LORA BRILL’S EUROBRAND CHALLENGE
The “United Cereal” case is focusing on European division of a giant multinational breakfast food company, which describes a launch decision for a new cereal product. As the case evolves, the decision has major strategic and organizational implications for Lora Brill, European VP. Lora Brill has been concerned with the decision of whether to make some major changes to a company with 100-year success history in order to push growth of the company’s potential to a completely new level. Lora Brill has been presented much of the information she needs to make a decision, but due to mixed results in past trials of a similar nature, Lora is not sure what to do. United Cereal is a pioneer in the use of research and focus groups. The company puts a very high value on extensive market testing prior to launching a new product. As the initial testing of the blueberry based cereal was not successful, Healthy Berry Crunch was not put through the normal testing to ensure complete customer acceptance.
United Cereal is an organization embodied with a strong set of core values. Throughout its 100-year history starting back in 1910 the company’s management believed in commitment, diligence and loyalty; attracted people to work for the company and promoted managers from within. Their managers are committed to “The UC Way” and certain deeply rooted beliefs like: • “Listen to the customer”- that led the company to pioneer the use of research and focus groups. • “Spot the trend, make the market”- led the company to place high value on extensive market testing prior to launching new products. • “Honoring the past and embracing the future”-gave UC a high regard for product development and innovation in marketing. To be able to answer whether the Eurobrand cereal is truly viable it is necessary at first to make clear what the cereal market in Europe looks like. The $7 billion cereal market is very diverse. The per capita consumption varies from 8kg in the United Kingdom to 0.5 kg a year in Italy due to differences in national tastes and breakfast traditions. Channels also vary a lot by country. United Cereal is pretty centralized in its organizational policies and practices as the Country Managers confirm to United Cereals embedded values, policies and procedures. But; it is pretty de-centralized concerning its market strategy and product strategy as each Country Manager makes his/her own marketing and product decision to maximize local profit of the subsidiaries. The Country Manager can also customize the products; adapt advertising and promotions keeping United Cereals policies in mind. The United Cereals Company is now facing a problem concerning Europewide launch of a new product - Healthy Crunch with Strawberries. Should Healthy Berry Crunch become UC’s first Eurobrand? The main challenge is that research and trials conducted in Lyon (France) showed good results concerning consumer’s willingness to repurchase the product, however diversity in tastes and cultural and eating habits across Europe make the market unpredictable.
The company has survived 100 years in cereal business and even has built itself to become a global competitor in a multi-billion dollar industry. The company is built on three core values that have always preserved throughout the company’s history. “The UC Way” slogan represents the companies drive to “Listen to the customer”, “Spot the trend, make the market”, and “Honouring the past while embracing the future”. UC was able to adapt and be a risk taker in the past. The company has made an effort to be a leading competitor around the curve of innovation and international integration. As a company originally rooted in America’s heartland, it has made some big jumps to become the 2nd leading seller of breakfast products in over Europe. UC’s willingness to promote people with fresh ideas and give...
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