Product Management - Food Brands

Group 3
Mohini Sahu
Prabhu Das
Rohan Singh
Food Brands - Cannibalization
1/11/2015
A07
A20
A26
1/11/2015
1/11/2015
The first documents the growing percentage of LaTreat

sales connected with promotional offers
A second graph disaggregates LaTreat's promotionrelated sales by four buyer categories Bill had created
from BehaviorScan data
A majority of
redeemers fall
into the last
two categories
"Loyalists" were
long-time
customers who
increased their
purchases in
response to a
deal
"Trial users"
bought LaTreat
for
the first time
because of the
promotion; who
seemed to be
turning
into loyal
customers
"Accelerators
customers: Used
coupons or
rebates to
stock up on
product they
would have
bought anyway
"Switch-ondeal were
nonusers:
Bought LaTreat
when there
were
promotions but
demonstrated
little
long-term
loyalty
1/11/2015
Loyalists"
account
for a shrinking
percentage
of sales
4
1/11/2015
Conflict of opinion arising in the top management

regarding the cannibalization of the product
Bill approaches Bob Murphy; Barbara Mayer
1/11/2015
1/11/2015
Jerry Della Femina

CEO, Della Femina, McNamee WCRS
1/11/2015
WHAT WENT WRONG

WITH PARADISE FOODS
1/11/2015
STATUS QUO is the

religion for the senior
management
Withdrawal of a new
product is the right
decision
Personal Interest over

Organizational goals
and objectives
It sent a message
that it is not serious
about new products
1/11/2015
10
Not prepared for

competition
COMPETITOR CAME UP WITH A RIVAL
PRODUCT CALLED SWEET FANTASY
SWEET FANTASY HAD A QUICK AND
SUCCESSFUL PRODUCT LAUNCH
1/11/2015
11
No marketing research techniques were used appropriately and

effectively
No consumer behaviour data on the frozen specialty dessert

category
No proper research done by Bill Horten

Lacked Objectivity
Experience in applying complex research
The perspective that comes from having wrestled with many
previous launches
1/11/2015
12
Cannibalization refers to a reduction in the sales volume, sales

revenue, or market share of one product as a result of the
introduction of a new product by the same producer
Eg: Introduction of diet coke may eat up some of its sales of

regular coke
vs
1/11/2015
13
KEEP YOUR
CANNIBALS IN
THE FAMILY
IF YOU MUST BE THE VICTIM OF A

CANNIBAL, MAKE SURE THE CANNIBAL IS A
MEMBER OF YOUR FAMILY
JERRY DELLA FEMINA

1/11/2015
14
SWEET DREAM NEEDS

A CHAMPION TO BEAT
THE ABOMINABLE NO
MEN
EVERY NEW PRODUCT NEEDS A CHAMPION

IN UPPER MANAGEMENT
JERRY DELLA FEMINA
1/11/2015
15
New power tools of the packaged goods industry
Supermarket scanners
Electronic test market facilities
Computer based marketing models
Easier for companies to get data, rather than

interpreting with necessary sophistication
1/11/2015
16
Marketing plan to launch a new Carpet

Deodorizer
1/11/2015
17
They Became their own cannibals

Knocked off own product
Priced it a few cents below that of competitors
Introduced product within four months
What did they use?

Quick planning &
execution
Highly visible
advertising launch
1/11/2015
They cut their

budget down to
nothing
18
1/11/2015
19
Incorporating a new character, Joes way of functioning
A test marketing analyst with a deal of experience in new

product launches
Designing a research program after consulting with the

managers
Would help in reducing the risk of launching Sweet Dream

and increase brand competition
1/11/2015
20
La
Treat alone
La
Treat + Sweet Dream
1/11/2015
21
Eating into existing product line?
Attracting new consumers?
1/11/2015
22
Extrapolating
Freezer
space availability
Attention
Regular
from test markets-difficult
from sales force & distributors
& heavy promotion required
1/11/2015
23
Joe, would anticipate cannibalization
Developing source of volume
He would help in forecasting Sweet Dreams post launch

performance based on the test market results and Paradises
agenda for the product
Joe can present the final presentation to the managing

committee as they would require (long or short)
1/11/2015
24
Successful Cannibalization
Successful Line Extensions
1/11/2015
25
LaTreat is now an old

product in a novelty
driven category
Fate of the entire
frozen specialities
line is endangered
New premium-priced
indulgent dessert
required
LaTreat will anyways
be cannibalized by
competitors
1/11/2015
26
Gradually
Cannibalize
LaTreat
Overall
profits
increase
with more
SKUs
1/11/2015
Favorable
absolute
contribution
margin level
27
More shelf space
Incentivize retailers
Coordinate strategy to
maximize combined
profits
1/11/2015
28
Priority: Retaining
existing customers
Penetrative
Marketing
Improved share in
frozen specialties
category
1/11/2015
29
End division
between new &
established
products
Senior managers
should be new
product
champions
Formulate
strategic plans
to strengthen
product
offerings
1/11/2015
30
Generate consumer
attitude data
Are product offerings

palatable?
Perception of Sweet
Dream relative to
LaTreat
Taste
Differentiate product
characteristics
Texture
Calorie content
1/11/2015
31
Why there is a market opportunity for

Sweet Dream in the first place
1/11/2015
32
Bill Horton
Senior Management
1/11/2015
33
1/11/2015
34
Attacking LaTreat with the mined data

Barbaras career thrives on established products
1/11/2015
35
No
launch decision should be based on a false sense

of security rather than hard data
Novelty
is critical asset in frozen goods category
Product
Life Cycle should not be miscalculated
If
need be, be your own cannibal
1/11/2015
36
1/11/2015
37

Product Management - Food Brands

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Group 3

Food Brands - Cannibalization

Food Brands - Cannibalization

Food Brands - Cannibalization

The first documents the growing percentage of LaTreat

Food Brands - Cannibalization

Food Brands - Cannibalization

Conflict of opinion arising in the top management

Bill approaches Bob Murphy; Barbara Mayer

Food Brands - Cannibalization

Food Brands - Cannibalization

Jerry Della Femina

WHAT WENT WRONG

Food Brands - Cannibalization

STATUS QUO is the

Personal Interest over

Food Brands - Cannibalization

Not prepared for

Food Brands - Cannibalization

No marketing research techniques were used appropriately and

No consumer behaviour data on the frozen specialty dessert

No proper research done by Bill Horten

Food Brands - Cannibalization

Cannibalization refers to a reduction in the sales volume, sales

Eg: Introduction of diet coke may eat up some of its sales of

IF YOU MUST BE THE VICTIM OF A

JERRY DELLA FEMINA

SWEET DREAM NEEDS

EVERY NEW PRODUCT NEEDS A CHAMPION

JERRY DELLA FEMINA

Food Brands - Cannibalization

New power tools of the packaged goods industry

Electronic test market facilities

Computer based marketing models

Easier for companies to get data, rather than

Marketing plan to launch a new Carpet

They Became their own cannibals

What did they use?

Food Brands - Cannibalization

They cut their

Food Brands - Cannibalization

Incorporating a new character, Joes way of functioning

A test marketing analyst with a deal of experience in new

Designing a research program after consulting with the

Would help in reducing the risk of launching Sweet Dream

Food Brands - Cannibalization

Treat + Sweet Dream

Food Brands - Cannibalization

Eating into existing product line?

Attracting new consumers?

Food Brands - Cannibalization

from test markets-difficult

from sales force & distributors

& heavy promotion required

Food Brands - Cannibalization

Joe, would anticipate cannibalization

Developing source of volume

He would help in forecasting Sweet Dreams post launch

Joe can present the final presentation to the managing

Food Brands - Cannibalization

Food Brands - Cannibalization

Successful Line Extensions

LaTreat is now an old