Campbell Soup Company is one the leading soup companies today but back in January 1997, the company decided to come up with a product line of healthy meals that aim to reduce health risks such as heart disease and diabetes. This product line was called Intelligent Quisine (IQ) and it was test-marketed in Ohio in 1997 but the launch did not prove successful since the product line did not come to the desired expectations due to a weak marketing strategy.
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The company was the first to dare to provide to a niche in the US that was much expected to be risky since such meals need an excellent communication strategy to convince the market. During that time around 60 million Americans were diagnosed with blood pressure and cholesterol issues and this provided them with a potential market. Such type of food was called “nutraceuticals” and then eventually the number grew to 100 million who were at risk of being diagnosed with blood pressure or similar problems (Campbell, 2008).
The Marketing Activity
Campbell was devoting 1 percent of its sales to R&D to come with this product line and within two years with the assistance of the team that included medical specialists in specific diseases and other specialists came up with a product line and they conducted clinical research on 800 patients. By 1997 when it was time to launch the company had spent $55 million already but they came up with 41 meals and mostly frozen ones which included breakfasts, lunch, dinner, and snacks as well.
The product was test-marketed for 15 months in Ohio where participants bought 21 IQ meals each week for $80. The participants agreed to stick with the program for only 10 weeks and that also on the condition of a discount offered. This activity cost the company $700. Campbell then began to provide print material that included diet advice, exercise options, and changing habits. They also provided prepaid phone cards to talk to dieticians. The launch was a bit slow and was often interrupted with problems since the company had not considered the taste of the products. Often the meals were healthy but not that tasty.
Campbell used the line advertisement for this product line which included television ads, print ads, and radio ads. They also had the number “800” for consumers to call and place an order. The ads promoted the product as having the unique quality of being able to reverse certain medical conditions such as high blood pressure, cholesterol, etc. The ads had the model claiming to have Campbell cheesecake and reduce cholesterol by a certain level.
The company distributed through a direct channel or rather through personal sell that is they delivered directly to the consumers to avoid the hassle of maintaining temperature while transporting to the retailer since that could affect quality. The company had its own sales representative and they often called on health professionals for further customer satisfaction. The test market seemed to be successful but the launch was a failure. In 10 weeks several customers proclaimed to have lost 10 pounds and a cholesterol drop from 240 to 200 or a blood sugar drop from 300 to 110 and these results were a success promise.
Often customers stooped prescribed medications with the use of these products which were even better results. The launch was a failure since the sales target was 40,000 orders and the company was getting as few as 2500 in just over six weeks. Campbell had an amazing product but their marketing strategy was not good enough. The target market for the product was those suffering from high blood pressure, cholesterol, or sugar.
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Their positioning strategy was more for less that is more benefits for a lesser price. Thus, in 1998, the company decided to pull off IQ from the market which marked the end of nutraceuticals again. The issue was that the company needed to educate its customers before launching the product and that is why their marketing strategy was a flop. Several analysts believed that there was never a market for such products but the problem was with the company’s marketing strategy since they could have educated their customers, created awareness and a need for the products before the launch (Ellen, 1998).
Text from book
A launch requires money and Campbell spent a lot of money. Their target market was concentrated to only those who had been diagnosed with specific diseases which was a niche in the market (Kotler, et al; 2007, p266). The positioning strategy was more or less which is known as a winning value proposition unlike in this case (Kotler, et al; 2007, p275). They used above-the-line mediums including TV, radio, and print ads which are said to have the highest impact and the most effective reach. Thus the media they chose is usually considered to be successful (Kotler, et al; 2007, p.552).
Their distribution strategy was personal selling since they delivered directly and had sales representatives (Kotler, et al; 2007, p.580). Their salespeople were a good team and personal sell is considered to be the most successful way of distributing products unlike in this case (Kotler, et al; 2007, p.582).
Comparison of theory and reality
The company did exactly as the theory suggested but of course, they did not pay much attention to their strategy since their strategy should have been aggressively consisting mostly to educate the customers and creating awareness to create a need in the market. The theory suggests that the target market should be evaluated whereas they simply focused on people with diseases and their market could have included health or weight-conscious people who are healthy and do not have any health problems.
The positioning strategy according to theory should have been successful but it was not since the problem was not positioning it was the product itself, advertising mediums used, and lack of awareness in the market, and also a poorly defined target market. The advertising mediums focused more on TV ads whereas they should have focused more on print ads and TV programs or events to educate their customers. Personal selling is usually successful but again the problem lay in the strategy not distribution whereas they could have hit their target market better if they would have supplied and sold through retailers.
The text is right in its place because it depends on the nature of the product and this product required educating the market and aggressive market including print media but the company simply focused on other aspects that were not effective. The theory is there to help but applying it accurately is necessary since their positioning strategy was apt but the initial base of their strategy was weak. They should have educated their customers through print media, TV programs, or events so that they understand the importance of healthy meals that can substitute medicines. They could have stated the bad effects of medicines and the benefits of food that will substitute medicines because customers are generally of the opinion medicines are the only cure.
The company should have created awareness regarding the breakthrough invention of food substitutes for medicines or a revolution of a different kind. This required aggressive marketing along with educating customers. Thus the theory and reality differed because the theory was not applied effectively and every product has a different need thus every product needs a different strategy based on theory but the theory should be implemented in a manner that adapts to the requirements of the market for the product to be an eventual success. Thus there was a difference between theory and application and the strategy failed in the market (Kotler, et al; 2007).
The marketing strategy used by Campbell was a failure but their product was a breakthrough and there was an untapped market for the product that Campbell could not tap effectively due to lack of an effective marketing strategy. As a result, a market follower Lifesource Nutrition Solutions adapted the same product line but marketed it the right way. They focused on the taste and they had the advantage that the research and development had been conducted and the product was already tested by Campbell.
They used a better marketing strategy and they hit the nail right this time. Thus Lifesource was an instant success in the market and selling the same products with different names to their customers. Thus, nutraceuticals were back in action and this time this company’s marketing strategy was a success, unlike Campbell Soup Company’s strategy which lacked in various areas.
Campbell Soup Company, 2008. About Campbell Company. Web.
Collins, Douglas (1994). America’s Favorite Food: The Story of Campbell Soup Company. Abrams Publishing.
Desolage, Rick (1999) Take out meals for specialized diets. Food management Journal. 22(3), pp. 10.
Ellen Mary, Kuhn, 1998. Why Campbell’s IQ didn’t live up to its potential. Web.
Holden, Jack (1998). A golden age for meal solution. Food processing Journal. 22(1), pp. 37.
Kotler, P, Brown, Adam, S. Burton & Armstrong, G (2007) Principles of Marketing, 9th edn, Pearson Prentice Hall, Upper Saddle River, NJ.
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Shea, Martha Esposito and Mathis, Mike (2002). Images of America: Campbell Soup Company. Arcadia Publishing.
Thompson, Stephanie, 1997. Eyeing an aging America, Food giants Broaden inroads into Nutraceuticals. Web.