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Giant Consumer Products (Gcp)

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| Giant Consumer Products (GCP) | | |

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A. Situation Analysis:
1. Context: In early September’08 Giant consumer Products, Inc. (GCP) realized that Frozen food division, which had been growing at 2.8% (compounded annual growth) rate since 2003 to 2007 and accounted for almost 33% of GCP’s overall business volume, is not doing well now. The sales as well revenue volume is around 3.9% behind the target. Most specifically marketing margin (key parameter for GCP business) was also under plan by 4.1%. GCP had been doing well in wall-street but performance of past couple of quarters has increased the worries of GCP i.e. whether GCP will able to maintain its profitable growth.
GCP is expecting FFD to deliver the sufficient …show more content…

B. Evaluation of Strategic alternatives: According to the current position of the sales volume of the various FFD products, we evaluated various options to meet the 2008 FFD annual plan. The few of the alternatives are:

i. Promote only DinardoTM-32 ii. Promote only DinardoTM-16 iii. Promote only The Natural MealsTM product iv. Promote either of DinardoTM & The Natural MealsTM

The key points in evaluating the above mentioned strategies are: a) ROMI – Return on marketing investment should be greater than Zero. b) Marketing Margin – It should also be greater than Zero and close to the planned annual target. It also accounted the cannibalization of other FFD products, while promoting one particular product. c) Gross Margin, Marketing Margin %, Net revenue of the entire FFD product Dinardo-16, Dinardo-32 & “The Natural Meals” should also be close to the planned annual Target.
Analysis of the alternative strategies based on the above parameters: * Our analysis shows that the ROMI of DinardoTM-32 & DinardoTM-16 are negative, which indicates that the incremental profits gained by promoting either of these products are less than the cost of their promotions (Please refer Exhibit-6). Our analysis also shows that there is a heavy cannibalization among both DinardoTM brands (Please refer Exhibit – 7). * We also analyzed the sales figures of other DinardoTM (8 & 6 ounce) products over

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