Oscar Mayer: Strategic Marketing Planning

OSCAR MAYER: Strategic Marketing Planning

CONTENTS

Introduction

According to the report of McTiernen Corporation, Oscar Mayer foods is facing two major changes that will affect the company’s profitability:

1. The increase in popularity of healthier products with less fat and salt content.

• The preference of consumption shifted from red meat to white meat. Divisional sales of Oscar Mayer product line (hotdog, lunch meat and bacon) has slowed down by 1.8% while the sales of Louis Rich (lunch meat and hotdogs) has increased by 10.9% with respect to last year.

1. The increase in demand for products that are more convenient to cook and easy to consume.

• This can be inferred from a couple of consumer trends going on in this market – move from “sit-down meals” to “on-the-go meals” and explosive growth of microwave oven.

Marcus McGraw was faced with a never encountered complex business challenge that had put him in a dilemma McTiernen advised that recent customer trends were changing which was affecting his sales growth. The focus on nutrition was adversely affecting the Oscar Mayer brand due to higher fat red meat being less preferred over lower fat white meat and hence benefitting Louis Rich’s brand. McGraw had to struggle with poor sales growth within the division’s largest brand which was considered to be their star product. Now each of his four trusted managers suggested their own solutions and recommendations to the problem but none of their plans seem to be similar. What changed his perspective was the realization that his work had become easier now, after receiving such solutions and that he need not choose a single option but can use them to strategize a mixed agenda by proper budgeting and risk management to allocate the resources.

Marcus McGraw’s Strategic Decision Making Process

First he identified the problem using McTiernen’s report, then he asked the managers to provide inputs, keeping into consideration the cost convenience, customers and competitive analysis. He then analyzed the proposed solutions and decided on a mix of solutions.  

Integrating different solutions

McGraw considered all the employees competent. If McGraw would have chosen the recommendations of just one department; firstly, he would be taking a huge risk by betting on a single marketing strategy and also at the same time negating the importance of other departments and their recommendations. For eg: If they chose to go with the 4th product, there might also be problems in the finance department of the company. It might demand huge investments in R&D which might put more pressure on Oscar Mayer. Favoring only one department can also result in a conflict and rivalry between the departments, or decrease in a decrease in the motivational level of the employees in various departments. To mitigate the damage, they should focus on all the departments and should do a detailed analysis before launching any new products.

Effect of Competition

There has been a monumental shift in the industry because of decline in sale of unbranded, fresh red meat products which lead to closure of many traditional meat sellers, who were acquired by bigger companies like Oscar Mayer and creating a situation where there were a few big and experienced players with strong financials and marketing skills. Because of this the firms would compete on product differentiation and promotions.
Given this, the company should focus their investments on researching and developing new lines of red meat products one of which enhance the value for traditional customers who buy red meat because of its taste and the other line which enhances the value for the customers who are concerned about high fat and salt content. Additionally more money should be invested on advertising that focuses on the USP of Oscar Mayer brand.