November 10 & 12, 2011
+ The Case
The environment: High Growth phase - more working mothers - more disposable income - more choices in convenience food products - market potential
Consumer Behavior: - the Danish housewife often serves the sliced pork with gravy along with Red cabbage salad - the habit of preparing the Red Cabbage salad at home could change; sales of ready-made Red Cabbage salad are expanding rapidly (marketing dept) Competition: - a large competitor is known to be preparing the launch of an equivalent meal
+ The Company
Tradi-Salad is specialized in branded vacuum-packed meat and other food meat-based products Introducing a SPECIALITY LINE OF COMPLETE MEALS, to be sold in attractive carton, with the “Sliced Pork Gravy with Red Cabbage” as a first product Objective: consider this new product/productline as a potential growth source AND an opportunity to test Market answers to such products.
Portfolio of 30 products with a very popular vacuum-packed sliced pork in gravy
Competition will introduce “complete meal” (threat of losing market share if Tradi-salad does not do the same)
+ The launch dilemma
Retail Price Price to D.M Total V.C Total F.C Production Advertising S & Admin exp Total COST
€ 8.20 € 5.26 € 3.23
Retail Price Price to D.M
€ 6.85 € 4.40
Total V.C Total F.C Production Advertising S & Admin exp
Total COST PROFIT
€ 0.54 € 0.30 € 0.19 € 4.26 € 0.14
€ 1.20 € 0.30 € 0.23
PROFIT € 0.30
+ PART I - Marketing Rationale
Marketing went for a Marginal Costing approach for the cabbage salad: they did not account for any Production Fixed Expenses for the cabbage, keeping only that of the 450g of Pork, i.e. €0.54 (as per the €1.2/kg company rule) Overhead Calculation Any Tradi-salad product abides by a €1.20/Kg... [continues]
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