BRANNIGAN FOODS

Marketing Metrics 2

Section 1 – Group 19
Name FT Number
Adaveni Sandeep FT193004
Ahmad Zaman Safvi FT193005
Aindril Deb Roy FT193006
Akash Bias FT193007
Srujan Kumar Rajuri FT191091
Brannigan is a company that has been operating for over 100 years. It has a Soup Division which
has experienced a decrease in its profitability and needs to create a new strategy to stop the
declining sales and market share it has been experiencing. It is important to highlight that the
soup division is the cash cow (according to the Boston Consulting Group product matrix) of
Brannigan Foods, reaching up to 40% of the company’s total sales.
The most profitable product category this division has is the Ready to Eat Soups (RTE), which
accounts for a total of 71% of the total revenues, ($210MM in total). The Soup Division has other
product and brand segments such as: Dry Soups, Healthier Soups and the Fast & Simple Meals.
Five years ago, a soup company named Anabelle was acquired to broaden the range of products
offered by introducing the Fast Meal category, and the strategy that has been followed during
the past few years has been to strongly invest in Dry Soups, Healthier Soups and the mentioned
Fast Meals.
Regarding brand awareness and value perceived by customers, Brannigan is behind competitors
in the following aspects:
• Health trends
• Diet claims
• Convenience offerings
• Flavours – especially popular regional ones
• Seasonal products outside of cold weather
For retailers the company doesn’t seem innovative nor profitable.

Problem Statement:
Brannigan Foods was facing a downfall in the profits because of the declining sales of soup
industry. The company was facing a reduction in profits and hence there was a decrease in the
market share. Bert Clerk, VP and GM of Brannigan Foods had asked four of the managers working
under him to suggest on how to improve the profitability for which he received 4 responses, one
from each manager.
Now Bert has to decide which of the four proposed alternatives must be adopted to reverse the
steady decline in the last three years. He has to move the division’s growth back to 3-4% at the
end of the year.
SWOT Analysis
Strengths

 Market Leader
 Well-known Brand
 Loyal customer base
Weakness

 Low health quotient

 Declining profits
 Dis-integrated framework
Opportunities

 New variety
 Cater to health quotient
 Improved retail network
Threats

 New entrants
 Deli shops
 Shift in customer loyalty

Analysis of the four Alternatives

Alternative 1 – Invest in growing sectors
The first alternative was proposed by the category Manager Mr. Srikanth Tipha where he
suggested to increase the investment in advertising and promotion which would in turn help
increasing the sales. This strategy was aimed at long term profitability and hence the company
would not face any profit increase next year. However, according to Srikanth, this strategy would
stop the declining sales.
Advantages:

 The proposed strategy is in synchronization with the existing strategy

 Helps in promoting the nutrient value of the soup which was in line with the customer’s
changing expectations
Disadvantages:

 Under valuates cash cow which accounts for 40% of sales

From the calculations below, it is clear that the net earnings decreases with the proposed plan.
Hence it is recommended not to go ahead with this strategy.

Alternative 2 – Acquire product lines to complement the core in growing sectors

The second alternative suggests that the company should acquire a firm in the similar industry to
extend its product line. Claire Mackay, director of Finance and planning proposes to buy out
smaller companies to enter healthier and convenient segment that has new flavours.
Advantages:

 Less investment in research and development

 Low risk of cannibalization
Disadvantages:

 Uncertainty of future
 Exemplified by previous acquisition of Anabelle
From the calculations below, it is clear that this strategy isn’t profitable either. We see a 7 percent
decrease in the net earnings per year
Alternative 3 – Investment in organic growth from internally developed new
products
Anna Chong, Chief Innovation Officer has a different perspective of the situation and suggests
investing in Research and Development along with sales promotion and advertisement. She
recommends that it is best to first ‘Milk the cash cow’ and then subsidize the investment on the
‘Star Products.’ According to Chong, developing products internally was far less cheap and more
profitable than acquisition of a smaller company.
Advantages:

 Increase product line

 Addition of products in RTE would lead to additional profits
Disadvantages:

 Only 1 out of 10 new products are usually a success

 Its contrary to reducing shelf space
The calculations below show that the net earnings still does not increase. Rather it decreases by
around 2%. Hence this also is not a feasible solution from a financial standpoint.

Alternative 4 – Invest in Core

The director of Marketing and Sales, Bob Pugh, suggests to increase investment in marketing by
20 Million to increase the brand awareness and restore it to previous status. He proposes a 5
cent cut in RTE soups and 22 million investment in capital to enhance the efficiency of
manufacturing plants.
Advantages:

 Focus on core products

 Reduce risk factor
Disadvantages:

 Risk of affecting brand image due to reduction in price

 Huge investment required to increase the efficiency of the machine

Thus we see that the only strategy by which the net earnings increases is by focusing on the core
competency of the company. For the next 3 years, we can see that the profit increases in a steady
manner.

Recommendation
We think that the best alternative is a mix of the option three and option four. It is important to
understand that these options alone may not generate a stable and steady growth in the long
term due to possible fluctuations in the market trends. The mix of both the strategies would help
the company achieve its short term goal and its long term goals with the investment made since
it increases the life cycle of RTE soups and boosts growth in early stages of PLC.