Introduction: -

 Brannigan Foods is a 100-year-old Brand.

 It has products ranging from RTE soups to Dry-Mix Soups.
 RTE soups is the most profitable category. Approximately 71% revenue comes from this
category.
 Considering the decline in the profitability from soup division. It is planning to
implement a new strategy.
 Despite being the leader of category, lack of innovation and low profitability is a key
concern for them.
 Most of their consumers believe that they are lagging behind on the factors such as
healthy products, diet focused products, convenient products, available flavors and
seasonality.
 Soup consumption is falling and profits are declining across the industry. The following
table depicts the scenario.

All figures in $ millions 2010 2011 Growth

Ready to serve wet soup 2257 2020 -10.50%

Condensed wet soup 1893 1821 -3.80%

Dry Soup 1366 1397 2.27%

Ready to serve broth 862 915 6.15%

Refrigerated soups 142 164 15.49%

Frozen Soups 27 46 70.37%

Deli Soups 110 140 27.27%

Total 6657 6503 -2.31%

Problem Statement: -
Its vice president Clark has to consider the 4 alternatives proposed by his key manager and act
accordingly to improve revenue and profitability, with the target of 3 to 4 percent of annual
growth for this business division.

Marketing Objective: -
 Increasing Profits
 Developing New Products
 Increasing Shelf Space Occupancy

Alternative Available for Mr. Clark: -

1)Invest in the growing sector: -

Mr. Tipha suggested that firm should invest in growing categories like Healthy soups and Dry
soups. His growth projections are as follows: -

2013
All figures in $ millions 2012 2013 Growth Growth
Tipha
Traditional ready to eat soups
Ready to serve wet soups 998 893 -10.50% 893 -10.50%
Condensed Wet soups 917 882 -3.80% 882 -3.80%
Broths 414 439 6.10% 439 6.00%
New products, acquisitions last 10
years
Low Sodium RTE "Heart Healthy" 321 360 12.00% 390 21.50%
Annabelle's Fast n Simple 71 80 12.00% 86 21.50%
Dry soups and mixes 53 54 2.30% 55 3.80%
Other, including private label 199 209 5.00% 209 5.00%
Total 2973 2913 -1.90% 2954 -0.60%
 2013
Year 2011 2012 2013
Tipha
Net sales of Brannigan's Foods 7330 7979 8230 8230
Net Sales of Soup Division 3034 2973 2913 2954
Less:
Cost of goods sold 1670 1635 1602 1625
Marketing, R&D, Selling Expenses 425 416 408 426
Other expenses 625 627 600 606
Net Earning 315 295 303 297
Broken out of Marketing and selling expenses
Advertising and Promotion 189 178 170 188

Healthy as well as fast and simple are becoming attractive. Hence, they can be positioned along
with awareness about health.

2) Acquire products to complement the core in growing sector: -

Claire Mackey suggested acquiring product lines. He estimated the profits for changing to
Brannigan’s brand name and keeping acquired brand name as follows: -

Year (Changing to Brannigan’s name) 2011 2012 2013 2014 2015

Net sales of Brannigan's Foods 7330 7979 8230
Net Sales of Soup Division 3034 2973 2949 2890 2832
Less:
Cost of goods sold 1670 1635 1623 1590 1557
Marketing, R&D 425 416 413 405 397
Other expenses 625 627 600 588 576
Cannibalization -- -- 25 25 24
Interest -- -- 1 1 1
Net Earning 315 295 288 282 276
Broken out of Marketing and selling expenses
Advertising and Promotion 189 178 175 171 168
 Year (keeping same name as Acquired) 2011 2012 2013 2014 2015
Net sales of Brannigan's Foods 7330 7979 8230
Net Sales of Soup Division 3034 2973 2949 2890 2832
Less:
Cost of goods sold 1670 1635 1622 1590 1558
Marketing, R&D 425 416 419 410 402
Other expenses 625 627 600 588 576
Cannibalization 18 17 17
1 1 1
Net Earning 315 295 290 284 278
Broken out of Marketing and selling expenses
Advertising and Promotion 189 178 181 177 174

This strategy may look attractive from short term point prospective but it requires very high
investment and therefore is very risky.

3)Invest in organic growth from internally developed new products: -

According to Anna Chong, the category is moving towards maturity and so the products. She
strongly feels the need to develop new products as well as processes. Therefore, she suggested
to increase the research and development budget to 19 million dollars, which is roughly 35
percent.

Year 2011 2012 2013 2014 2015

Net sales of Brannigan's Foods 7330 7979 8230
Net Sales of Soup Division 3034 2973 2929 2894 2866
Less:
Cost of goods sold 1670 1635 1610 1590 1574
Marketing, R&D 425 416 423 419 416
Other expenses 625 627 600 588 576
Net Earning 315 295 296 296 300
Broken out of Marketing and selling expenses
Advertising and Promotion 189 178 180 171 163
4)Invest in your core products: -
Bob Pugh is advising to raise marketing expenditures for core products as despite decline in the
revenues, they still contribute to a big proportion of sales and profitability.

2013
Year 2012 2013 2014 Pugh
Pugh
Traditional ready to eat soups

RTS wet soups 998 893

1819 1962
Condensed Wet soups 917 882

Broths 414 439 439 466

New products, acquisitions last 10 years

RTE "Heart Healthy" 321 356 356 395

Annabelle's Fast n Simple 71 79 79 88

Dry soups and mixes 53 54 54 55

Other, including private label 199 209 209 219

Total Sales 2973 2913 2957 3186

Year 2011 2012 2013 2014

Net sales of Brannigan's Foods 7330 7979 8230

Net Sales of Soup Division 3034 2973 2957 3186

Less:

Cost of goods sold 1670 1686 1626 1752

Marketing, R&D, Selling Expenses 425 449 427 447

Other expenses 625 653 600 588

Net Earning 315 276 304 399

Broken out of Marketing and selling expenses

Advertising and Promotion 189 209 189 209

Our Opinion/Conclusion: -
After analyzing the data for all the options available, we would suggest to go for 4 th option i.e.
to invest in core products. This will be a very good strategy for long term prospective.

Submitted by: - Group 13 (Section 1)

Arihant Choudhary- FT201017

Arun Mehndiratta- FT201106

Abhishek Paul- FT201006

Abhijit Nidichenametla -FT201003