1. General Mills Single-Serving Shelf Stable Growth Plan Presented by Elizabeth Dolinski Debbie Nolind Ann Singhakowinta Jay Wohlken Franck Valas Ana Valverde

2. 2 I. Executive Summary Strong growth is desired for General Mills’ in the single-serving pre- prepared meal category. Barriers to growth include: –Positioning discrepancy –Non-loyal customer base –Undifferentiated product –Retail placement is fragmented There is currently a disconnect between the consumers targeted for Betty Crocker Bowl App é tit and the consumers actually purchasing the product –Although all consumers desire a basic standard of taste and convenience in single- serving pre-prepared meals, they tend to prioritize one or the other. –Consumer perceptions of all Bowl Appétit attributes are dominated by their perceptions of competitive products’ attributes. –Consumers tend to be self-focused or family-focused. Family-focused consumers purchase products with individuals other than themselves in mind (i.e. spouses, children). Self-focus consumers purchase for their own consumption only.

3. 3 I. Executive Summary Development of products in the taste-seeker, self-focused and taste- seeker, family-focused segments is recommended –The convenience segment is crowded with competitors –General Mills brands have a core strength in taste and quality Two product concepts recommended: –New & Improved Betty Crocker Bowl Appétit: a higher quality version with wet pack for sauces, cheeses, or dressings and dry pack for Parmesan and herbs. Old Bowl Appétit is phased out. –Progresso Soup Singles : a new a wet, shelf-stable single-serve bowl of soup product.

4. 4 II. Contents I.Executive Summary II.Contents III.Situation AnalysisSituation Analysis Company Current Product Competition IV.Problem DefinitionProblem Definition V.Marketing StrategyMarketing Strategy VI.New Product ConceptsNew Product Concepts Concept #1 – New & Improved Bowl Appétit Concept #2 – Progresso Soup Singles Market Summary VII.AppendixAppendix

5. 5 III. Situation Analysis Company –Background –Competencies Current Product –Facts: Price, promotion, placement, packaging. –Target Customers and Actual Current Customers Competitive Landscape –Groupings/Structure –Competitive Set

6. 6 Situation - Company Over $13 billion in sales across numerous food categories Major businesses include cereals, meals, Pillsbury, baking products, and yogurt Foodservice and restaurant chains are part of diverse portfolio. Ownership of some of the best-known brands in the world:

7. 7 Situation - Company Competencies –Core competencies in several food categories –Presence and placement in numerous food aisles –Opportunities to leverage powerful brands –Experience in product innovation –Manufacturing expertise –Economies of scale –Strong retail relationships –Powerful advertising

8. 8 Situation - Company Portfolio Management –Opportunity for Betty Crocker Bowl Appétit to acheive robust volume growth in expanding category –General Mills has opportunity for category leadership and dominant share position –General Mills can achieve long-term growth potential in this category through one or combination of: Incubation of current product Creation of new products Acquisition of similar products

9. 9 Situation - Current Product Betty Crocker Bowl Appétit –“Single-serve, convenient lunch bowls” –Packaging Self-contained, disposable bowl Dry, portable product Single-serve portion (16 oz prepared) –Preparation: Requires water and microwave –10 Varieties: Pastas (4), Rice (3) Potatoes (3) –Price: $1.50 – 1.89 (Range: Average Nielsen figure to local retail price)

10. 10 Situation - Current Product Betty Crocker Bowl Appétit –Retail Distribution Grocery 92%, Mass merchandisers 8%, Club stores 0% –Placement: Aisle varies by retailer/store Pasta Rice/Potatoes Sides/Meal Starters Often grouped with other Betty Crocker products –Promotion Current share largely attributable to heavy couponing: 22% of purchases made with coupon versus 8% weighted average for category

11. 11 Sales for Year One –$28 million Fit with Firm –Consistent with General Mills competency in dry, shelf-stable meal starters Distribution Manufacturing Food technology –Strong branding support Situation - Current Product

12. 12 Situation - Current Customers Target Audience –Married women with children Target Audience Consumer Insight –For busy moms who do not have time to prepare an elaborate meal, but still want something tasty Consumption Habits –Purchased for office or away- from-home meal, but used at home See Appendix A1.1 Actual Current Customers –Young singles –Younger childless couples –Middle-aged childless couples Current Customer Consumer Insight –Trial inspired by promotions and coupons Consumption Habits –Convenience and ease of preparation most important purchasing factors See Appendix A3 Current Target Audience and Current Customers

13. 13 Situation – Competitive Landscape Category Competition –No direct competitor due to highly fragmented category –New and growing market Competitors can be grouped by the following characteristics: Degree Preparation Cooking method Ingredients required Cooking receptacle needed Price Less than $1 $1 – 2 More than $2 Form Wet or frozen Dry Container Packaging Bowl Cup Platter Nothing Target Audience Adults Kids Usage Occasion Lunch Dinner Snack Anytime Aisle Placement Pasta Soups Frozen Side dishes Exotic/International Canned Meats See Appendix B1

14. 14 Situation – Competitive Grouping Using these competitive grouping characteristics, nine major categories emerged: –Noodle/rice starters with stovetop preparation –Dry with wet pack –Other frozen (family-size, health-based, etc.) –Frozen bowls –Vacuum-packed, shelf-stable –Add-water cups –Microwave cups with meat –Noodle cups –Microwave multi-packs Categories were mapped based on similarity to the Bowl Appétit product (see next slide)

15. 15 Lean Cuisine Stouffer’s Chef Boyardee Dinty Moore Fantastic meals/soups Knorr’s Tasty Breaks Spice Hunter Bowl Appétit It’s Pasta Anytime Uncle Ben’s Rice Bowls Healthy Choice Bowls Maruchan Instant Lunch Nssn Cup of Noodles Ramen Noodles Kraft EZ Mac Ragu Express Lipton Pasta & Sauce Rice/pasta/noodle mixes Tamarind Tree Competitive Structure See Appendix B1

16. 16 Situation – Competitive Set Of the nine categories, six were selected for their point proximity to Bowl Appétit –Hamburger Helper, another General Mills brand, is already a strong offering positioned in the pasta/rice starter category –Non-bowl frozen products were considered inherently similar to frozen bowls Within each competitive category, the product with the greatest market share was selected to define the current product’s competitive set: –Chef Boyardee: Chicken with Rice & Vegetables –Classico: It’s Pasta Anytime –Knorr: Taste Breaks Chicken and Vegetable Soup –Uncle Ben’s: Chicken and Vegetable Rice Bowl –Kraft: Easy Mac –Maruchan: Chicken and Vegetables Noodles

17. IV. Problem Definition

18. 18 Growth Goal –“Generate the maximum level of sustainable growth in shelf-stable, single-serve food product revenues for the next three years.” Options for translation into a measurable objective –Conservative growth (5-15% annually) On par with category growth, achievable with status quo strategy –Strong growth (15-50% annually) Requires development of new marketing strategies –Dramatic growth (50%+ annually) Requires extraordinarily high investment/sacrifices profits Incurs high levels of risk Strong growth is a reasonable goal –Within General Mills’ stockholders expectations of risk –Inferred from project guidelines to develop new concepts Problem - Growth

19. 19 Positioning discrepancies Placement constraints Undifferentiated product Non-loyal customer base Barriers to achieving growth target: Problem - Barriers

20. 20 Betty Crocker “Bowl Appétit” positioning is sending mixed signals –The product is designed to be a convenience product, but the Betty Crocker brand stands for high quality –Singles and childless couples are purchasing the Bowl Appétit, but Betty Crocker is perceived to be a mom/family brand –Advertising messages show families at home, but many purchasers are singles/couples eating at work –Bowl Appétit price point ($1.50) is higher than most of the competition for “snack/light lunch” and lower than most of the competition for “meal/dinner” Problem – Positioning

21. 21 Based on focus group data, the following are word associations for Bowl Appétit: Positive Neutral Negative Salty Cacophony Gross Low Quality GrittyDry Fake Cheese Steamy Bland Small Bites Easy and Cheap Crunchy Round Hot Cheap Mix Flavorful Easy to make Quick Cheesy Fast Home Food Convenient Economical Colorful Fast No worry Spicy Current associations for Bowl Appétit are positive for preparation & negative for appearance/taste Problem – Positioning

22. 22 Positive Neutral Negative The focus group also offers insight on perceptions of the Betty Crocker brand: Current associations for Betty Crocker are positive for eating/taste and mixed for image/preparation Home Cooked Hearty Family Dinner Tasty Hot Savory Sweet Cake Meal Recipe Like mom Unpretentious Industrial Processed Fast Helper Box Long Instructions Children Feminine Old Fashioned Boring Unsophisticated Southern Mid-west Hamburger HeavyBland Dessert Yummy Problem – Positioning

23. 23 Problem - Loyalty Betty Crocker Bowl Appétit isn’t attracting unique purchasers, making the consumer base unstable –Couponing rate is one of the highest in the category Betty Crocker is 22% versus weighted category average of 8% –Betty Crocker users are likely to be heavy purchasers of all types of single-serving pre-prepared meals Betty Crocker users purchase 8.0 single-serving pre-prepared meals per month vs. an average of 6.3 units per month for all consumers surveyed When a Betty Crocker purchase is made, it represents a relatively low percentage of the total category volume purchased on that trip (28% versus a weighted average of 53% for all brands in the category) –Purchasers do not perceive Betty Crocker Bowl Appétit to have any attribute advantages over the other products they purchase.

24. 24 According to the web survey, perceptions of Betty Crocker Bowl Appétit qualities are dominated by other brands Attribute Radar (see Appendix A2.3) Problem - Differentiation

25. 25 Single-serve shelf-stable pre-prepared meals are not located in one aisle of the grocery store, causing consumer confusion Bowl Appétit is often the only product of its kind in the aisle –High risk of cannibalization as new flavors are introduced BrandTypical Aisle(s) Betty Crocker Bowl AppétitMeal Preparation Classico It’s Pasta AnytimePasta Knorr’s Taste BreaksSoup/Instant Meals Maruchan Instant LunchSoup/International Foods Uncle Ben’s BowlsFrozen Chef Boyardee CupsTuna Fish/Canned Food Kraft EZ MacCanned Food Problem - Placement

26. V. Marketing Strategies

27. 27 FASTPREPARATION SnackMealYummyHealthy SweetSavoryHotCold Am I hungry right now? Am I in a rush? When and where will I eat? How do I feel about myself and family? What mood am I in? Situation Thoughts Feelings Satisfaction Requirements Consumers may determine type of food based on logic, but use varying “Motivation-in-the-Moment” to select item Strategy - Buyer Motivations

28. 28 If buyer motivations vary by situation, how do we make product design and marketing choices? –Define segments: determine factors which influence motivation to purchase single-serving pre-prepared foods Segment consumers with like-motivations Demographic characteristics are secondary –Select segments to address –Design strategy to address those factors Product form is a tool for conveying attributes Strategy - Buyer Motivations

29. 29 Consumers tend to be oriented to Taste or Convenience Taste-related attributes are positively correlated with each other, but not correlated with convenience attributes (and vice versa) Attribute segments: Taste-seekers, Convenience-seekers Strategy - Segments

30. 30 Consumers tend to be self-focused or family-focused –Family-focused consumers purchase products with individuals other than themselves in mind ( i.e. spouses, children) –Self-focus consumers purchase for their own consumption only Focus determines behavior patterns –Usage location: Family-focused consumers are less likely than self- focused consumers to use single-serving pre-prepared meals as home-meal replacements –Usage occasion: Family-focused consumers are more likely than self-focused consumers to purchase single-serving pre-prepared meals for lunch (probably because they are more likely to be preparing dinner for multiple people) Women are more likely than men to make food purchases with a family-focus –Focus group data suggests Betty Crocker brand and Bowl Appétit name are less appealing to men Strategy - Segments

31. 31 Which segments should General Mills select? Taste-Seekers (65%) Convenience-Seekers (35%) Self- focused (42%) 25% of consumers, 6.1 units/month Dual singles and couples Dinner home-meal replacement Primarily use at home Higher income / More educated 17% of consumers, 6.8 units/month Dual singles and couples Dinner home-meal replacement Primarily use at home Youngest segment / Lowest Income Family- focused (58%) 40% of consumers, 6.2 units/month Married, families, female Primarily for lunch Eat at home and work Oldest segment / More educated 18% of consumers, 6.4 units/month Married, families, female Snack and lunch usage Eat at home and work Working Moms / Highest Income Strategy – Segment Selection

32. 32 Convenience segments are less of a strategic fit –General Mills portfolio doesn’t include a suitable brand for targeting consumers who seek convenience over taste Launching a new brand is more expensive than making line extensions –Majority of consumers are Taste-seekers –Convenience is a crowded segment (see Attribute Radar) –Would need to compete with offerings with a much lower price point (Maruchan, Fantastic Meals, Knorr) DO NOT FOCUS ON CONVENIENCE Strategy – Segment Selection

33. 33 Strategy - Recommendation Two product lines are recommended to provide coverage of the Taste-seeker segment in order to achieve growth goals Self-focused Taste-seeker Family-focused Taste-seeker

34. 34 Position a product in both taste segments to maximize growth Both product concepts must meet the following criteria: New Improved Betty Crocker Bowl Appétit Progresso Soup Singles Addresses segment needs XX Differentiated XX Vehicle for growth XX Fits core competency XX Fits manufacturing capabilities XX Fits distribution capabilities XX Relevant switching logic XX Retail execution feasible XX Profitable XX Strategy - Evaluative Criteria

35. 35 Lean Cuisine Stouffer’s Chef Boyardee Dinty Moore Fantastic meals/soups Knorr’s Tasty Breaks Spice Hunter Bowl Appétit It’s Pasta Anytime Uncle Ben’s Rice Bowls Healthy Choice Bowls Maruchan Instant Lunch Nssn Cup of Noodles Ramen Noodles Kraft EZ Mac Ragu Express Lipton Pasta & Sauce Rice/pasta/noodle mixes Tamarind Tree Strategy - Competitive Hamburger Helper New Improved Betty Crocker Bowl Appétit Progresso Soup Singles Each product is positioned against different competitors

36. VI. New Products

37. 37 New Product - Concept #1 Product Name & Picture Positioning Target Customers Fit with the Firm Improvements Packaging Distribution, promotion & pricing strategies Financials

38. 38 “New and Improved” Bowl Appétit

39. 39 Dry, shelf-stable product with wet pack for sauces, cheeses, or dressings. Dry pack for Parmesan and herbs. Single-serve bowl of original varieties, with larger vegetables and reduced fat and sodium Portable Microwaveable Self-contained and disposable 16 oz portion (after preparation) Position in aisle next to other Betty Crocker products (Hamburger Helper, Instant Potatoes, etc.) Priced at $1.99 Bowl Appétit - Description

40. 40 Positioning –“New and improved Bowl Appétit is just as easy to prepare, tastes better, and is better for you. A fast, nutritious meal for your family.” Relevance/Consumer Insight –This product targets the family-focused, convenience- seekers by offering a healthful, easy-to-prepare alternative to frozen meals for families…and does so at a lower price. Bowl App é tit–Positioning/Relevance

41. 41 Demographics –Mothers (working and stay-at-home) –Young couples without children Psychographics –Adults with busy lives who care about taste, quality, and health –Willing to pay a small premium for quality ingredients –Time-constrained parents who want to provide children with a nutritious meal Bowl Appétit – Target Customers See Appendix A4

42. 42 Repositioning brand requires fewer resources than brand extension and builds on success of Bowl Appétit Established retail presence/shelf-space with current product Bowl format unchanged in New Product Concept #1 or #2, allowing for economies of scope Leverages equity of Betty Crocker brand as “homemade food” Bowl Appétit – Fit with Firm

43. 43 Bowl Appétit - Packaging “New and Improved” prominently displayed on more colorful packaging Front features very large, fresh vegetables Emphasizes low fat, low sodium on some varieties Continues “Box Tops For Education” promotion Text on back describes quality, natural ingredients, and good taste

44. 44 Establish pricing benchmarks –Competitive price range: $1.50 - $3.50 (frozen), $2.71 (dry) –Consumer willingness to pay for Taste-oriented, Family-focused segment: $3.25 (web survey) –Previous Bowl Appétit price: $1.50 –Estimated costs for product improvements: $.50 or 30% Recommended Price: $1.99 Estimated Contribution Margin: 15% x 1.99 = $.30 Economic Value Calculation $3.41 - $1.49 = $1.92 Willingness to pay - Product Price = Consumer Surplus Bowl Appétit - Pricing

45. 45 Retail –Shelving placement instructions to locate product near other Betty Crocker meal starters Promotion –Maintain marketing mix –Maintain previous level of promotion –Seek “New Product” aisle flags next to product –Select more upscale flavor names to underscore improvement For example: Tomato Basil Pasta with Natural Parmesan Pouch Bowl Appétit - Placement

46. 46 Months 0-2 design package improvements for different sizes and new sauce/cheese/herb packets Months 2-4 support retailer transition to improved product and allow stocking of both items until old stock consumed Month 4 raise price to $1.99 Month 4-6 address any packaging, promotional strategy issues; ensure in-store promotion as “new” product Maintain identical SKUs and varieties Maintain previous level of promotions Bowl Appétit – Roll Out Plan

47. 47 Bowl Appétit - Financials Assumptions 22% of our current customers (those couponing) will not switch to the improved Bowl Appétit. Penetration is therefore: 4.71 (current percentage) *.78 = 3.67 Repeat rate will improve due to emphasis on taste, beginning at current level and reaching competitors’ weighted average in three years

48. 48 Bowl Appétit - Financials Revenues Revenue estimates for the improved Bowl Appétit using base scenario assumptions

49. 49 Bowl Appétit - Financials Sensitivity Analysis 2002 sales sensitivity to each of the assumptions, all things else constant

50. 50 Bowl Appétit – Financials Crystal Ball The table below summarizes revenue estimates for the improved Bowl Appétit, taking into consideration all three scenarios by running 1,000 iterations with Crystal Ball.

51. 51 Competitive Implications New concept is more directly in competition with Classico’s Pasta Anytime (use of sauce packs). Uncle Ben’s could enter the dry single serve meal market. Firm’s handling of competition General Mills is still operating in a new category. The strong Betty Crocker equity and technological hurdles will prevent quick entry in this space. Furthermore, Uncle Ben’s is “rice-limited” (strong equity in rice) and Classico is “pasta limited”. Bowl Appétit can counter competitors by quickly developing a large assortment of flavors in pasta, rice and potato. Competitive Reaction

52. 52 New Product Concept #2 Product Name & Picture Description Positioning & Relevance Target Customers Fit with Firm Packaging Promotional Strategy Rollout Financials

53. 53 Progresso Soup Singles

54. 54 Wet, shelf-stable product Single-serve bowl of soup with plastic seal Portable Microwaveable Self-contained and disposable 16 oz portion Priced at $1.49 New aisle destination for single-serve, shelf-stable General Mills products Soup Singles - Description

55. 55 Soup Singles-Positioning/Relevance Positioning –“The only premium ready-to-eat soup in a single- serving size with its own portable, microwaveable bowl.” Relevance/Consumer Insight –Progresso Singles are an innovation that is consistent with consumer needs: Progresso consumers have busy lifestyles but care about eating well. Progresso Singles adds convenience to a product they already love.

56. 56 Demographics –Young working singles –Young couples, no kids Psychographics –“Taste-seekers” who are “Self-focused” –Young adults with busy lives but who still care about taste, quality, and eating well –Willing to pay slightly more for “freshness” and quality ingredients –Slightly more sophisticated taste than the average soup consumer Soup Singles – Target Customers

57. 57 Core competencies in wet soup category –Utilizes same product as canned Progresso product Economies of scope for packaging and containers –Same bowl as used for Bowl Appétit Strong retail presence/shelf-space in soup Strong brand equities in Progresso Expands aisle locations for single portion, shelf- stable products Soup Singles – Fit with Firm

58. 58 Bowl sealed with reinforced plastic seal Pull tab on plastic seal for easy removal before consumption Sealed bowl packaged in cardboard sleeve Circular window in sleeve shows soup product Packaged for same upright facing as Bowl Appétit Progresso branding Outside packaging emphasizes convenience, short preparation, and portability Soup Singles – Packaging

59. 59 Establish pricing benchmarks –Competitive price range: $.50 - $1.50 (cups) –Consumer willingness to pay for Taste-oriented, Self-focused segment: $3.41 (web survey) –Previous Bowl Appétit price: $1.50 –Progresso Cans $1.50 – 2.19 Recommended Price: $1.49 Estimated Contribution Margin: 15% x 1.49 = $.22 Economic Value Calculation $3.41 - $1.49 = $1.92 Willingness to pay - Product Price = Consumer Surplus Soup Singles – Pricing

60. 60 Soup Singles – Promotion

61. 61 Soup Singles – Promotion Retail –Prominent shelving placement with Progresso Soup –Emphasis on features and displays –Shelf Talk or Shelf Vision to draw in-store interest –Trade allowance for merchandising –Incentive through retail competition/goals –Promotional campaigns Seasonal and holiday

62. 62 Broadcast –National Television Advertising: 15 and 30 second spots –National Radio: 15 second spots Print –Weekly publications: People, TV Guide, Entertainment Weekly, etc. –Monthly publications: Glamour, Premiere, In Style, Cooking Light –Major metropolitan papers, “The Food Section” Other promotional vehicles –Couponing –FSIs –Sponsorships and tie-ins: Winter sports –Billboards & transit Soup Singles – Promotion

63. 63 Soup Singles – Rollout Plan Months 0-6 (in fall winter) rollout product in regional trial markets with strongest market share –Minneapolis –New York –Boston –Chicago –Detroit Month 6-8 address any packaging, promotional strategy issues Months 8-12 rollout national distribution in Grocery retail Months 10-12 rollout national advertising: Television, print, radio Months 12+ rollout distribution in alternate channels (Mass, Club)

64. 64 Soup Singles – Financials Assumptions Single-serve soups are a separate category, and Campbell’s Soups to Go is the pioneer Apply Entrant’s Forecasted Market Share model to estimate 2002 sales

65. 65 Soup Singles – Financials Assumptions For years 2003 and 2004, we use a similar model as the one applied in Concept #1 Because we lacked the information regarding trial and repeat for Campbell’s Soups to Go, we instead used information on Knorr’s and Spice Hunter as a proxy for those rates

66. 66 Soup Singles – Financials Revenues Revenue estimates for the improved Bowl Appétit using base scenario assumptions for 2003 and 2004

67. 67 Soup Singles – Financials Sensitivity Analysis 2003 sales sensitivity to each of the assumptions, holding all other factors constant

68. 68 Soup Singles – Financials Crystal Ball The table below summarizes revenue estimates for Progresso Singles in 2003 and 2004, taking into consideration all three scenarios by running 1,000 iterations with Crystal Ball. See Appendix D1

69. 69 Competitive Reaction Expect swift reaction from Campbell’s, the other major player in the ready-to-serve soup category. May quickly imitate the Bowl concept. Strong quality positioning may delay entry of other soup competitors in this space. Firm’s Handling of Competition Progresso should continue to emphasize its superior quality by stressing its use of superior ingredients (as is the case in the canned category). Competitive Reaction

70. 70 Market Summary

71. 71 Product Summary Strong growth goal achieved -The 2 new concepts have limited overlap (as the previous slide demonstrates) -The new Bowl Appétit is positioned in the meal category -The Progresso soup single is positioned in the meal category

72. 72 Appendix A - Data Collection: Consumer Insight Sources A1 Focus Group A1.1 Process A1.2 Questionnaire A1.3 Results A1.4 Focus Group Conclusions A2 Market Structure Web Survey A2.1 Process A2.2 Questionnaire A2.3 Results A2.4 Web Survey Conclusions A3 Secondary Data: Nielson Panel Data A4 Secondary Data: Nielson Psychographics Appendix

73. 73 Appendix B - Competitive Set B1 Base Information to Construct Competitive Structure chart Appendix C - Concept/Product Development C1 Rejected General Concepts which did not deliver strategy C2 Rejecting Convenience as a strategic alternative C3 Rejected Brand Concepts for Taste-seeker Self-focused segment Appendix D – Financial Models Rejected D1 Other Financial Models Considered Appendix

74. 74 Data Collection: Three sources were explored to provide consumer insights –Focus Group –Market Structure Web Survey –Secondary Data: Nielson Panel Data A1 Guideline to Data Collection Return to Presentation

75. 75 Purpose: Lacking information on consumer insights and psychographics for the product and category, we hosted a focus group in order to assess consumer perceptions on the following attributes: –Experiential perceptions: Taste, texture, aroma, consistency, quality –Price –Imagery: Feelings, perceptions, associations –Convenience –Name: Appeal, appropriateness, universal understanding of “appetit” –Packaging: Color, attractiveness, size –Portion size: Satisfaction –Consumption habits: Eaten alone or with accompaniment –Health/Nutrition: Healthy choice, sodium concerns, fat –Appeal of other potential product attributes A1.1 Focus Group: Process

76. 76 A1.1 Focus Group: Process Objectives: Through this focus group, we sought to ascertain information both specifically on Bowl Appétit, as well as on competing products: –Specific to Bowl Appétit: Target consumer information –Demographics –Psychographics –Usage occasion Key consumer insights/Relevance Unmet consumer needs –Because of Bowl Appétit’s unique competitive grouping, among the competing products in the overall category, we were most interested in collecting and comparing information on specific taste attributes, and the relationship between value to quality in consumer minds.

77. 77 A1.1 Focus Group: Process Assumptions and Cautions Against Data Bias: –Participants were able to prepare only the Bowl Appétit product themselves; other sampled products were served and preparation instructions described to them. –Due to limited resources, focus group participation was limited to 8 individuals of different gender, age, family size, and economic background. –Ethnicity, geographic representation, nor lifestyle factors were taken into consideration of focus group content. –Participants were allowed to select, prepare, and sample Bowl Appétit varieties of their choice.

78. 78 A1.1 Focus Group: Process Due to the lack of direct competitors, we sought to test products with the following shared attributes: –Single-serve portion size appropriate for similar meal occasion –Convenient preparation –Hot meal –Similar retail availability –Forms in either pasta, rice, or potatoes –Brand name Products from each of the competitive groupings were included in our focus group: –Noodle cups –Add-water cups –Microwave cups with meat –Microwave multipacks –Frozen –Vacuum-packed, shelf-stable

79. 79 A1.1 Focus Group: Process Within each competitive grouping set, the product with the greatest market share was selected to be tested in the focus group: –Chef Boyardee: Chicken with Rice & Vegetables –Classico: It’s Pasta Anytime –Knorr: Taste Breaks Chicken and Vegetable Soup –Uncle Ben’s: Chicken and Vegetable Rice Bowl –Kraft: Easy Mac –Maruchan: Chicken and Vegetables Noodles

80. 80 A1.1 Focus Group: Process GENDERAGEOCCUPATIONMARITAL STATUS Female19StudentSingle, no children Female27WorkingSingle Female46WorkingSchool-aged kids Female60HomemakerMarried, adult children Male23StudentSingle, no children Male33WorkingSingle, no children Female44HomemakerMarried, teenage kids Female34WorkingSingle, school-aged kids Male26StudentMarried, no kids Focus group participant profiles:

81. 81 A1.2 Focus Group: Questionnaire TASTING FOCUS GROUP FOR BOWL APPÉTIT9/11/01 I) Before Tasting the product 1) Are you (please circle)? FemaleMale 2) Age: _____ 3) Do you usually purchase prepared meals (frozen or dry)? Yes No How often (per month) ____ 4) Have you ever purchased Bowl Appétit?YesNo How often (per month) ____

82. 82 II) Chose your selected variety of Bowl Appétit 1) What type of Bowl Appétit did you select (please circle)? Pasta RicePotato 2) What is your taste expectation for this product (graphic grade between 1 and 7 provided in the actual survey on each criteria)? 3) Is your taste expectation influenced by the General Mills brand name? 4) Is your taste expectation influenced by the Betty Crocker Brand name? 5) Do you like the packaging of the product? Comments on the Packaging of the Product: ____________________________________ ____________________________________________________________________________ A1.2 Focus Group: Questionnaire

83. 83 III) Please start tasting 1) How do you rate the taste of this product (graphic grade between 1 and 7 provided in the actua survey on each criteria)? Comments: 2) Please a grade between 1 (bad) and 7 (excellent) for the following attributes: -Aroma __ -Texture __ -Quality -Satisfying/Filling - Portion size 3) Was the overall experience (please circle)? -Better experience than expected -Just as expected -Worse experience than expected 4) What words do you associate this product with? ____________________________________ A1.2 Focus Group: Questionnaire

84. 84 IV) A little evaluation 1) Would you consider this product to be? - A Lunch entrée - A Dinner entrée - Side dish - Snack - A treat 2) Would you use this product?-At Home -At the office/School -Both at home and at the office/school -Never 3) After tasting this product would you purchase it in future?YesNo If Yes, would this product be an alternative to (circle all that apply)? -Home cooking -Take-out -Getting fast food A1.2 Focus Group: Questionnaire

85. 85 What would be the main reasons for your purchase (please rank 1= top reason)? - Taste __ - Convenience _ - Easy to prepare __ - Other (please specify) _ What price range would you consider this product to be good value for money ( circle all that apply) -Less than $1 -$1 to $1.50 -$1.50 to $1.99 -$2 to $2.50 4) How would you improve the product? ____________________________________ ____________________________________________________________________________ A1.2 Focus Group: Questionnaire

86. 86 V) Please taste the comparative products (fill in the following perceptual maps) A1.2 Focus Group: Questionnaire

87. 87 Bowl Appétit Preparation: All the panelists prepared their own meals. Most felt that it was very straightforward. However, one panelist felt that the plastic film was not very easy to remove completely before cooking. Taste: 3 of the 9 panelists chose a rice variety. All three felt that the rice was undercooked. 5 to 6 felt that the product was too salty. Most panelists felt that the sauces were not very creamy and that the meals were rather dry. The moms concluded that this product was not very suitable for their children. They were particularly concerned with the lack of “good” ingredients, such as vegetables. Price: The panelists did not object to the $1.89 price. Return to Presentation A1.3 Focus Group: Results

88. 88 Chef Boyarde The product is considered to be good value at 99 cents. The positives are the presence of meat and big chunks of vegetable (identifiable portions). Most considered this product to be more healthful, less salty than Bowl Appétit, and better value for the money. However, consistency is a problem. It was considered to be slimy and “snotty”. The consistency, between a rice meal and a soup, was deemed unacceptable. When asked to describe the clear sauce, on participant described it as “goop.” Conclusion: Taste OK, Poor Consistency. Return to Presentation A1.3 Focus Group: Results

89. 89 Maruchan Instant Lunch (Roast Chicken flavor) Price seems to be the main selling point at 34 cents. Considered too salty. A panelist said that it was perfect for the moments when she craved noodles and salt. The pieces of roast chicken were considered “gross” and compared to pieces of “sponge”. Mothers considered the meal not healthy enough for their children (too many preservatives), although they felt that young teens could have fun with these “slurpy” noodles. 3 panelists said it was “too hot” and one burned her tongue. Although the consensus was that the meal was “very salty”, 2 out of 9 panelists felt that it was less salty than the Bowl Appétit. Packaging was considered to be very bland and reflected the nature of the food. Conclusion: OK when you need cheap food, but considered to be a very inferior product. A1.3 Focus Group: Results

90. 90 Uncle Ben’s frozen meal The packaging is considered attractive. Two panelists loved the orange color and felt that the product would be easily identifiable in the store. They recognized the co-branding with “Tyson’s chicken” as a sign as quality. A panelist felt that the “98% fat free” and the “6 minute preparation time” flags were very visible. The handles were deemed very convenient for preparation (much more so than for the Bowl Appétit bowl). Panelists felt this was a superior product in taste and quality of ingredients. All 3 moms felt that this was a product that they could give their children, because it seemed healthy. They felt that the chicken tasted as it should and had the right consistency. Unlike the previous products, salt content was not an issue. The product was only slightly less convenient than Bowl Appétit because it is frozen. A1.3 Focus Group: Results

91. 91 Uncle Ben’s frozen meal, continued Most panelists felt that the $4.89 price was very high; too high for the moms in the room to consider this product for their family. One mom suggested that she would buy the product for herself and serve “Bowl Appétit” to her children so they would think that they were all eating the same thing. Uncle Ben’s frozen meals initiated a debate on different brand association. Four panelists felt that the “Betty Crocker” name was associated with desserts and was inappropriate for a meal product. Although associated with feminine imagery, the men did not feel that this would prevent them from purchasing the product. Conclusion: The product is attractive. It has convenient packaging and great brand associations. The high price seems justified by the superior taste and quality of the product, but is not acceptable in a household with children. A1.3 Focus Group: Results

92. 92 Knorr Taste Break This product was considered to be a cheaper alternative to Campbell’s or Progresso soup. Its $1.19 price was a little too high for most panelists Men described it as being very ordinary, bland, “soup without substance”. The young urban male professional in the group described it as tasting like “cardboard”. Two ladies went so far as to say that they liked the “chicken broth” taste. One mother said that she would definitely not purchase the product because it contained MSG. The consensus was that the packaging was very unattractive. One panelist said that he would have expected chlorine tablets in this type of packaging, not soup, as it did not even feature the product. Conclusion: Knorr Taste Breaks has many of the attributes linked to the Maruchan product; it’s cheap and easy. All panelists said that it should be priced at less than $1. A1.3 Focus Group: Results

93. 93 Kraft EZ Mac There was a strong connection emotional connection with panelists to this product. All fondly associated this product with their childhood. Unlike the other products, all the panelists were familiar with the product. Four had purchased it in the past and judged that it was very close in taste to the original “Mac&Cheese”. While recognizing that this product was very familiar, or “extraordinarily ordinary,” the panelists liked the product. The mothers felt that it was OK to give this product to their children. Single people associated it with “comfort food”. The product was not deemed much more convenient than the original Mac&Cheese. The moms felt that this was a good product that their children could prepare for themselves, provided they were old enough to handle the microwave. The mothers of the older children thought that the portion might be too small for teenagers. The $3.50 price was deemed a good value for the money. Panelists did not indicate a preference for having the product sold in individual pouches. In fact, they liked the single pouch serving system. Conclusion: The product met consumers’ expectations and is good value for the money. The product seems especially suited to families with school-aged kids and is considered by moms to be a staple. There were few perceived differences between this product and the traditional Mac&Cheese. A1.3 Focus Group: Results

94. 94 Classico’s Pasta Anytime Most people liked the taste and the consistency of the pasta. Three people did not like the sweetness of the sauce. Moms felt that this was an acceptable product to give their kids. Interestingly, the attractiveness of the package seems to have an impact on the “health” perceptions of the product. The packaging conveyed ideas of superior quality and positive health attributes. The green color is considered to be a “turn on,” and an incentive to purchase it. Panelists agreed that this was a dinner entrée, “It’s not ‘Pasta Anytime’ but pasta for dinner”. At $3.50 this was considered to be an up-scale product, and not particularly suited to large families. Conclusion: Very good rating on taste for a shelf stable product. The exceptional feature, however, was the attractiveness of the packaging. A1.3 Focus Group: Results

95. 95 Overall Focus Group Conclusions Possible new flavors for the Bowl Appétit: –Sun-Dried Tomato flavor –Rice Pilaf –Turkey Stuffing meal –International flavors –Kid’s flavors Moms were very concerned that the food that they prepared for their kids was “healthy”. They were concerned about salt content and the presence of potentially harmful ingredients, such as MSG. All the panelists had strong pre-conceptions about the “Betty Crocker” name brand. The brand is less associated with the idea of a meal, but rather of dessert. This brand seems to have very strong polarizing effects on people. The product’s packaging has an impact on the panelists’ perception of its health attributes. A1.3 Focus Group: Results

96. 96 A1.3 Focus Group: Recap

97. 97 A1.3 Focus Group: Recap

98. 98 Focus Group Low taste expectations before tasting the product. Not considered a dinner item, but appropriate for lunch or a snack Taste is only 3 rd motivator for purchase. Convenience 1 st Ease of preparation 2 nd Betty Crocker has associations with “desserts” category among participants A1.4 Focus Group: Conclusions

99. 99 Objective - To uncover usage patterns and consumer perceptions about the product attributes in the single-serving pre-prepared food category Methodology – Web survey –Speed of delivery, collection, and tabulation of results –Ability to reach a wider range of consumers across geographies, ages, Survey Biases - –Non-representative sample Forwarded to our family and friends Polled internet users only Over-delivered high income, high education and younger consumers Over-delivered certain geographies (New York, Los Angeles, Durham, Kansas) –Small sample size (117 responses) makes some of the data unstable A2.1 Web Survey: Process

100. 100 Invitation to participate was sent via email Respondents accessed survey via link to web site First page displayed was a screener page: A2.2 Web Survey: Questionnaire

101. 101 A2.2 Web Survey: Questionnaire General usage data collected for all participants who purchase single- serving pre- prepared meals

102. 102 A2.2 Web Survey: Questionnaire Respondents ranked the importance of product attributes on a five point scale

103. 103 A2.2 Web Survey: Questionnaire Purchase levels collected for seven products: Betty Crocker Bowl Appétit, Classico It’s Pasta Anytime, Knorr Taste Breaks, Maruchan Instant Lunch, Uncle Ben’s Rice Bowls, Chef Boyardee Cups, and Kraft EZ Mac

104. 104 A2.2 Web Survey: Questionnaire Repondents who purchased each product (ranked 3 or 4 on the previous question) were asked to rate the product on the attributes

105. 105 A2.2 Web Survey: Questionnaire Page displayed only to respondents who answered “no” to screener question

106. 106 A2.2 Web Survey: Questionnaire Respondents could still submit the survey even if they failed to answer some of the demographic questions

107. 107 A2.2 Web Survey: Questionnaire Respondent data tabulated only when entire survey was completed

108. 108 Analysis – –Need-based segments for the category were identified – correlated attributes were used to determine segments –The competitive landscape was mapped against each attribute to create a profile of the market –Brand usage patterns were uncovered for each competitor including willingness to pay, purchase volume, and usage occasion & location –Segment profiles were created including usage data and demographics Unreadable Results – small sample sizes –Data on purchase location was not stable due to minimal responses for locations other than grocery stores –Presence of children in the household was used in aggregate rather than segmented by age –Non-purchaser data was unreadable due to low response –Level of response was inadequate to separate perceptions based on awareness level –Gender identification omitted (oversight) A2.3 Web Survey: Results

109. 109 Return to Presentation A2.3 Web Survey: Results

110. 110 Attribute scores for single serve meals A2.3 Web Survey: Results

111. 111 Consumers can be grouped based on their product attributes priorities Consumers demand a sufficient level of all attributes Taste and convenience are the most important attributes A2.3 Web Survey: Results

112. 112 A2.3 Web Survey: Results

113. 113 A2.3 Web Survey: Results

114. 114 Surveys People who care about convenience, do not necessarily care about taste, and vice-versa Consumer attribute ratings for Betty Crocker Bowl Appétit are dominated by ratings for competitive products Consumer willingness to pay ranges from $2.82 to $3.61 Betty Crocker Bowl Appétit is used by heavy users of single-serving pre-prepared meals Usage occasion and location choices vary by brand A2.4 Web Survey: Conclusions

115. 115 A3 Nielsen - Demographics Return to Presentation

116. 116 A3 Nielsen - Demographics Current customers are young singles, childless younger couples, and middle-aged childless couples

117. 117 A3 Nielsen - Demographics

118. 118 A3 Nielsen - Demographics

119. 119 A4 Nielson Psychographics Return to Presentation

120. 120 Return to Presentation B1 Competitive Analysis

121. 121 B1 Competitive Analysis

122. 122 Concept ideas generated which did not fit the marketing strategy: Kid bowl Int’l Brand Vending machines B’fast Bowl Add spoon New flavor Cup pkg Addresses segment needs XXXX Differentiated XX Vehicle for growth XXX Fits core competency XXXXXX Fits manufacturing capabilities XXXXXX Fits distribution capabilities XXXXXX Relevant switching logic XX Retail execution feasible XXXXXX Profitable XXX C1 Rejected Concepts

123. 123 BrandProsCons Green GiantFlexible, aisleFreshness is core equity ProgressoFlexible, aisleSoup, wet, all about taste JenoFlexible (unknown)No brand equity, Italian LloydsLimited flavors, meat El PasoConvenience, aisleMexican only Gold medalFlour only Hamburger HelperStrong brandNot convenient (“helper”), meat General Mills does not have a brand that stands for convenience as a priority over taste Return to Presentation C2 Convenience Brand Analysis Exploring the possibility of launching a product in the Convenience-seeker segment

124. 124 All General Mills brands were analyzed to select the best brand to launch the new Self-focused Taste-seeker product For example: –Old El Paso: Brand equity restricts offering to Mexican dishes. –Kids Delight: Very crowded space; competitors would aggressively defend an entry into this segment. –Small Planet: Organic foods (and the associated high costs) may be ill- suited for a mass product. –Green Giant: The brand equity is based on freshness and does not marry well with the concept of a dried product. –Olive Garden: Same problem as Old El Paso, restrictions on the types of varieties that could be offered. C3 Rejected Brand Concepts

125. 125 D1 Other Financial Models Considered Bass Model No real innovation. There are already many players in the category. We did not count with historical data for sales to run the regression Decision Model for Product-line Additions We did not have information about costs "Entrant's Forecasted Market Share" model Not applied to the improved Bowl Appétit given that there were already many players and had no information regarding time to entrance (which was pioneer, which second entrant…) Return to Presentation