cornagra case study
CASE SUMMARY
Company History and Background:
- Subsidiary of Corn Agra, Inc, formerly known as Hunt-Westton, Inc
- Founded by the Hunt Brothers in 1890 in Santa Rosa, California.
- Over 8,000 employees nationwide and annual sales of $2.5 billion
- Mission – “to provide the finest quality and best tasting products to consumers.”
- Produced, marketed, and sold a wide variety of products, including tomato paste and sauces, canned tomatoes, ketchup, pasta, soups, cereals, dry beans, syrups, cookies etc.
Organization:
- Ken Sobaski is the Head of Marketing Division; Douglas Knudsen is the President of Sales Division.
- In the old marketing approach, CAGP focus more on growth, however after the disappointing result, they try to change new marketing approach involved more of a focus on the building of brand equity and long term success.
- CAGP’s marketing strategy involved the segmentation of markets and allocation of trade spending dollars.
The Old System
- Deal parameters - set up by trade marketing as guidelines for sales when they planned and executed merchandising deals with accounts.
- Quarterly trade spending allocations and budget
- The sales organization had their own planning process
- The incentive compensation system – trade marketing were based on CAGP profit before tax, profit contribution of the brands managed, and other objectives tailored to the role; meanwhile sales personnel were based on sales volume and CAGP profit before tax.
- Spiffs – special incentives for sales personnel for accomplishment of specific short-term incentives.
The New System
- New variable budget allocation system called case rate system
- Allow the sales teams, rather than trade marketing managers, to set volume and spending objectives.
- Semiannually trade spending allocation and budget.
- Creation of new role customer marketing manager to serve as liaisons between marketing and sales functions.
- The incentive compensation system – bonus plan for sales
Company History and Background:
- Subsidiary of Corn Agra, Inc, formerly known as Hunt-Westton, Inc
- Founded by the Hunt Brothers in 1890 in Santa Rosa, California.
- Over 8,000 employees nationwide and annual sales of $2.5 billion
- Mission – “to provide the finest quality and best tasting products to consumers.”
- Produced, marketed, and sold a wide variety of products, including tomato paste and sauces, canned tomatoes, ketchup, pasta, soups, cereals, dry beans, syrups, cookies etc.
Organization:
- Ken Sobaski is the Head of Marketing Division; Douglas Knudsen is the President of Sales Division.
- In the old marketing approach, CAGP focus more on growth, however after the disappointing result, they try to change new marketing approach involved more of a focus on the building of brand equity and long term success.
- CAGP’s marketing strategy involved the segmentation of markets and allocation of trade spending dollars.
The Old System
- Deal parameters - set up by trade marketing as guidelines for sales when they planned and executed merchandising deals with accounts.
- Quarterly trade spending allocations and budget
- The sales organization had their own planning process
- The incentive compensation system – trade marketing were based on CAGP profit before tax, profit contribution of the brands managed, and other objectives tailored to the role; meanwhile sales personnel were based on sales volume and CAGP profit before tax.
- Spiffs – special incentives for sales personnel for accomplishment of specific short-term incentives.
The New System
- New variable budget allocation system called case rate system
- Allow the sales teams, rather than trade marketing managers, to set volume and spending objectives.
- Semiannually trade spending allocation and budget.
- Creation of new role customer marketing manager to serve as liaisons between marketing and sales functions.
- The incentive compensation system – bonus plan for sales