Case Analysis Campbells IQ Meals

1. Case background
As a once market leader in the soup manufacturing industry with over 75 per cent market share in
1990, Campbells effort in seeking continual business growth in the relevant market sectors and
closely linked businesses was without question an encouraged trail. Its decision to enter into the
production and promotion of food products with medical benefits seemed to be a smart strategic
change based on two major evident: geographical trend and business closeness. On one hand,
provided the fact that 58 million American people having some form of cardiovascular disease and
16 million having diabetes, such geographical trend actually indicated great market opportunity for
food products with medical benefits; and on the other hand food line with medical purposes still
would be in the food industry which could inherit the companys core competitiveness. In the
following reasons behind the unsuccessfulness of the new food line would be discussed.
2. Problem analysis
2.1 Negligence of product life cycle
Figure 1 The product life cycle theory
One major reason behind many new conceptual products failure is the negligence of the theory
product life cycle which results in the inability to market a new product successfully in the beginning
stage. As we know from the product life cycle, a typical product or service could begin with its
introduction to the marketing, growth, maturity to its decline or reduce in demand in the market.
Together with the different stage is the varied performance of sale. In another word, it takes time for
the market to generate the sufficient market base to support the profit-making sale, in particular for a
new product to enter into growth or maturity stages. As in the case of the Campbells IQ Meals, the
market in the 1990s in the US should have the potential to accept the foods with medical purposes
but market potential is not equivalent with sufficient and mature market base to support project
making new products. Therefore one probable reason behind the unsuccessfulness of the new
product line with medical benefit was the company / managements negligence over the new
products taking time to mature in the actual market.
2.2 Inability to meet the continual customer needs
From the fact that many of the customers who had enjoyed the medical benefits from the new
product line finally turn away from the companys offering because of being tired of the same nine
meals repeating over and over again. Even from our daily life experience we can learn that it is over
demanding that a normal person would like to have different taste of food over time though his or her
choices may be restricted because of having certain kind of diseases. Therefore, the inability to
perceive the demand information from the customers as well as researching the customer behaviors
and preference certainly contribute to the market failure of the new product line with medical

purposes. Here one major wrong assumption that the company / management could have made is
that they were serving patient rather than customers.
2.3 Inappropriate pricing strategy
With one week sample pack of the new product line priced at US $80 and recommended plan priced
US $700, another major reason behind the failure of the new product line is the inappropriate pricing
strategy. The rationalization is like this: assume that the company had expected great business
potential from the new product line, then it must target at the large population which concern their
health a lot (e.g. the large population of diabetes patients); and by targeting such large populations
the company had to price their products at reasonable level which could be accepted by the majority
of the families. But with the fact that many of the ordinary families would find the pricing level of the
new product line costly or too high, the company obviously was adopting a seriously wrong pricing
strategy to pricing the product too high though the company had a number of reasons to add various
cost into the prices of the final products.
3. Suggestions
3.1 Develop different strategies over different product life cycle stages
One strategy related to the product life cycle theory is to advise the management to enact different
business and marketing strategies during different product life cycle stages. For instance, the
company / management could have warned the investors that the new product line of food could take
a certain period of time to mature and contribute to the desired business growth.
3.2 Product line variation in features such as taste
From the lesson that many of the customers who had enjoyed the medical benefits from the new
product line finally turn away from the companys offering because of being tired of the same nine
meals repeating over and over again, one main strategy that could have been adopted by the
management of the company is that the company should timely differentiate the product offering by
providing different provision of product feature combinations. To be detailed, different tastes of the
same product offering could be added into the product line to increase the customer choices and
keep the product attractive to the existing customers.
3.3 Adjusting the product and pricing strategies
With the conclusion that by targeting such large populations the company had to price their products
at reasonable level but the pricing level of the new product line was found to be too high for most
families, the company should have adopt consistent product and pricing strategy that at anytime are
in accordance with the product positioning. With the clearly positioning at the common families, the
products should be developed and manufactured at a controlled cost level by adopting relevant
product strategies such as packing design and also the products should be priced competitively

compared to the similar product offering to ensure that its price strategy would include its targeted
customer groups.
4. Concluding remarks
From the analysis above we can see that the company started with an excellent business opportunity
but due to some strategic mistakes, the product line with medical benefits finally turned out to be
marketing / business failure which should had been avoided by adopting some strategic changes
and some of these changes are mentioned above.