Integrated Marketing Communication Case

Submission

Giant Consumer Products: Case study

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Complete Exhibit 3. Provide the answers in a table format

Exhibit 3-1
Avg Monthly volume for Dinardo 32 Dinardo 16

1.When that item is on promotion 10460942.67 6210220

2. When that item is Not on Promotion 6816234.948 3088564
3.When Nothing is On promotion 7164484.234 3798942

Incremental volume from promotion 3296458.435 2411278.042

Revenue Change from promotion 6922562.713 5787067.3
Variable cost change from promotion 2432786.325 2006690
Promotion cost change from promotion 3758202.551 4307322.799
Marketing margin change from promotion 731573.8377 -526946.47
ROMI 19% -9%
Change in %store promoting 19.65347453 23.603
When the item is on promotion 27.075 30.8
When nothing is on promotion 7.421525468 7.196331
Incremental Profit 3837208.375 5787067.301

Exhibit 3-2
Avg Monthly volume for Dinardo 32 Dinardo 16

1.When the other Dinardo's item is on promotion 5740724.056 424647.92

2.When Nothing is On promotion 7164484.234 3798942.32

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Volume change from promotion of other item 1423760.178 -3374294.4
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Revenue change from promotion of other item 2989896.373 -8098306.56
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Variable cost change from promotion of other item 1050735.011 -2808123
promotion cost change from promotion of other product 17528.9984 75556
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Marketing margin change from promotion of other product 1956690.361 -5365739.19
Total brand impact from promotion on top-line revenue
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Total Effect of D32 promotion 1175743.847
Total effect of D16 promotion 2797170.927
Total brand impact from promotion on marketing margin
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Total Effect of D32 promotion 4634165.352
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Total effect of D16 promotion 2483636.831

Exhibit 3-3
 Impact on Natural
Avg monthly incremental volume for Natural 705251.9518
Avg % store promotion for natural 7.626205481
Avg Monthly incremental volume/promo point 92477.43895
Incremental volume from 25% promo points 2311935.974
Revenue change from promotion 6704614.324
variable cost change from promotion 2080742.376
Promotion cost change from promotion 4125417.112
Marketing margin change from promotion 498454.8353
ROMI 12%

The above form will help you figure out if Sanchez should have a sales event across the country.
What impact does it have on other brands if it's true? How much does it cost to promote different
items?

Q2. Do you advise Sanchez to run a national sales promotion? if so, Which one of the items should
the funds be allocated to: Dinardo 32, Dinardo 16 or Natural Meals?

Based on the first part of Exhibit 3, we can see that a sale for D32 would make the item's ROMI go
up. We can say, though, that the ad has a big effect on D16 that the company should try to avoid
after seeing Exhibit 3 Part 2.

Instead, money should be put towards Natural Meals, which has a ROMI of 12.08% after marketing.

Our group advocates for a national sales promotion within Giant Consumer Products' Frozen Food
Division (FFD) to bolster profitability. Recognizing FFD's pivotal role in GCP's profits and the lagging
performance metrics in 2008, a swift sales lift is imperative. The move aligns with consumer trends
favoring promotions, ensuring relevance, building loyalty, and expanding brand awareness. With the
looming threat from competitors and the substantial market share held by restaurants, a well-
executed promotion becomes a strategic necessity. Our recommendation targets the Natural Meals
brand, showcasing positive past performance and a projected 12% Return on Marketing Investment
(ROMI). To preserve Natural Meals' premium brand positioning during the promotion, we propose a
coupon strategy and increased advertising efforts. This approach not only safeguards the brand but
positions GCP for long-term success in the competitive frozen food market.

Q3. Would the promotion end up being a “win” for not only FFD, but also for retailers and

consumers?

Yes. Promotion would be a win for both retailers and customers. Customers will get the item at a
discounted price. Also promoting GCP brands would bring more store traffic for retailers. Also,
retailers will not be promoting items for free and thus would be benefitted by the sales promotion.

Q4. What can be concerns regarding the use of trade promotions and in which extent those
concerns can affect go-no go decisions?

CEO Allan Capps of Giant Consumer Products hesitates about a trade sales promotion due to
concerns about cannibalization, brand equity erosion, forward-buying, pass-through, and consumer
stockpiling. Cannibalization risks are low between Dinardo’s and Natural Meals. To prevent brand
equity erosion, a coupon strategy can be employed. Forward-buying threats can be managed
through contracts with retailers. Pass-through concerns can be alleviated by specifying price
reduction obligations for retailers. Consumer-related threats like stockpiling are minimal in frozen
foods, and brand loyalty minimizes switching. Capps' primary concerns lie in retailer threats and
brand credibility retention, emphasizing the need for strong relations with retailers.