Campbell's Innovation Struggle: A Market Misstep

Introduction: This case is largely based on Vanessa O'Connell, "Food for Thought: How Campbell Saw a Breakthrough Menu Turn into Leftovers, the goals we need to reach is to gain the understanding of this company, why they can get the innovation and how they can manage it, also we can learn the experience of this company.

The back ground of the company: In 1990, Campbell Soup was the undisputed leader among U.S. soup manufacturers, with a market share of over 75 percentages.

Soup consumption, however, was levelling 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.

Innovation plan: At that era, the U.S. public was becoming more interested in the relationships which are between diet and disease prevention.

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No requires, no supplies. The Vanessa O’Connell’s focusing on foods that could be used to prevent illnesses such as diabetes or cardiovascular disease (including high blood pressure).

Description of Industry: Campbell Soup Company (NYSE: CPB), also known as Campbell's, is an American producer of canned soups and related products. Campbell's products are sold in 120 countries around the world. It is headquartered [2] in Camden, New Jersey. Campbell's divides itself into three divisions: the simple meals division, which consists largely of soups both condensed and ready-to-serve, the baked snacks division, which consists of Pepperidge Farm, and the health beverage division, which includes V8 juices.

Marketing Plan: The Company using the differentiated strategy not only provide the common things but also provide the sophisticated products and services in order to feet most of the customers. Soon enough, the rough idea had been generated: a line of foods with medical benefits. The rough idea now needed to be further developed.

Organizational plan: 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, Campbell's CEO at the time, David W. Johnson, was 100 percentages behind the food-with-medical benefits idea, this innovation cause the company goes to a high-profit product. The key to success:

The Campbell food technologists found this a challenging task—one of the early prototype fibber-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 Centre for Nutrition and Wellness, based in the Camden, New Jersey, head office and employing 30 nutrition scientists and dieticians.

Next the company came the market test. Campbell marketing staff selected the name "Intelligent Quinine" (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. Critical Risks:

By May 1997, sales in the Ohio market test were dismal, and another problem was 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.

Conclusion: The fate of IQ Meals was sealed in a corporate shakeup at Campbell in July 1997. By fall 1997, Campbell announced plans to sell IQ Meals. For using the correct strategy, in 2012, Campbell announced plans to buy Bolthouse Farms, a maker of juices, salad dressings and baby carrots, for $1.55 billion. Analysts saw this as an attempt to reach younger, more affluent consumers.