Case Study in Oscar Mayer Essay

Rob Goodman is of the idea that white meat products are trending and they should be promoted more. He believes that white meat lines would eventually capture 50% of the market over time and the same should aggressively promote their LR category. But in our opinion a complete and drastic rebranding would leave OM in a very bad position with every possibility of OM not only losing its present customer base, relying on their red-meat products but also failure of their promotions of white meat.

Jane Morley suggests aggressive expansion plans based on takeovers of smaller businesses that offer healthier and more convenient products.

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In our opinion, this takeover plan gives an instant way of adding new products to the company’s portfolio thus saving them time and manpower which would have otherwise been utilized (wasted) for research and development of newer products. But on the flip side they can also put a huge debt burden on the company. So decision has to be made relying on past and present performance of each of the company that they are trying to takeover.

Jim Longstreet holds the opinion that the company should invent newer categories of food with a focus on low pricing and miniaturization.

But, in our opinion when such drastic cost cutting and miniaturization steps are affected it may or may not appeal to the consumers. But at the same time it will start showing the negative features of production concept. Hence bringing up distribution costs and affecting overall margin of profit. So, the promotion of this kind of product has to be made in such a way that they add value to the existing customer base and not erode it. Customer should identify them as one of the products of the company and not the main product.

Eric Stanger is worried that paying more interest in LR and a simultaneous cut in A&P budgets have resulted in a decrease in brand value of OM. His suggestion is to revert back to old ways and promote OM again. In our opinion, while increasing attention towards OM is a very good idea, LR can’t be neglected completely as going by the present scenario it is the winner in OM’s stable. Both OM and LR have to be equally promoted though demarcating targeted segments would be a good idea so that their interests don’t clash and eat into each other’s profits. A1.

In the beginning Mr. Marcus McGraw lacked creative ideas to tackle the challenge, so he called upon his able managers from the four different divisions of the company to give their valuable suggestions. The end-result was each of the managers came out with their own equally competent suggestions. This presented McGraw with a problem as to which of the suggestions are to be implemented and which to be discarded. He has to take up a strategic decision making process so that each of the four divisions not only feel belonged but also well addressed to their concerns.

In our opinion, McGraw should carry out extensive research encompassing all the suggested solutions and come up with an optimum solution which efficiently allocates capital and labour so as to maximize profits. A2. Each of the competent managers offered solutions which they felt were in the best interests of the company. Choosing only one of the solutions would have resulted in other managers feeling de-motivated and discouraged. Further, company’s policies on diversity of products would have been lost and only one division would have benefitted, with the others being marginalized.

A3. In the past five to ten years, many meat packers who depended on the sales of unbranded fresh red meat products were forced to close down or sell to new ownership as the preference in the market shifted from hamburgers and steaks to chicken. The results of these closures and acquisitions is a more consolidated meat industry comprising of companies with sophisticated manufacturing and marketing skills, stronger financial position and focus on value added brands and market shares.

Oscar Mayer faces a tough competition from multi-billion dollar competitors such as ConAgra, Saralee, Hormel etc. There is a constant race by each of the competitors for the new ideas to capture the market share. As a consequence if any of the product or strategy taken up by Oscar Mayer fails then it will have a negative effect on its market share as well as its profits. The weakness of the competition is that in the past when the companies have come up with the new products, the failure rate has been more than that of success.

So if Oscar Mayer comes up with a well-researched product which suits the need of the people, then it has an edge to capture the market. A4. The most viable solution is provided by Jim Longstreet. Backed by R&D, it recognizes target audience and designs products on their needs. Hence it adopts marketing concept and provides value to the customers. He aims to cut on price and size, so he is basically trying to cash in on an already existing distribution network. So, new segment of customers with lower income can be targeted and hence add to company’s sales.

The second best strategy is that of Jane Morley A5. The strategy to be taken up by Oscar Mayer to overcome the critical situation is to have a mix of strategies suggested by the four managers. 1. To switch to a bigger advertising campaign as suggested by Mr. Rob Goodman, the “Switch to Rich” campaign will benefit OM as it will promote LR’s product and those which will be coming up as the part of this new strategy.

2. As suggested by Jane Morely, the acquisition of Turkey-Time will be most beneficial for OM as Louis Rich is already into turkey meat and it is a substitute for high fat red meat. . The idea of “Lunchables”, as suggested by Jim Longstreet, will target the market comprising of working people and will be a good alternative as lunch for kids going to school. As, fifty five percent of women are now working outside the homes, this might increase the sales as it is fast to eat and balanced alternative. 4. To further enhance OM product range with R&D formulating a low fat and salt line range of Oscar Mayer’s flagship products.

5. To analyze the capacity utilization of OM’s plants and to make full use of them as it will reduce the prices and most importantly announce to the salesforce that the main aim of OM is to reinvigorate Oscar Mayer’s brand growth. A6. “Zappetites”, the miniature family favourites pizza slices, burger on buns etc that go directly from freezer to microwave are likely not to succeed as a similar product by the name “Stuff ‘n Burgers” which was a similar frozen food didn’t do well in the past,so we feel that consumers are not into such products.

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