Introduction

General Mills (GM) is a manufacturer and marketer of consumer foods, which was founded over 160 years. It markets many well-known brands such as Häagen-Dazs, Cheerios, Trix, and Cocoa Puffs. GM has produced cereal related products for many years. In order to improve sales and better understand the effectiveness of in-store promotions and advertisements, we need more analysis that focuses on comparing different brands and our primary competitors. Therefore, we are provided 21,850 observations of a representative sample of weekly sales from several stores, which included store number, price, brand, flavor, promotion, advertisement and so on.

According to the weekly cereal weekly sales data, we highlight some compelling results as below shown:

The Regular cereal flavor is the most competitive market, which has the highest sales than other flavors.
GM has the lowest units sold and the lowest sales on Regular flavor compared with other producers.
The promotion from GM didn’t work well on raising the sales for Regular and Toast flavor.
In all the flavors, GM’s medium advertisement didn’t bring enough influence on raising the number of packages sold compared with a small advertisement.
Kelloggs has the highest sales of the three producers.

For more detail of analysis, we came up with two specific and interesting findings to demonstrate, which we did some research and deep analysis to improve operational performance and revenue.

Finding 1 - Do promotion and advertising strategies work as expected?

We did an evaluation for promotion and advertisement by different brands produced by GM. For the promotion strategy, Surpricely, we found that sales are not influenced by promotion in some of the flavors when we run the statistic test for the relationship among promotion, sales and the number of cereal packages sold. we listed all the results of the statistic test as below shown.

We found that promotion works well on most of the flavors except Toast and Regular flavor. In the statistic test results, we noticed that the Toast flavor’s mean sales are even $6 dollars less when they have a promotion. As it stands, we could explain the promotion mark down the price, but it didn’t bring enough cereal packages sold. For Regular flavor, the statistic test result shows there is no obvious difference in raising the mean sales. Therefore, we recommended that we stop promoting flavor Cheerios and KIX if our main goal is increasing sales instead of increasing market share.

For the advertisement strategy, we used the same statistic method to test the relationship among advertisement, sales and the number of cereal packages sold. The result as below shown.

We found that medium and small advertisements are statistical significance. Both are worked well on raising the number of packages sold. However, the statistic test results show there is no difference between medium advertisements and small advertisements. The medium advertisement didn’t bring a better number of packages sold at this point. We assumed that the medium advertisements would spend more money. Obviously, base on the statistic result, it’s not necessary to adopt a medium advertisement for all our brands.

Finding 2 - Why the sales of REGULAR flavor is lower than Kelloggs’s?

Regular is a flavor that three producers are selling. As we mentioned before, Kelloggs has the highest sales among the three producers. Base on the chart below, we found GM and Kelloggs have a similar pattern on the sales by the week timeline in one-year data. Hence, we could assume that they have similar sales markets and target customers.

So what makes the sales different? First of all, we analyze the data base on several factors that might be an influence. As we can see below the chart, we found that GM has the highest price per quantity, which can be one of the reasons why GM can’t attract the customers. Second, as we mentioned earlier, the promotion strategy didn’t work well in raising the sales by marking down the price. Furthermore, we count the number of promotions, and compare them with Kelloggs’. GM didn’t do as many as Kelloggs did. The same thing happened to the advertisements. As a result, GM couldn’t have an outstanding performance of sales on Regular flavor.

Conclusion

Based on the analysis, we came up with several executive thoughts. In the Regular flavor , GM’promotion strategy needs to be optimized rather than only marking down the price. Apparently, promotion doesn’t work well as we expect. For instance, they could do the bundle sales or other kinds of promotion activities. Moreover, excessive use of sales promotions and discounts can cause a price orientation in customers, this technique does offer many benefits when used effectively. Clear objectives can help the company understand which sales promotion ideas will work and how they fit with our marketing activities such as advertising.

Considering the cost of advertisement is an important factor for marketing. GM needs more advertisement but should think about using an appropriate size of advertisement that can bring the maximum profit for the company.

Through detailed analysis could help GM to focus on the correct side to improve the sales and market share. A great analysis could support important decision-making for the executive. We would like to discuss the analysis further if there is anything not clear or need to be elaborate more. Please do not hesitate to contact us through our information: ychen@seattleu.edu/ hyang1@seattleu.edu. Thank you!

Gloria, Vanessa