Thursday, February 21, 2019
Cracker Jack Case Analysis
The primary reason for the Borden Foods to divert itself from noshs is to emphasis its efforts and imagerys in the reaping of their whole-wheat meal segments. Because of this valuation they had and a growth plan they had they unconquerable to announce sale of cracker seafarer in 1997. The counsel police squad of let out also recognized that with the increase in competition they claim not been able to successfully grow the gross sales figure in past five years. Also because the banger mother fucker brand has miscellaneous packaging options and has been maintaining a huge product line of 32 Stock-Keeping Units (SKUs). However, currently Broaden production facility had only 32 percent of lacuna allocated to Cracker old salt Products and has been operating at 32% of its full capacity.Cracker Jack Management believed that the broadened dispersal was the most important element of their new strategy. They believed that Broaden sales force and broker/distributor bring inwor k currently in use should be replaced by a conduct-store-deli truly sales force. It was believed that a DSD sales force would provide product placement in the grocery DSD snack aisles, which is the luxuriouslyest velocity snack aisles in super grocery stores. However, a DSD sales force is more resource intensive than Bordens present sales and distribution network. Borden Foods management was neither prepared to make the investment required nor equipped to conduct a DSD sales force for Cracker Jack given the resource demands of other business opportunities.Problem identification and root causeFrito-Lay is the market attraction in the salty snack food production having something different in their products ordain get a competitive advantage. Cracker Jack as a brand has a 97% awareness with people from the ages of 15 to 60 and a 95% awareness amongst the caramel popcorn users. This was a very well known brand even with a very a couple of(prenominal) advertisements. There are oth er several reasons which is explained below wherefore Frito-Lay unconquerable to acquire the Cracker Jack. Frito-Lay sales and distribution team were starting to do the research as soon as the Cracker Jack eruditeness fortune became public. It was a great opportunity to fit in Cracker Jack in the existing Frito-Lay sales and distribution infrastructure. The Cracker Jack name registers virtually universal awareness and Cracker Jack has decent brand equity due largely to its heritage and generally prosperous imagefoundation.It is a recognized brand with a positive account that has lost its momentum in recent years but mum has that chance of growing to the peaks. According to the results of Simulated Test Market , near 50% of the consumers are not buying this product because of no advertisements, non-availability in the area and product quality or value. Here is the best opportunity to improve and re gain that 50 % market share by winning over these customers. This might be on e of the major reasons why Frito-Lay decided to acquire the Cracker Jack. Additionally the new division of the attractive snacks dope fix opportunities for the Frito-Lay by using appropriate existing distribution networks and marketing channels for the new add on product. Addition of Cracker Jack is one of the example of marketing enhancement which impart create the additional retail selling points, giving Frito-Lay distribution opportunity in both salty and confectionery.SWOT Analysis Strengths Strong and Reputed Brand Name much Numbers of wish wells compared to dislikes of the products Brand awareness of 97% amongst the 15-60 years old A 100 years history of existence Huge room for expansion or addition of new products as has 50 manufacturing and processing plants bemuse tools and infrastructure to work closely with 480,000 retail trade locations weekly. Opportunities Stimulated quiz market Brand Extension Flavor extension Sales through with(predicate) different channels like small and large scale business. flunk CJ has too many products SKU numbersThe weak financial position of Cracker Jack which incurred losses in 1995 and 1996 CJ increased the price of the product to maintain their net income resulting the Frito-Lay to decrease to remain competitive.Threats Competition Lack of adaptability Internal Developmental cost High price than other.Evaluation of AlternativeCracker Jacks sales will represent a tiny part of the Frito-Lays business currently, however the chances are high to get the numbers high from this division if proper decisions are made. Frito-Lay is the leader in the US market concerning market share and sales volume. So they can use their advertising and marketing experience to uplift CJ. CJ should be marketed as a stackable treat which is healthy as of natural ingredients like popcorn. Marketing researchers should focus on the small children as the target market as well. By launching the different sizes and convenient packages to th e customers so that they can grab it and go rather than having a box. The CJ should be made gettable to as many stores as possible by utilizing the same direct store delivery channels. A careful analysis has to be make to change any features like gifts in each bag and the smelling of the CJ, because that is the major point of CJ and most of the customers are attracted because of that particular features.RecommendationIn my opinion the Borden Foods will sell the company for above 30 million dollars based on the assets it has and the goodwill for the year ending 1996. However the Frito-Lay should only pay some 25 million dollars for acquisitions of the company. Because of the Cracker Jack current market shares and the popularity in that location is much more work needed to be done so that the product can gain the similar amount of sales figures as other general Frito-Lay products does. Also the price of the product has to be move to remain competitive which is another factor for Frito-Lay.