Case 5-1 Barkley Foods

Joyce Stevenson, the manager of marketing research for Barkley Foods, had just left an emergency meeting with the firm’s president. An opportunity to buy an established line of gourmet (high-quality/high-priced) frozen dinners had arisen. Because there were other interested buyers, a decision had to be made within three or four weeks. This decision depended on judgments about the future prospects of the gourmet frozen dinner market and whether Barkley could achieve a competitive advantage. The marketing research group was asked to provide as much useful information as possible within a 10-day period. Although uncomfortable with the time pressure involved, Joyce was pleased that marketing had finally been asked to participate in the analysis of acquisition prospects. She had pressed for such participation and now she had to deliver.

Because of prior work on frozen fruit juices, Joyce had some knowledge of the gourmet frozen market. It was pioneered by Stouffer, who introduced the Lean Cuisine line of entrees in 1981. Since then, other firms have entered the industry with complete gourmet dinners (including Swanson’s Le Menu and Armour’s Dinner Classics). The distinction between entrees, dinners, and the three main types of food offered—conventional, ethnic (i.e., Benihana Restaurant Classics), or low-calorie (i.e., Weight Watchers or Light & Elegant)—define relevant submarkets. Joyce hypothesized that the gourmet frozen food buyer differs from the buyer of conventional “TV dinners” in several respects. The gourmet frozen food buyers are generally young, upper-socioeconomic-group people who probably have microwaves, are more health conscious, and are likely to be working women and others who want sophisticated cuisine but lack the time to prepare it.

Barkley Foods was a diversified food company with sales of $2.3 billion. Over 80 percent of its sales came from branded packaged food products sold nationally through grocery stores. Its largest product areas were canned tomato products, frozen orange juice, cake mixes, and yogurt. Barkley was known to have strengths in operations (product preparation), distribution (obtaining distribution and managing the shelves), and advertising. Their brands typically held a solid second-place position in the supermarket. There was no effort at umbrella brand identification, so each product area was carried by its own brand.

Joyce Stevenson had previously been in strategic planning, and reviewed the type of information and analysis that would be required to support a strategic decision like this one. She wrote down the following four sets of questions to guide the thinking of the research group:

To complete this week’s assignment, please refer to the case study entitled, Barkley’s Foods found at the end of Chapter 5 in your textbook. You are the Marketing Research Manager for Barkley Foods; you just left an emergency meeting with the firm’s president. There is an opportunity to buy an established line of gourmet (high-quality/high-priced) frozen dinners had arisen. Because there were other interested buyers, you need to make a strategic decision so Barkley’s Food could achieve a competitive advantage over their competitors.

Please consider the following four topics to help guide your decisions as the manager of the research group:

1. Market analysis
2. Environmental analysis
3. Customer analysis
4. Competitor analysis

Write a three- to five-page report addressing the following questions

1. What is your target market and the importance of your target market to competitors?
2. What are the potential drawbacks for Barkley Foods entering a particular marketing environment of your choice?
3. Does the industry contain markets that are suitable for innovation or do Barkley Foods need to take advantage of an emerging market?
4. Are there any secondary entrants that could impact Barkley Foods business?