Campbell S Soup Case

Topics: Campbell's Soup Cans, Campbell Soup Company, Food processing Pages: 17 (3721 words) Published: May 13, 2015

External Analysis
“The U.S. food processing sector is extensively regulated by state and federal agencies. Federal agencies dominate the regulatory oversight: USDA FSIS for the meat and poultry processing businesses and FDA for all other food processing businesses. State agencies also have an active role in overseeing food processing businesses within their respective states, but their role is in collaboration with the federal agencies”.1 Fortunately, there was no mention of any issues that Campbell’s has encountered regarding their manufacturing operations. However, they have run into some ethical issues regarding the methods used by the companies that they employed to do their marketing research. Campbell’s hired three different marketing research companies. The first was Innerscope Research Inc. who measured bodily responses such as galvanic skin response, heart rate variability, pupil dilation etc. Using these measurements, they looked to see which parts of Campbell’s television commercials were eliciting responses from the consumer. The second marketing research company they hired was Merchant Mechanics Inc. who conducted studies in the field (rather than a lab) to determine what it was about products that attracted customers. Merchant Mechanics believed that changing the retail environment was the best way to increase sales. Finally, they hired Olson Zaltman Associates who used a metaphor elicitation technique to ascertain thoughts and feelings that might be occurring in the mind of the customers. These methods encountered some ethical objections as there was concern about companies being unethical in their use of neuroscience to sell more of their products. It is mentioned in the case study that a group called Commercial Alert has raised objections regarding this kind of research. “Neuromarketing is a controversial new field of marketing which uses medical technologies such as functional Magnetic Resonance Imaging (fMRI) -- not to heal, but to sell products. We see three big potential problems with neuromarketing: (1) increased incidence of marketing-related diseases; (2) more effective political propaganda; and, (3) more effective promotion of degraded values”.2 Another ethical concern within their industry was regarding the mandatory nutritional labeling of food products by manufacturing companies. “The Food and Drug Administration recognizes the importance of food labeling as a vehicle for dietary messages and, thus, enforces stringent guidelines to maintain the integrity of the food label”.3 Manufacturers were stretching the truth about what was in their products. An example of this is the ‘natural’ label. “The word "natural" is not regulated by the FDA and therefore is very misleading. Sure "natural" brings to mind thoughts of fresh, minimally processed and healthy food, but it means nothing about a food's nutritional content, ingredients, safety, or health effects”.4 Economic

This case study was done during the time when the world was on the cusp of a global economic recession. “In 2008 the world economy faced its most dangerous crisis since the Great Depression of the 1930s”.5 The upside for Campbell’s was that the food industry is considered ‘recession proof. “Some goods and services are a necessity, meaning people will buy them in about the same quantities regardless of changes to their income or employment circumstances. Food is an obvious essential”.6 Food and beverage companies were still considered safe by investors during 2008 downturn. As well, a favorable currency exchange rate had contributed to growth in markets like Canada and the US.

In addition to the favorable exchange rate and industry that Campbell’s was in, they also had the advantage of focusing their business on the late stages of food manufacturing which is a high margin, high value category that allows for brand building. Socio-cultural

During the time of this case study (2007-2008) there was a new...
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