1. 1 The Role of Marketing Research In the CPG Industry Rob Riester March 18, 2004

2. 2 Overview  Intro  Who is ConAgra?  Role of Marketing Research  Product  Price  Placement  Promotion  The 5 th P???  Kickstarting your Marketing Research Career

3. 3 The 5 th P: Paige

4. 4 ConAgra Foods 2003 Sales $19.8 Billion 2003 Sales $19.8 Billion 63,000 employees 63,000 employees In business since In business since1874 Headquartered in Headquartered in Omaha, NE 80+ Brands 80+ Brands 33 Brands with annual sales exceeding $100 Million each 33 Brands with annual sales exceeding $100 Million each Food supplier in more than 70 countries around the world Food supplier in more than 70 countries around the world 2003 #50 in Fortune 500 2003 #50 in Fortune 500 2003 #3 Consumer Food Company in US and #5 in the world 2003 #3 Consumer Food Company in US and #5 in the world

5. 5 Our Products

6. #3 Consumer Food Company in the U.S. Fortune Magazine, April, 2003 *FY 2003 Revenues

7. 7 Role of Marketing and Market Research Finance Operations Marketing/ Market Research Sales R&D/Packaging

8. 8 Role of Marketing Research  Product  Price  Placement  Promotion

9. 9 Product  What is positioning?  How do you position a brand?  Strategic  A&U, Segmentation, Market Structure  Qualitative research  Quantitative research  Example: Product Positioning:

10. 10 Product Positioning – Knott’s Berry Farm

11. 11 Product Positioning – Knott’s Berry Farm

12. 12 Product Positioning – Knott’s Berry Farm

13. 13 Product  Product formula  Taste & texture  Ingredients  Preparation  Packaging  Container type  Graphics  Cost of goods

14. 14 Price Value = Benefits Price  How do you determine price?  Benchmarking  Consumer testing  Price elasticity  Thresholds

15. 15 Price  Example Base Price Elasticities Price Elastic/Sensitive Price Inelastic/Insensitive Cooking Oil -2.08 Dry Dog Food Dry Cat Food -1.9 Coffee -1.5 Tomato Sauce -1.25 Frozen Breakfast -1.1 Baking Mix Ingredients Cough/Cold Medicine -0.9 Adult Toothbrushes -0.65 Niche Products -0.6 Decongestants -0.4 Canned Dog Food -2.0 Cat Litter -1.8 Canned Tomatoes -1.6 Mustard -1.3 Baby Food -1.2 Shampoo -1.1 Internal Analgesic -0.9 Household Cleaners -0.8 Dry Soup -0.7 Mouthwash -0.5 Men’s Fragrance -0.3 Mid-Tier Sensitive

16. 16 Price  Price elasticity analysis helps identify the volume and profit relationship to price

17. 17 Placement  Power shift to retailers  Outlet landscape is diverging  In-store placement is key  Shelf space – slotting  Store location  Arrangement  Out of stocks

18. 18 Form The “Tomato Matrix” shelf set simplifies the shopping experience  Brand-block set led by store brand, then followed by Hunt’s  Horizontal form set with Whole and Diced on top, Sauce and Puree on the bottom The Tomato Matrix Set simplifies the shopping experience by best reflecting the category market structure Tomato Matrix Set Specialty Ro*Tel Sauce/Puree Paste/Crushe d Whole/ Specialty Diced Diced/ Stewed Store Brand Hunt’s Del Monte/ Contadina Brand Regional/ Brands Shelving

19. 19 Promotion  Trade promotions  Advertising  TV, radio, print, outdoor, internet  Example...

20. 20 Chef Boyardee

21. 21 Promotion (continued)  Consumer promotions  Coupons  Free Standing Inserts, in store  Sponsorships  Measuring ROI  Event to event  Across a portfolio of products  Across geographies

22. 22 Volume Decomposition  Marketing Mix Modeling can break down incremental volume driven by different marketing activities. Source: IRI Mix Drivers Model, Total US Food Volume Sales

23. 23 Kickstarting your Marketing Research Career  CPG companies often look for experience  How do you get experience?  Start off at a research supplier  Doesn’t have to be CPG focused  Or, pursue an internship  Work at a research field site, even if it’s part time while in school  What qualities do they look for?  Intellectual curiosity  Analytical mindset  Able to challenge the status quo  Action oriented  Good juggler  People person

24. 24 Summary  Role of Marketing Research  Product  Price  Placement  Promotion  Kickstarting your Marketing Career