Ivan Guillen sat at his desk in October $2006$ and thought about the Pillsbury refrigerated baked goods

$($RBG$)$ business plans for the upcoming fiscal year. Guillen was the marketing manager on the RBG

category at General Mills Canada Corporation $($GMCC$),$ and he was faced with the challenge of developing

a strategy that would lead to improved business performance in his category. RBG was GMCC$$s fourth$-$

largest category, and its performance over the past two years had been less than stellar. Volume growth

between $2004$ and $2006$ had been flat, and household penetration had fallen to a five$-$year low.

Of particular concern to Guillen was the refrigerated$-$cookie product line, which represented $62$ per cent

of RBG$$s unit sales and over $75$ per cent of the category$$s profit. Refrigerated cookies had always been

the anchor for the RBG business. When cookies performed well, the entire category tended to perform

well. The same could be said for those times when cookie performance was suffering. As Guillen looked

back at the performance of the cookie segment, he noted that annual volume growth was only one per

cent over the past three years, and household penetration had fallen.

Guillen had his work cut out for him. In February $2007,$ he and his team would have to present RBG$$s new

business plans to the senior leadership team. Given the importance of this business to GMCC$,$ it was crucial

that Guillen worked with his team to understand what could be done to profitably grow the business going

forward. Guillen believed the team should focus its efforts on the refrigerated cookie segment since it was

the most profitable segment within the category. As he filtered through historical data on the cookie

segment, Guillen wondered how the team could improve the segment$$s performance. Was there a taste or

formula issue? Was the Pillsbury brand message not resonating with consumers? Was the current cookie

advertising campaign not targeting the right consumer? As Guillen thought about these questions, he knew

that he would have to generate new insights into current and potential consumers.

GENERAL MILLS INC.

General Mills Inc. was headquartered in Minneapolis, Minnesota, and was the world$$s sixth largest food$-$

product manufacturer. The company produced and marketed food products in more than $100$ countries

and possessed a portfolio of iconic brands, including Betty Crocker, Progresso, Pillsbury, Green Giant

and Cheerios. General Mills competed in numerous food categories and distributed products across the

world through retail stores, such as Safeway, Wal$-$Mart and Costco, and through food service operators,

including restaurants and cafeterias.

General Mills Inc. was composed of three distinct operating segments: U$.$S$.$ Retail, International, and

Food Service. The U$.$S$.$ Retail segment was the largest of the three, representing $69$ per cent of total

sales; the International segment followed with $16$ per cent of total sales. Total company revenue for fiscal

$2006$ was $$11\mathrm{.}6$ billion, with earnings of $$1$ billion $($see Exhibit $1).$

GENERAL MILLS CANADA CORPORATION

Established

in

$1954,$

General

Mills

Canada

$($GMCC$)$

was

the

second

largest

division

within

the

International segment, with annual sales of US$$566$ million. GMCC was a leader in the Canadian

packaged foods market, holding the No$.1$ or No$.2$ position in virtually all of the categories in which it

competed. Many of the same brands and products that General Mills marketed in the United States could

be found in Canada.

The Canadian division was split into four business units: breakfast, baked goods, meals, and snacks.

These business units were further broken down into $12$ categories. For example, baked goods separated

into the categories of into RBG$,$ pizza snacks, mixes and frozen breakfast foods. Each category had a

dedicated marketing team that worked with cross$-$functional partners in finance, supply chain and sales to

manage the business and profitably grow market share.

GMCC

operated

autonomously

from

its

U$.$S$.$

parent,

giving

cross$-$functional

business

teams

full

ownership over new product development, brand strategies and consumer spending. Examples of unique

products that have been developed specifically for the Canadian market include Oatmeal Crisp Maple Nut

cereal and Pizza Pops snacks. Despite having autonomy, GMCC often leveraged new products and

advertising from the United States, as development co