Oscar Mayer:

Strategic
Marketing Group 01, Section A

Planning Roll Number Name Roll Name

Number

MBA21125 Sarang Bhardwaj MBA21130 Shruti Sharma

MBA21153 Gautam Singh MBA21170 Riya Jaiswal

MBA21196 Ayushi Srivastava MBA21249 Shruti Vetal

MBA21255 Pramit Chakraborty MBA21272 Gnana Sai Venigalla

Case Synopsis

Problem Statement Challenge Options Solution

He currently has 4
However, he is facing
Marcus McGraw, the memos from his
the challenge of
President of Oscar managers, based on
selecting the
Mayer Food division of McTiernan report, which
appropriate strategy to
Kraft Foods, needs to suggest different
fuel future growth for his
present an upcoming strategies to achieve
division and sustain the
strategic plan for his the target growth and
goal of 3-4% annual
division. shape the future of the
growth rate.
business.
Company Overview
Philip Morris Oscar F. Mayer founded the Company went public and it Merger with Kraft Food Inc.
company in Chicago was listed in the NYSE
Companies

1883 1971 1989

General Foods
1936 1979

WeinerMobile makes its debut Louis Rich Inc. was acquired by

Oscar Mayer
Kraft Foods

Oscar Mayer

hot dogs bacon

bologna ham
McTiernan Report
Shifting Consumer Trends Success of Louis Rich
● Marketplace for processed meat undergoing fundamental ● Louis Rich - turkey based line of products
changes ● Low in fat and lower priced
● Consumers becoming health ● Shift in consumer preference Current Two years
Type Brand mkt. share ago
conscious towards white meat
● Red meat under attack for being ● Leveraged distribution system Lunch Meat Oscar Mayer 22.3% 23.4%

too high in fat content of Oscar Mayer to become Louis Rich 8.6% 7.0%

● Oscar Mayer brands witnessing leader in white meat segment Hot Dogs Oscar Mayer 12.5% 13.2%
softening in sales trend Louis Rich 2.9% 1.4%

Target Audience Investment Bets

● Moms in workforce represent a large part of the target “The division should continue to focus on broadening and
audience contemporizing its product lines against emerging health and
● Fast paced lives convenience trends”
● Looking for products that are faster and
easier to use ● Add new benefits to current OM/LR products
● “Convenient food” ● Strengthen/ diversify product lines via acquisitions
● Internally develop new products to tap the new needs
Case Dilemma
Whether to align the business as per changing consumer trend or focus on flagship Oscar Mayer
products? Which strategy to choose in case focus is revamped?
Rob Goodman backs Louis Rich Foods
acquisition and suggests focussing on White Meat
Products. He proposes the following 2 initiatives:
● Switch to Rich campaign to boost brand
awareness
● Introduce new products such as Turkey
Bacon and Roast Turkey
Case
Dilemma
According to Jim, the company must invent a 4th
major category to drive future growth. He proposes
2 ideas for the same:
● Zappetites: Frozen miniature favourites
such as pizza slice, taco, etc.
● Lunchables: A compact lunch tray
constituting of sliced meats, cheese,
crackers, condiments and chocolate.
Jane suggests acquiring small companies that
offer both healthier and convenient products. She
proposes the following 3 companies for acquisition.
● Chicken Rite Inc.
● Turkey Time Ltd.
● Crabbies
Eric suggests to “get back to basics” on the Oscar
Mayer business. Following is the action plan that
he proposes:
● Price cut on top 3 OM products
● Increase the Adv. & Promotion budget
● Spend on R&D to lower fat and salt line of
OM products
● Rationalize capacity utilization
 What changed the president’s perspective from the beginning of the case to its end? What
strategic decision-making process does McGraw pursue?

President’s perspective changed because:

● The diverse opinions gave McGraw to analyse the problem and project future revenues through the lens
of all verticals of his company
● The reminder he got from Eric Stanger about how they have handled difficulties and steered through
them further motivated him to adopt a wider perspective to tackle the situation

1 2 3 4 5

Problem Identifying Gathering Choosing

Identification Objectives Alternatives and Decision Making Implementation
Evaluating them Strategies and
evaluating them
 If McGraw chooses a strategic direction that favours only one department, what negative effects
could this have on other departments? How can McGraw mitigate the damage?

It's likely that McGraw's decision to favour one department over another can hurt the morale
and sentiments of other departments.

If McGraw decides to stick with reinventing Oscar Mayer brand, it will require huge
advertising and R&D spend as per Eric’s proposal.

Additionally, if they concentrate more on red meat products, they will overlook the emerging
product categories that could eventually take 50% of the market share of the meat sector.

However, if they focus on white meat, they will be ignoring the crux of the company which
accounts for 82% of their total profit.

In order to mitigate this, McGraw should focus on both segments. While white meat segment
shows great promise, red meat has been a cash cow for the company.
 What effects is the change in the strengths and weaknesses of competition having on the Oscar
Mayer division? How does this impact the investment decision?

Strengths Weaknesses
A more consolidated competition with sophisticated The weakness of the competition is the closure of
machinery and better financial backing will make the small business dealing in red meat which has led to
situation even tougher for Oscar Mayer​ consolidation in the industry.
Competitors focus on R&D for better quality products
This will help firms with sophisticated manufacturing
and change in customer preferences which in turn is
and marketing skills to capture market share
leading to reduction in Oscar Mayer market shares​

Investment Decision
● Oscar Mayer need to increase investment in Research and Development​
● More budget needs to allocated for advertising and promotion purposes​to strengthen the brand
● Acquisition in new firms focusing on healthy processed food
 Which of the four departmental​directions do you think is :-
Most viable
● The best course of action
when resources are limited is
to follow Jane Morley.​
● The acquisition will aid Oscar
Mayer in diversifying its
product offering.​
● OM will benefit the most from
purchasing Turkey-Time
because it is already a
replacement for high-fat red
meat.​
Second most viable
● Jim Longstreet's plan to
expand his product line
through R&D is the second-
best alternative approach.​
● Through R&D, the company
will identify its target market
and design products
accordingly. ​
● However, the launch of a new
product will take 6 to 8
months.​
Least viable
● The least realistic plan is to
just spend $22 million on
advertising and promotion
without improving the product
in any way. ​
● Given that the company's
current product hasn't
changed, an advertising
campaign will only result in
increased brand awareness
and not significantly a rise in
sales.​
Which of Jim Longstreet’s new product ideas is less likely to succeed? Why?
Lunchables
- Lunchable idea came from working
moms and was “Important problem-
superior solution model”.
- It has Economy of scale with it existing
ingredients.
- It has potential to be a credible lunch.
- With its competitive pricing of $1.25 (on
average) it is cheaper compared to
Zappetites.
Zappetites
- Change in consumer preference to healthy
foods.
- There are many existing players in this
segment.
- Frozen products are likely to lose its taste
and texture.
- OM has already failed in frozen food
channel with “Stuff n Burger”
THANK YOU