Case 5-2 Colombo Soft-serve Frozen Yogurt
1) Colombo Yogurt Company faces competition in two different channels, namely the independent yogurt shops and impulse shops that sell other products besides yogurt. During the early 90s, Colombo’s competitive environment consists mainly of franchise operations like TCBY and Freshens. The size of these franchise companies that account for most of the independent yogurt stores pose a serious competition to Colombo and by the early 90s, the yogurt stores have added distinctive new products such as smoothies, boosters and granitas. Meanwhile, many yogurt stores that fail to innovate and introduce new products were put out of business. This puts a lot of pressure on Colombo to continue its research and develop its yogurt product line. As for its impulse channel, Colombo Yogurt faces competition from other products that are served by these impulse stores that consists of food service operators like cafeterias, colleges, and buffets. The focus is much less on yogurt in these stores and they’re usually less committed in taking additional risks like buying new equipments or getting additional labor to serve differentiated yogurt products like smoothies. Essentially, the impulse stores can easily replace yogurt from its product offerings and Colombo also faces stiff competition from other brands to attempt selling its yogurt and its other differentiated products. GMI’s response to the competitive environment faced by Colombo is to boost its marketing plan. This plan includes merging its salesforce to include Colombo’s salesforce. This gives them an edge on understanding Colombo yogurt, smoothies and its other products. With the large salesforce that GMI has, it was able to reassign a lot of Colombo customers to a salesforce that is closest to them. The customer is getting a lot of attention in return. Additionally, GMI also promote merchandising to its stores. This refers to the signs and kits that were previously charged by...
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