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Oscar Mayer Case Report

Essay by   •  January 25, 2013  •  Case Study  •  1,263 Words (6 Pages)  •  2,052 Views

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INTRODUCTION:

Oscar Mayer a renowned food company which had been operating for over 100 years in Meat market. This case highlights the setback by Oscar Mayer's fall in sales in the recent years due to customer dissatisfaction. The reasons for decrease in sales were largely due to market competition and absence of new product development which really reflected the inability of Oscar Mayer to cater the customer needs and wants. Traditionally Oscar Mayer product was red meat which comprises in form of bologna, hot dogs and bacon. However, high content of fat and prices of the product led to customers turning towards competitive brands and as a consequence the sales started to marginally decline over the period. Furthermore, acquisition with Louis Rich was not in the positive direction and eventually the investment cost to build the second brand was high. Further, the other competitors like copy cat brands of turkey, chicken and hot dogs were slowing the sale of white meat, a Louis Rich product. Going further the managers proposed their memos on the report of their consultant firm "Mctiernan" which led to MacGraw( President of Oscar Mayer) in a dilemma for decision making under the current scenario for Oscar Mayer.

Solutions:

Answer 1

Marcus McGraw (President of Kraft Foods division head) has proposed growth for Oscar Mayer in the upcoming years and is finding the same challenging under the current circumstances of the company. The predicament was to obtain increase in 15% of operating income and 4% in pound volumes but whereas the rest of the managers were projecting a dip of 5.2% in operating income in the following year. The most critical threat to McGraw decision was the divisions current portfolio's shiftiness out of the alignment with consumer trends, specifically traditional red meat products like bologna, hot dogs, bacon all branded Oscar Mayer products were out of the customer's touch for being too high in fat content resulting in falling sales for the company. Further, McGraw had a thorough understanding of opinions of all managers and was unbiased in his decision making and business strategy, as he knew the different aspects and plans which have been suggested by the managers that could be market driven and competitive. Following are the 3 strategies that could have been followed:

o By increasing the budget for advertisement & promotion and eventually boosting their brand awareness and trial by piling up their advertisement behind the new "switch to rich" campaign and to restore back the fair share support for the brand.

o Get enough R&D resources to formulate a new product with low fat content and salt line of specially Oscar Mayer products.

o Having innovative and creative concepts through value & engineering and economic evaluation stage, those are Zappetites, Lunchables to ease the life of consumers (working mothers, school going children's, etc.)

Answer 2

 By means of Rob's memo, the same could have resulted in being on the fast going path but at the same would have also incurred losses in future even for the new product taking base bacon made from turkey which could be a flop. However, to mitigate this decision he would have followed some new trends in easy to cook products that could have led them to regain and capture the consumer market.

 Following Jane's memo could have been very difficult to balance as Oscar Mayer was already under losses with the already held acquisitions with Louis Rich. To mitigate this decision, McGraw could sell back the new mergers at profits by goodwill earned and recover some fall in income.

 As per Jim's memo if the company would have undergone new product development which already lacked brand boosting. Furthermore suggestions from consultants in the past were not been implemented for the new product developments. To mitigate this decision McGraw could have done advertisement & promotions and discontinue those new products which were low in sales volume.

 Implementing Eric's memo would have led to Oscar Mayer lacking behind in new mergers and acquisitions (M&A) opportunities in the product market. To mitigate

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