MONTREAUX CHOCOLATES USA MEMORANDUM
DAVID RAYMOND, MONTREAUX USA DIVISION MANAGER
ANDREA TORRES, DIRECTOR OF NEW PRODUCT DEVELOPMENT
MONTREAUX USA PRODUCT LAUNCH
APRIL 10, 2015
As of October 2012, Andrea Torres, director of new product development at Montreaux Chocolate USA, needs to recommend whether or not the company should pursue a new product launch in the United States. The new product, a 70% cocoa dark chocolate with fruit product, has been tested because of “its heightened revenue potential, better alignment with health and wellness initiatives, and strong consumer acceptance of the proposition” (Quelch 7). This memo will address the reasons why Andrea will recommend more product testing for the new product line at a cost of $3 million and for a time frame of one year before actually launching the product either regionally or nationally. This memo provides an Ellet’s Five Phase analysis which includes a statement of the situation, a list of questions, a hypothesis, an explanation of proof and action, alternatives, and final recommendations as to why the company should pursue more testing of the new product line before implementing either a regional or national rollout.
Analysis: Ellet’s 5 Phases
In October 2012, Andrea Torres needs to make several decisions which include: “should the company conduct further product testing, launch the product in selected test markets, stage a regional rollout, or launch nationally” (Quelch 1). Other important decisions for Torres involve deciding whether to name the product Montreaux or Apollo and also whether to develop production facilities and processes in the US. She must also consider the following objectives when making these strategic decisions: The company should achieve first-year sales of at least $30 million; The company should nationally distribute Montreaux product line by year-end 2015; The company should achieve $115 million in annual sales by year-end 2015; and The company should be in the top 25 in revenue (.60% market share) by year-end 2015. Torres needs to make these imperative decisions for a board meeting scheduled to take place on December 10. She must present her decisions to her boss, David Raymond, and the board who both expect her research and recommendations as vitally important in launching and promoting the Montreaux Chocolate company in the US. Questions:
Should the company be named Apollo or Montreaux Chocolate USA? Should the company purchase a new manufacturing plant in the US? Who are Montreaux Chocolate USA’s competitors?
Will Montreaux Chocolate USA become the leading global player in the chocolate industry? Will the company be able to achieve the NPD’s goals of national distribution of Montreaux Chocolate USA and of developing new product lines? How will the company “address issues such as product formulation, positioning, size, and packaging?” “Should Montreaux build upon its European brand equity or more directly tailor to the American consumer?” Should the company pursue integrated marketing communications to promote the new product line and create brand awareness? How much should the company spend on advertising the new product line?
Because of the mediocre results generated by the BASES II Testing, the company should not aggressively market the Montreaux dark chocolate with fruit product. Because Montreaux will face competition in the dark chocolate with fruit category, the company should plan to introduce the new product gradually, evaluate the success of the new product, and then increase or decrease the product infiltration accordingly. In addition, test marketing will enable the company to determine which markets will provide the greatest profit so that the company will not waste additional time and money on unsuccessful endeavors. Therefore, the company needs to conduct further test marketing...
Cited: MarketLine, Global Confectionary, 0199-0710, November 2012, pp. 8, 10, and 12.
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