Marketing Montreaux free essay sample

In pursuit of upscale segments of the market and an increased market share, Consumer Food Groups (CFG) purchased the rights to become a distributor of Montreaux’s European chocolate products in the United States in June 2011. As CFG is the division which produces confectionery products for Apollo foods, they contribute not only to one-third of the company’s total revenues and net income, but are a vital part of Apollo’s ranking as second in the global confectionery business. Upon acquisition of the rights for Montreaux’s chocolates CFG formed a new division, Montreaux Chocolate USA. Under the leadership of David Raymond as division manager and Andrea Torres as director of new product development, this division is working to help Montreaux Chocolate Company reach its goal of expanding to the US and Apollo’s to seek a greater presence in the lucrative chocolate market and grow its confectionery market share. Of all the different segments within the confectionery market, chocolate is the most lucrative accounting for almost 53% of the market’s total value. Not only is confectionery market itself growing, but the chocolate segment specifically is showing increases in both market share and revenues projected to 2015. Chocolate market trends in 2011 indicated that dark chocolate sales were on the rise, consumers are interested in low-calorie options, premium chocolate was becoming more accessible in mainstream channels, and packaging and labeling were growing more likely to affect customer appeal. Awareness of these trends and growing consumer focus on fitness and health, placed Torres in a unique position to work to develop new products which featured a healthy focus. Through combined efforts of the New Product Development (NPD) team, Torres, Montreaux Research and Development, and Apollo, the growing dark chocolate market was explored as a possibility of development of a new product line. With the use of BASES, Montreaux USA would be able to hone in on a new product opportunity and strategy that was not only in line with the strategy for health and wellness laid out by Montreaux and Apollo, but also was very  viable to consumers and had the financial potential strong enough to meet the goals set forth. Through a series of BASES screening and concept tests, an original set of 45 ideas for concept development was first narrowed down to 12, then to 5. Of these final five concepts, all involved dark chocolate with fruit. Further research found that when comparing the taste of 70% cocoa to 90%, consumers preferred the 70% mix with the top three fruit flavors being cranberry, pomegranate, and blueberry. In addition to actual product formulation, the positioning, size, and packaging were all issues to be addressed as well. In regards to positioning, health vs. taste needed to be considered. Given credibility issues due to the unfamiliarity of the Montreaux name in America, should brand be tailored more to the American consumer as well? In regards to size and packaging, would consumers have more interest in smaller squares in stand up package or a 3. 5 ounce bar, given growing health and fitness concerns. After a second round of BASES concept testing, it was found that the greatest revenue potential for Montreaux Chocolate USA laid within the 5 ounce pouch with healthy positioning. Further BASES II testing used the 70% cocoa dark chocolate with fruit in a 5 ounce package that displayed healthy messaging and a stand-up pouch due to potential revenue gains, alignment with health and wellness initiatives, and consumer desire. The BASES II would enable Torres and her team to evaluate the market readiness of the product and pinpoint areas of potential product optimization. In this round of BASES testing, the team wanted to examine the various levels of awareness and distribution (low, medium, and high) as well as various repeat rates (mediocre, average, excellent) to consider sensitivity of meeting or exceeding the $30 million sales volume desired. In looking at these projections, Torres had to make a decision as to her next steps in implementation of the fruit flavored dark chocolate. She could either (1) recommend product for further product testing (2) market the product in selected test markets (3) plan a regional rollout or launch nationally. She had until the board meeting to make her final decision for a recommendation. Based on calculations from the student template provided, in order to achieve the $30 million in sales volume, at least two of three areas (awareness, distribution, repeat rates) need to be within their moderate ranges with the third in the high/excellent range. At worst case scenario, with all measures at their lowest limits, sales volume would only be reflected at $17. 4 million, barely over half where it needs to be. Given the credibility concern due to the Montreaux name being unfamiliar to American consumers, this could create some hesitation. A SWOT analysis could further help identify the appropriate action to take. Strengths: Apollo is second in global confectionery market – strong customer base Consumer desire for dark chocolate and fruit Fits with health and wellness initiatives Market is growing Weaknesses: Lack of credibility due to unfamiliarity of Montreaux name Opportunities: Bringing a quality product to a growing market Could be potential for further expansion of fruits with dark chocolate Potential for push to number one in global confectionery market Strength of product with Apollo name Threats: Competition – another tested dark chocolate with fruit concept not far from an introduction After formulation of the SWOT analysis and given the strength of Apollo’s reputation and global market ranking, I recommend that Torres and Montreaux Chocolate USA suggest a regional rollout or to launch nationally at the next board meeting. Further testing of the product or market testing are not only costly, but time-consuming as well. As it currently stands, there is one competitor also carrying the dark chocolate with fruit concept, and failure of Montreaux Chocolate USA to launch their product could result in  missed revenues and missed opportunities. Given the results of attribute ratings and the strength in those measures, the solidarity of Apollo as a market leader, and the projected continued growth of the chocolate market, I feel it is within the best interest of Montreaux Chocolate USA, CFG, and Apollo to launch their new concept. The templates below show where percentages must lie in order to successfully reach the $30 million mark, but with the strength of CFG and Apollo, there is a great chance for success.