The Situational Analysis identifies three main problems that FFD’s director of marketing, Mike Sanchez, is faced with: (1) the Dinardo’s and Natural Meals brands have been underperforming against sales estimates, (2) the risk to key metrics if Sanchez recommended a price promotion for one of the three major product lines, and (3) the risk of losing retailer support and consumer loyalty.
We can see from current sales performance that Dinardo’s “Other” products, 6 and 8 ounce portions, are the weakest product line in FFD’s product mix. It’s important at this point for FFD to determine if their product lines are meeting consumer demand and expectations. The environmental analysis leads us to conclude that consumers are not looking for those perfectly portioned meals out of the box while eating alone. The impact of the recession and other market forces have led individuals and families to eat more at home as well as saving what they do not eat for leftovers. Also, Natural Meals currently only had one portion size, 16 ounces. This may be a potential option to expand healthy options to families who demand portions larger than 16 ounces.
The second issue in the situational analysis deals with Sanchez’s decision to recommend a price promotion for one or more of FFD’s product lines. There are several potential impacts Sanchez must consider. First, retailers may use a promotion as a means to stockpile inventories of cheaper products, only to resell them later at normal pricing with increased margins. This would ultimately hurt revenues as retailers would be buying increased volumes of product at discounted vs. normal pricing. Second, a price promotion of the Natural Meals line risks decreasing brand value. This brand is distinctly different from Dinardo’s from a healthy-living perspective and Sanchez’s decision must protect this image. Third, Sanchez must demonstrate positive impacts to ROMI and incremental volumes while considering the... [continues]
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