Marketing 18th Edition by William Pride,Ferrell

Exercise 1

Campbell's Wants to Show You the Value of Soup
The Campbell Soup Company is on a mission to create value in the minds of consumers. Value is the customer's subjective assessment of benefits relative to costs in determining the product's worth. Campbell's is very aware of the value equation and is concerned that some consumers may not appreciate the good value of Campbell's soups. To change this perception, Campbell's has intensified its marketing efforts to reposition its soup brands and differentiate them from the competition. Campbell's Soup was founded in 1869 as a canned-food company. Its iconic red-and-white colors, first adopted in 1898 based upon the colors of the Cornell football team, have since become a core part of the company's brand identity. While most people associate Campbell's with soup, the company has adopted new product mixes through acquisitions and expansions. Campbell's is divided into three main divisions: Campbell North America, Pepperidge Farm, and International. The company owns such well-known brands as Campbell's, Pace, Pepperidge Farm, and V8. Campbell's has been largely successful as a company, but in recent years its soup division in North America has diminished. Although product lines such as Pepperidge Farm have performed well globally, simple meal sales within the United States, which includes Campbell's soups, decreased 6 percent. With more than $1 billion in condensed soup sales, such a decrease is a serious threat to Campbell's Soup. In response the company is taking the bold marketing move of increasing its marketing by $100 million in order to reposition how consumers, particularly the younger generation, view condensed soup. This is not Campbell's first endeavor to alter consumer perceptions of its flagship brand. In the last few years the company has performed extensive marketing research that culminated in changing its iconic labels and adopting a new advertising slogan. The bowls on the labels got bigger, the soup got steamier, the spoon was abandoned, and the logo was moved toward the bottom. To emphasize the quality and versatility of its soups, Campbell's adopted the tagline "It's Amazing What Soup Can Do" for all of its different soup lineups within the United States. However, Campbell's newest marketing initiatives are set to push the limits of how its soups are perceived. For many years Campbell's has been emphasizing the healthy nature of its soups. As consumers have become more health conscious, Campbell's responded by reducing the sodium in its soup products. Yet because the campaign was not successful in increasing purchases, Campbell's is taking the controversial step of de-emphasizing its health initiatives and pouring marketing dollars into re-portraying its brand as tasty and exciting. Such a move comes with controversy because Campbell's has raised the amount of sodium in some of its soups. However, when companies try to address nutritional issues but consumers show little interest, the companies are faced with the dilemma of dropping their health campaigns in exchange for adopting attributes, such as taste, that customers value. Campbell's had also introduced discounts on its soups in the hopes of attracting price-conscious consumers. After the move failed to generate increased sales, Campbell's decided to stop discounting its soup products. Without these discounts, Campbell's will have to increase the perceived value of its products to convince consumers to pay more. Yet Campbell's remains undeterred. The company aims to engage in what Campbell's' CEO calls "disruptive innovation" with the introduction of new product lines, new packaging, and new flavors. For instance, Campbell's released new exotic flavors in pouches to appeal to the younger generation. Campbell's has even tested marketing through new technology channels. The company has released iAds through Apple iPhones and iPads, a tactic which appears to aid brand recall. Initial studies found that consumers who viewed Campbell's iAds were five times more likely to recall them than those who had seen its TV ads. If Campbell's has its way, then a can of soup will become much more valuable to consumers.
Evaluate Campbell's success in implementing the marketing concept.