Front of the Class: Micro & Macro-environmental Analysis of Campbell’s Soup

Micro-environmental factors

The company, Campbell Soup Company, was formed by Joseph Campbell and Abraham Anderson in 1869 in Camden, New Jersey. It was then called the Joseph A. Campbell Preserve Company and its products are canned tomatoes, soups, vegetables, minced meat, jellies and condiments. Then in 1897 Dr. John T. Dorrance, a chemist, joined the company and soon invented the condensed soup. The condensed soup became so popular that in 1922 the company added the “Soup” in its brand.

Along with the success of the condensed soup, Campbell’s made use of effective advertising to reach its customers and have an edge over its competitors. In 1904 the company introduced the Campbell Kids. This campaign targeted the working mothers who do not have as much time as the typical housewives. To make the Campbell Kids successful, Campbell created 21 varieties of it for only a dime each. Then in 1930 Campbell had the “M’m! M’m! Good!” radio-jingle which added customers to its already increasing American market. In the 50s, it made use of television to reach the keep in touch with its market. Up to the present the company remains to be one of the leading US television advertisers.

Since the success of the condensed soup, the Campbell brand has been a part of American household. The white and red colors of the Campbell’s Soup are one of the most recognizable packages in the US. Since then the soup has become a part of the American diet that at present more than 440 million cans each year are consumed in the US. Moreover, the Campbell’s Soup comes only behind meat, pasta and spices in terms of the most commonly used ingredient for dinner in the US (History, n.d).

Since 1897 the Campbell’s Soup line has expanded. The Chicken Noodle and the Cream of Mushroom was introduced in 1934 and other varieties such as the Double Noodle, Cream of Broccoli later on were added to the line. To fit the customers’ changing needs, Campbell’s created different types of soups. At present, for instance, there is the Healthy Request Soups which has less sodium, cholesterol, fat and calories.

The company has also expanded and its number of brand names now includes Godiva Chocolates, Swanson Broths, V8, Pepperidge Farm breads and cookies and Franco-American gravies and pasta. Again in these products, Campbell’s used intensive marketing campaign and advertising. Celebrities such as Ronald Reagan to Michael Jordan were used by the company to for market positioning and its other campaigns have been so successful in its solid hold of the market that some of them have become part of pop culture of every generation.

To ensure that its customers receive only the best quality product from Campbell’s, the company has standard requirements for its supply base providers. The supply base providers are the brokers, co-packers, repackers, special packers, suppliers and licensee. All the supply base providers are required to be knowledgeable and required to comply with all federal, local, regional and state regulatory requirements, international regulatory requirements for exported product (if applicable), religious requirements where appropriate (such as for Kosher, Halal, etc.), and all the requirements as described in the Supply Base Requirement and Expectations Manual (Supply Base Requirement, 2006).

The company is not active politically and is not an active political contributor although it is involved in at least one trade association. Recent reports have shown that the company has not made any major political contribution in the recent election cycles (Political Transparency, 2007).

Macro-environmental Factors

With its growth, Campbell’s Soup Company understood that in order to have a competitive edge over its competitors it must respond to the present diverse marketplace. In order to do so, it has diversified its employees, consumers and supplier base. The present supplier base of the company reflects the demographic diversity of the present consumer marketplace. Thus, its present Supplier Diversity Program allows for certified companies owned by minorities to have equal procurement opportunities at the company (Supplier Diversity, n.d). Since diverse groups of consumers purchase the Campbell’s products, the company believes that doing business with the diverse group of suppliers is also beneficial to the company and its market.

Internally, the Company’s board of directors is active in its governance. It is focused on the management and how the top executives are doing. According to the company’s former CEO, David W. Johnson, “good corporate governance can be a competitive advantage if the board focuses on performance, ‘not conformance’,” (Corporate Boards Should, 2002). Since he was hired by the company in 1990, Johnson has made board governance part of the Campbell’s new strategy for management. He demanded that the board take a more active role in the management. Since the executive compensation is dictated by performance, he made the same for the board. This has then crated a more active participation of the board which has added to the stability of the company.

The success of the company over the years is also due to its ability to increase the usage frequency of its customers or market. Since the company has become a dominant brand in the US and around the globe, increasing its usage frequency has been more effective and cost effective than encouraging the non users to switch to the product. In fact a research conducted on the advertising campaign on increasing usage frequency has shown that these advertising campaigns have indeed increased the usage of households by 1.0 to 2.8 units in a month (Ray & Wansink, 1995). This is has proven that what Campbell does is quite effective in strengthening its market position and blocks any attempts of its competitors to penetrate its market base.

The company also acknowledges the importance of emerging technologies and using it to satisfy the market since it has been around since the late 1800s. For instance, when the company launched a soup in the plastic, it failed miserably in the market. The consumers could not identify the significant difference between the ones in can and these new ones in plastic. Thus, despite some misses, the company tries to use the new technologies to satisfy market need (An Elusive Goal, 2004).

Marketing strategy

For over a century, Campbell Soup Company has been producing food products to homes across the US and across the globe. Its target market extended from soup buyers in the late 1800s to the working moms in the 50 and to almost every adults and children in the present. The price of each product by Campbell’s is well within the spending capacity of its market. And to have a wider range of consumers the products are very affordable. This way the products will reach those, not just in the middle income range but even those in the lower bracket.

The products produced by Campbell’s have become the trusted brands since they are wholesome, nutritious and great tasting. At the same time, the company ensures that these products are part of its consumers’ balanced nutrition and healthy lifestyle. So for its marketing strategy, the product itself plays an important role. The company is committed to offering the consumers nutritious, delicious and wholesome products.

For the product promotion, the company is aware that homemakers or parents are the ones who are responsible for the food choices. Thus, the company positions the products well within the reach of these individuals. The campaigns are well directed to the adult market however its campaigns or promotion are directed to mixed audience. Targeting mixed audience, the company ensures that its ads or campaigns carry responsible messages. This is because the children are not always with their parents when they see these ads. Its responsible advertising is part of strengthening its hold on the market (Global Guidelines, n.d).

For market positioning, the company identifies new products that the consumers actually want (An Elusive Goal, 2004). This is seen in the Soup in Hand, which the company spent five years to develop. This product was developed by determining the growth areas for the soup. The researchers then found that with the kind of lifestyle people now lead convenience is certainly one of the growth areas. Thus, the Soup in Hand was developed (An Elusive Goal, 2004). Campbell understands that the success of the product over another lies in whether it is a market-driven product.

Current and Global Events

Globally at present, the company has reached almost every country in the world. Some products, such as the Cream of Chili Poblano Soup, respond to the cultural differences of the market. At present, Campbell International represents about $1.5 billion of the company’s annual revenue. Some of the Campbell products are the leading brands in Asia and even in Europe. In North America, the company’s products are also the leading brand in their category. The North American products represent about $5.2 billion of the company’s revenue (History, n.d).

Last year, Premier bought Campbell Soup Company in the United Kingdom and Ireland. The $830 million deal did not include the brand so the Campbell’s Condensed Soup can will be canned by Premier foods and will be rebranded as Batchelors Condensed Soup. This will take effect this year since the brand name will expire by mid 2008. The label will then carry the tag line: “Formerly Campbell's. Same great taste” (UK Shops, 2007)

Works Cited

An Elusive Goal: Identifying New Products that Consumers Actually Want. 2004.

Knowledge@Wharton. Retrieved 9 February 2008 from

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1089

Corporate Boards Should Focus on Performance, Not Conformance. 2002.

Knowledge@Wharton. Retrieved 9 February 2008 from

http://knowledge.wharton.upenn.edu/article.cfm?articleid=537

Global Guidelines for Responsible Advertising to Children. n.d. Campbell’s Soup Company.