Campbell's iq meals case study

First questions:

Respond to the following in a minimum of 175 words:

Review Attached “Case: Campbell’s IQ Meals” in Ch. 5 of New Products Management.
Describe what went wrong in this situation, and what Campbell’s might have done differently.

Second Questions:

Respond to the following in a minimum of 175 words:

$15 million dollar assumption

I worked with a large software gaming company that runs the Lottery in more than 80 different nations. The project we were working on is an online application for the world lotteries… so that a player could play the lottery from home.

It was a wildly held opinion that in the gaming world the new trend was multiple player action where people can play online with other online players thereby making the experience more exciting. It was true for most gaming so we went forward in the software design. It was an incredibly difficult task as we needed to license very expensive software and modify it to our needs… simply designing this platform took the majority of our $15 Million dollar budget… and we were still having problems.

Then the marketing team did a study in London as we had just received a contract to design their system… we found out from this study that when gambling on the lottery that the respondents did not want to have others in the room playing with them in fact the vast majority wanted to play alone and be anonymous…

This marketing study cost us around 10 thousand dollars… had it been completed a year earlier it would have saved us nearly 15 million dollars…

Knowing what they really want before we design the product is key!

Case: Campbell’s IQ Meals36

In 1990, Campbell Soup was the undisputed leader among U.S. soup manufacturers, with a market share of over 75 percent. Soup consumption, however, was leveling off, and top management was looking for opportunities for growth in related markets. Competitors such as ConAgra (Healthy Choice brand) and H. J. Heinz (Weight Watchers brand) were making sizeable sales and profit gains in their frozen foods lines, stressing their dietary benefits, and this seemed like a good place for Campbell to begin generating new product ideas.

At the time, the U.S. public was becoming more interested in the relationship between diet and disease prevention. It seemed that, every day, health benefits were turning up in one food or another, causing fads such as oat bran to sweep the country. Campbell’s R&D department soon turned to investigating the diet-disease relationship, focusing on foods that could be used to prevent illnesses such as diabetes or cardiovascular disease (including high blood pressure). Given that 58 million Americans have some form of cardiovascular disease and another 16 million have diabetes, this focus seemed very reasonable. Soon enough, the rough idea had been generated: a line of foods with medical benefits. The rough idea now needed to be further developed.

The challenge was to develop a food line that not only played a role in the prevention of these diseases, but also would be accepted and adopted by the U.S. population. Dr. R. David C. Macnair, Campbell’s chief technical officer, built an advisory board consisting of leading nutrition, heart disease, and diabetes specialists, who would scientifically analyze the new products. Campbell’s CEO at the time, David W. Johnson, was 100 percent behind the food-with-medical-benefits idea, saying that it had “explosive potential.” Soon, he was attending the advisory board meetings as well. Mr. Johnson said, “Wouldn’t you be dumbfounded by the opportunity to take a quantum leap and develop a product that could help improve the health and nutrition of the world?”

With the backing of the Campbell CEO, the project was underway with a clear goal: to make the concept of healthy, vitamin-and-mineral-rich meals a reality. The Campbell food technologists found this a challenging task—one of the early prototype fiber-enriched rolls “could have been marketed as a hockey puck,” according to Macnair. By fall 1994, however, about 24 meals that passed early taste tests were ready for clinical trials to determine health benefits. Over 500 subjects ate the meals for 10 weeks, and most reported improvements in cholesterol, blood pressure, and blood sugar levels. None experienced side effects, and many reported they liked the taste. Meanwhile, Mr. Johnson created Campbell’s Center for Nutrition and Wellness, based in the Camden, New Jersey, head office and employing 30 nutrition scientists and dietitians.

Next came the market test. Campbell marketing staff selected the name “Intelligent Quisine” (or IQ Meals), and a blue box or can for packaging. The plan was for UPS drivers to deliver 21 meals (mostly frozen, a few in cans) each week to test subjects’ doors. By January 1997, the product was being test marketed in Ohio, backed up with a print ad campaign and a 10-minute infomercial designed to stimulate toll-free calls to Campbell’s information line. Campbell also hired part-time pharmaceutical sales reps to pitch IQ Meals to doctors, and contacted leading hospitals such as the Cleveland Clinic to distribute IQ Meals and promotional material. Things were looking up!

The first sign of trouble was at the phone bank. Callers found out that the one-week sample pack cost $80, and the recommended plan (10 weeks) cost $700, and promptly hung up. Fixed-income households found the price especially steep. At the American Heart Association’s Columbus office, Campbell sponsored a lunch to promote IQ Meals’ benefits, but failed to impress many of the dietitians present. Further, Wall Street analysts had their doubts as well: One of them wrote a report titled, “UPS T.V. Dinners Drive Top Line?”

Soon, Campbell executives were doubting the IQ Meals as well. Consultants were called in to assess the project’s viability, and Dale Morrison, head of international and specialty foods, cut IQ’s budget drastically. By May 1997, sales in the Ohio market test were dismal, and another problem was

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arising. Those that had stuck with the program since January were showing health benefits, but now many of them were reporting that they were getting tired of the same nine meals over and over again.

The fate of IQ Meals was sealed in a corporate shakeup at Campbell in July 1997. Mr. Johnson, its biggest supporter, gave up his CEO position (and became Campbell’s chairman). Mr. Morrison rose to president and CEO, with a plan to expand international sales and to focus on key brands. Swanson, Vlasic, and other Campbell brands were spun off—and the marketing and promotion for IQ was terminated (though clinical trials were continued). The Center for Nutrition and Wellness researchers were reassigned. By fall 1997, Campbell announced plans to sell IQ Meals.

IQ Meals seemed to be a classic case history. The idea that was generated seemed foolproof with respect to the marketplace opportunity and the associated demographic trends. Campbell would appear to be the perfect company to pull it off, given its core competencies and its willingness to expand into growth areas. The line even did well in both clinical trials and early consumer tests. But somehow, something got lost in the translation. And clearly, this is not an isolated incident. What went wrong? And what might Campbell product developers or executives have done differently? Or was this one just doomed from the start?

Case: Earning Organizational Respect In this case, you and your classmates play the role of the marketing department in a firm involved in new product development. Your firm is struggling with instituting team-based product development, and over the last several months several of the marketing staff have been placed on product teams with personnel from engineering, design, and manufacturing. The experience so far has not been positive for you and your marketing colleagues. You feel that marketing is routinely left out of key team decisions and that top management seems more sympathetic to