Montreaux Chocolate marketing assignment PDF

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Summary

Montreaux Chocolate marketing assignment with analysis done through calculations...

Description

Montreaux Chocolate USA Andrea Torres was the director of New Product Development (NPD) at Montreaux Chocolate USA in October 2012. It had been mor than 15 months since the Consumer Food Group of Apollo Foods had purchased the rights to distribute Montreaux’s Europea chocolate products in the US. On December 10, Torres had to make a presentation on the assimilation of Montreaux and the plan to launch the product in the US market. The New Product Development (NPD) team and Nielsen BASES, a marketing consultancy with which Montreaux had partnered, carried out extensive research to understand consumer behaviour and the market. Based on thi analysis Torres had to draw the next move of the company and drive the launch of the new dark chocolate product. She wa evaluating choices: should the company do further testing, launch in selected test markets, regional rollout, or rollout nationally. Further Testing

Pros

Test Market

Regional Rollout

Understand the consumer better wrt average trial rate

Can gauge performance in actual market conditions

Possibility to test for situations where the product performance is weak/ soft.

Opportunity to build product awareness and credibility

National Rollout

Cheaper to roll out leading to higher profits due to lesser costs incurred

Edge over competitors Use of Apollo’s extensive salesforce

Focus on specific markets with a larger population of our targeted customers

More data for accurate financial projections

Access to Apollo’s huge customer base and brand name

Lesser loss in case of failure Economies of scale

Delayed launch

Most expensive option of the four options

Budget and time constraints Cons

Launch gets delayed, while competitors move forward

Duplication of efforts

Competitors may get an advantage due to limited rollout as they expand aggressively Lesser revenues as compared to national rollout.

Gives the competition a look at our product and a chance to plan accordingly

Expensive A manufacturing plant was required but the project was not ready yet A failed product launch would prove costly Higher Risk

Selection of the wrong target group can be disastrous

From the sensitivity analysis conducted where the three parameters - Awareness, ACV (Distribution), and % of household repurchasing were varied, it was found that out of the 27 possibilities, the $30M hurdle rate was crossed only in 6 scenarios as show in the table below. It can be seen that the hurdle was crossed only in situations where the ACV was medium (65%) or high (79%) Therefore Torres should recommend the board opt for the national rollout of the product. Additionally, this would also align with th commitment made by David Raymond regarding the national distribution of the new product line by year-end 2015 (Data taken from Exhibit 5). Awareness

17%

17%

20%

20%

20%

20%

ACV

79%

79%

65%

79%

79%

79%

% of households repurchasing

33%

38%

38%

28%

33%

38%

Sales Volume ($MM)

$30.5M

$33.1M

$32.1M

$32.8M

$35.9M

$39.0M

Plans that can be recommended to the Board by Andrea: ●

Increasing awareness among consumers towards health coupled with positioning of Montreaux Chocolate as a healthy choice would result in an increase in sales over years.

●

Target customer group as college-educated females aged 45-64, earning $50,000 or above and concerned about their health. Reasons: i) Women are more likely to identify with a premium product and attach value to the health benefits which dark chocolate offers. ii) Consumers in the 45-64 age group are the highest per capita spenders and still increasing their consumption, especially of dark chocolate as they grow older. iii) Dark chocolate consumers were typically brand loyal and socially influential. Getting them as loyal Montreaux customers would help with word-of-mouth promotion and eventually increase sales.

●

Product to be sold would be 70% cocoa chocolate with fruit identified in Snapshot Concept Test and Line Optimization Analysis. The size selected is 5oz. pouch. This pouch would contain smaller squares which customers will prefer (as the preference has shifted to mini to snack size due to awareness of health issues and an effort to control consumption.)

●

The market research revealed that while health benefit was the most important factor for the customer, taste was an important secondary factor. So, the product should be positioned as a healthy chocolate based snack good for heart-health, which is as tasty as the regular chocolate. Taste considerations led to removal of bitter 90% cocoa chocolate. The fruits are relevant to both health benefits (as all natural offering bereft of artificial inputs) and taste.

●

There are certain credibility issues with the Montreaux name as the US customers are unfamiliar with the European brand. Apollo is already a respected name in the market. So an ideal product name should leverage both Apollo’s brand name and the health benefits of the product. This combination will catch the attention of the chosen target group best.

●

Production facilities - As it is known that Montreaux chocolate products require a unique manufacturing process and for Apollo Foods to roll out nationally and meet the supply requirements, they should go ahead with the purchase of the chocolate manufacturing facility in Pennsylvania.

Conclusion Montreaux Chocolate USA conducted market research from June 2011 to late 2012. The multiple rounds of research, to develop a lis of ideas and winnow it to identify those with maximum revenue potential included using proprietary market research tools, interna brainstorming, internet surveys, and focus groups. The results give insight into consumer preferences without which, a chocolat company could make wrong decisions about the possible target (adults spend more than children though some may have though otherwise), product category (dark chocolate was the leading choice with growing health priorities and the uniqueness of the produc at that moment), positioning (focussing too much on health would have led to adopting 90% cocoa chocolate but research showed that taste consideration could not be disregarded). Marketing research helps us avoid pitfalls due to the wrong assessment of marke conditions....