General Mills Warm DelightsTM Marketing

General Mills Warm DelightsTM Vivian Milroy Callaway, vice president for the Center for Learning and Experimentation at General Mills, retells the story for the “indulgent, delicious, and gooey” Warm Delights™. She summarizes, “When you want something that is truly innovative, you have to look at the rules you have been assuming in your category and break them all!” When a new business achieves a breakthrough, it looks easy to outsiders. The creators of Betty Crocker Warm Delights stress that if the marketing decisions had been based on the traditions and history of the cake category, a smaller, struggling business would have resulted. The team chose to challenge the assumptions and expectations of the accumulated cake category business experience. The team took personal and business risks, and Warm Delights is a roaring success. Planning Phase: Innovation, but a Shrinking Market “In the typical grocery store, the baking mix aisle is a quiet place,” says Callaway. Shelves sigh with flavours, types, and brands. Prices are low, but there is little consumer traffic. Cake continues to be a tradition for birthdays and social occasions. But consumer demand declines. The percentage of U.S. households that bought at least one baking mix in 2000 was 80 percent. Four years later, the percentage of households was 77 percent, a very significant decline. Today, a promoted price of 89 cents to make a 9 x 12-inch cake is common. Many choices, but little differentiation, gradually falling sales, and low uniform prices are the hallmarks of a mature category. But it’s not that consumers don’t buy cake-like treats. In fact, indulgent treats are growing. The premium prices for ice cream ($3.00 a pint) and chocolate ($3.00 a bar) are not slowing consumer purchases. The Betty Crocker marketing team challenged the food scientists at General Mills to create a great-tasting, easy-to-prepare, single-serve cake treat. The goal: Make it indulgent, delicious, and gooey. The team focused the scientists on a product that would have the following: · Consistently great taste · Quick preparation · A single portion · No cleanup The food scientists delivered the prototype! Now, the marketing team began hammering out the four Ps. They started with a descriptive name “Betty Crocker Dessert Bowls” and a plan to shelve it in the “quiet” cake aisle. This practical approach would meet the consumer need for a “small, fast, microwave cake” for dessert. Several marketing challenges emerged: · The comparison problem. The easy shelf price comparison to 9 x 12-inch cakes selling for 89 cents would make it harder to price Dessert Bowls at $2.00. · The communication problem. The product message, “a small, faster-to-make cake,” wasn’t compelling. For example, after-school snacks should be fast and small, but “dessert” sounds too indulgent. · The quiet aisle problem. The cake-aisle shopper is probably not browsing for a cake innovation. · The dessert problem. Consumer’s on-the-go, calorie-conscious meal plans don’t generally include a planned dessert. · The microwave problem. Consumers might not believe it tastes good. In sum, the small, fast-cake product didn’t resonate with a compelling consumer need. But it would be a safe bet because the Dessert Bowls positioning fit nicely with the family-friendly Betty Crocker brand. Implementation Phase: Leaving the Security of Family Behind The consumer insights team really enjoyed the hot, gooey cake product. They feared that it would languish in the cake aisle under the Dessert Bowls name because it didn’t fully describe the essence of what the food delivered. They explored who really are the indulgent treat customers. The data revealed that the heaviest buyers of premium treats are women without children. This focused the team on a target consumer: “What does she want?” They came up with a name that would appeal to “her” which was “Warm Delights” and that became the brand name. An interesting postscript to the team’s brand name research: A competitor apparently liked not only the idea of a quick, gooey, microwaveable dessert but also the “Dessert Bowls” name! You may now see its competitive product on your supermarket’s shelves. Targeting the on-the-go women who want a small, personal treat had marketing advantages: · The $2.00 Warm Delights price compared favourably to the price of many single-serve indulgent treats. · The product food message “warm, convenient, delightful” is compelling. · On-the-go women’s meal plans do include the occasional delicious treat. One significant problem remained: The cake-aisle shopper is probably not browsing for an indulgent, single-serve treat. The marketing team solved this shelving issue by using advertising and product displays outside the cake aisle. This would raise women’s awareness of Warm Delights. Television advertising and in-store display programs are costly, so Warm Delights sales would have to be strong to pay back the investment. Vivian Callaway and the team turned to market research to fine-tune the plan. The research put the product branded as Warm Delights and Dessert Bowls on the shelf in a few test stores. A few key findings emerged. First, the name “Warm Delights” beat “Dessert Bowls.” Second, the Warm Delights with nuts simply wasn’t easy to prepare, so nuts were removed. Third, the packaging with a disposable bowl beat the typical cake-mix packaging involving using your own bowl. Finally, once they put the actual product on supermarket shelves and in displays in the stores, sales volumes could be analyzed. Evaluation Phase: Turning the Plan into Action! The marketing plan isn’t action. Sales for “Warm Delights” required the marketing team to (1) get the retailers to stock the product, preferably somewhere other than the cake aisle, and (2) appeal to consumers enough to have them purchase, like, and repurchase the product. The initial acceptance of a product by retailers is important. But each store manager must experience good sales of Warm Delights to be motivated to keep its shelves restocked with the product. Also, the Warm Delights team must monitor the display activity in the store. Are the displays occurring as expected? Do the sales increase when a display is present? Watching distribution and display execution on a new product is very important so that sales shortfalls can be addressed proactively. Did the customer buy one or two Warm Delights? Did the customer return for a second purchase a few weeks later? The syndicated services that sell household panel purchase data provide the answer. The Warm Delights team evaluates these reports to see if the number of people who tried the product matches with expectations and how the repeat purchases occur. Often, the “80/20 rule” applies. So, in the early months, is there a group of consumers that buys repeatedly and will fill this role? For ongoing feedback, calls by Warm Delights consumers to the free consumer information line are monitored. This is a great source of real-time feedback. If a pattern emerges and these calls are mostly about the same problem, that is bad. However, when consumers call to say “thank you” or “it’s great,” that is good. This is an informal quick way to identify if the product is on track or further investigation is warranted. Good Marketing Makes a Difference The team took personal and business risks by choosing a Warm Delights plan over the more conservative Dessert Bowls plan. Today, General Mills has loyal Warm Delights consumers who are open to trying new flavours, new sizes, and new forms.

1. Now that it is 2021, using what you know from the case, your world experience and the concepts we covered in class, conduct another environmental scan for Warm Delights. You do not have to have all the answers related to this product and its market, but you should at least be able to express what areas to think about for each of the environmental forces. Once you have come up with a potential trend for each of the forces, describe how each of the trends represents an opportunity or a threat for Warm Delights. /5

 2. Warm Delights is looking to expand but needs to decide on their best growth opportunities. Conduct a market- product analysis and decide which of the four marketproduct strategies you would recommend and explain why. /6

3. How can Warm Delights apply the three concepts of Social Responsibility? /3

4. Sometimes, consumers do not engage in the five-stage purchase decision process. Instead, they skip or minimize one or more stages, depending on the level of involvement. Explain which of the three levels of problem solving variation do you believe is being used for the purchase of Warm Delights. Explain two situational influences, two psychological influences, and two socio-cultural influences on this consumer behavior. /5

5. In order to create this product, General Mills must decide on what to make themselves and what needs to be purchased from an outside vendor. Assume they are looking to find the best source for their packaging material, explain the consumer decision making process that they would use for their organizational buying. /5

6. If they were to consider selling Warm Delights in another country, what would be three economic considerations they would need to think about in deciding if it is a good place to expand to? /3

7. All of a sudden the purchase of cake products drops and General Mills needs to do some exploratory research on the cake eating market. Explain two techniques that you would recommend they use to help them clarify the scope and nature of the marketing problem. /4

8. Then assume, from the exploratory research, you discover that the attributes that people are interested in for their cake purchases are changing and that is why sales are down. Now you need to use descriptive research to figure out what criteria consumers are using to evaluate their purchase of cake products. Develop a short questionnaire (with 5 questions), using different types of questions, to determine which evaluative criteria consumers are using when choosing their cake product. /5

9. The case begins to describe the market segment they are focused on for Warm Delights. Using the information given, go through the five main criteria for developing market segments to recommend a more detailed market segment for Warm Delights. Then, make sure to describe your market segment using the 4 main dimensions used to segment Canadian consumers. /9

10. Explain where you think Warm Delights is in the product lifecycle and what that means for their marketing objectives, competition and the 4Ps of the marketing mix. /6

11. What are some pricing constraints they may have with Warm Delights? /4

12. Betty Crocker is thinking of launching a new product. It is a gourmet version of their Warm Delights for the real foodies. They will sell the product at a slightly higher price point ($4.00). The fix costs allocated to this product are $10,000 and the variable cost is $1.00. Do a break even analysis for the new product. How many will they have to sell to break even? How many will they have to sell to break even if they change the price to $5.00? Please show your work. /5

13. What types of pricing strategies would you recommend that Betty Crocker use for this new product? /3

14. Companies can choose to use direct or indirect marketing channels. Discuss the potential factors that would have affected channel choice for Warm Delights and what type of channel they use. /4.

 15. What promotional objective do you recommend Warm Delights focus on? Suggest three promotional activities to use to try and reach that objective. Share the strengths and weaknesses of your choice to demonstrate why they would work well in an integrated marketing context. And what type of scheduling should they use? /5

 16. The case mentions that to generate sales for Warm Delights they would need to reach out to both the retailer and the consumer. What are two consumer and two trade sales promotions that could be useful for Warm Delights to achieve the objectives mentioned. /4

17. Make up one (fictional) example where Warm Delights would be using deceptive pricing. /2

18. We know that where a product is in the life-cycle is important for marketers to know and that we can help manage the product life cycle by modifying the product or modifying the market. Explain how you would modify Warm Delight’s product to extend the life cycle. Explain how you would modify Warm Delight’s market to extend the life cycle. /2