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  • Marketing 3 - Group 3 - Giant Consumer Products - Case Analysis

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    This document contains a case analysis and recommendations for Giant Consumer Products regarding whether to run a national sales promotion. [1] The concerns raised about trade promotions like cannibalization and brand erosion are valid given evidence of customers shifting between 16 oz and 32 oz packages during past promotions. [2] The analysis recommends against a national promotion due to risks of cannibalization and brand erosion, but suggests reallocating promotion funds from 16 oz to 32 oz Dinardo's packages if a promotion is deemed necessary, while avoiding promotions for the Natural Meals brand.

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    This document contains a case analysis and recommendations for Giant Consumer Products regarding whether to run a national sales promotion. [1] The concerns raised about trade promotions like cannibalization and brand erosion are valid given evidence of customers shifting between 16 oz and 32 oz packages during past promotions. [2] The analysis recommends against a national promotion due to risks of cannibalization and brand erosion, but suggests reallocating promotion funds from 16 oz to 32 oz Dinardo's packages if a promotion is deemed necessary, while avoiding promotions for the Natural Meals brand.

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    127 views3 pages

    Marketing 3 - Group 3 - Giant Consumer Products - Case Analysis

    Uploaded by

    puneet
    This document contains a case analysis and recommendations for Giant Consumer Products regarding whether to run a national sales promotion. [1] The concerns raised about trade promotions like cannibalization and brand erosion are valid given evidence of customers shifting between 16 oz and 32 oz packages during past promotions. [2] The analysis recommends against a national promotion due to risks of cannibalization and brand erosion, but suggests reallocating promotion funds from 16 oz to 32 oz Dinardo's packages if a promotion is deemed necessary, while avoiding promotions for the Natural Meals brand.

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    of 3

    Marketing Management Assignment –

    Giant Consumer Products Case Analysis

    1. To what extent should the concerns that Capps has raised regarding trade
    promotions (cannibalization, brand equity erosion, forward-buying, pass-through,
    and consumer stockpiling) affect the “go” or “no-go” decision to field a national
    sales promotion?

    Ans: The concerns regarding trade promotions that have been raised are actually very valid in
    this context. Also, in this specific instance, they do hold good because of the evidence of
    cannibalization in terms of any of the brands as shown in Graph 1. All the three other brands
    are targeted towards a different consumer set looking for the same kind of product but it is
    seen that even the 16 ounce customers shift to 32 ounce during promotions. Also the risks are
    much more because these products have been targeted towards the same segment which is
    very price conscious and is mostly sold through supermarkets where they are stocked
    together.
    The Running of a Promotion strategy on the Natural Meals Segment can be a two edged
    sword, it can definitely help drive up short term sales, but because it is a segment that has had
    a healthy growth rate and also enjoys a niche market where it is positioned well, the
    promotion campaign can erode its brand positioning and thereby destabilize its current
    growth momentum. Also, it may tarnish company’s premium image.
    For the Dinadro Packages in its all 3 segments, the promotion campaign would not hamper
    its positioning but eat into each other’s market shares (cannibalisation) as it does not have
    niche segmentation and caters to a much more price Conscious segment, who might be more
    interested in the promotion campaign.

    2. Do you advise Sanchez to run a national sales promotion? If so, to which one of the items
    should the funds be allocated:
    (a) Dinardo’sTM 32-ounce packages,
    (b) Dinardo’sTM 16-ounce packages, or
    (c) Natural MealsTM?

    A National Sales Promotion is isn’t good idea to run for Sanchez. As is evident from the graph 1
    below, as there has been massive cannibalization from the 16 Ounce packs into the 32 Ounce
    packs every time the promotion for the 32 ounce pack has been run.
    What is however interesting is that every time a Promotion campaign for the 16 ounce packets
    has been run the cannibalization into the 16 ounce from the 32 ounce category has not been as
    massive.
    Also interesting to note is that the promotion spend of both the 16 ounce packets and 32 Ounce
    packets has been equal as is evident in Graph 2, however the returns of spending on the
    promotions from the 16 Ounce packets seems to be much lower than the uptick that is observed
    in the 32 ounce category during the Promotions.

    However if the Management does decide that a National Sales Promotion is indeed necessary , it
    should be for the 32 Ounce Category by assigning promotion Costs from the 16 Ounce Category.

    The other recommendation would be to stay from any promotions from the Natural Meals
    segment as that caters to a different category and has had a consistent growth rate in its category
    and there exists a very serious risk of brand erosion.
    Promotion
    Promotion
    Promotion
    Graph 1

    Promotion

    Cannibalization

    Graph 2

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