Written Analysis of HBR Case - Pillsbury Cookie Challenge

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WRITEN ANALYSIS CASE
PILLSBURY COOKIE CHALLENGE
I. EXECUTIVE SUMMARY
The case discusses the challenges faced by the Canadian Pillsbury Refrigerated Baked Goods
(RBG); the declining performance (sales) of the cookie line segment has caused the management
to rethink their strategy. The marketing manager is under a lot of stress to come up with a
strategic plan that could help turn around the performance of the cookie segment before a serious
problem takes hold. In order to gain useful insights about consumer attitudes, preferences and
behavior towards their product, Ivan Guillen - the marketing manager, decides to conduct a
market research with the help of consumer insight team. In addition to gaining an in-depth
understanding of consumer preferences and attitudes towards the category, the research was also
aimed at finding out the desired attributes and perceived brand image of the product.
What I analyzed from the case is that the company was focusing too much on the product and
was ignoring the most important variable in the equation – the end consumer. Furthermore, I
believe, they somehow missed a very important target segment – kids as they were targeting
mothers (age 30-40) only. The company needs to redesign their marketing strategy, needs to
come up with powerful ATL and BTL campaigns to attract customers, not to mention the overall
marketing strategy needs to be customer-centric. New products especially made for the Canadian
market should be launched with tailored advertisement campaigns.
II. STATEMENT OF THE PROBLEM

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#1: What are the challenges that Ivan Guillen faces?
The largest international segment of the General Mills Inc; General Mills Canada Corporation
(GMCC) is the market leader in packaged food market. There are four business units in the
Canadian division: snacks, baked goods, meal and breakfast; these business units are in turn
divided into 12 categories and RBG or refrigerated baked goods is one of the most profitable
product categories of GCC.
Challenges Faced by Ivan Guillen
The challenge faced by Ivan is big; he is the marketing manager of the RBG category and he
needs to come up with a solid strategy to turnaround the segment. Over the past 5 years, the
category has experienced only moderate growth. Pillsbury dominates the refrigerated baked
goods category with 85% market share. Representing 62% of the total unit volume (of the
category), cookies are the most profitable SKU’s in the RBG category. Ivan believes that in
order to turnaround the segment’s performance, he needs to focus on growing the refrigerated
cookie segment.
Now the situation is that, this segment is experiencing issues in terms of sales performance; sales
volumes between fiscal 2004-2006 has remained almost flat at 1% and the household penetration
of has also decreased to 24%. In order to design a strategy that works for the segment, he needs
to understand the possible reasons of declining performance of the segment and for that he calls
for a market research to gain useful consumer insights. The primary objectives of the market
research were to find out: if there was an issue with the taste, the brand message, or the target
market.

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MARKETING RESEARCH PROBLEM MANAGEMENT PROBLEM
What are the underlying drivers and motives that drive
Canadian customers to buy cookies?
The research objectives are:
• To understand the product usage and attitudes of
customers towards RBG cookies
• To gain insights about customer preferences
towards the brand and the product
• To find out the underlying cause of declining
performance with a focus on figuring out whether
the issue lies in the product formula, the brand
message or the target audience and to find the
differences & similarities in terms of attitudes &
behavior of US and Canadian consumers
To design a mind-blowing, consumer-
centric marketing strategy to turnaround
the segment’s performance by boosting
sales volume, increasing household
penetration (of the cookies) and to improve
overall growth of the RBG category.
Unsatisfactory Performance RBG
Wrong Target Market
(Targeting mothers only)
Advertising Campaigns
(not tailored for the
Canadian region
Low Brand Budgets in
Canada
New products leveraged
from the U.S

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Short-Term vs. Long-Term Problems
SHORT-TERM PROBLEMS LONG-TERM PROBLEMS
Unsatisfactory performance; flat sales volumes
Hence, the short term goal was to improve volume
growth by redefining the marketing mix of cookies
Decreasing household penetration
The long-term goal was to improve penetration
(cookies) and improve the overall growth of the
RBG category (5-7% annual growth)
The market research is done and now Ivan needs to use the findings of the research to design a
strategy that effectively answers all concerns. His focus is on leveraging the research findings to
increase the purchase frequency and market penetration of RBG cookies, to define the target
market, brand message, and how to communicate the message in a way that results in increased
sales.

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III. CAUSES OF THE PROBLEM
#2 what are consumer insights? What type of business challenges can benefit from consumer
insights? How are consumer insights obtained?
Before discussing the causes of the problem in detail, I’ll answer the question on consumer
insights based on what I’ve learned from class lectures. Consumer insight’, in simple words is
the understanding of your customer based on their behaviors, attitudes and preferences. Few
things are as complex as understanding what drives your consumer’s attitudes and behavior and
this is where consumer insights come in. Conducting market research activities to gain useful
information about consumer attitudes and behavior is nothing new. Nevertheless, with changing
demographics, consumer preferences and influx of new businesses, businesses are spending a big
chunk of their marketing budget on market research activities like these. In short, consumer
insight is an in-depth understanding of customer needs and wants and is essentially the
interpretation of their preferences, beliefs and experiences.
Businesses can leverage the power of customer insights by making use of critical information to
address issues related to the performance of their products in the market, before introducing new
products, to obtain feedback about their products and services, and when designing marketing
strategies to make sure they’re aligned with the needs of the customers, to name only a few.
Consumer insights are obtained through market research either conducted by internal marketing
team of a company or a research agency. The research could be qualitative or quantitative and
may include focus groups, in-depth interviews, surveys, product testing/usage, attitude surveys
and KAP studies.

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Ivan engaged the consumer insights team to conduct an in-depth research on consumer
preferences and attitudes because he wanted to understand the underlying causes of the two
major challenges that RBG cookies segment was facing - declining penetration and flat volume
growth. From the case, we know that RBG category is highly dependent on the performance of
their Pillsbury cookies because they constitute more than 60% of their total category sales
volume. However, even though, the category held a leadership position in their sales volume
remained flat at 1% from 2004-06 and the penetration had fallen from 24%.
I believe one of the major causes of the problem is that GMCC despite being an autonomous
division, leveraged new products & advertising campaigns from the US region, primarily due to
high production costs and because of low brand budgets in Canada, ignoring the differences in
consumer taste, attitudes, preferences, and behaviors of Canadian and US consumers. The
research also revealed that there were significant differences between the Canadian and US
customers, which demanded due consideration. Secondly, the company was targeting mothers
aged 30-40, a very narrow target market. The values offered were taste and ease. I believe they
missed out the most profitable target market when defining their target audience – kids and teens
and young people. Furthermore, the value offered also needs modification like rich, luxurious
experience, cherishing good times – something that touches their emotions rather than talking
about the physical attributes of the products only.
#3 Given the key leanings from usage & attitude study, what are the corresponding implications
for what actions the team should take?
The primary objective of the attitude survey was: to gain insights on the product usage behaviors
and attitudes of Canadian customers and to find out the similarities and differences in the

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attitudes, preferences and behaviors of Canadian and US customers. ‘Screeners method’ was
employed by the research agency to screen the participants for the study by asking a set of
questions. Based on their responses they were divided into three main categories:
1. Users - who had bought the Pillsburry cookies during the last 12 months
2. Lapsed users - who had last purchased the Pillsburry cookies about a year ago
3. Non-users - who never bought the RBG cookies (these could be the potential customers)
Key Findings Interpretations Implications
Canada vs. US
market
Product Usage
Compared to
Canada, Scratch
baking is more
popular in
(Canada
Canada – 56%,
Most Canadian people like
baking different things
from scratch (from the very
first step). This could be
because they either love
baking or their experience
with alternatives is not
good enough to convince
them to use alternatives or
ready to bake products.
GMCC needs to rethink
their product proposition
and focus on offering
something like a
memorable, luxurious or a
fun-filled baking
experience instead of
talking about ease and
convenience.

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1Table 1: Purchase Drivers in Canada vs. US
Interpretations Implications
Canada US
"Like the
brand"
45% 52%
The brand is more
liked in the US
compared to Canada
The advertising strategy was not
tailored according to the needs &
preferences of the Canadian market
"You like the
flavors that
are offered"
31% 40%
The flavors offered
are also liked in the
US more compared to
Canada
In addition to advertising strategies,
the company is also leveraging new
products from the US, which clearly
doesn’t meet the unique taste
preferences of the Canadian
consumers
"It's similar to
homemade
cookie
dough"
31% 36%
In terms of flavor &
experience, the
Canadian customers
did not like the
cookies much and
only 31% thought
they were similar to
homemade cookie
dough
Product leveraging from the US is
doing the company more harm than
good. They might be able to save
new product development costs but
by ignoring the preferences & needs
of the Canadian customers, they
were experiencing problems
"For my own
indulgence"
30% 39%
Canadian consumers
were less connected
with the cookie brand
compared to the US
consumers
The brand awareness needs to be
improved; secondly customer
indulgence factor is missing.
GMCC needs to incorporate both
these elements in their ATL and
BTL activities
1
Exhibit 7 – Casestudy

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"Is a high-quality
cookie dough"
29% 41% In Canada, the RBG cookies are
not considered a quality substitute
for baked goods that are made
from scratch
The brand message should
talk about the nutritional
and health benefits of
cookies
"Makes the right
amount of cookies"
23% 33% Canadian customers are not
satisfied with the amount of
cookies in the pack
Demographic information
of the Canadian consumers
including the family size,
meal size etc needs to be
employed
"Helps you create a
happy/warm home"
19% 24% This value was never emphasized
upon by GMCC and is reflected
from the findings as well
Information regarding
consumer attitudes and
behaviors is needed to offer
a luxurious, heart-felt
experience to consumers
# 4 Develop perceptual maps for potential targets (users, lapsed users and potential users).What
are the implications from these maps?

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2Table 2: Perceptions of Different User Types in Canada
Findings
Interpretations Implications
Users
Lapsed
Users
Non
Users
"Is so easy, you
can make them
in a spur of the
moment"
92% 86% 58%
Users and lapsed users
both agree to the
convenience and quick
bake attributes offered by
the product. More than
50% non-users also agree
with these attributes
They’re already
promoting
convenience offered
by the cookies, so
they should continue
promoting these
attributes
"Is an easy way
to make cookies
without a mess"
89% 82% 46%
Both users & lapsed
users agree with the
benefits offered by the
RBG cookies. Non-users,
however, weren’t very
much convinced about
these benefits for obvious
reasons of course
In addition to
convenience, they
should also promote
these benefits that are
offered by the
cookies
"Is good when I
am in a hurry"
86% 73% 36%
"Is easy to clean
up"
83% 82% 45%
"Can be kept in
hand for when
needed"
80% 74% 48%
2
Exhibit 8 – Case study

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"For making
something
special"
48% 31% 30%
Users and non-users both
aren’t much convinced
that the product could be
used for making
something special
The company can
promote the idea of
making special
recipes from the
product
"There are
recipes on
package that I
use"
16% 17% 14%
Both users and lapsed
users agree that there
aren’t any recipes
mentioned on the
packages that they could
use
The company can
introduce the product
with different recipes
printed on the
package to improve
the product appeal
"I use the dough
in my own
recipes"
10% 4% 19%
Both users and lapsed
users agree that they
don’t use the dough for
creating their own
recipes
Brand awareness
needs to be
emphasized upon in
addition to
communicating
product usage to
consumers

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#5 Why did Guillen and his team conduct the in-home and discovery workshops?
While the usage and attitude surveys offered useful insights on major differences between US
and Canadian consumers, these didn’t answer a very important aspect of branding: does the
product experience resonate with most consumers? This information was very crucial for
designing a powerful communication message.
Two research studies; in-home immersions and a discovery workshop were then conducted by
engaging a marketing agency, TerraNova Market Strategies, Inc.
1. In-home immersions – Also known as Ethnographic Research, the primary aim of in-
home immersions to gain an in-depth understanding of consumer actions, motivations
and preference with regard to the product. For the purpose of this research, mothers (the
target market) were asked to buy cookies beforehand and bake them when the research
team visited them. In-home immersions revolve around immersing yourself in the world
of consumers and observing them in their environment. To gain a more realistic, dynamic
view of the consumer and the consumer-brand relationship while getting to know about
other important things like the kitchen type, the cooking rituals etc, in-home immersions
were conducted by Guillen.
2. Discovery Workshops – The discovery workshop is very similar to in-house immersions,
the only difference is that these take place outside the homes of research participants.
Another difference was that these workshops were collaborative in nature and for the
purpose of research 18-27 were invited for a working session. The workshops were
designed to provide a relaxing environment to consumers where they could comfortably
share their experiences, thoughts and opinions about the product. A number of techniques

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were used to help consumers express their honest opinions including role playing,
customer-experience mapping.

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IV. RECOMMENDED SOLUTION, IMPLEMENTATION & JUSTIFICATION
#6 What actions should Guillen and his team take?
I propose the following recommendations:
1. Tailored Marketing Campaigns - GMCC needs to design their own marketing
campaigns and stop leveraging the US campaigns. Campaigns from the US could be used
only when products match the preferences of both markets (US and Canada) and not for
every single product.
2. Consumer-Centric Approach – The marketing campaigns of the company are product-
centric and needs to be changed. It needs to be more consumer-centric.
3. Target Market (Finding New Customer Segments) – The target market needs to be
redefined. They are currently targeting mothers only, they need to include explore other
target markets, such as kids, teens and young people.
4. Promotional Campaigns – The element of fun, interest and entertainment should also be
included in the advertisements for teens and kids. It is a known fact that kids are the main
drivers of purchases by mothers. The element of emotional connection is missing in their
campaigns, which needs to be added. All these elements including ease of use, multi-
purpose, and nutritious should be efficiently communicated through their BTL and ATL
activities.
5. New Products Development – More products need to be offered especially for the
Canadian region, with customized recipes for the market. They can also collaborate with
some cooking show – a sponsored cooking show that promotes the multiple uses of the
product in different recipes.

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The marketing campaign needs to be aimed at:
1. Promoting multiple uses of the product (market development)
2. Reach out to new consumer segments (kids, teens, young people) – (market development)
3. New product development – products designed for the Canadian market keeping their
preferences and needs in consideration.
REFERENCES:
1. Bryman, A. and E. Bell (2003). Business Research Methods. Oxford, Oxford University
Press
2. Sue Greener (2008). Business Research Methods, ISBN 978-87-7681-421-2