INTRODUCTION

McCain Foods Ltd. is the world's largest producer of French Fries and Potato

Specialities. Located in Florenceville, New Brunswick, Canada, McCain has grown to

become a global leader in the frozen food industry. McCain Foods was founded in 1957 in

Canada by the McCain brothers Harrison, Wallace, Robert and Andrew. From Canada,

across the world to Japan, from the tip of Argentina to suburbs in Australia, tasty and

convenient food products are served in restaurants and sold in retail stores; adding nutrition

and flavour to family meals time after time.

McCain Foods (India) is a wholly-owned subsidiary of McCain Foods Limited in

Canada. Since 1998, McCain has been engaged in agriculture R&D and in development of

frozen food market in India and subcontinent countries. McCain products are used by leading

fast food chains, hotels, restaurants, catering companies and are popular for in-home

consumption.

McCain constant endeavour to create good food that is delightfully fresh. In order to

maintain an impeccable standard of quality, they strive to use the highest quality ingredients.

The products are prepared simply with wholesome ingredients made by good people who

care about delivering quality in every box, every bag and every bite.

McCain focuses on providing great variety to customers and consumers. A delectable

range of products is available, world favourites like McCain French Fries, McCain Smiles

and local delights such as McCain Aloo Tikki, Idli Sambar Combo and real cheese appetizers

like McCain Cheese & Jalapeno Nuggets and Potato Cheese Shotz.

The range of World Favourites like McCain Smiles, Hash Browns and Local Delights

like McCain Aloo Tikki, Tandoori Vege Nuggets, Chilli Garlic Potato Bites and more have

been spreading delight across the globe. Some of the regions where our products are a great

success are South Africa, US, UK, Middle East & China.

McCain Foods is now the largest chip producer in the world with a market share of

almost 33% and more than 20,000 employees working in 57 locations worldwide. Since 1968

McCain GB has been operating from its UK base in Scarborough, North Yorkshire.

McCain prides itself on the quality and convenience of its product range and for over

three decades has been making healthier versions of favourite staple foods. The McCain

brothers had a simple philosophy 'Good ethics is good business'. This lies behind the McCain

brand message 'It's All Good'.

It is not just the food that is good. The philosophy also refers to the way McCain

works with its suppliers and builds its relationship with its customers. McCain believes it is

important to take care of the environment, the community and its people. It works with

around 300 farmers in the UK , chosen for the quality of their potato crop. McCain factories

are located in key potato growing areas, which help to reduce food miles.

THE MARKETING MIX

McCain strives to be a company making good, simple food in an increasingly

sustainable way, while meeting business objectives. To achieve this, the business ensures that

it balances the four elements (the four Ps) of the marketing mix.

A product or service will have its own different mix of the four Ps. The right mix will

achieve marketing objectives and result in customer satisfaction:

PRODUCT - this has to look and taste good and be made from wholesome ingredients

PRICE - the price has to be attractive to ensure enough sales to generate a profit

PLACE - the place and position of the product in the market is important to compete for

market share

PROMOTION - this has to fit the company”s objectives for the product.

PRODUCT

McCain Foods is the world's leading manufacturer of frozen potato products.

Although McCain is perhaps best known for producing Oven Chips, its product lines are

much wider. In the UK they include various other potato products such as McCain Wedges

and McCain Home Roasts, as well as McCain Sweet Potato and McCain Micro Pizza. In

other countries McCain sells a variety of foods including frozen vegetables, ready meals and

desserts.

Some products, for example, McCain Oven Chips, captured the public imagination

immediately and continue to sell well without needing to be changed. Other products change

through time or are adapted to create new variations, e.g. curly fries or thin and crispy fries.

Under product, we study about the external influences affecting McCain food and the

way they manage to retain the quality of their products. We also study the BCG Matrix to

find out the position of McCain foods in the market.

A) EXTERNAL INFLUENCES

Changes in the range are driven by a number of different factors. For example,

microwaveable snacks take account of changing lifestyles, where people are looking for food

that does not take long to prepare. McCain has also been responsive to market needs for

healthier options and its products support the governments Change4life campaign. This

encourages people to 'Eat Well, Move More, Live Longer'.

The company's philosophy supports the 'calories in/calories out' principle. This states

that to maintain a healthy weight, calories consumed should not exceed calories used. This

also forms part of the 'It's All Good' message - not only does McCain food taste good, but it

fits in with current thinking on healthy diets.

McCain now only uses sunflower oil in the preparation of its chips. It knows that

customers want to eat healthily without compromising on taste and it is careful to use

wholesome ingredients in its products. Having a wide range including healthier options, such

as Oven Chips, as well as products developed for taste, e.g. Wedges, and means the company

can meet different consumer needs for different meal occasions.

B) MANAGING QUALITY

To protect quality throughout the whole supply chain, McCain manages its own potato

seed development. After specially selecting the seeds, McCain works closely with around 300

farmers to ensure the potatoes are grown to a high standard and harvested at their peak. Only

the best potatoes are chosen to make McCain chips and potato products.

McCain Foods' product offering extends outside the home to include food service. This

provides products specially designed for use in restaurants and canteens.

PRICE

In pricing its products, a business must consider four things:

1. Business objectives. The business may set its pricing to achieve a number of different

objectives. These may be to:

maximise profits

achieve a target return on investment

achieve a target market share

match the competition.

2. Costs. In order to make a profit a business must make sure that its products are priced

above their cost. The total cost of a product includes overheads such as research and

development, investment in equipment, people and technology, as well as direct costs, such

as raw materials and ingredients.

3. Competitors. If there is no competition the business can set whatever price it chooses. On

the other hand, if there is perfect competition then the business must accept the market price

for its products. In most cases the reality is somewhere in the middle.

4. Customers. The business needs to consider what its customers' expectations will be.

McCain uses a range of pricing strategies associated with adding value for money. For

example, 'extra-fill' packs can give the customer up to 30% extra free. This rewards regular

buyers of a particular product. McCain may also offer its products at a special promotional

price using price-marked packs to encourage people to try the product.

PLACE

Place describes the channels McCain uses to position its products in the market place.

As a business-to-business (B2B) organisation, McCain does not sell directly to its

consumers. Instead it places its products with wholesalers and retailers, such as major

supermarket chains. McCain may then be able to influence how its products reach the

consumer at the point-of-sale. For example, it may secure key positions for its products in

stores. By paying for end-of-shelf positions for its products, customers are more likely to see

and buy them.

McCain does not use its own vehicles to distribute products to its customers.

Transportation is outsourced, which means another organisation carries out the deliveries.

Products are delivered directly to retailers' central depots for onward distribution to their

stores. Alternatively, they may go to wholesalers, who sell them on to other businesses such

as restaurants.

McCain takes the need for sustainability and reducing its impact on the environment into

consideration in transporting its products. For example:

Where possible local farmers are used to reduce food miles.

Double-decker trucks are used, saving in the region of 2,000 lorry journeys a year.

The lorries have built-in solar panels which helps to provide additional power, for example,

to help with the internal lifting mechanism

PROMOTION

A further demonstration of the 'It's All Good' ethos is McCain Foods' ethical stance on

promotion. McCain makes a commitment not to advertise to children under 12 years old.

It also ensures that the retail labelling on its products carries clear information on

levels of fat, saturated fat, salt and sugar to help shoppers choose healthier options. Its

labelling is in line with the Food Standards Agency (FSA) traffic light scheme and the food

industry's Guideline Daily Amounts (GDA).

Promotion falls into two main categories:

A) ABOVE-THE-LINE

Above-the-line promotion is paid-for and includes traditional advertising routes such

as television, radio and the press. These are good for carrying marketing messages to a large

audience. However, it is less easy to measure the impact of these channels, for example,

whether a TV advert has increased sales.

McCain, too, does the above the line promotion of its products by promotions

products through television ads and newspapers.

Special displays or positioning in stores or advertising on supermarket trolleys are

also examples of above-the-line promotional activity at McCain Foods.

B) BELOW-THE-LINE

Below-the-line promotion can take many forms and is usually more under the control

of the business. Typical examples include events or direct mail. McCain uses a combination

of below-the-line activities including:

Door-to-door leaflet drops or books of vouchers which give customers discounts over

a period of time. These help to attract consumers and establish brand loyalty so the

consumer buys the product again.

Email newsletter for consumers. This creates a relationship with consumers, which is

unusual for a B2B organisation. It not only allows McCain to communicate directly

with and listen to consumers, it also enables the business to collect information, for

example, about their lifestyles and product choices. This is used for feedback,

research and promotions.

PR AND SPONSORSHIP

Public relations (PR) is a form of promotion that is concerned with developing

goodwill and understanding between organisations and the public.

For example, McCain uses its relationship with UK Athletics to deliver 'Track and

Field' road shows across the UK. These emphasise the link between healthy food and healthy

lifestyle. Again, this aligns with the 'It's All Good' message.

McCain also takes part in different types of sponsorship, such as:

TV show Family Fortunes. This brings the McCain brand to a wide audience through a

popular family programme.

McCain Athletics Networks which encourage young people to get involved in the sport

through local clubs. This further supports the company’s approach to balancing calories in

with calories out.

McCain also aims to promote better understanding of where food comes from through

initiatives such as The Potato Story. This is an educational resource that helps teach children

about how potatoes grow and their place in a balanced healthy diet.

HOW McCAIN RESPONDS TO CHANGES IN THE MACRO ENVIRONMENT

A business' ability to meet the objectives depends on two main groups of factors:

1. the internal strengths of the organisation for example being able to make the right

products in an efficient way

2. being able to identify external influences in the business environment and on its

consumers and adapt accordingly.

The external environment today is changing fast. The external environment consists of

everything outside the business. McCain needs to identify changes in the external

environment. It must then rise to the challenges posed by change.

The McCain product most people recognise is Oven Chips. McCain is the world's

largest producer of chips. McCain buys 12% of the British potato crop. McCain is also one of

the world's largest frozen foods companies.

McCain is a privately owned company with a strong market focus. This means that it

carries out research to find out what consumers want. It then uses this market information to

create products that consumers want to buy.It provides consumers with a wide variety of cut

and seasoned potato products through UK retailers, like supermarkets and restaurants. These

include roast potatoes, potato wedges, hash browns, waffles and potato croquettes.

McCain produces more specific potato shapes like Potato Smiles, Crispy Bites and Sum

things (shaped as numbers) which appeal to younger consumers. McCain also makes pizzas.

EXTERNAL CHALLENGES

One of the biggest environmental factors affecting McCain in 2005/6 was the growing

concern about obesity, particularly in children.

McCain's view is that its chips can and do play a role in a healthy balanced diet and it

is continually finding ways to ensure McCain products are as healthy as possible.

 

Thus in order to be able to understand its customers' requirements and respond to other

changes, it is important for a company to analyse its environment.

A SLEPT analysisis a tool that helps to analyse the environment.

To create a SLEPT analysis the company needs to examine the key environmental factors that

affect its business. Having carried out the analysis it must then take action to respond to the

important changes that have been identified. Of course, some of the factors in the SLEPT

analysis can be placed under more than one of these headings.

The following analysis outlines SLEPT factors and indicates some of the changes that

McCain has made and is making.

SOCIAL FACTORS

Social trends are one of the key factors affecting a business. Consumer buying

patterns are determined by trends. Just as the demand for some popular clothes are

determined by fashion, demand for food products is determined by eating patterns. Eating

habits are always changing. Currently one in four of all British potatoes consumed are eaten

as chips.

Recently McCain and other food producers have seen a slow down in sales as a result

of campaigns to encourage healthier eating such as that spearheaded by Jamie Oliver.

McCain has responded to this challenge in two main ways:

1. By reducing quantities of salt and oil throughout its potato products range.

McCain argues that these figures are very low already. For example, McCain's Oven

Chips contain only 5% fat, 0.8% saturated fat and 62mg of sodium in every 100g

portion. They are made with only natural ingredients - specially selected potatoes and

sunflower oil.

2. By seeking to get the message over that its chips are not unhealthy. The message

that it communicates through public relations campaigns and advertising is that all

McCain potato products are made from simple ingredients such as whole potatoes and

sunflower oil.

A key way in which McCain has responded to changing customer tastes has been to

improve the nutritional make-up of its products. All of McCain's potato products are now pre-

cooked in sunflower oil instead of regular vegetable oil to reduce saturated fats. There is no

added salt in oven chips and added salt has been reduced by up to 50% in other potato

products.

LEGAL FACTORS

Responsible businesses not only abide by the law, they seek to create standards above

minimum requirements.

McCain has to be aware of a number of legal factors. The government's Food

Standards Agency has recommended that firms put 'traffic light' labels on food to help people

understand what they are buying and to help them make the right choices:

Red represents high levels of ingredients such as fats and salts.

Green represents low levels.

McCain has put 'traffic light' labels on its British products as a response to consumer

concerns about healthy eating. All of McCain's potato products are able to display the green

label for saturated fat and none of its products show a red label.

Also featured on the labels are Guideline Daily Amounts (GDAs) which show how much fat,

saturated fat, sugar and salt each product contains. This helps the consumer to achieve a

consistently balanced diet.

In addition McCain's products comply with a range of laws, including:

The Food Safety Act, covering the way in which food is prepared and served.

The Trades Descriptions Act, which states that goods and services must be exactly as

described.

The Weights and Measures Act governing such aspects as giving the right weight on packs.

For example, McCain's oven chips come in packs of 454g, 907g, 1kg, 1.5kg, and 1.8kg.

ADVERTISING

In the UK, advertising of products is supervised by a voluntary body within the

advertising industry. It is called the Advertising Standards Authority (ASA).

McCain makes sure that all its advertising sticks rigidly within the requirements of the

ASA. The ASA sets out that all adverts must be:

legal

decent

honest and

truthful.

ECONOMIC & POLITICAL FACTORS

Economic factors include changes in buying patterns as people's incomes rise. For

example, as incomes go up people prefer to buy what they see as superior varieties of a

product type. We see this with the development of ready prepared foods.

As people become cash-rich and time-poor they prefer to switch to ready meals and

simple to prepare foodstuffs that they can quickly heat in an oven or microwave. Rather than

buying potatoes and making chips at home or taking the time to go to a fish and chip shop, it

may be seen as more desirable to buy oven chips. Of course, it may be cheaper to make your

own chips by peeling and cutting up potatoes. However, with growing affluence people

prefer ready prepared oven chips.

Responsible eating and healthy exercise encourages everyone's health and well-being.

McCain has risen to this challenge by creating a range of varieties e.g. McCain's Straight Cut

Oven Chips, Home Fries, roast potatoes and wedges, to appeal to a variety of customers.

On political factors, the UK government has increased the pressure on food suppliers

to come up with healthier foods. The government publicises and supports healthy eating by

creating initiatives such as 'Healthy Schools'. This encourages pupils to think about the

choices they make when choosing what to eat.

McCain supports the government's initiative. It believes that the foods that it provides,

including potato products which are nutritious and are prepared in a healthy a way.

TECHNOLOGICAL CHANGES

Food technology is one of the most dynamic technologies in the modern economy.

Food technology involves researching and developing new techniques for making products as

diverse as ice cream, probiotic yoghurt, frozen oven chips and muesli bars.

Each of these products involves finding technical solutions to problems such as how to:

freeze while retaining flavour

maximise natural nutritional characteristics

turn a frozen product into an oven heated product.

McCain is continually being faced by new challenges from technological factors. It

should be no surprise therefore that McCain's food technologists were only too happy to rise

to the challenge of making its potato products even healthier. McCain needed a solution that

not only reduced fat and salt, but also kept the sort of flavour that would delight customers.

The solution was to use sunflower oil which reduced saturated fats by 70% across the

whole potato product range. Food technologists know that by working with real

potatoes they are dealing with a product with a very strong nutritional pedigree.

It is a little known fact that potatoes are a major source of vitamin C for the UK diet.

As a product, potatoes are the second most important staple food in the world today

(rice is the first), providing essential carbohydrates that help us to generate energy.

Potatoes also have tremendous future potential. In 1995 the potato became the first

vegetable to be grown in space. NASA worked with top scientists to develop super-

nutritious and versatile potatoes. These can be used to feed astronauts on long space

voyages and NASA hopes one day that these will feed space colonies.

CONCLUSION

'It's All Good' is a message that is embedded in all aspects of McCain Foods'

marketing mix.

Not only are the products designed to look and taste good, they are produced from

good quality crops in a way that addresses people's concerns about issues such as health and

the origins of their food. This helps to ensure that McCain remains a trusted brand.

McCain also takes great care to minimise its impact on the environment. Its products are

placed in the market in a way that reduces both food miles and carbon emissions.

Promotion of the products focuses on the positive relationship between McCain food and a

healthy diet and reinforces the importance of food and exercise in a healthy lifestyle.

Change comes from a number of sources Social, Legal, Economic, Political and

Technological. Change is the one constant in the business environment.

Because McCain is a market-focussed company, it recognises that it has to respond to

what its consumers want. There are clear indicators that toSday's consumers want to live a

healthier lifestyle.

Consumers are increasingly aware of food content and food issues. More and more

people look at food labelling and read information in the press about what is good for them.

They listen to people like Jamie Oliver and government spokespeople. They listen to advice

from teachers and nutritionalists.

The challenge has been, and continues to be, to prepare chips and potato products in

the healthiest way possible. Fortunately for McCain, it has market researchers and food

technologists who enable the company to keep in tune with the changing environment.

McCain's advertising supports the company's message that chips are nutritionally

acceptable provided they are made in the right way. The challenge now is to keep listening to

consumers and to the external environment in order to continue to give those consumers the

best value healthy chips and other food products.

The setbacks in the Indian frozen foods R&D sector is firstly limited or non-

availability of core infrastructure like high-tech controlled production facilities, grading,

packaging, warehousing, integrated processing units, poor transportation and erratic power

supply are the major concerns for efficient supply of frozen foods in India.

The frozen food market in India is very nascent and is typical of a market, which is in

the early stages of development. For the Indian consumer, frozen food is a new category

altogether and they are still getting familiar with it.

McCain’s local range of frozen food offerings are growing well and products with local tastes

are registering good acceptance. Aloo Tikki, the most popular of McCain’s local product,

introduced in 2008 is gaining good acceptance in the retail and food service channel and it

also won the coveted SIAL d’OR Country Award 2010 for the best ethnic adaptation. 

The evolving market demand made us introduce McCain 3-minute Idli, which marked our

foray into non-potato-based frozen product in India. Made of real rice and lentils, the product

offers great convenience as it gets ready in microwave in just 3 minutes. 

Today, McCain products are being used by leading fast food chains, hotels, restaurants and

catering companies in India and abroad, and are also very popular with retail consumers.

McCain Foods India also exports Made in India products across the world.