Chapter 5 Case StudyInstructions Kraft Mac and Cheese: A Stealth Marketing ApproachA trend that has a critical impact on the consumer packaged goods industry in recent years is consumers’ desire for simpler, more transparent, and more natural ingredients. More companies have responded by publicly stating their intentions to remove artificial coloring and preservatives from longstanding brands and then repositioning the product as “clean” or “pure” within the market. While this strategy aligns well with trends, it risks alienating individuals who are used to purchasing goods based on more intangible factors such as nostalgia, predictability, and even taste.Kraft used a novel approach to handling these shifting consumer preferences. To stay competitive within the category, the company realized it had to rethink the product formula of one of its superstar brands, Kraft Mac and Cheese. However, management knew it was crucial to make changes without tainting elements of the product that consumers had come to expect. For generations, individuals had associated Kraft Mac and Cheese with its orangish hue and smooth sauce consistency. Kraft made it a point to carefully maintain these identifying attributes as it eliminated ingredients and removed artificial dyes.The aspect of Kraft’s strategy that was a real differentiator though was how it rolled out the reformulation. Rather than advertising the measures the company had taken to make its product more natural—common practice among competitors—Kraft simply didn’t say anything. Studies have shown that even the mention of a new formula can cause consumers to perceive flavor to be different, so Kraft chose not to call attention to the change.After consumers had accepted the new formula, as evidenced by sales remaining stable, Kraft launched a digital campaign to announce the adjustment. The campaign tagline “It changed. But it hasn’t.” was featured in 15- and 30-second online video spots. Tongue-and-cheek lines such as “We’d invite you to try it, but you already have.” were incorporated into digital display ads, promotions through channels like Pandora radio and Snapchat, and magazine print. Kraft also encouraged fans to share their experiences with the product on social media using #didntnotice and offered giveaways to encourage postings.Kraft’s ability to make a fundamental change to an iconic product without consumer backlash is a testament to its thoughtful marketing approach. Quietly testing the waters in a landscape of uncertainty can help companies anticipate reactions to significant product changes that ultimately help them stay one step ahead.Questions:In what way(s) could Kraft’s strategy have backfired? How might Kraft have been prepared for this possibility?How should Kraft respond to the demographic trends outlined in your textbook? What about cultural trends? Sustainability trends? Please be sure to answer each of these questions; they should not be lumped together but instead treated separately.

You value education and you want your child to receive the best possible education. But sending a child to private schools and Ivy League colleges is not cheap. You want to start saving money so that when you child need the money, you can support him/her.The current assumption is you will have your 1st child in 5 years and you wish to have $200,000 in today’s dollars when he/she is 15 years old. Based on current situation, you expect inflation to be stable at 2% in the foreseeable future. Your plan is to put down savings each year and you can save every year an amount that’s 2% more than the previous year. All your savings go to a stock fund that is expected to return 10% annually, of which 1.5% will be dividends and 8.5% will be capital gains. You pay 15% tax on dividend income as you receive them at the end of each year. You re-balance your fund every year, in other words, you sell all your positions and re-invest at the beginning of a new year, so capital gains are also realized every year, you pay 15% tax on capital gains as well.To have enough money for your child’s education in 20 years, how much money do you have to save in the first year?M7 Assignment - Goal Seek for Financial Planning RubricInput section clearly labeling all the variables and current values1 ptSet up year-by-year table including beginning balance, new savings and growth,dividend income, capital gains income, dividend tax, capital gains tax, ending balance5 ptsUse goal seek to estimate the initial saving amount2 ptsTotal8 ptsPreviousNext