OEP- brand diagnosis and strategic recommendation

ID: 601122

OEP- brand diagnosis and strategic recommendation

ID: 601122

Indeed, market leadership is an appealing fact but sustaining it for the future is what matters most. Keeping this in mind, I must say the Brands play here the mastery act, where the stage of marketing executions sets the tone. OEP, the brand I would look after, has all its marketing virtue; yet I feel something quite necessary ingredients are missing & adding that can just make OEP spicier. Well, a brand with deep rooted heritage instilled into it, TOM awareness at its height and leading the market with handsome share-nothing can go wrong at this point. But somehow all these abstracts funneled with numbers just do not appease my neurons of marketing instinct. Why? Lets dig and see things a bit details; l would start diagnosing OEP in the following mannerEquity Matters: Aligning with the principles of becoming the best food company, Pillsbury acquired OEP for their marketing penetrations into the food industry. 75 year old heritage, a healthy mix of wide (100) ranges, caters VFM (value for Money), relies on authenticity and versatility in style and location specificity- are the equity that OEP has inherited. Now if I look at the share, I may become complacent enough since OEP possess 30 years of market leadership in Mexican food category. But reality seems quite different & tricky as wellits all about the historic win for OEP till 90s; the projection for future looks appalling. The fact that Market currently asks for innovations and creativity; OEP on the contrary has been unable to cater these attributes for the consumers. Surely, OEP has longing for heritage but it has to be tweaked with the advent of recency wave because Brand has to grow but not at the cost of its youth. Brands like OEP with heritage can always remain young and aspiring. Positioning Matters: Looking at a broad spectrum, I would say that OEP has done tremendous so far. But analyzing the footprints of 3Cs (Consumer, Customer & competition) I would say rooms of better positioning should be the choice then.
Consumers end There has been a shift in consumer choice in the salsa Market. OEP seems quite far from the consumers mind in that segment. Strong Appeal is not there. Engagement of recent consumers is missing and so the point of innovations. Company end Still a market leader, yes; but growth rate is below the industry average. (4.7% of own vs. 7%) For consecutive years, share drops (7 pp in 4 years) in a dynamic and growing segment (15% growth). It has not got due consideration in terms of targeting the segment and expense for that. Priority has been misled and returns on marketing spending has been decreasing. Competition end Due to prominent market size, competition is quite agile here. Competition has growth in SOS (Share on segment) where as OEP stands stagnant Both Ortega and Tosittos are denting hard in terms of market share & brand image. The most important thing is consumers as if has turned down OEP just due to an availability of easy & trendy substitutes.

OEP- brand diagnosis and strategic recommendation

ID: 601122

I cant really find where OEP standpoint vs. its equity. Self limiting points has been very much in place and that shook the positioning of the brand. Perception Matters: Since positioning pays the price for a Brand, OEP here somewhat routing in the wrong track. As a matter of fact, un tight positioning lets OEP lose its addictive perception and thus it will let the brand live with just commodity effect. Logical enough, missing the value therefore wont allow crossing the border of price sensitivity to a great extent. All these facts are pulling OEP down to price compromising position; as a result, achieving $1bln mark seems bleak right now in 1994. Quite a contrast of the fact that for both salsa & refried beans segments-OEP placed heavily down than the competitors in terms of brand value index (in $). Therefore, making a perception of good bargain is not just enough. And to make it worse, an awful positioning makes this perception as an unwanted attributes for OEP. OEP needs immediate care on these issues. Execution Matters: Everything follows like a chain reaction in the brand world. So missing a positioning is not a sign of good fortune at all. If I look at the execution level, I am not sensing much of a difference of what I said earlier. Looking at the advertising spending for the last 4 years, I see a complete mismatch as well. Increasingly low expenditures on the growth driven markets wont allow OEP hold the guns for tomorrow. I seriously feel that guns are over loaded for Taco shells and mix segment whereas for Salsa segments, spending has been cut by 5 pp. The way I see it is losing the share of Voice has led the drops in market share as well. And for me its rather a question that why OEP hasnt feel the pulse of growing segment (Salsa) first and then spending has been increased for the saturated segment (Refried beans), shocking I say. It sounds like putting all the intellectual efforts willingly exercised in vain. Point of Sales Matters: Its inevitable that Brands are built in retails. OEP has got a firm presence in retails and has got a significant advantage in shelf and space retailing just because OEP is the current market leader. Retail sense the pulse of consumers better than any other channels so it would not be a problem for OEP to hold a great advocacy from retails unless OEP lose its grip on market leadership. A growth in private labels can be great concern but it actually emphasis the previous position further; If OEP has had positioned itself to a Brand that associate the inherent aspects of consumers, private label wont stand a chance at all. I have started reading the facts of OEP and fairly convinced that OEP has got great brand equities yet I feel its not properly positioned to the consumers brains and therefore underperformed. I looked on to each & every aspect as a devils advocate view, I know. I wrap this diagnosis in the following manner:

OEP- brand diagnosis and strategic recommendation

ID: 601122

OEP- brand diagnosis and strategic recommendation

ID: 601122

Strategic Recommendation

OEP- brand diagnosis and strategic recommendation

ID: 601122

Strategic Recommendation Looking at the numbers and attributes, I would say detecting the problematic zone and connect it with the current performance of OEP is the primary thing to do. Once we agree with the fact that problem exists; we can affirm the path of solutions as well. Now if I simulate the market data for 1995-96 we might see the following:

In the perception map I can figure out the following as wellA. OEP stands for VFM and location specific Mexican item.(South Westernish) B. OEP holds the heritage intact but cant find the magic of disruptive innovations in the growing segments. The overall impression here is yes, we acknowledge the problems and its also need to be noted here that reactions to these problems were way out of the track. Having an understanding on the overall facts I would suggest having 2 tier 70-30 ruler for putting the old el paso to its due position in the market. I name the program as Reshape 95. As I said, this initiative will be a two tier broadly divided asA. Repositioning B. Execution at the right lane. Repositioning: Over the years, big brands have gone for repositioning due to the demand of survivals. Like an historian, Brands also sprays its articulation in the past years. This is the absolute time- OEP needs to look back to its brand history. Looking at the past, I feel OEP has one distinctive advantage than others which can make it different; thats heritage. But somehow market feels about this as oldies. Heritage not necessarily needs to mean for old age rather it can mean for exquisite, experienced and caring. I strongly propose to go for heritage theme in Mexican food since OEP still holds a great portion of loyal Hispanic Americans.

OEP- brand diagnosis and strategic recommendation

ID: 601122

Brands need to be different and in the Mexican food industry, thats what absent here. Consumers expect innovations but not necessarily they would ask for that. Good brands read the pulse of the consumers. OEP, the heritage owner of this industry, can give innovations. Innovativeness in the brand is like the gene sequence; one has to stand always at par the time. OEP with its heritage can bring new sequence through some minute difference in products or may be in packaging which will lead them towards attaining a new image. Authentic products with heritage and innovative recipe are the equities OEP can hold for. And that product cannot be undervalued as well. Pricing here adds a muscle to the identity of the brand. OEP missed this momentum. Upgrading in the price and putting it between the competitors can change its position from perceiving it as an undervalued product. Brands become great when it has been accepted across the board of consumers. OEP having all the fantastic equities on their back didnt try to go beyond the western boundaries. And adding to that, its just so concentrated on one side that it could not grab the wave of authentic Mexican restaurants agenda for non Hispanics. Therefore-

A very crucial stage for OEP is to reposition its value in the market so that consumers can understand the real image of the brand. The challenging part here is: there would be a chance of initial sales loss but it will recover with handsome share growth in the segments where it has lost its leadership. The beauty here is to stay consistent in delivering the value in the market. Execution at the right lane ( 70-30 rule) Once we reposition OEP in the market, it has to be backed by lots of activities from different channels. TM&D (Trade marketing & distribution) can play a vital role here. From OEP house to the retail market, from retails to the consumer hands- OEP has to reach without any hassle. Its a blessing that OEP is still the market leader so communication in the market through retail would not be a hard task to do now and in the near future as well. Two different execution plans can serve a lot.

OEP- brand diagnosis and strategic recommendation

ID: 601122

A. Communication through retail: Since brands now grow in retail. Significant push should be in retail for Salsa segment. It has to be backed by both qualitative advertising and 12-1 engagement with household consumers. Trade promotions that we did over the last few years can play along the side. On the other side, Yellow shelf retailing can do for the remaining 2 segments. B. Consumer engagement platform: Its always better to take the people onboard even before they think that something has been changed for their brand. 1-2-1 or even 1-2many can be options for the first 3 months starting now. This BTL communication will give OEP a handsome acknowledgement on its new positioning. And in terms of ATL, current advertisement will play for the existing segments and a new campaign should be on air from the next month reassuring the new positioning of OEP. Budget: For the next 6 months, 70-30 rule can be applied where 70% expense for Salsa segments and 30% for the remaining segments. Trade promotions expense will add on here to prevent private labels. Along with all these executions, I need a thorough tracker which can give us idea on how things are rolling both on and off the market. Project Reshape and timeline 1995-96

Ok, its not Milli Vanilli in the background, now its Vivaldis 4 seasons- and I feel all this moment a precious one in my life. I am diagnosing a Brand which may pave out for an illustrious journey in the coming years with astonishing footprints in emerging Mexican food category in USA. Looking at the window, I see a mirror image full of excitement-happy enough to spot the critical issues of OEP. Now its a waiting time for you Brad! And to shift the gear for Reshape!