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Marketing Plan for Lunchables Health Box
1. Executive Summary
Kraft-Heinz aims to provide consumers with wholesome food products in ways that promote
sustainability of the surroundings. Through its Lunchables line of products, Kraft-Heinz is looking to tap
into newer markets that seek the convenience of healthy packaged meal options while remaining
steadfastly uncompromising on the nutritional contents of the product. Typical customers are working
people whoplace agreat premiumontime.
The new product—Health Box—is a ‘leaner Lunchables’ that packs in the goodness of fresh ingredients
for the burgeoning number of health-conscious professionals. Kraft-Heinz will launch Health Box under
the Lunchables brand and will leverage its experience and its existing supply chain and logistics network
to deliver value at the consumer’s office desk. The company is looking to partner with farmers’ markets
stakeholders in various regions and set up processes to source ingredients, pack and prepare the
product,and deliverthe HealthBox tolocationsthatare easilyaccessibletothe customer.
Kraft-Heinz will set up local networks and integrate logistics partners to ensure the efficacy of these
mostly-localized supply chains to ensure timely replenishment of the relatively lower-shelf-life product.
We envisage being the go-to option for the healthy-living folks who are looking for packaged meal
solutions without compromising on the nutritional content which will conform to prescribed per-meal
standards. The Health Box will be piloted at selected regions and will be made available at retail
locationswhocan meetstorage requirements.
Advertising will be through newspapers and social media and billboards concentrated in ‘office’
locations. The pilot program will feature sales folks with Health Box samples at street sides at office-
locationslookingtohijackthose headingtowardsthe hotdogsand fries.
The current Lunchables leadership will oversee the program while individual regions will have Lean
Leadersto manage anddrive the operationsinvolved.
The objectivesinthe firstthree yearsinclude:
·Delightcustomerswithanever-seen-beforeconvenient,nutrition-packedbox
·Year onyear growthinsalesby 7% on an average
·Increasedpartnershipswithlocal stakeholdersto reduce the farmtotable time to a minimum
·Create value anddemandsothis‘leanerLunchables’canthrive withthe cashit generates
Ajay,Kaushal,Rutuja,Saira
Mission: Kraft-Heinz’s mission is to be the go-to packaged meal solution for the growing number of
health-focused individuals.
Keysto Success:
·Buy-infromlocal supplychainpartners
·Conformance tothe higheststandardsof quality
·Establishment of the perceived value of the product in the consumer’s mind to drive repeat sales while
alsohavinga price pointhigherthana typical burger& friesmeal
2. Company Description
On July2, 2015, the mergerbetweenKraftandHeinzwascompletedtocreate The Kraft HeinzCompany.
The Kraft Heinz Company is the third-largest food and beverage company in North America and the
fifth-largest food and beverage company in the world, with eight $1 billion+ brands. A globally trusted
producer of delicious foods, The Kraft Heinz Company provides high quality, great taste and nutrition for
all eating occasions whether at home, in restaurants or on the go. The company has dual headquarters
in Pittsburgh and Chicago, the respective headquarters of Heinz and Kraft. The Kraft Heinz Company
nowhas 13 differentbrandsvaluedat$500 millionormore each.
Lunchables is a sub-brand of Kraft Heinz Company that offers convenient prepackaged lunch. .
Lunchables offers 26 different varieties of meal combinations, which include crackers, pizzas, small hot
dogs,small burgers,nachos,subs,andwraps.
Lunchables, having made Lunchtime fun for kids over the last 28 years, has now come up with a healthy
Lunchtime Snack for health-conscious adults called the “Lunchables Health Box”. The Lunchables Health
Box is not just time-saving for the savvy youth of today, but it is a super healthy Grab-and-Go Lunch
option for the fitness-loving adults. It features a Multigrain Tomato and Lettuce Turkey Breast Sandwich
- one of the leanest meats available with low sodium content. The Health Box also consists of a small
1000
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1400
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Dec 2015 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
Five Year Projections - Sales, Gross &
Revenue
Net revenues Gross Margin Sales
Ajay,Kaushal,Rutuja,Saira
salad bowl with mineral-rich vegetables like celery, lettuce, spinach, carrots and cucumbers with ranch
dressinganda small mixedfruityogurtsmoothie.
3. Strategic focus and plan
The Kraft Heinz Company is dedicated to the sustainable health of our people, our planet and our
Company.
Mission: To enrich and delight the world through our products, nourishing not just kids but each and
every member of the family through the range of highly nutritious food options in this rapidly growing
section. To Introduce a Sensible Solution labeling program in the United States, featuring a prominent
on-pack "flag" for food and beverage products that meet specific, "better-for-you" nutrition criteria that
Krafthas establishedforeachcategoryof products.
Goals:
NonfinancialGoals-
1. To enter10 majormetropolitanmarket.
2. To partner with major local farmers to gain popularity in respective community and minimize
the logisticscost.
3. To have wide varietyof choices,eachwithhighnutritional value.
4. To add a new product line every season, Kraft will be running a biggest campaign to support the
Lunchables brand to advertise its new line extension that features Dolefruit as part of its efforts
to offerhealthieroptions.
5. To be intop 3 choicesof all the workingparents,youngoffice goers.
6. To be intop 2 foodchoice of retiredseniorcitizens.
7. Increase availabilitybypartneringupwithmajorsupermarketsandlocal coffeeshops.
Financial Goals:
1. With previous revenue of $1 billion, aim for $1.2 billion this year with new product category.
(20% up frompreviousyear)
2. Reduce the marketing and advertising cost to $10 million (50% less than $20 Million of the
previousyear)
3. Investadditional $30millioninestablishingdistributioncentersacrossthe country.
Core competency and sustainable competitive advantage:
With its new line of products, Lunchables aims to have following core competencies- 1. Provide highly
nutritious food, low in sugar and saturated fat with wide range to choose from not compromising on its
nutritional value.
Ajay,Kaushal,Rutuja,Saira
2. Make this microwave ready product available to customer in compact packing.
In order to gain sustained competitive advantage using these core competencies, the Kraft Heinz
Company will work with R&D team and local farmers to balance nutritional value and taste preferences
of respective regional segment. Company will also invest more in R&D to come up with various
combinationsof fooditemsappealingtowide range of taste pallets.
4. Situation Analysis
SWOT Analysis:
Figure 1 shows all the internal and external factors affecting the market opportunities for
Kraft Heinz Figure 1. SWOT Analysis for Kraft Heinz
Strengths Weaknesses
IconicBrands:
KraftHeinzis well servedbyitsportfolio of leading
brands,includingeightbillion-dollarbrandsandfive $500
million-pluslabels.
Low Revenues:
On an apples-to-applesbasis,salesfell9%
versusthe year-earlierperiod,andprofits
slipped4%,to$0.44 a share.
GoodCashFlow:Cash flow hasbeenverysolid,andit
seemssure toimprove asnewcost-cuttingmeasurestake
hold.EquallyencouragingisKraftHeinz’ssoundbalance
sheet(the debt-to-capital ratioisaverymanageable 30%
and cash on handtops$4.4 billion),
IncreasingDividends:The factthat the board of directors
has alreadyraisedthe quarterlydividendby5%,to
$0.575 a share.Itis expectedmore dividendincreasesto
enhance shareholdervalue overtime.
Better product expansionstrategies:
Most of the excesscash will likelybe used,for
productexpansionstrategies,stepped-upmarketing
campaigns,andsmall tuck-in,accretive deals.
High Coststructure:
New productswere introducedtoexcite
the customerswithlimitedadspending
the company’scost structure.
Ajay,Kaushal,Rutuja,Saira
SkilledWork force:
Aside froma determinedandhighlycapable
managementteamthat’sheadedbyCEOBernardoHees
(whoremainsapartner at 3G Capital),Berkshire
Hathaway’slarge stockpositionsuggeststhatWarren
Product recalls:Frequentproductrecalls
indicate poorqualitymeasures,whichin
turn mighttarnishthe company’sbrand
image.
Buffettwill playaninstrumental partinplottingKraft
Heinz’scourse in2016 andbeyond.
GoodmanagementSkills:Lowerselling,general and
administrativeexpensesreflectedloweroverheadcosts
drivenbycost managementefforts,partiallyoffsetby
highermarketingspendingandthe costsof operatingas
an independentpubliccompany.
Operational expenditure:
Furthermore,besidessaleslostdue to
productunavailabilityduringthe recall
process,the companyincursvariouscosts
associatedwiththe recall processthat
increasesoperational expenditure.
High profitability:
The operatingandnet profitsincreasedby71.95% and
65.35% respectivelyascomparedto2012. Thisincrease
was principallydue tothe decrease in
selling/general/adminexpenses
Substantial Debt Position
The debtto equityratioof the company
was 182.2% in2012, as comparedto
148.38% in2011. Such huge debtrequires
the companyto dedicate asignificant
portionof itscash flow fromoperationsto
service interestandprincipal payments.
Diversifiedcustomers:
KraftFoodsserve leadingcompaniesthathelpsitto
reduce the impactof marketinstabilityandoffer
diversifiedsourcesof income.Itsellsfoodandbeverage
productsprincipallytosupermarketchains,convenience
stores,massmerchandisers,clubstores,distributors,
wholesalers,supercenters,drugstores,valuestoresand
otherretail foodoutletsinthe US andCanada.
High LoanRates
Heinzhassubstantial debt,whichcould
limititsabilitytoobtainfundingon
acceptable termsdue todeterioration in
creditand capital markets.
Opportunities: Threats
Ajay,Kaushal,Rutuja,Saira
LunchablesUploaded: Newproductline Lunchables
Uploadedhighlightsthe opportunitiesthatcanstemfrom
agingup (or down) andtryingto meetthe needsof
differentage groups.
Competitors:
The Company competes with Del Monte
Food Company, Nestle S.A, Campbell soup
Company.
Kraft brandsin theaters.
KraftFoodssignsa long-termdeal withcinemaad
networkNCMto bring neworiginal entertainment
segmentsandtraditional adspotstotheaterscreens.
Low –cost alternatives:
Competitionsare intensifiedwhichresult
inPrice reductions.If companyisnotable
to maintaincustomerloyaltythensale
FeaturedKraftbrandsinclude OscarMayer Lunchables,
Stride gum,and Ritzcrackers.The campaignbeganApril
30 across NCM's theaternetworkof 15,400 movie
screensownedbyAMC,Cinemark,Regal,and otherU.S.
exhibitors.
Global Access:
Kraftholdsa fewbrandssuch as A.1.,Velveeta,Planters,
MiO and Lunchablesthatithasn’tgiventoMondelez,
these brandscan be extendedglobally.
volume will reduceandhamperitsmarket
position.
Mondelezholdsthe rights to sell manyof
Kraft’s brandsinternationally:
Mondelezstill holdsthe rightstosell the
majorityof Kraft’ssnackbrands
internationallyforthe nextfew years.
Therefore,the KraftHeinzCompany's
international expansionusingKraft's
brandswill be limiteduntil Mondelez’s
rightsto those brandsexpire.
LunchablesSmart choicewill avoidover eating: Two of
five adultsskiplunchatleasttwice a week,accordingtoa
1995 Galluppoll.Whetherpeople intentionallyavoida
middaymeal inorderto save caloriesorlack time tofind
food,missingthe opportunitytorefuel inthe middle of
the day frequentlyleadstoovereatinglater.Lunchables
smart choice inconvenientpackage savestime to
prepare andconsiderable portionsof saladwith
sandwichwill getenoughcaloriestoburntill theyfinish
office.
Packaging:
CompetitorslikeSmartBoxesfromFresh
and Easy hasmore clearplasticdesignsto
reveal itscontents.
Ajay,Kaushal,Rutuja,Saira
Growthopportunities
A significantchange inthe consumptionpatterninthe
foodindustrycouldoffergrowthopportunitiesforthe
company.Due to hecticschedule andchangesthe work
life,modernconsumersare more likelytopreferthe food
available outside ratherthancookingfoodthemselves.
Decliningsalesby Food critics:
Lunchableshaslongbeenafavorite target
of foodcritics,whocontendthatthe
producthas too much fat,sugar and
preservatives.
Discountingstrategies:
The introductionof discountingand
subsequentpricingpressure exertedby
supermarketssuchasWal-Mart on the
suppliers,includingHeinz,willleadto
marginpressure onthe company.
Industry Analysis
RefrigeratedFoods:The shifttofreshand refrigeratedfoodsisunstoppable.Nearlynine in10 adults
(87%) feel thatfreshfoodsare healthier,and80% believe thattheyare tastier;78% of consumersare
makinga strong efforttoeatmore freshversusprocessedfoods(Technomic2014a; MSI 2014a).
Over the past 10 years, consumption of fresh foods grew 20% to more than 100 billion “eatings” per
year.The NPDGroup (2014a) projectsfresheatingwillexceed120 billionperyearby2018.
Packed Lunches: The FMI U.S Grocery shopping Trends indicate that 59% of the Lunch meals are eaten
away from home, compared to 7% Breakfast and 33% Dinner. This proves the market for a portable,
healthy Lunch meal product. Lunchables Claim 78% Of Refrigerated Lunch Pack Sales. Maximum
percentage of shoppers also claim opting for a whole grain product, 41% opting for low sodium and 37%
lowsugar,according to a specificfactoranalysis.
CompetitorAnalysis:
a. Limited Global expansion
It is clear that the merger between Heinz and Kraft will increase both companies' global footprint, in
practice this transition may be more complicated than anticipated. Mondelez (an American
multinational confectionery, food and beverage firm that comprises the global snack and food brands of
the former Kraft Foods Inc.) holds the rights to sell many of Kraft’s snack brands internationally for the
next few years. Therefore, the new Kraft Heinz Company's international expansion will be limited.
Lunchables is a leader in the Packed Lunch Category, enjoying over 75% of its market share. Although
widely criticized for its high sugar and sodium content, Lunchables is now cutting down the sugar and
sodiumcontentinitsproductsand comingupwitha new line of HealthyLunchoption.
Ajay,Kaushal,Rutuja,Saira
b. Rise in Private labels:
Huge portion of Heinz's revenues comes from sales to Wal-Mart stores. Furthermore, the rise in private
label productsmayadverselyaffectthe company'srevenues.
c. Lunchables VS. Tesco’s Smart Box:
Smart box by fresh and Easy folks betting more nutritious contents appeals more to health conscious
people and weight watchers whereas Lunchables offer mostly cheese and nachos. The new line of
product “Lunchables Health Box” with “Sensible Solution'' nutrition guidelines will include salads with
turkey sandwiches, will overcome the critics. Strong market Strategies like spending on ad and running
Foodfestivalsaroundthe countrywill supportthe launchingthisnew Brand
d. Lunchables Vs. Active Packs
Active Packs are produced by Armour-Eckrich Meats, who describes the products as “convenient
portable lunch kit options that are American Heart Association certified and made with high quality
ingredients parents can embrace.” Healthy Ones Active Packs seem to be in direct competition with
Kraft Foods’ Oscar MayerLunchablesproducts, who do have a bit of a head start in this category, so
marketing programs that generate awareness and trial will be critical. Lunchables were selling at $3.09
each,$.10 higherthanthe Active Packsregularprice.
Althoughthese are the competitorsforthe LunchablesBrand,the directcompetitorsforthe new
productline are Amy’sKitchen,Starbucks,andlocal canteensinoffices.Amy’sKitchenprovidesonly
vegetarianlunchesandthe lunchproductsatStarbucksare expensive whencomparingquantityand
price.
Company Analysis
The Kraft Heinz Company, co-headquartered in Pittsburgh, Pennsylvania and the Chicago area, is the
result of a $46 billion merger between the former Kraft Foods Group and H.J. Heinz Holding Corporation,
the ketchup powerhouse that had been owned by Brazilian private equity firm 3G Capital Partners and
Warren Buffett’s Berkshire Hathaway. Moreover, it has an enviable roster of consumer brands. Oscar
Mayer's Lunchables, a 200$ business, enjoys the major share of the Lunchables was the first of its kind
packed Lunch Meal. It overtook the market successfully, lacking any competitors and its focus group
analysis proved that there was a high scope of success in the market for a product which provided
working mothers with a time-saving convenient and fun Lunch option for kids. Convenient and Packed
Meals Market. Lunchables markets its products innovatively by engaging it's consumers in events like
Fieldtripsforkids,videoseriesandonlinegames.
Ajay,Kaushal,Rutuja,Saira
CustomerAnalysis
Thissectionwill focus oncharacteristicsandhealthrequirementsof ourtargetconsumers.
CustomerCharacteristics:
Our primary customers would be health-conscious working adults (married or unmarried). According to
US ‘Bureau of Labor Statistics’, 80.1% of households have at least one working adult (full-time) and 0 to
2 part-time workers. Also, 3 out 5 households have all the parents working. This ratio is increasing every
year. Also, the number of unemployed adults is decreasing every year (unemployment rate in Dec 2015
was 5 %). For the families with children, the income of parents is not substantial to provide for health
insurance,housingandotherexpenses.One inevery2Americanearnslessthan$30,000 a year.
These statistics portray the demand for ready-to-go, convenient food option high in its nutrition value.A
great opportunity for Kraft Heinz Company to satisfy this demand keeping American taste and nutrition
preferencesinmind.
Health and Nutrition Concerns:
This product line is mainly aimed to comprise of low-sugar, low-sodium, high-protein and high-calcium,
healthier andwhole ingredients. Itis a much healthier alternative than its competitors. It aims on getting
approvalsfromdifferenthealthassociations inthe countryforthisnew product.
Ajay,Kaushal,Rutuja,Saira
5. Market Product Focus
Marketing and Product Objectives:
• Current markets: Existing consumers of packaged meals often ‘settle’ for frozen meals or food items
that are not out-of-the-box meals by themselves. A.T. Kearney forecasts dollar sales of the fresh
prepared foods segment will grow at a 6%-7% compound annual growth rate (CAGR) through 2017,
up from its 5%-6% CAGR in the 2007 to 2012 period (source: supermarketguru.com). Kraft Heinz will
capitalize on the lack of quality fresh food options for the time and health conscious grownup by
making the Health Box available at leading grocers and supermarket chains where existing packaged
foodconsumersmayfindandsee it as a superioralternativetocompetitors’frozenmeals.
• New markets: Health Box from Lunchables will look to create a niche in the minds of the fit folk on
the run, typically working in large cities or satellite townships with little time to step out for a bite.
By the third year, Health Box for Lunchables will be available at 50 of the United States’ most
populous cities partnering with the local farmers’ market community in each geography to provide
nutritiousmealsfromfarmtotable.
• New Products: Health Box, the new Lunchables product line, will be offered in 5 variants to provide
‘a plate for every palate’. The Health Box will be a compact, goodness infused package that is
portable and convenient to re-heat and eat. Nutritive values per lunch pack will conform to
governmentprescribedlevels permeal.
• Distribution channels: Kraft Heinz will exploit its current distribution network to make the Health
Box available at grocers and supermarket chain stores. As a pilot, cafeterias and stores in and
around organizations or office spaces, will be used as a new channel to reach consumers. Kraft Heinz
will create strategic partnerships with the local farmers’ market community for the last mile
assemblyandpossiblydeliveryof HealthBoxestoensure the freshestfarmtotable experience.
Target Markets
The target audience for Lunchables brand have been parents of 10-14 something school kids being the
target consumers. Health Box from Lunchables is targeted at healthy-living millennials. The target
audience will be individuals from 17 to 40 years of age, watching what they eat as they lead very busy
lives. These individuals believe in “You are what you eat”. It is a time-saving, wholesome lunch option,
intendedforthose notaverse tospendingmore onhigh-qualityproducts.
To make the buyers aware of the reasons why the new Health Box is actually healthy, Lunchables plans
to get approval from a number of Health Organizations like the American Heart Foundation, meeting
government specified guidelines for nutrition content, etc. and have a transparent packaging from sides
so that customers can see the salads and yogurt and be inclined towards this clean labelled product. The
Health Box will also partner with active communities and office canteens as a pilot to market this
productto its targetaudience.
Ajay,Kaushal,Rutuja,Saira
Pointsof Difference
Lunchables has been the king of packaged and refrigerated lunch products for school kids and teens.
Now Lunchables aims on providing healthy, high-protein, high-calcium and low-fat lunches to health
conscious adults who are always on-the-go. There is no product in the market combining all the
ingredients of a healthy lunch like salads, smoothies, yogurts as well as sumptuous items like Turkey
Sandwich, Bison Meatballs, etc. in a single, packaged easy-to-carry Health Box, providing healthy and
easyfood.
Premium packaging make it superior to other lunch boxes, very convenient to grab-and-go for the savvy
workingadults.
Low Calorie. Given the media emphasis on obesity, this new product is definitely offering low saturated
fat,lowsodiumandlowcalorieslunchthatis attractingnew marketfor weightwatchers.
Lean cuts of meat are usedinthe HealthBox like TurkeyandBisonMeat. Lunchablesisusingthe leanest
cuts of meat while makingsure thatwhole grain,low-fatandlow-sodiumingredientsare alsousedin
the product.
Unique taste.The HealthBox containsall-time consumerfavoriteslike TurkeySandwich,BurritoBowl,
and Spaghetti whilealsomakingsure that‘somethingsweet,somethinggreenandsomethingmeat’also
tastesgreat.
The mix-and-match nature of the Health Box makes it easy to cater to all the varied tastes in the lunch
market,an importantfactorwhentryingto getintothe lunchbags of the pickiesteaters.
Offeringvarietiesinthisproductline likedifferentkindsof fillers,saladsandflavoredsmoothies.
Positioningstatement
“The Health Box from Lunchables is a convenient choice for health-conscious and busy individuals on
the run, since it is a one of a kind packaged meal with the goodness of farm fresh ingredients that will
delight the taste buds, delivered as a wholesome lunch daily to the neighborhood store, leveraging Kraft
Heinz’ssuperiorsupplychainnetworkandvastexperience inthe packagedmeals.”
Ajay,Kaushal,Rutuja,Saira
6.Marketing Program
Product Strategy
The four elements of the marketing mix for the Oscar Mayer Lunchables Health Box marketing program
are detailedbelow:
ProductLine-
Oscar Mayer Lunchables presents ‘The Health Box’ – the first of its kind, healthy, pre-packaged
refrigeratedLunchComboBox forAdultsretailingat$9.99 eachfor 14 ounce packs.
ProductQuality-
The meat used in The Health Box meals is made from low-fat, lean cuts from Turkey and Bison meats. It
ingredients like whole grain bread and wheat spaghetti, etc. Each Health Box also contains two of the
belowcombinations:healthygreenleafysalad,fruitsalad,asmoothie ora flavoredyogurt.
Packaging-
The Health Box will be packaged as a rectangular flat box, transparent from the sides so that consumers
can see the contents inside easily. The Health Box Package will have a removable smoothie/salad box
and a reheat-able box for the ‘filler’ sandwich/meat/burrito item. The package will show an image of a
healthy and fit adult, an office bag on one side, a clock on the other and Lunch written behind –
symbolizing how individuals are not able to take care of their health needs while constantly being on the
run. Sensible solution labelling that Kraft has established for its product can provide nutritious value as
well asinformationoneverypack.
Price Strategy
Lunchables Health Box, retailing at $9.99 for a 14 ounce package consisting of a “filler” item (Turkey
sandwich/Wheat burrito/Bison meatballs), a salad serving, and a small yogurt or smoothie serving
conveniently packaged in a single and easy to carry box. This pricing is competitive, although slightly
higher to other items sold by competitors. Due to the three varieties of products being packaged into a
single itemandthe highcostsincurredbyrefrigeratedproducts,thisprice isjustified.
Promotion Strategy:
Promotional objectivesshould be buildingawarenesstorepeatpurchaseswhichhave designedfora
well-definedtargetaudience,shouldbe measurable andcoversspecifictime period.Theseobjectives
can be achievedbythe following:
1. Advertisinginthe local Sundaynewspaperabout“HealthBox”targetingyoungoffice goingadults.
Sensible solutionnutritionguidelinesonthe HealthBox Label canattract theirattention
2. Incentivestorepurchase like fewcentsoff couponswhichcanhelpawarenesstothe shoppers,these
couponscan be insertedinthe shoppingbagsatthe time of checkout
Ajay,Kaushal,Rutuja,Saira
3. Buy 2 getone free tactics: Itattracts shoppersgivingthemafeelingof savingmoneyandaddingvalue
to the product at the same time.
4. Using demographicdata;gettingdatafor healthyyoungprofessional adultslivinginthe nearbyareas,
inmail couponscan be anotherwayof awareness.
5. In gym / Office cafeteriademonstrationof low calories,low fatandhighProteindietsandhandingout
fewcouponscan be helpful.
6. Increase availability bypartneringwithlocal supermarketsandcoffee shops.
7. Approvalsfromdifferenthealthassociations:byacknowledgingshoppersconsuminglow fatlow
sodiumhighproteinwholegrainsandwichesinthisnew productline of “HealthBox”Lunchablescan
serve ashealthieralternative thanitscompetitorslikeTescosmartBox.Lunchablesplanningtoget
ApprovalsfromAmericanHeartassociationbasedonthe guidelinesforthe healthyheartdiets.
Place strategy
Place strategyoutlineshowandwhere acompany will place itsproductsandservicesinanattemptto
gainmarketshare andconsumerpurchases.Thiscomponentof the 4Psis sometimesreferredtoas the
distributionstrategyandmayinclude stores,bothphysical andonline,andanyothermeansbywhich
the companycan reachcustomers.
DistributionChannelsandExamples:
To determine whichdistributionmethodisused,the KraftandHeinzmustunderstandthe needsof the
consumeranddetermine whichavenue providesthe bestabilitytoputthe product or service infrontof
the potential buyer.Here youcansee the maindistributionchannels
1. Wholesale Distributors,partnershipwithlocal farmermarketstogetfreshsalads,fruitspackedwith
freshnessinLunchablesHealthBox.
2. Supermarketslike Walmart,Meijer’sandKroger.
3. Grocery storesand Coffee shops.
4. On line andOffice billboardsenablingcustomerstobuythisnew product,targetinganew audience,
or bringingthisproductto market
5. Kraft and Heinzextendingdistributionchannel like as apilot,Cafeteriasandinthe office space or
aroundthe organizationstoresume itsCustomers.
6. Direct bysalespersonor sale Teams: directsalesinfrontof Office streetsduringlunchhourtime can
getdirectfeedbackfromthe customers.
Ajay,Kaushal,Rutuja,Saira
7. Financial Data and Projections
Past Sales Revenue
Over the years, Kraft Heinz has seen steadyincrease almost each year in net revenues. In 2011, the sales
of 26 yr-old ‘Lunchables’ brand exceeded $1 billion, a 7% increase over the comparable period in
previous year. This was largely due to the introduction of the Lunchables with Fruit and $20 million
invested in advertising campaigns for it. Sales have continued to rise, netting $500 million in annual
saleswithinnovative productssuchasthe Uploadedline gettingintroduced.
Five Year Projections:
A comparisonof salesforpast years:
RefrigeratedMeals Dec 2014 Dec 2015 $ Change (inmillions)
Netrevenues 1296 1320 24
OrganicNetRevenues 1296 1280 16
Segmentoperatingincome 159 119 40
Projections
Dec 2015 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
Net
revenues
1320 1382 1486 1561 1595 1620
Gross
Margin
1261 1298 1382 1427 1454 1471
Sales 1520 1520 1596 1647 1683 1717
1000
1100
1200
1300
1400
1500
1600
1700
Dec 2015 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
Five Year Projections - Sales, Gross & Revenue
Net revenues Gross Margin Sales

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Sample marketing plan - The Health Box - a refrigerated healthy lunch meal

  • 1. Ajay,Kaushal,Rutuja,Saira Marketing Plan for Lunchables Health Box 1. Executive Summary Kraft-Heinz aims to provide consumers with wholesome food products in ways that promote sustainability of the surroundings. Through its Lunchables line of products, Kraft-Heinz is looking to tap into newer markets that seek the convenience of healthy packaged meal options while remaining steadfastly uncompromising on the nutritional contents of the product. Typical customers are working people whoplace agreat premiumontime. The new product—Health Box—is a ‘leaner Lunchables’ that packs in the goodness of fresh ingredients for the burgeoning number of health-conscious professionals. Kraft-Heinz will launch Health Box under the Lunchables brand and will leverage its experience and its existing supply chain and logistics network to deliver value at the consumer’s office desk. The company is looking to partner with farmers’ markets stakeholders in various regions and set up processes to source ingredients, pack and prepare the product,and deliverthe HealthBox tolocationsthatare easilyaccessibletothe customer. Kraft-Heinz will set up local networks and integrate logistics partners to ensure the efficacy of these mostly-localized supply chains to ensure timely replenishment of the relatively lower-shelf-life product. We envisage being the go-to option for the healthy-living folks who are looking for packaged meal solutions without compromising on the nutritional content which will conform to prescribed per-meal standards. The Health Box will be piloted at selected regions and will be made available at retail locationswhocan meetstorage requirements. Advertising will be through newspapers and social media and billboards concentrated in ‘office’ locations. The pilot program will feature sales folks with Health Box samples at street sides at office- locationslookingtohijackthose headingtowardsthe hotdogsand fries. The current Lunchables leadership will oversee the program while individual regions will have Lean Leadersto manage anddrive the operationsinvolved. The objectivesinthe firstthree yearsinclude: ·Delightcustomerswithanever-seen-beforeconvenient,nutrition-packedbox ·Year onyear growthinsalesby 7% on an average ·Increasedpartnershipswithlocal stakeholdersto reduce the farmtotable time to a minimum ·Create value anddemandsothis‘leanerLunchables’canthrive withthe cashit generates
  • 2. Ajay,Kaushal,Rutuja,Saira Mission: Kraft-Heinz’s mission is to be the go-to packaged meal solution for the growing number of health-focused individuals. Keysto Success: ·Buy-infromlocal supplychainpartners ·Conformance tothe higheststandardsof quality ·Establishment of the perceived value of the product in the consumer’s mind to drive repeat sales while alsohavinga price pointhigherthana typical burger& friesmeal 2. Company Description On July2, 2015, the mergerbetweenKraftandHeinzwascompletedtocreate The Kraft HeinzCompany. The Kraft Heinz Company is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world, with eight $1 billion+ brands. A globally trusted producer of delicious foods, The Kraft Heinz Company provides high quality, great taste and nutrition for all eating occasions whether at home, in restaurants or on the go. The company has dual headquarters in Pittsburgh and Chicago, the respective headquarters of Heinz and Kraft. The Kraft Heinz Company nowhas 13 differentbrandsvaluedat$500 millionormore each. Lunchables is a sub-brand of Kraft Heinz Company that offers convenient prepackaged lunch. . Lunchables offers 26 different varieties of meal combinations, which include crackers, pizzas, small hot dogs,small burgers,nachos,subs,andwraps. Lunchables, having made Lunchtime fun for kids over the last 28 years, has now come up with a healthy Lunchtime Snack for health-conscious adults called the “Lunchables Health Box”. The Lunchables Health Box is not just time-saving for the savvy youth of today, but it is a super healthy Grab-and-Go Lunch option for the fitness-loving adults. It features a Multigrain Tomato and Lettuce Turkey Breast Sandwich - one of the leanest meats available with low sodium content. The Health Box also consists of a small 1000 1200 1400 1600 Dec 2015 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Five Year Projections - Sales, Gross & Revenue Net revenues Gross Margin Sales
  • 3. Ajay,Kaushal,Rutuja,Saira salad bowl with mineral-rich vegetables like celery, lettuce, spinach, carrots and cucumbers with ranch dressinganda small mixedfruityogurtsmoothie. 3. Strategic focus and plan The Kraft Heinz Company is dedicated to the sustainable health of our people, our planet and our Company. Mission: To enrich and delight the world through our products, nourishing not just kids but each and every member of the family through the range of highly nutritious food options in this rapidly growing section. To Introduce a Sensible Solution labeling program in the United States, featuring a prominent on-pack "flag" for food and beverage products that meet specific, "better-for-you" nutrition criteria that Krafthas establishedforeachcategoryof products. Goals: NonfinancialGoals- 1. To enter10 majormetropolitanmarket. 2. To partner with major local farmers to gain popularity in respective community and minimize the logisticscost. 3. To have wide varietyof choices,eachwithhighnutritional value. 4. To add a new product line every season, Kraft will be running a biggest campaign to support the Lunchables brand to advertise its new line extension that features Dolefruit as part of its efforts to offerhealthieroptions. 5. To be intop 3 choicesof all the workingparents,youngoffice goers. 6. To be intop 2 foodchoice of retiredseniorcitizens. 7. Increase availabilitybypartneringupwithmajorsupermarketsandlocal coffeeshops. Financial Goals: 1. With previous revenue of $1 billion, aim for $1.2 billion this year with new product category. (20% up frompreviousyear) 2. Reduce the marketing and advertising cost to $10 million (50% less than $20 Million of the previousyear) 3. Investadditional $30millioninestablishingdistributioncentersacrossthe country. Core competency and sustainable competitive advantage: With its new line of products, Lunchables aims to have following core competencies- 1. Provide highly nutritious food, low in sugar and saturated fat with wide range to choose from not compromising on its nutritional value.
  • 4. Ajay,Kaushal,Rutuja,Saira 2. Make this microwave ready product available to customer in compact packing. In order to gain sustained competitive advantage using these core competencies, the Kraft Heinz Company will work with R&D team and local farmers to balance nutritional value and taste preferences of respective regional segment. Company will also invest more in R&D to come up with various combinationsof fooditemsappealingtowide range of taste pallets. 4. Situation Analysis SWOT Analysis: Figure 1 shows all the internal and external factors affecting the market opportunities for Kraft Heinz Figure 1. SWOT Analysis for Kraft Heinz Strengths Weaknesses IconicBrands: KraftHeinzis well servedbyitsportfolio of leading brands,includingeightbillion-dollarbrandsandfive $500 million-pluslabels. Low Revenues: On an apples-to-applesbasis,salesfell9% versusthe year-earlierperiod,andprofits slipped4%,to$0.44 a share. GoodCashFlow:Cash flow hasbeenverysolid,andit seemssure toimprove asnewcost-cuttingmeasurestake hold.EquallyencouragingisKraftHeinz’ssoundbalance sheet(the debt-to-capital ratioisaverymanageable 30% and cash on handtops$4.4 billion), IncreasingDividends:The factthat the board of directors has alreadyraisedthe quarterlydividendby5%,to $0.575 a share.Itis expectedmore dividendincreasesto enhance shareholdervalue overtime. Better product expansionstrategies: Most of the excesscash will likelybe used,for productexpansionstrategies,stepped-upmarketing campaigns,andsmall tuck-in,accretive deals. High Coststructure: New productswere introducedtoexcite the customerswithlimitedadspending the company’scost structure.
  • 5. Ajay,Kaushal,Rutuja,Saira SkilledWork force: Aside froma determinedandhighlycapable managementteamthat’sheadedbyCEOBernardoHees (whoremainsapartner at 3G Capital),Berkshire Hathaway’slarge stockpositionsuggeststhatWarren Product recalls:Frequentproductrecalls indicate poorqualitymeasures,whichin turn mighttarnishthe company’sbrand image. Buffettwill playaninstrumental partinplottingKraft Heinz’scourse in2016 andbeyond. GoodmanagementSkills:Lowerselling,general and administrativeexpensesreflectedloweroverheadcosts drivenbycost managementefforts,partiallyoffsetby highermarketingspendingandthe costsof operatingas an independentpubliccompany. Operational expenditure: Furthermore,besidessaleslostdue to productunavailabilityduringthe recall process,the companyincursvariouscosts associatedwiththe recall processthat increasesoperational expenditure. High profitability: The operatingandnet profitsincreasedby71.95% and 65.35% respectivelyascomparedto2012. Thisincrease was principallydue tothe decrease in selling/general/adminexpenses Substantial Debt Position The debtto equityratioof the company was 182.2% in2012, as comparedto 148.38% in2011. Such huge debtrequires the companyto dedicate asignificant portionof itscash flow fromoperationsto service interestandprincipal payments. Diversifiedcustomers: KraftFoodsserve leadingcompaniesthathelpsitto reduce the impactof marketinstabilityandoffer diversifiedsourcesof income.Itsellsfoodandbeverage productsprincipallytosupermarketchains,convenience stores,massmerchandisers,clubstores,distributors, wholesalers,supercenters,drugstores,valuestoresand otherretail foodoutletsinthe US andCanada. High LoanRates Heinzhassubstantial debt,whichcould limititsabilitytoobtainfundingon acceptable termsdue todeterioration in creditand capital markets. Opportunities: Threats
  • 6. Ajay,Kaushal,Rutuja,Saira LunchablesUploaded: Newproductline Lunchables Uploadedhighlightsthe opportunitiesthatcanstemfrom agingup (or down) andtryingto meetthe needsof differentage groups. Competitors: The Company competes with Del Monte Food Company, Nestle S.A, Campbell soup Company. Kraft brandsin theaters. KraftFoodssignsa long-termdeal withcinemaad networkNCMto bring neworiginal entertainment segmentsandtraditional adspotstotheaterscreens. Low –cost alternatives: Competitionsare intensifiedwhichresult inPrice reductions.If companyisnotable to maintaincustomerloyaltythensale FeaturedKraftbrandsinclude OscarMayer Lunchables, Stride gum,and Ritzcrackers.The campaignbeganApril 30 across NCM's theaternetworkof 15,400 movie screensownedbyAMC,Cinemark,Regal,and otherU.S. exhibitors. Global Access: Kraftholdsa fewbrandssuch as A.1.,Velveeta,Planters, MiO and Lunchablesthatithasn’tgiventoMondelez, these brandscan be extendedglobally. volume will reduceandhamperitsmarket position. Mondelezholdsthe rights to sell manyof Kraft’s brandsinternationally: Mondelezstill holdsthe rightstosell the majorityof Kraft’ssnackbrands internationallyforthe nextfew years. Therefore,the KraftHeinzCompany's international expansionusingKraft's brandswill be limiteduntil Mondelez’s rightsto those brandsexpire. LunchablesSmart choicewill avoidover eating: Two of five adultsskiplunchatleasttwice a week,accordingtoa 1995 Galluppoll.Whetherpeople intentionallyavoida middaymeal inorderto save caloriesorlack time tofind food,missingthe opportunitytorefuel inthe middle of the day frequentlyleadstoovereatinglater.Lunchables smart choice inconvenientpackage savestime to prepare andconsiderable portionsof saladwith sandwichwill getenoughcaloriestoburntill theyfinish office. Packaging: CompetitorslikeSmartBoxesfromFresh and Easy hasmore clearplasticdesignsto reveal itscontents.
  • 7. Ajay,Kaushal,Rutuja,Saira Growthopportunities A significantchange inthe consumptionpatterninthe foodindustrycouldoffergrowthopportunitiesforthe company.Due to hecticschedule andchangesthe work life,modernconsumersare more likelytopreferthe food available outside ratherthancookingfoodthemselves. Decliningsalesby Food critics: Lunchableshaslongbeenafavorite target of foodcritics,whocontendthatthe producthas too much fat,sugar and preservatives. Discountingstrategies: The introductionof discountingand subsequentpricingpressure exertedby supermarketssuchasWal-Mart on the suppliers,includingHeinz,willleadto marginpressure onthe company. Industry Analysis RefrigeratedFoods:The shifttofreshand refrigeratedfoodsisunstoppable.Nearlynine in10 adults (87%) feel thatfreshfoodsare healthier,and80% believe thattheyare tastier;78% of consumersare makinga strong efforttoeatmore freshversusprocessedfoods(Technomic2014a; MSI 2014a). Over the past 10 years, consumption of fresh foods grew 20% to more than 100 billion “eatings” per year.The NPDGroup (2014a) projectsfresheatingwillexceed120 billionperyearby2018. Packed Lunches: The FMI U.S Grocery shopping Trends indicate that 59% of the Lunch meals are eaten away from home, compared to 7% Breakfast and 33% Dinner. This proves the market for a portable, healthy Lunch meal product. Lunchables Claim 78% Of Refrigerated Lunch Pack Sales. Maximum percentage of shoppers also claim opting for a whole grain product, 41% opting for low sodium and 37% lowsugar,according to a specificfactoranalysis. CompetitorAnalysis: a. Limited Global expansion It is clear that the merger between Heinz and Kraft will increase both companies' global footprint, in practice this transition may be more complicated than anticipated. Mondelez (an American multinational confectionery, food and beverage firm that comprises the global snack and food brands of the former Kraft Foods Inc.) holds the rights to sell many of Kraft’s snack brands internationally for the next few years. Therefore, the new Kraft Heinz Company's international expansion will be limited. Lunchables is a leader in the Packed Lunch Category, enjoying over 75% of its market share. Although widely criticized for its high sugar and sodium content, Lunchables is now cutting down the sugar and sodiumcontentinitsproductsand comingupwitha new line of HealthyLunchoption.
  • 8. Ajay,Kaushal,Rutuja,Saira b. Rise in Private labels: Huge portion of Heinz's revenues comes from sales to Wal-Mart stores. Furthermore, the rise in private label productsmayadverselyaffectthe company'srevenues. c. Lunchables VS. Tesco’s Smart Box: Smart box by fresh and Easy folks betting more nutritious contents appeals more to health conscious people and weight watchers whereas Lunchables offer mostly cheese and nachos. The new line of product “Lunchables Health Box” with “Sensible Solution'' nutrition guidelines will include salads with turkey sandwiches, will overcome the critics. Strong market Strategies like spending on ad and running Foodfestivalsaroundthe countrywill supportthe launchingthisnew Brand d. Lunchables Vs. Active Packs Active Packs are produced by Armour-Eckrich Meats, who describes the products as “convenient portable lunch kit options that are American Heart Association certified and made with high quality ingredients parents can embrace.” Healthy Ones Active Packs seem to be in direct competition with Kraft Foods’ Oscar MayerLunchablesproducts, who do have a bit of a head start in this category, so marketing programs that generate awareness and trial will be critical. Lunchables were selling at $3.09 each,$.10 higherthanthe Active Packsregularprice. Althoughthese are the competitorsforthe LunchablesBrand,the directcompetitorsforthe new productline are Amy’sKitchen,Starbucks,andlocal canteensinoffices.Amy’sKitchenprovidesonly vegetarianlunchesandthe lunchproductsatStarbucksare expensive whencomparingquantityand price. Company Analysis The Kraft Heinz Company, co-headquartered in Pittsburgh, Pennsylvania and the Chicago area, is the result of a $46 billion merger between the former Kraft Foods Group and H.J. Heinz Holding Corporation, the ketchup powerhouse that had been owned by Brazilian private equity firm 3G Capital Partners and Warren Buffett’s Berkshire Hathaway. Moreover, it has an enviable roster of consumer brands. Oscar Mayer's Lunchables, a 200$ business, enjoys the major share of the Lunchables was the first of its kind packed Lunch Meal. It overtook the market successfully, lacking any competitors and its focus group analysis proved that there was a high scope of success in the market for a product which provided working mothers with a time-saving convenient and fun Lunch option for kids. Convenient and Packed Meals Market. Lunchables markets its products innovatively by engaging it's consumers in events like Fieldtripsforkids,videoseriesandonlinegames.
  • 9. Ajay,Kaushal,Rutuja,Saira CustomerAnalysis Thissectionwill focus oncharacteristicsandhealthrequirementsof ourtargetconsumers. CustomerCharacteristics: Our primary customers would be health-conscious working adults (married or unmarried). According to US ‘Bureau of Labor Statistics’, 80.1% of households have at least one working adult (full-time) and 0 to 2 part-time workers. Also, 3 out 5 households have all the parents working. This ratio is increasing every year. Also, the number of unemployed adults is decreasing every year (unemployment rate in Dec 2015 was 5 %). For the families with children, the income of parents is not substantial to provide for health insurance,housingandotherexpenses.One inevery2Americanearnslessthan$30,000 a year. These statistics portray the demand for ready-to-go, convenient food option high in its nutrition value.A great opportunity for Kraft Heinz Company to satisfy this demand keeping American taste and nutrition preferencesinmind. Health and Nutrition Concerns: This product line is mainly aimed to comprise of low-sugar, low-sodium, high-protein and high-calcium, healthier andwhole ingredients. Itis a much healthier alternative than its competitors. It aims on getting approvalsfromdifferenthealthassociations inthe countryforthisnew product.
  • 10. Ajay,Kaushal,Rutuja,Saira 5. Market Product Focus Marketing and Product Objectives: • Current markets: Existing consumers of packaged meals often ‘settle’ for frozen meals or food items that are not out-of-the-box meals by themselves. A.T. Kearney forecasts dollar sales of the fresh prepared foods segment will grow at a 6%-7% compound annual growth rate (CAGR) through 2017, up from its 5%-6% CAGR in the 2007 to 2012 period (source: supermarketguru.com). Kraft Heinz will capitalize on the lack of quality fresh food options for the time and health conscious grownup by making the Health Box available at leading grocers and supermarket chains where existing packaged foodconsumersmayfindandsee it as a superioralternativetocompetitors’frozenmeals. • New markets: Health Box from Lunchables will look to create a niche in the minds of the fit folk on the run, typically working in large cities or satellite townships with little time to step out for a bite. By the third year, Health Box for Lunchables will be available at 50 of the United States’ most populous cities partnering with the local farmers’ market community in each geography to provide nutritiousmealsfromfarmtotable. • New Products: Health Box, the new Lunchables product line, will be offered in 5 variants to provide ‘a plate for every palate’. The Health Box will be a compact, goodness infused package that is portable and convenient to re-heat and eat. Nutritive values per lunch pack will conform to governmentprescribedlevels permeal. • Distribution channels: Kraft Heinz will exploit its current distribution network to make the Health Box available at grocers and supermarket chain stores. As a pilot, cafeterias and stores in and around organizations or office spaces, will be used as a new channel to reach consumers. Kraft Heinz will create strategic partnerships with the local farmers’ market community for the last mile assemblyandpossiblydeliveryof HealthBoxestoensure the freshestfarmtotable experience. Target Markets The target audience for Lunchables brand have been parents of 10-14 something school kids being the target consumers. Health Box from Lunchables is targeted at healthy-living millennials. The target audience will be individuals from 17 to 40 years of age, watching what they eat as they lead very busy lives. These individuals believe in “You are what you eat”. It is a time-saving, wholesome lunch option, intendedforthose notaverse tospendingmore onhigh-qualityproducts. To make the buyers aware of the reasons why the new Health Box is actually healthy, Lunchables plans to get approval from a number of Health Organizations like the American Heart Foundation, meeting government specified guidelines for nutrition content, etc. and have a transparent packaging from sides so that customers can see the salads and yogurt and be inclined towards this clean labelled product. The Health Box will also partner with active communities and office canteens as a pilot to market this productto its targetaudience.
  • 11. Ajay,Kaushal,Rutuja,Saira Pointsof Difference Lunchables has been the king of packaged and refrigerated lunch products for school kids and teens. Now Lunchables aims on providing healthy, high-protein, high-calcium and low-fat lunches to health conscious adults who are always on-the-go. There is no product in the market combining all the ingredients of a healthy lunch like salads, smoothies, yogurts as well as sumptuous items like Turkey Sandwich, Bison Meatballs, etc. in a single, packaged easy-to-carry Health Box, providing healthy and easyfood. Premium packaging make it superior to other lunch boxes, very convenient to grab-and-go for the savvy workingadults. Low Calorie. Given the media emphasis on obesity, this new product is definitely offering low saturated fat,lowsodiumandlowcalorieslunchthatis attractingnew marketfor weightwatchers. Lean cuts of meat are usedinthe HealthBox like TurkeyandBisonMeat. Lunchablesisusingthe leanest cuts of meat while makingsure thatwhole grain,low-fatandlow-sodiumingredientsare alsousedin the product. Unique taste.The HealthBox containsall-time consumerfavoriteslike TurkeySandwich,BurritoBowl, and Spaghetti whilealsomakingsure that‘somethingsweet,somethinggreenandsomethingmeat’also tastesgreat. The mix-and-match nature of the Health Box makes it easy to cater to all the varied tastes in the lunch market,an importantfactorwhentryingto getintothe lunchbags of the pickiesteaters. Offeringvarietiesinthisproductline likedifferentkindsof fillers,saladsandflavoredsmoothies. Positioningstatement “The Health Box from Lunchables is a convenient choice for health-conscious and busy individuals on the run, since it is a one of a kind packaged meal with the goodness of farm fresh ingredients that will delight the taste buds, delivered as a wholesome lunch daily to the neighborhood store, leveraging Kraft Heinz’ssuperiorsupplychainnetworkandvastexperience inthe packagedmeals.”
  • 12. Ajay,Kaushal,Rutuja,Saira 6.Marketing Program Product Strategy The four elements of the marketing mix for the Oscar Mayer Lunchables Health Box marketing program are detailedbelow: ProductLine- Oscar Mayer Lunchables presents ‘The Health Box’ – the first of its kind, healthy, pre-packaged refrigeratedLunchComboBox forAdultsretailingat$9.99 eachfor 14 ounce packs. ProductQuality- The meat used in The Health Box meals is made from low-fat, lean cuts from Turkey and Bison meats. It ingredients like whole grain bread and wheat spaghetti, etc. Each Health Box also contains two of the belowcombinations:healthygreenleafysalad,fruitsalad,asmoothie ora flavoredyogurt. Packaging- The Health Box will be packaged as a rectangular flat box, transparent from the sides so that consumers can see the contents inside easily. The Health Box Package will have a removable smoothie/salad box and a reheat-able box for the ‘filler’ sandwich/meat/burrito item. The package will show an image of a healthy and fit adult, an office bag on one side, a clock on the other and Lunch written behind – symbolizing how individuals are not able to take care of their health needs while constantly being on the run. Sensible solution labelling that Kraft has established for its product can provide nutritious value as well asinformationoneverypack. Price Strategy Lunchables Health Box, retailing at $9.99 for a 14 ounce package consisting of a “filler” item (Turkey sandwich/Wheat burrito/Bison meatballs), a salad serving, and a small yogurt or smoothie serving conveniently packaged in a single and easy to carry box. This pricing is competitive, although slightly higher to other items sold by competitors. Due to the three varieties of products being packaged into a single itemandthe highcostsincurredbyrefrigeratedproducts,thisprice isjustified. Promotion Strategy: Promotional objectivesshould be buildingawarenesstorepeatpurchaseswhichhave designedfora well-definedtargetaudience,shouldbe measurable andcoversspecifictime period.Theseobjectives can be achievedbythe following: 1. Advertisinginthe local Sundaynewspaperabout“HealthBox”targetingyoungoffice goingadults. Sensible solutionnutritionguidelinesonthe HealthBox Label canattract theirattention 2. Incentivestorepurchase like fewcentsoff couponswhichcanhelpawarenesstothe shoppers,these couponscan be insertedinthe shoppingbagsatthe time of checkout
  • 13. Ajay,Kaushal,Rutuja,Saira 3. Buy 2 getone free tactics: Itattracts shoppersgivingthemafeelingof savingmoneyandaddingvalue to the product at the same time. 4. Using demographicdata;gettingdatafor healthyyoungprofessional adultslivinginthe nearbyareas, inmail couponscan be anotherwayof awareness. 5. In gym / Office cafeteriademonstrationof low calories,low fatandhighProteindietsandhandingout fewcouponscan be helpful. 6. Increase availability bypartneringwithlocal supermarketsandcoffee shops. 7. Approvalsfromdifferenthealthassociations:byacknowledgingshoppersconsuminglow fatlow sodiumhighproteinwholegrainsandwichesinthisnew productline of “HealthBox”Lunchablescan serve ashealthieralternative thanitscompetitorslikeTescosmartBox.Lunchablesplanningtoget ApprovalsfromAmericanHeartassociationbasedonthe guidelinesforthe healthyheartdiets. Place strategy Place strategyoutlineshowandwhere acompany will place itsproductsandservicesinanattemptto gainmarketshare andconsumerpurchases.Thiscomponentof the 4Psis sometimesreferredtoas the distributionstrategyandmayinclude stores,bothphysical andonline,andanyothermeansbywhich the companycan reachcustomers. DistributionChannelsandExamples: To determine whichdistributionmethodisused,the KraftandHeinzmustunderstandthe needsof the consumeranddetermine whichavenue providesthe bestabilitytoputthe product or service infrontof the potential buyer.Here youcansee the maindistributionchannels 1. Wholesale Distributors,partnershipwithlocal farmermarketstogetfreshsalads,fruitspackedwith freshnessinLunchablesHealthBox. 2. Supermarketslike Walmart,Meijer’sandKroger. 3. Grocery storesand Coffee shops. 4. On line andOffice billboardsenablingcustomerstobuythisnew product,targetinganew audience, or bringingthisproductto market 5. Kraft and Heinzextendingdistributionchannel like as apilot,Cafeteriasandinthe office space or aroundthe organizationstoresume itsCustomers. 6. Direct bysalespersonor sale Teams: directsalesinfrontof Office streetsduringlunchhourtime can getdirectfeedbackfromthe customers.
  • 14. Ajay,Kaushal,Rutuja,Saira 7. Financial Data and Projections Past Sales Revenue Over the years, Kraft Heinz has seen steadyincrease almost each year in net revenues. In 2011, the sales of 26 yr-old ‘Lunchables’ brand exceeded $1 billion, a 7% increase over the comparable period in previous year. This was largely due to the introduction of the Lunchables with Fruit and $20 million invested in advertising campaigns for it. Sales have continued to rise, netting $500 million in annual saleswithinnovative productssuchasthe Uploadedline gettingintroduced. Five Year Projections: A comparisonof salesforpast years: RefrigeratedMeals Dec 2014 Dec 2015 $ Change (inmillions) Netrevenues 1296 1320 24 OrganicNetRevenues 1296 1280 16 Segmentoperatingincome 159 119 40 Projections Dec 2015 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Net revenues 1320 1382 1486 1561 1595 1620 Gross Margin 1261 1298 1382 1427 1454 1471 Sales 1520 1520 1596 1647 1683 1717 1000 1100 1200 1300 1400 1500 1600 1700 Dec 2015 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Five Year Projections - Sales, Gross & Revenue Net revenues Gross Margin Sales