Page 2: 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.
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 government”s 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, means the company can meet different consumer needs for different meal occasions.
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.
A useful tool to help a business analyse its product lines is the Boston Matrix. The Boston Matrix identifies four types in a company's product portfolio:
- Stars. These products have a high market share in markets that are growing quickly. For example, the Playstation was a star when it was first introduced into the games market.
- Question Marks. These products have a low market share in a growing market. Costs are more than returns as the company tries to increase market share. An example of a Question Mark could be a newly launched fashion item or a new car model.
- Cash Cows. These products have high market share in established markets, for example, cornflakes in the breakfast cereals market.
- Dogs. These products have low market share in a low growth market. A company may look to get rid of these products or invest in marketing to improve sales. For example, DVD recorders have replaced video recorders which became Dogs for the electrical firms making them.
A business wants to avoid any of its products being Dogs, although this may happen as technology, innovation and trends change.
Stars can be cash-flow neutral. This means that although they generate income, money needs to be spent on promotion. Stars should in time become Cash Cows.
Cash Cows generate income and require little investment. Question Marks (sometimes called Problem Children) generate costs in terms of promotion, while returning little. Businesses hope that they will turn into Cash Cows with some investment. However there is the danger that they could become Dogs.