Reference no: EM131684199
Case 5-1 Barkley Foods
Joyce Stevenson, the manager of marketing research for Barkley Foods, had just left an emergency meeting with the firm’s president. An opportunity to buy an established line of gourmet (high-quality/high-priced) frozen dinners had arisen. Because there were other interested buyers, a decision had to be made within three or four weeks. This decision depended on judgments about the future prospects of the gourmet frozen dinner market and whether Barkley could achieve a competitive advantage. The marketing research group was asked to provide as much useful information as possible within a 10-day period. Although uncomfortable with the time pressure involved, Joyce was pleased that marketing had finally been asked to participate in the analysis of acquisition prospects. She had pressed for such participation and now she had to deliver.
Because of prior work on frozen fruit juices, Joyce had some knowledge of the gourmet frozen market. It was pioneered by Stouffer, who introduced the Lean Cuisine line of entrees in 1981. Since then, other firms have entered the industry with complete gourmet dinners (including Swanson’s Le Menu and Armour’s Dinner Classics). The distinction between entrees, dinners, and the three main types of food offered—conventional, ethnic (i.e., Benihana Restaurant Classics), or low-calorie (i.e., Weight Watchers or Light & Elegant)—define relevant submarkets. Joyce hypothesized that the gourmet frozen food buyer differs from the buyer of conventional “TV dinners” in several respects. The gourmet frozen food buyers are generally young, upper-socioeconomic-group people who probably have microwaves, are more health conscious, and are likely to be working women and others who want sophisticated cuisine but lack the time to prepare it.
Barkley Foods was a diversified food company with sales of $2.3 billion. Over 80 percent of its sales came from branded packaged food products sold nationally through grocery stores. Its largest product areas were canned tomato products, frozen orange juice, cake mixes, and yogurt. Barkley was known to have strengths in operations (product preparation), distribution (obtaining distribution and managing the shelves), and advertising. Their brands typically held a solid second-place position in the supermarket. There was no effort at umbrella brand identification, so each product area was carried by its own brand.
Joyce Stevenson had previously been in strategic planning, and reviewed the type of information and analysis that would be required to support a strategic decision like this one. She wrote down the following four sets of questions to guide the thinking of the research group:
Market analysis
What are the size, current growth rate, and projected growth rate of the industry and its relevant subsets (such as ethnic dinners) for the next five and ten years?
What are the important industry trends?
What are the emerging production technologies?
What are the distribution trends?
What are current and future success factors (a competitive skill or asset needed to compete successfully)?
Environmental analysis
What demographic, cultural, economic, or governmental trends or events could create strategic threats or opportunities?
What major environmental scenarios (plausible stories about the future) can be conceived?
Customer analysis
What are the major segments?
What are their motivations and unmet needs?
Competitor analysis
Who are the existing and potential competitors?
What are their current or forecasted levels of sales, market shares, and profits?
What are their strengths and weaknesses?
What strategies are they following, and how are they differentiating themselves in the market?
Questions for Discussion
What secondary data sources would be useful? What types of questions might be answered by each?
Identify one piece of information from the library that would be helpful and relevant. How did you locate it?
What other mechanisms would you use to gather information?
You need to:
*Identify key data for collection to determine a marketing strategy.
*Analyze the competitive environment to contribute to strategic decision making.
*Determine research methods to identify customer characteristics.
*Apply technology tools to identify effective data.
*Create relevant, actionable, and specific recommendations.