The Marketing Manager of Lucas Foods must decide on a marketing strategy for Gold Medal Crumpettes that will best capture the available market opportunities and support the company's mission, The product is in the beginning of the life cycle and is a success in Alberta. The problem is whether Lucas Foods should maintain the products existing geographic coverage, or should it expand?
Lucas Foods is a food manufacturing and wholesaling business with a broad product line. They have recently entered the market with a new product called Gold Medal Crumpettes which is targeted toward the "Upscale Buyer"
Five major national food wholesalers.
Smaller regional wholesalers and independent grocery stores
Direct competition from crumpets, scones, english muffins, tea biscuits, and substitute products (toast, doughnuts, muffins) Strong brand name recognition of competitors like Weston, McGavin Foods, SB Thomas
Target market is the "Upscale buyer"
Gold Medal Crumpettes is seen as a luxury item but is marketed to all age groups
Canadian Dollar is on the rise and can affect exports to the U.S.
Option B is the best alternative.
Option B is the best alternative because even though Lucas Foods has the production capacity, there is not enough market potential to allow it to achieve its growth-oriented mission and objectives to only remain in Alberta. Lucas Foods has a growth potential of 960,000 cases or $11,500,000 in volume by expanding throughout Canada, compared to 43,000 cases or $520,000 in volume by maintaining the status quo and only remaining in Alberta. They must expand outward for their company to grow but Option C is not feasible because Lucas Foods does not have the production capacity to expand into both markets. It is also the most risky and...