Case study Company Case Campbell Soup Company: Watching What YouEat You might think that a well-known, veteran

Fantastic news! We've Found the answer you've been seeking!

Question:

Case study

Company Case Campbell Soup Company: Watching What YouEat

You might think that a well-known, veteran consumer productscompany like the Campbell Soup Company has it made. After all, whenpeople think of soup, they think of Campbell’s. In the $5 billionU.S. soup market, Campbell dominates with a 44 percent share.Selling products under such an iconic brand name should be a snap.But if you ask Denise Morrison, CEO of Campbell, she’ll tell you adifferent story. Just a few years ago, when Morrison took over ashead of the world’s oldest and best-known soup com- pany, she faceda big challenge—reverse the declining market share of a145-year-old brand in a mature, low-growth, and fickle marketcharacterized by shifting consumer preferences, ever- expandingtastes, and little tolerance for price increases. Turning thingsaround would require revitalizing the company’s brands in a waythat would attract new customers without alienating the faith- fulwho had been buying Campbell products for decades.

Morrison had a plan. A core element of that plan was to main-tain a laser-like focus on consumers. “The consumer is our boss,”Morrison said. “[Maintaining a customer focus] requires a clear,up-to-the-minute understanding of consumers in order to create morerelevant products.” Morrison’s plan involved transforming thetraditional stagnant culture of a corporate dinosaur into one thatembraces creativity and flexibility. But it also involved em-ploying innovative methods that would allow brand managers andproduct developers to establish the customer understand- ing thatwas so desperately needed. In other words, marketing research atthe Campbell Soup Company was about to change.

Reading Consumers’ Minds

Soup is a well-accepted product found in just about ev- eryone’spantry in the United States. However, not long ago, Campbellresearchers discovered that marketing soups

presents unique problems. People don’t covet soup. Sure, asteaming bowl of savory soup really hits the spot after com- ing inout of a bitingly cold rain. But soup is not a top-of-mind meal orsnack choice, and it’s typically a prelude to a more interestingmain course. The bottom line—consumers don’t really think muchabout soup, making meaningful marketing research difficult.

For years, Campbell researchers relied on good old paper-and-pencil surveys and traditional interviews to gain con- sumerinsights for making ads, labels and packaging, and the productsthemselves more effective. But Campbell’s experi- ence with suchmarketing research showed that traditional methods failed tocapture important subconscious thoughts, emotions, and behaviorsthat consumers experience when shopping for soup.

So instead, to get closer to what was really going on insideconsumers’ hearts and minds, Campbell researchers began employingstate-of-the-art neuroscience methods. They outfit- ted shopperswith special vests that measured skin-moisture levels, heart rates,depth and pace of breathing, and postures. Sensors tracked eyemovements and pupil width. Then, to aid interpretation, suchbiometric data was combined with inter- views and videos thatcaptured each shopper’s experiences.

The high-tech research produced some startling insights.Campbell knew that people hold strong emotions associated witheating soup. After all, who doesn’t remember getting a hot bowl ofsoup from Mom when they were sick or cold? But the new biometrictesting revealed that all that warmth and those positive emotionsevaporated when consumers confronted the sea of nearly identicalred and white Campbell’s cans found on a typical grocery store soupaisle.

4-14 What sample sizes are necessary to cover thepopulation of the whole region in which you live with a confidenceinterval of a 5-percent and a 95-percent confidence level? Explainthe effect population size has on a required sample size. (AACSB:Written Communication; Information Technology; AnalyticalThinking)

right individual and added to the terabytes of informationNielsen already possesses. Through data sorting and analytics,Nielsen cuts through billions of daily transactions to deliverclear con- sumer insights to clients.

After viewing the video featuring Nielsen, answer the followingquestions:

4-15 What is Nielsen’s expertise?
4-16 Providing a real-world example, describe how Nielsen

might discover a consumer insight.

4-17 What kinds of partnerships might Nielsen need to formwith other companies in order to accomplish its goals?

In the past, the top of a typical store shelf display featured alarge Campbell’s logo with a bright red background. But the newresearch showed that such signs made all varieties of Campbell’sSoup blend together, creating an overwhelming browsing situationand causing shoppers to spend less time at the aisle. The biometricresearch methods also revealed that the soup can labels themselveswere lacking—the big bowl of soup on Campbell’s labels was notperceived warmly, and the large spoon filled with soup provoked noemotional response.

Based on these research insights, in an attempt to prompt andpreserve important consumer emotions surrounding soup consumption,Campbell began evaluating specific aspects of its displays, labels,and packaging. This led to seemingly small but important changes.For starters, the Campbell’s logo is now smaller and lower on theshelf, minimizing the over- whelming “sea of cans” effect. Tofurther encourage browsing, can labels now fall into differentcategories, each with distin- guishing visual cues. Varieties likeBeef Broth and Broccoli Cheese, which are typically used asingredients in recipes, feature a narrow blue swath across themiddle of the can with a “Great for Cooking” label. A green swathand the label “98% Fat Free” characterize reduced-fat varieties.Tomato Chipotle & Olive Oil, part of Campbell’s “LatinInspired” line, features a black background rather than thetraditional white. And top-sellers such as Chicken Noodle, Tomato,and Cream of Mushroom feature the plain traditional label with thecen- ter medallion, immortalized by Andy Warhol’s larger-than-liferecreations of Campbell’s soup cans. As for bringing out those warmemotions, Campbell’s labels are now adorned with steam rising off alarger, more vibrant picture of the fea- tured soup in a moremodern white bowl. The non-emotional spoons are gone as well.

Can such minor label changes make a real difference? Yes, theycan. Campbell claims that its sales of condensed soups are up by 2percent since making the changes. That may not sound like much, buteven a small sales bump applied to a $2 billion consumer brandmeans real money. The sales jump also indi- cates that consumersare receiving greater value through a more fulfilling shoppingexperience.

Diving Deeper for Insights

Although the insights from Campbell’s biometric marketing re-search have proven valuable, it will take more to capture theattention of a new generation of customers and stay attuned to thechanging nature of consumer food tastes and prefer- ences.Additionally, the Campbell Soup Company makes and markets much morethan just soup these days. Over the years, the company has added orcreated such brands as Pepperidge Farms, Swanson, Pace, Prego, V8,Bolthouse Farms, and Plum Organics. Today, Campbell’s house ofpackaged food brands includes something for just about everyone.With that kind of product portfolio, maintaining and creatingrelevant products based on a clear, up-to-the-minute understandingof consumers is an especially daunting proposition.

To capture clear and contemporary customer insights, Campbellresearchers turn to deep dive marketing research— qualitativemethods employed in the fields of anthropology and other socialsciences for up-close-and-personal study. Campbell researchers andmarketers dive in and spend time

with consumers on their own turf. “We’re in their homes,” saysCharles Vila, Campbell’s vice president of consumer and cus- tomerinsights. “We are cooking with them; we’re eating with them; we’reshopping with them.” By spending hours at a time with consumers andobserving them in their natural environ- ments, researchers canunlock deep consumer insights of which customers themselves areoften not aware.

By employing deep dive marketing research methods, Campbellresearchers have identified six different consumer groups, eachwith an extensive profile. For each of these groups, Campbell hascreated six fully equipped kitchens at its Camden, New Jersey,headquarters, each designed to mir- ror the homes of consumers inthe six groups. Each kitchen has a unique design, with differentappliances, different fea- tures, and, most importantly, differentfood in the cabinets and refrigerators.

At one end of the spectrum is the group called “Uninvolved QuickFixers.” These are individuals and families who are not acquaintedwith or into cooking. Their kitchens are strewn with pizza boxes,and collections of takeout menus adorn their fridges. Their stovesand ovens often look like they’ve never been touched. “They’redoing a lot of microwaving and frozen foods,” explains the managerof Campbell’s test facilities.

At the other end of the spectrum is group six, the “PassionateKitchen Masters.” Their kitchens tend to be filled with well-used,high-end appliances. Their refrigerators are stuffed with freshproduce, dairy, and meats. Gourmet sauces and artisanal breads andpastas are complemented by a wide variety of spices.

Such levels of detail help Campbell marketers discover andunderstand existing and developing trends in each consumer group aswell as in the general market. For example, ginger is in. Only afew years ago, this herb was something found only in ethnicrestaurants or in obscure recipes. But now its popularity issoaring. Campbell expects that it will soon be an importantingredient for each of the six consumer segments, a valuableinsight for developing new products.

Another conclusion from Campbell’s deep dive is that al- thoughPassionate Kitchen Masters consume far fewer prepared and packagedfoods than other consumers, they still buy a lot ofingredients—such as broth. Broth flies under the radar of mostconsumers. But for people who like to cook, it’s a sturdy compo-nent of soups, sauces, and braised meats.

Under both the Campbell’s and Swanson brands, broth is also a$400 million business for the Campbell Soup Company. Applying the 2percent sales boost resulting from the label changes discussedearlier translates to $8 million in sales gains for broth alone.That’s why Campbell researchers are so inter- ested in consumertrends, big and small.

The main goal is to enhance the customer’s food experience. Forexample, Thai dishes are becoming more popular for food- ies. Butcoming up with key ingredients like lemongrass is both timeconsuming and expensive. “Even for confident cooks, to bring thosetogether, to go and purchase them, and actually blend them in sucha way that it actually works, that’s not easy,” says Campbell’svice president Dale Clemiss, who oversees the Swanson and otherCampbell brands. Add that to other insights that Campbell’sresearch has uncovered, and a new broth is born—Swanson ThaiGinger, a broth “infused with flavors of lime, soy sauce, coconut,lemongrass, cilantro, and ginger—a simple way to make deliciousrestaurant inspired global dishes at home.”

CHAPTER 4 | Managing Marketing Information to GainCustomer Insights 153

154 PART 2 | Understanding the Marketplace andCustomer Value

Every marketing research method has pitfalls. So Campbellcombines multiple research methods to minimize the possibility ofmaking incorrect judgments. In addition to neuroscience and deepdive research, the company still employs traditional meth- ods ofsurveys and interviews. The triangulation of data across methodsallows for greater accuracy as well as the ability to cover largerconsumer samples.

In the packaged foods business, every little bit helps. It’s allabout staying in tune with consumers and keeping up with thechanges—large and small—in consumer preferences. That philosophyhas worked well for the Campbell Soup Company in the past. And asCampbell has dug deeper through multiple marketing researchmethods, the proof is in the pudding. Over the most recent threeyears, Campbell’s corporate revenues rose 12.6 percent while netprofits returned 6 to 10 percent each year. Campbell’s stock pricealso increased by more than 60 percent during that time. As thecompany website states, “For gen- erations, people have trustedCampbell to provide authentic, flavorful, and readily availablefoods and beverages that connect them to each other, to warmmemories, and to what’s important today.” With the help ofCampbell’s marketing research program, it looks like consumers willcontinue to trust Campbell for gen- erations to come.

Questions for Discussion

4-18 What are the strengths and weaknesses of the CampbellSoup Company’s marketing information system?
4-19 What objectives does Campbell have for the marketingresearch efforts described in this case?
4-20 Compare the effectiveness of Campbell’s biometricresearch with its deep dive research.
4-21 Describe how traditional marketing research could beintegrated with Campbell’s research efforts from this case.

Sources: “Soup in the U.S.,” EuromonitorInternational, December 2015,www.euromonitor.com/soup-in-the-us/report; Mark Garrison, “How FoodCompanies Watch What You Eat,” Marketplace, December 2, 2013,www.marketplace.org/topics/business/how-food-compa-nies-watch-what-you-eat; Ilan Brat, “The Emotional Quotient of SoupShopping,” Wall Street Journal, February 17, 2010, p. B1;Bonnie Marcus, “Campbell Soup CEO Denise Morrison Stirs the Pot toCreate Cultural Change,” Forbes, April 25, 2015,www.forbes.com/sites/bon-niemarcus/2014/04/25/campbell-soup-ceo-denise-morrison-stirs-the-pot-to-create-cultural-change/; and information from www.campbell-soupcompany.com/about-campbell/ and www.google.com/finance,accessed September 2016.