Oscar Mayer | Marketing | Case

1. OSCAR MAYER
GROUP 6:
LAVISH KHURANA
LOKENDRA SINGH RATHORE
MEHAK KAUL
NAVLIKA SINHA
NIKITA SHARMA
SIMRANJEET KAUR
YASH KANCHAN
ZAHID M JAMAL
SUBMITTED TO:
PROF. SEMILA FERNANDES

2. The Oscar Mayer Company is
an American meat and cold cut production company,
owned by Kraft Heinz. It is known for its hot
dogs, bologna, bacon, ham and Lunchable products.

3. Rob Goodman
Louis Rich Category Manager
Jane Morley
Director of Finance and Planning
Jim Longstreet
Direct Management Team
Eric Stanger
VP of OM brand
Marcus McGraw
Big Boss
Mike McTiernan
Consultant

4. Increasing popularity of healthier products with lesser fat and salt
content.
High Investment Cost.
More consolidated meat industry comprising companies with
sophisticated manufacturing and marketing skills(Competition).
Higher Customer Expectations.(Demand for products which are
more convenient to cook and easy to consume.)
Challenges

5. New benefits via existing products.
Diversifying by either acquiring or merging with other
companies.
Develop New Products to tap new markets/ needs.
Increase Economies of Scale & Scope of the other production
line.
Propositions

6. Strategic Marketing Planning
Strategic
Marketing
Analysis
Strategic
Marketing
Goal
Strategic
Marketing
Action

7.  White meat products are in trend.
 Recent slowdown due to competition.
 Pumping more money and increasing
advertisement and promotional budgets.
 Compromise profits for short run and
concentrate more on volumes for the long run.
 R&D help to develop new products i.e. turkey
bacon, great roast bacon and gravy diner line.
 “Switch to Rich” campaign.
Annual Per Capita Consumption
(Pounds)
Meat Current Five years ago
All meat 170.1 168.5
Red 124.9 134.7
White 45.2 33.8
Rob Goodman
Louis Rich Category Manager
Analysis & Proposed Solution

9. Advertisement cost would increase the cost.
The consumption of meat by the rich may not be
very high because of Engel’s law.
Obstacles

10.  Expand production by either a M&A with one of the small enterprises
preferably Turkey Time Ltd.
 Raise money for the acquisition by borrowing money at 12%annual
debt service.
 Automatically increase the product line. Example: frozen sandwiches.
 Merger with Turkey Time Ltd. would result in better economies of
scale.
 Other options for acquisition could be with Chicken Rite Inc. or
Crabbies Inc.. Chicken Inc. has low calories chicken salad serve tubs
and Crabbies would cover a new range of shellfish products(eg. Crabs,
lobsters)
Company Name
Estimated
Sales(Millions of $)
Chicken Rite
Inc. 15
Turkey Times
Ltd 10 to 20
Crabbies Inc. 15
Estimated Cost 15
Jane Morley
Director of Finance and Planning
Analysis & Proposed Solution

12. Obstacles
 A decrease in demand would tarnish the profits and
further deepen the losses of the firm.
 Accumulated debt may lead to insolvency.

13.  Increase the product line by catering to consumers based on their need.
 Basic Mantra- Consumer time will help you earn consumer’s money.
 Automatically increase the market share and will help you position your product in a different
manner.
 Positioning= Target Segment+Differentiation
Product Name Category Product Price ($)
Zappetites Precooked Frozen meals Pizza slices, tacos 1.39
Lunchables Ready to cook recipes
Meat, cheese, cracker,
condiment and chocolate 1.25-1.50
Jim Longstreet
Direct Management Team
Analysis & Proposed Solution

14. Obstacles
New product will automatically attract more risk.
Success rate of new products is very low.

15. Concentrate on your core competencies.
Try reducing the cost of production and cost of the product.
Develop low salt and fat line of products via R&D
Remind your employee force that they have to reinvigorate the sales growth of Oscar Mayer.
Capacity Maximization
Reinstitute the Wienermobile promotional program.
Pro forma profit and loss: Oscar Mayor Brand
Parameter Last year current year Next year
Pound Volume(million) 662 650 660
Advertisement(million) 245 236 250
Operating income 107 110 110
Eric Stanger
VP of OM brand
Analysis & Proposed

17. Obstacles
Advertisement depends purely on viewership and is fully
written off after it has been incurred.
Very often, markets which have become obsolete would
not recover even after continuous effort is taken by the
company.

18. Strengths Weakness
Considerate Market Share Lower Diversification
Good Brand Image Change in Consumer Preference
Widespread Advertisement High Investment Cost
Opportunities Threats
Economies of Scale Competition
Developing Newer Products Increasing Consumer Expectations
M & A Saturated Market
SWOT ANALYSIS

19. Core Benefit
Potential Product
Expected Product
Augmented Product
Basic Product
Customer
Value
Hierarchy

21. Oscar Mayer took over Louis Rich in the year 1979.
Concept of lunchables was launched in the year 1988.
The revenue from lunchables was $317 million in the first year and
currently it is $1 billion.
Rampant Advertisement techniques were used to increase the visibility.
In the Western countries, it was considered as a staple food.
The market for red meat was already saturated.
Analysis

22. Thus it becomes of primary importance that we should try to discover/tap
newer markets.
Based on our analysis we feel that Oscar Mayer should try to reach out to
newer markets i.e. eastern countries.
The point of objection in our mind would be the high capital expenditure but
we need to realize that if we use the concept of ‘Purchasing Power Parity
(PPP)’ the capital expenditure would not be as high as expected.
But we need to re-design/differentiate the way we position our product in
those untapped markets.
Regardless to say ‘Beef & Pork is a big no, no.’
Solutions

23. Advertise Oscar Mayer as a product which sells chicken, Lamb, Beef, Turkey and
other products which would be consumed by the people in the Eastern countries.
Additionally, since we are trying to target Eastern countries we need to develop
newer products or else we would not be successful.
For instance In India approximately 29% (31,25,00,000) individuals are
vegetarians and there is a huge gamut of people who are vegetarian by choice.
Additionally, most of the elite category are also vegetarians therefore, Oscar
Mayer would not be able to maximize to its full capacity unless it introduces a
vegetarian diet in it’s product line i.e. Paneer, Soya, Mushroom, Aloo Tikki etc.
Solutions

24. Advantage of Entering Eastern Countries
Most of the Eastern countries were closed economies till the latter
half of the 19th
century and were slowly opening up because of
various reforms initiated by their respective Governments.
Therefore we now have an underutilized market.
Targeting an under utilized market would be much easier vis a vis a
fully utilized market.(Selling in Eastern countries maybe easier than
the Western countries.)

25. Thank You