Question

MARKETING RESEARCH

The principal activity of General Mills is to produce and market packaged consumer food products. The products include cereals, desserts, flour and baking mixes, dinner and side dish products, organic products, snacks, beverages and yogurt products. The products are sold under the brand names namely: Cheerios, Wheaties, Lucky Charms, Total, Chex, Pillsbury, Haagen-Dazs, Betty Crocker and Bugles. Wal-Mart Stores, Inc. is one of the major customers of the Group. As of 2005, the company operated in the United States, Canada, Latin America, Europe and Asia/Pacific.

In order to determine the impact of an important strategic move, such as lowering prices or introducing new products, General Mills uses marketing research. General Mills ran into problems when a pesticide panic hurt sales and private label makers started to cut into their market share. Store brands have become increasingly popular with consumers. Store owners took advantage of cereal prices of up to $5 per box, resulting in increased market share for the store brands. At least one cereal maker, Quaker Oats, started making a house brand version of its cereal. Quaker’s lower priced-bagged-copies of leading brands have grown rapidly and advanced Quaker’s market share to over 10%. Ralcorp Holdings Inc., the leading maker of private label cereals, expects the trend of house or private brands gaining increased market share to continue, since only about half of the leading cereals have private label competition. Ralcorp expects to gain a larger portion of the market as it continues to introduce more imitations. Some industry experts believe that unless the big brand name cereal prices are cut, or the promotions increased, this trend will continue.

In order to address this problem, General Mills conducted problem solving research to determine what, if any changes they should make to their price and promotions strategy. In order to determine the effects of changes, consumer surveys were undertaken followed by test marketing. The results of General Mills test markets suggested several pricing and promotional changes that would help increase their success. General Mills cut prices on several of its cereal lines. Along with this price reduction, General Mills cut its coupon and promotion budget in an effort to halt spiraling costs and to reduce the price gap between General Mills’ products and the competition, which had been as high as 25% in the past.   

In addition to lowering prices, General Mills launched sweetened cereals to capture the aging baby boomer market. In January 2005, the company introduced Fiber One Honey Clusters, which has slightly sweetened flakes instead of the original Fiber One’s fiber twigs. This introduction was based on the belief that if a product does not taste good, it does not matter what the nutritional benefits are. It is not going to be a success. The sweetened cereals have also helped to insulate General Mills from price competition. Private labels are less likely to knock off the sweetened brands, either because they are too narrowly targeted at market niches or because store labels cannot compete with the hefty marketing budget of General Mills. These moves have increased General Mills’ sales and profits. The strategy of consistently low prices and introducing niche products, supported by marketing research, is paying high dividends for General Mills.

Questions

2.              If General Mills decides to conduct causal research to determine the effects of the "Fiber One Honey Clusters' flavor" on demand for cereals by baby boomers, what type of true experiments would you advise them to design? why and how? . (20 points -200 words approx.)

ASAP PLEASE!!!!

Answer 1

The type of research to determine the effect of" fibre one Honey clusters flavour on-demand" for serials by baby bloomers the type of through experiments that should be designed are -
1. There is a general belief that , if a product does not taste good it does not matter what the nutritional benefits are it is not going to the success" keeping in mind this. The company should conduct a taste survey of the product. If the taste is liked by the people the product can be launched otherwise it has to make changes.
2. The type of packaging also has a effect on the sales of any product. So in order to make the product success the companies Packaging of the product must be such that it not on the attracts the kid but also looks good to the parents of the the baby boomers. Packaging plays an important role in the final decision making of purchase of the product.
3. The price of the product should be also experimented. A proper experiment should be carried out to determine whether the parents are ready to pay the price finalized by the company to purchase the product.
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