IMC Case Studies J453 Folgers 2000 Amanda Riley Scott Sieg 1. How would you compare P&G’s strategy with that of General Foods? Which company’s coffee business would you rather have? Procter and Gamble’s strategy is merely skimping by on advertising expenditures. In January of 1979, Procter and Gamble’s advertising sales came as a total of $23,292. In January of 1982, P&G’s advertising total came to $40,090. In January of 1985, their advertising sales came to a total of $35,790. As one can see, the trends are staggering throughout the years. They apparently don’t put in as much effort for the advertising expenditures. General Foods, one of their strategies would be putting their best foot forward into the advertising expenditures. In January of 1979, their total sales in advertising expenditures came to $68,794. In January of 1982, the advertising expenditures came to a whopping $123,798. Lastly, in January of 1985, their advertising sales came to a total of $56,950. Apparently General Foods care a lot more about their advertising and promotions compared to Procter and Gamble. The market shares have the same type of trends compared to advertising expenditures throughout the years. Procter and Gamble have an average market share of 17.6. General Foods have an average market share of 40.4. Obviously, General Foods has a higher market share, because they invest a lot more into their advertising expenditures to raise their sales. Procter and Gamble’s strategy should be by paying more attention to their advertising itself. General Foods main strategy was by slashing advertising expenditures by 17.5 million. They wanted to concentrate on sale promotions instead. They also took the approach of reformulating its product to reduce the cost of beans. Procter and Gamble’s overall strategy would be focusing on their best brand of Folgers. They repositioned the brand from a spokesperson to a catchy slogan. They also wanted to have the strategy to stand out more, for example, they used an advertising sponsorship of a race car. General Foods and P&G have both strong strategies going in different directions. Overall, General Foods have higher market shares and advertising expenditures, they know the secret ingredient to have success in the market place. The company’s coffee business I would rather have would be Maxwell House. Maxwell House has a better standing than Folgers. I predict that in the long run, Maxwell House will fly past Folgers. They both are in the same competitive streak today, but one can only possibly succeed. 2. What forces are responsible for the decline of coffee consumption in general? As mentioned in the article, over the past two decades, coffee consumption has been steadily declining. The main reason the coffee consumption is declining, which is by soft drink competitors. The soft drink competitors have aggressive marketing throughout the U.S. The second reason why coffee is declining would be the media reports linking caffeine with adverse health effects. During the time, people were getting more heath conscious of caffeinated beverages. Lastly, the third reason why the coffee market is declining which by coffee itself gained an image of being old- fashioned and out of date. 3. Why do people drink coffee? Which market segments are declining fastest? People drink coffee to obtain the much needed caffeine buzz. America is the type of culture, when everyone is in a hurried state daily. People with demanding lives often resort to drinking 2 to 3 cups of coffee in the morning. The market segment in the age group of 20-29 plummeted from 81 percent to 30 percent. The number one reason why the sharp decline was caused is by the soft drink industry. The young target market is more exposed to the soft drink advertising more than the coffee advertising. From this perspective, they tend to think that coffee is for the older target market of over 40. 4. What do you think of the design of the prototype experiment? Which elements of the Folgers 2000 campaign were critical and which might be reduced or eliminated? I think that the design is useful, but not nearly as memorable. It takes a lot more to gain the target market’s recency effect. I feel that it is a working start, but the prototype needs to be more main stream to college students. The artwork of the prototype gives out a cartoon vibe. The illustrations also give out a tonality of not being “serious” about the brand itself. The before and after element is a strong critical point in the prototype. One of the elements has a claim of having lower amounts of sugar, which is also another strong critical point of the prototype. The third strong element would be the coupon incentive to poor college students. The elements of which needs to be eliminated would be the slogan (Folgers: A Natural Choice), because I feel it is a “yawn.” The slogan isn’t catchy and it is not a best “fit” for the target market. The slogan would be for the older target markets. Lastly, the element of the cartoon illustrations, the illustrations needs to be more serious and college- like. The illustration does not fit well within the college culture. 5. What has been learned? Has future coffee consumption increased among students at Miami University? How would you apply what you learned to Folger’s coffee business? Folger’s concluded that the image or impression of coffee on students was an “out-of-date” product. The image of coffee was tarnished as the case states. A method of product positioning towards revitalization and rejuvenating was created and eventually implemented to attract and gain market share in the college student demographic. The catalyst or framework was introduced with the “Jump Start Your Day” campaign and slogan. The case stated that students consumed coffee in major quantities. The rates of sales increase were equivalent between on-campus and off-campus students. Approximately three-fourths of students drank Folgers coffee was consumed by college students during both halves of the eight week period, separated by spring break. “The Jump Start Your Day” was a test pilot in a marketing strategy to complete the objective of gaining market share amongst college students. This was during a time period where refrigerated vending soft drinks on campus declined by nearly 22 percent. Kroger, a local grocer reported a 400% sales increase in Folger’s coffee products. Applying what’s learned to the Folger’s business, we can reposition or strengthen the position with our older market through the same conventional marketing tactics as executed with the University of Miami. Furthermore, this information or marketing scheme can be trialed at work with different professional business companies for the morning “Jump Start to Your Day.” The objectives and strategies to get there were thorough for Folger’s and it helped initiate a formulated plan to attract and reel in product use by the college student audience. The result was conclusive and yielded a high increase in sales and awareness in the product. 6. What did you think of the slogan “Jump Start Your Day?” I thought it was an appropriate slogan, establishing a concept of need for a demand, a function with a task or target market endeavor, as well as a trendy catch phrase for a trend setting audience segment. It was a researched, calculated, devised slogan that attaches itself to the main product scheme for consumers, even beyond the college student market. It is relatable to the traditional and classic market, as well. 6a. Alternative slogans ideas: Every day starts with Folgers What’s in your cup? Get into the Grind of things with Folgers Sip into the Buzz Be Awakened from Hibernation Folgers: An Eye-Opener Sink into the Aroma of Folgers 6b. Recommend some additional promotional ideas that would reach/involve students and promote coffee drinking. Coffee during finals Coffee during the first day of classes Both of which fall in line with the “Jump Start Your Day” slogan Trick or Treat for Coffee …? Folgers give away cart throughout the dorm halls in the mornings 7. If you have a print ad idea, share it with the class. (This is optional!) REFER TO SKETCH ON GRAPH PAPER!