uwmcc montreaux case - first place by adrian
TRANSCRIPT
“Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”
Situation
Big Questions
Ideal Corporate Targets
Thought Framework
Recommendation
Supporting Evidence› Qualitative and quantitative
Revisiting Corporate Goals
Summary
Supplementary Information
Apollo acquires rights to Montreaux for
America on June 2011
Consumer Food Group (CFG), a
subsidiary, forms Montreaux USA
Andrea Torres, director of new
development, is faced with multiple
decisions
Next steps for Montreaux
USA?
› How are we launching the
product
Time to upgrade logistics?
› Pennsylvania factory
American or European branding?
› Heritage
› New product line
Brand
Sub-brand
New product name?
National distribution of Montreaux
product line
$115 million in annual sales by 2015
0.60% market share
› Top 25 in revenue
Acceptable hurdle rate of $30MM
› Needed for full national rollout
Support each decision with evidence
Calculate projections
Pros and cons matrix
Nielsen’s 12 Product Success Factors
Name› Euphoria by Healthy Cravings
Branding› Apollo sub-brand
Features› 70% Cocoa
› Pouch Bag Format
› Premium chocolate
› Health positioning Slogan
Flavours› Pomegranate
› Blueberry
› Cranberry
Price› $4.49 MSRP
Acquire Pennsylvania factory
“Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”
Further Testing The
Market
Launch in Selected Test
MarketsStage a Regional Rollout National Launch
Pros • Fine-Tune Consumer Insight• Gather Additional Consumer
Insight
• Middle-Of-The-Road
Approach
• Display Commitment to
Retailers
• Most Limited Liability and Risks• Most Representative of Market
Condition• Average Expenditures
• Biggest Opportunity to
Increase Market Share
• Discover New Opportunities • Limited Liability and Risks• Greatest Revenue
Opportunity
• Begin Market Share
Dominance
Cons • Possibly Redundant Data• Long Result Reading Time (1
Year)• Conservative Strategy • Very Expensive
• Delaying Market Entrance • Delaying Market Entrance • Potential Lost Opportunity • Requires New Factory
• Difficulty In Finding Suitable Test
Markets
• Less than 100% Commitment
to Market
• Greatest Resource
Commitment
• Convincing Retailers for Limited
Batch Purchases• Requires New Factory
• Most Expensive ($3 MM) • Poor Regional Selection
• Limited Production Capabilities SELECTED LAUNCH PLAN
Market Trends
Product Choices
Capturing the Market
› The Ideal Customer
Mainstream Distribution Channels
Low-calorie options such as reduced fat and aerated chocolate
Premium chocolate products moving to mainstream channels (i.e., supermarkets, mass merchandisers)
Dark chocolate popularity rise
Packaging transition to stand-up pouches and biggersizes
New labeling with terminology emphasizing shareability, portion control, and saving a piece for later
Increases in pricing attributable to rising commodity costs
70% Cocoa concentration› Preferred taste versus 90% in
qualitative testing
› Emphasize health positioning
Bold Flavours› Blueberry, pomegranate, cranberry
Narrowed from top five ‘winners’
Pouch format› Shareability, portion control,
economical
› 3.5oz – less unique, less revenue generation
Healthy Cravings – Apollo sub-brand
Confusion in European credibility
“Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”
Socioeconomic Status
Consumer Type
Gender Differences
Age
Cater to as many
demographics as
possible› 45-64 Age group
› Everyday
sophisticates
› Brand loyalists
› Women
Older aged upper-middle class female
45-64 age group
Motivations
› Personal health considerations
› Luxurious reward
› Mood enhancement
› Enjoys trying out new flavours
Purpose
› Identifying ideal launch path
Calculating Sales Projections
Chocolate Market’s Future
› Relation to Corporate Goals
Explaining the details
Further Testing The
Market
Launch in Selected Test
MarketsStage a Regional Rollout National Launch
Pros • Fine-Tune Consumer Insight• Gather Additional Consumer
Insight
• Middle-Of-The-Road
Approach
• Display Commitment to
Retailers
• Most Limited Liability and Risks• Most Representative of Market
Condition• Average Expenditures
• Biggest Opportunity to
Increase Market Share
• Discover New Opportunities • Limited Liability and Risks• Greatest Revenue
Opportunity
• Begin Market Share
Dominance
Cons • Possibly Redundant Data• Long Result Reading Time (1
Year)• Conservative Strategy • Very Expensive
• Delaying Market Entrance • Delaying Market Entrance • Potential Lost Opportunity • Requires New Factory
• Difficulty In Finding Suitable Test
Markets
• Less than 100% Commitment
to Market
• Greatest Resource
Commitment
• Convincing Retailers for Limited
Batch Purchases• Requires New Factory
• Most Expensive ($3 MM) • Poor Regional Selection
• Limited Production Capabilities SELECTED LAUNCH PLAN
Calculated all possible sales volumes scenarios using methodology formulas› Market-adjusted trial rates, repeat volume, etc.
› 3^3 = 27 Possible Scenarios
› Determined sales volumes
Combination of three factors › Awareness type
Marketing campaign effectiveness
› ACV type Market reach effectiveness
› Product quality Repeat rate of consumer
Calculating repeat volume
Type Awareness Type ACV# of Trial
Households (MM)Quality of Product
% of Households Repurchasing
Repeat Purchase Occasions
Repeat Volume (MM)
Low
Low
2.82 Mediocre 28% 4 3.16
2.82 Average 33% 4 3.72
2.82 Excellent 38% 4 4.29
Medium
3.05 Mediocre 28% 4 3.42
3.05 Average 33% 4 4.03
3.05 Excellent 38% 4 4.64
High
3.71 Mediocre 28% 4 4.16
3.71 Average 33% 4 4.90
3.71 Excellent 38% 4 5.64
Medium
Low
2.82 Mediocre 28% 4 3.16
2.82 Average 33% 4 3.72
2.82 Excellent 38% 4 4.29
Medium
3.71 Mediocre 28% 4 4.15
3.71 Average 33% 4 4.90
3.71 Excellent 38% 4 5.64
High
4.51 Mediocre 28% 4 5.05
4.51 Average 33% 4 5.95
4.51 Excellent 38% 4 6.85
High
Low
3.42 Mediocre 28% 4 3.83
3.42 Average 33% 4 4.52
3.42 Excellent 38% 4 5.20
Medium
4.36 Mediocre 28% 4 4.89
4.36 Average 33% 4 5.76
4.36 Excellent 38% 4 6.63
High
5.30 Mediocre 28% 4 5.94
5.30 Average 33% 4 7.00
5.30 Excellent 38% 4 8.06
$-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
5.9
8
7.1
0
7.0
9
7.8
7
9.3
5
6.5
4
7.8
6
9.3
5
10
.46
7.2
6
8.6
3
10
.12
11
.24
13
.36
Sa
les
in $
MM
Number of Purchases in MM
Retail Sales Value
($ MM)
Montreaux Sales
Volume ($ MM)
Acceptable
Hurdle Rate
Band range
of ACV,
Quality and
Awareness
Corporate 2015
goals overly
aggressive
› Despite double
annual market
adoption rate
Accomplished
national rollout
2012 Market 2015 EstimateAggressive
2015
Chocolate Market Size
(BN)
$ 17.664
$ 19.120
$19.120
Annual Growth Rate
2% 4%
Average Montreaux Sales (MM)
$ 39.02
$ 42.24
$45.65
Market Share 0.22% 0.22% 0.24%
Acceptable downsides› Taste
Findability› ACV focus
Product delivery and loyalty› New factory
› Perpetual improvement
Market goals› Nielsen’s 12 Success Factors
› Accomplished national rollout
Expand manufacturing capabilities› Pennsylvania
Montreaux USA marketing plan› Target demographics
› Focus on supermarkets
Product specifications› Euphoria by Healthy Cravings
› Pouch
› 70% Premium Cocoa
American credibility› Sub-brand of Apollo
“Introducing Euphoria Pomegranate by
Healthy Cravings –Reward yourself with happiness and good
health”
Opportunities
› Partnering with other firm than the Big Two
› Develop better infrastructure Perhaps more factories
and manufacturing centers
› Product specifically targeted to men
› Virtual integration with Suppliers Mexico
Risks
› Introduction of superior rival product
› Product not well-tested
› Manufacturing capabilities not up to par
› Ability to Scale
Competitive Rivalry Within
Industry
Bargaining Power of
Buyers
Threat of New
Entrants
Bargaining Power of Suppliers
Threat of Substitutes
Bargaining Power of Buyers› Low to moderate
› Large volume orders
› Lack of threat of backward
integration
› Reliance on industry product
Threat of Substitutes› High
› Alternate
confectionery
available
› Competition
during holidays
Threat of New Entrants› Low
› Very expensive manufacturing
costs
› Lack of distribution channels
› Regulatory restrictions
› Confectionery and chocolate
market relatively saturated
Bargaining Power of Suppliers› Moderate to high
› Supplier group is concentrated
› No threat of forward integration
› Industry is important customer to
supplier
Source: http://jmfrrell.blogspot.ca/2011/06/chapter-4-industry-analysisporters-five.html
Competitive Rivalry Within Industry› High› Equally capable
competitors
› Slow growing
› High storage and fixed costs
› High exit barriers
Go through retail channels
› Supermarkets
and grocery
focus
Premium
chocolate
moving into this
distribution
channel
15.8%
11.7%
9.0%
8.8%
54.7%
Distribution Channels Breakdown
Supermarkets/Gr
ocery
Convenience
Stores
Drugs Stores
Big-Box
Supercenters
Other
Bar/Bag/Box
(>3.5 oz),
7.149
Seasonal
Chocolate,
4.407
Bar/Bag/Box(
<3.5 oz), 3.479
Snack-size
Chocolate,
2.522
Market Share Revenue ($ in MM)
Bar/Bag/Box (>3.5 oz)
Seasonal Chocolate
Bar/Bag/Box(<3.5 oz)
Snack-size Chocolate