Gardenburger - Marketing Proposal

MKTG 540 Case Analysis April 27, 2011

Proposed Growth Strategy

• Brand the Veggie Patty Category• Leverage the brand into new channels (retail

70% penetration, 6 SKUs)• Support expansion with advertising and

promotion• Strengthen leadership position in current

channels (food service, club stores, natural food stores)

• Develop and introduce new products2

YES: Branding the Veggie Patty Category

• Category doesn’t have a “name” yet• Gardenburger marketing has focused on

association with veggie patty, not ALL meat alternatives

• In better position than competitors: self-descriptive name– Worthington Foods: MorningStar name means

nothing and has way too many associations– Harvest Burgers are Pillsbury: different associations– Boca Burger has no name associations

3

YES: Leverage Brand into New Channels

• Need to Cross the Chasm from “cultural creatives” to “health modifiers”… and they buy in grocery stores– Target: women aged 25-54, looking for convenience, taste,

and healthy alternatives to balance diet– Differentiation: taste, quality ingredients, convenience

• To increase brand awareness, product must have widespread availability

• Capitalize on mainstream “Health” movement• Worked at Quaker: granola, oatmeal, waffles, Gatorade• Veggies are mainstream, Soy is not—better fit

4

YES: Support Extension With Ads & Promo

• Necessary to increase brand awareness– Health modifiers less informed than “cultural

creatives”– Word of mouth won’t suffice– Mainstream = increased competition

• Trade promotion necessary to get shelf space and move consumers up the hierarchy of effects to trial

• MorningStar advertising at 10X, must respond– $11MM to $1.5MM, $14MM to $3.8MM

5

YES: Strengthen Leadership Position in Current Channels

• Position in club stores is necessary for mainstream availability

• Position in natural food stores is critical for association with “health” to maintain credibility

• Position in food service channel will drive brand awareness

6

YES: Develop and Introduce New Products

• Differentiation based on flavor and taste needs to be supported

• Brand loyalty developed through introduction of variety

• Should leverage brand awareness, perception of “quality”, and health-movement

• “Mainstream” tastes change over time

7

NO: Branding the Veggie Patty Category

• Just changed name to Gardenburger in ‘97• Not 1st to market or market leader in a

competitive space (23% to 46% share)– May generate primary demand that buys from

MorningStar– Will be Super Expensive

• Different naming conventions in food service versus retail

• Will limit future product extensions8

NO: Leverage Brand into New Channels

• 6 SKUs are arbitrary and confusing to customers who don’t know the brand yet– Testing to identify top “flavors” per city– Should limit expansion to NE, SW, and NW…not Midwest or

SE• Distribution expansion will be expensive– Requires massive resources– No current relationships with national distributors: will take

time• Expanding distribution without differentiation is

ineffective9

NO: Support Extension With Ads & Promo

• Expansion needs to be targeted• Can’t compete with MorningStar spend– Competition may drive additional spend and

drive profit from entire industry• Without brand awareness, category growth

benefits market leader

10

NO: Strengthen Leadership Position in Current Channels

• Position in health food stores isn’t necessary, as cultural creatives won’t buy “mainstream” products

• Position in food service channel needs to be targeted and use same naming conventions to avoid diluting brand awareness

11

NO: Develop and Introduce New Products

• “Gardenburger” name limits possible brand extension

• Extensions could dilute association with “veggie burger,” not meat-alternative

• Additional SKUs will confuse customers

12

Discussion Questions

• How is Gardenburger differentiated from competitors? How should they be?

• How should Gardenburger leverage its health-association to mainstream consumers without losing its more hard-core current customer base?

• How can Gardenburger promote trial without price-based promotions?

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Budget Allocation

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Questions?