Swot Analysis
Strengths
- Established brand name
- Each Business unit has measurable and well-defined goals
- Appreciates accountability
- Gigantic Revenue
Weaknesses
- Quiet rigid organizational structure
- Not flexible enough, being an FMCG company
- The difficulty in applying cross functional team based approach
Opportunities
- Huge market, full of potential
Threats
- Competitors
- Consumer buying trends
Problem Statement
The case basically deals with the major strategic issues which a company faces in developing and implementing a sales promotion strategy which includes the brand equity erosion, cannibalization, forward-buying, consumer stockpiling and pass-through. Additionally, this case provides a chance to use purchase data related to retail scanner and based on the ROMI, a best solution, feasible from both the financial and strategic perspective has to be recommended.
Alternatives
D32
- Inexpensive way to feed (huge sales) (+ve)
- High product quality (+ve)
- Successful brand (+ve)
- It has 2nd best marketing margin of 42% (+ve)
- It has the bit low marketing/lb of 87%, ranked at 2nd among the 3 options
- It has the weakest gross revenue of 210% among the three options (-ve)
- It also has a lower 55% gross margin, as compared to the other two options (-ve)
- It has the lowest ROMI of 37% (-ve)
D16
- Solution for two people (+ve)
- High product quality and easy to prepare (+ve)
- Successful brand (+ve)
- No issues related to price because of being niche
- It has the lowest marketing margin of 33% (-ve)
- It has the lowest marketing/lb of 78%, ranked at 3nd among the 3 options (-ve)
- It has the 2nd best gross revenue of 240% among the three options (+ve)
- It also has a 2nd best 111 % gross margin, as compare the D32’s (+ve)
- It has the highest ROMI of 124% (+ve)
Natural Meals
- 25% contributor in the entire FFD’s revenues
- Health conscious customers (+ve)
- Great product quality (+ve)
- Successful brand (25% alone contributor in less time) (+ve)
- It has highest marketing margin of 48% (+ve)
- It has the strongest marketing/lb of 139%, ranked as 1st among the 3 options (+ve)
- It has the highest gross revenue of 290% among the three options (+ve)
- It also has a higher 178% gross margin, as compared to the other two options (+ve)
- It has the low ROMI of 76% as compared to the 124% of D16
Identification and Brief Description of Rating Scale
| 4.0 à | Best ROMI |
| 1.5 à | High |
| 1.0 à | Middle |
| 0.5 à | Low |
The score 4 represents the best score, which is only given to the category who possess a best ROMI among the three options. Now the elements like marketing margin, gross margin, gross revenue and marketing margin/lb has been equal rating of 1.5 maximum, 1 for middle or average value and 0.5 for the lowest. Since ROMI has the extraordinary importance for any company, therefore it has been rated quite high for best quantitative outcomes.
Decision Grid
|
Maximum Points |
Dinardo's 32 |
Dinardo's 16 |
Natural Meals |
|
| Marketing Margin % |
1.5 |
1 |
0.5 |
1.5 |
| Gross Revenue/lb. |
1.5 |
0.5 |
1 |
1.5 |
| Gross Margin/lb. |
1.5 |
0.5 |
1 |
1.5 |
| Marketing Margin/lb. |
1.5 |
1 |
0.5 |
1.5 |
| ROMI |
4 |
0 |
4 |
0 |
| Total |
10 |
3 |
7 |
6 |
This case is all about selecting the best category for promotions. Every company spends money on marketing with an aim to get an exceptional return on its investment. In this case return on marketing investment has a major role to play because Giant Consumer Products has to take a decision that in which category they must go for maximum promotions so that they could achieve the maximum rate of return.
Recommended Option
Dinardo's 16 (D16) looks the most favorable option among all three. Although its marketing margin of 33% is low as compare to the natural meals and even D32. Moreover D16’s gross revenue/lb of 240% is lower the gross revenue/lb of natural meal category, but it is quite better than the D32’s gross revenue/lb. The marketing margin of D16 is 33%, which is the lowest among all the three, but even this element cannot be the final justification for recommending any category at this stage. D16’s gross margin/lb of 111% is at the second rank among all the three categories which is somehow acceptable in comparison with D32. Marketing margin.lb of 78% is the lowest among all. The element which has the vital role to play in this regard is the return on marketing investment because after doing....................
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