Brannigan Foods: Strategic Marketing Planning

Brannigan Foods: Strategic Marketing Planning

HYE JOO IN (2018730565)

        The process that Clark uses to determine his best “investment bets” for allocating resources consists of reading through proposals offered by his team and which one can be the best investment bets for the division. It’s important for Clark to review the requests carefully and evaluate each one of individual strategy that will be beneficial to Brannigan Foods in long-term. Clark must consider the potential benefits and cost associated with each manager’s proposal. And he must keep in mind Brannigan’s current standing in comparison to its competitors and consumer trends according to DeGennaro’s findings.

        Bob Pugh’s proposal should be the proposal that Clark favors the most and should consider the most viable because it focuses on the core products which reduces the risk of introducing new products that might not be effective in the market. Also, it would be a waste of money and resources to allocate more funds into acquisitions and niche products. For instance, the acquisition of Annabelle’s fell short of expectations and the addition of the Heart health reduced sales of core products. The direct cause of the sales decline is the decrease in brand awareness caused by reducing A&P spending for the core products. Therefore, increasing the marketing expenditure on core products by $20 million appears to be beneficial to meet the profit goal. According to the market trend, the products needed to be targeted to younger generations of consumers and this part is the most necessary requirement for the Brannigan Foods. Regarding to this issue, Pugh suggests bringing back “Boys and Girls love Soup” campaign. Moreover, A price decrease of the RTE soups by 5cents and $22MM investment in capital will enhance the manufacturing plants’ efficiency and cut production costs. In this case, this alternative seems profitable, I can see the Brannigan’s net earnings will be increasing during the next 3 years (exhibit 1)

        The second-best strategy is the Anna Chong’s strategy which is investing in R&D and advertising and promoting new products entries. This option targets different segments for the soup division, especially the growing categories for healthy meals and active lifestyle. One important innovation is to add new products for the RTE category, which is the most profitable for the company. With this alternative, I can see that Brannigan’s net earnings wouldn’t be increased but instead decreased only a 2% on average per year (exhibit 2). On the other hand, Claire Mackey’s proposal is the least viable strategy because the market share of that small company’s products is uncertain, and the past acquisition of Annabelle’s didn’t meet the expectations so the board and stockholders might not be satisfied with this option. Also, this strategy wasn’t profitable either since Brannigan’s net earning would be decreased by 7% per year. (exhibit 3)

        If Clark choose Pugh’s proposal, it will negatively affect the Tipha’s strategy which is focusing on growing segments of the market but leaves the “cash cow” (RTE soups). Clark should maintain promoting the cash cow rather than the star products because net earning would be reduced by a 4% with Tipha’s new products. Also, Clark needs to realize that promoting the star products is not even feasible when the cash cow, which finances the star products, loses the profit.

        Based on investigation for the four alternatives, I recommend mixing of Pugh and Chong’s strategies because promoting only the cash cow may not generate high growth in the perspective of a long-term. Also, consumers will follow the new market trend as well, therefore, Brannigan needs to invest in R&D due to changing trends and needs of the market. It’s important to promote the sales of RTE soups, therefore, it could be used in financing the star products which will make the future profits out of growing market. The combination of these two strategies will enable the company to benefit from both short and long-term growth.

(exhibit 1)

(exhibit 2)