthronisation in advertizing and promotion if they kept the acquired brands, if they changed into their own, there was a greater risk of cannibalization and of losing shelf space in big retailers.3rd proposalAnna Chong, Chief alteration OfficerAnna feels that her department could 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 allow a set increase hence increase in margin. Cons 1/100 products substantial were actually launched in the market and reached Brannigans threshold for success. The costs of development 100 products and launching 9 with only 1 to be productive are very heavy. Also launching products that may eventually become means also costs for retailers which are becoming increasingly illiberal and more demanding for better conditions.4th proposal chase Pugh, VP Sales and Marketing, Brannigan Soups wharf focuses his proposal on the core products reduce selling price to put one across the gap between 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 regularize to recover losses due to lessening of selling price. cork also wants to bring back a reason campaign more appealing to younger generations. Pros The aimed products are guaranteed successes and retailers will apprise the strategy. Cons This plan totally ignores the new market trends and price reduction could scathe margin objectives as well as brand positioning.Looking at each proposal individually I think Clark should favor Bob Pughs proposal because it focuses strongly on the divisions main core, enables to increase thoroughgoing(a) 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 noteworthy is the proposal by Anna Chong which goes in a very different direction but is as well an interesting approach. Anna, as the Chief Innovation Officer, focuses, not surprisingly, on developing new products, there is of course a large investment involved, but it does take into account th e new trends. My last pick would be the proposal made by Claire Mackey, Director of Finance & Planning, since it represents a very large investment and recent experience with Annabelle will direct it hard to pass it by the board.Her preference goes to Red Dragon Foods flow rate Sales $36 millionCannibalization of Sales 0.45% (Mackey says 0.3% Clark 0.6%)$13 million Estimated EBITDA $4.2 millionsEstimated equal $29.4 million (considering highest price)Amortization + interest per year 2.54 million (in 10 year period)Gross Margin $16.2 millionGross Margin with cannibalization effect $10.3 millionCost of A&P $11 million sack Earnings in the First 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 just add 5% )$38 millionFrom the analyzed companies by Mackey, the emerging competition is mainly focused on the area where Brannigans is not as strong health oriented products (MSG free and low sodium), new flavors (Asian flavors) and trends (Deli like). These so far small sub categories may well grow in the next years and this may pose 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 voiceless for new brands to try to compete with Brannigan on their strongest products and in which they are the unchallenged leader. So the natural strategy for new companies is to target the products where there is not such a strong recognized brand.This point must be considered by Clark when making his decision. Can Brannigans afford to leave these new products wide open or should he get his hands on this before 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 lead 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 delimit the new strategy. Bringing 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 become 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.