United Cereal Case Study
1. As Lora Brill, United's European VP, would you authorize Jean-Luc Michel's request to launch the "Healthy Berry Crunch" brand in France? Is yes, for what reasons? If no, on what basis?
Central to Lora Brill’s dilemma of whether to launch “Healthy Berry Crunch” in France is the potential gain from the first-mover advantage by launching the product now versus increased market visibility and certainly by launching the product later after proper market research. Adding to the pressure to make a quick decision is the rumor that Cereal Partners is planning to launch Berry Burst Cheerios in France, a move that could potentially threaten United Cereal’s position as the first mover in the market. In order to make an informed decision on this complex issue, it is prudent to first evaluate the advantages and disadvantages of launching the product, access whether now is the optimal time to launch, and reflect on what can be gained by waiting.
The most attractive advantage of launching the product now is the strong market penetration that could be gained from being a first-mover in the market. In this market segment, where the only other competing product is Kellog’s Special K, Healthy Berry Crunch is presented with a window of opportunity to build a sizeable market share. By launching early, the company could preempt competitors and gain a competitive advantage. Moreover, with growing consumer interest in healthy food, United Cereal could revitalize stagnant sales of its existing “Healthy Crunch” product by introducing a novel and more exciting alternative. Lastly, to carry out another full-scale market testing is expensive – costing another $2 million in expenses. Launching the product now could save costs in times where profit margin is already squeezed tightly.
Unfortunately, the drawbacks of launching a product without adequate market development and testing also abound. Firstly, the results from the full-scale test market in Lyon do not seem promising, with
Central to Lora Brill’s dilemma of whether to launch “Healthy Berry Crunch” in France is the potential gain from the first-mover advantage by launching the product now versus increased market visibility and certainly by launching the product later after proper market research. Adding to the pressure to make a quick decision is the rumor that Cereal Partners is planning to launch Berry Burst Cheerios in France, a move that could potentially threaten United Cereal’s position as the first mover in the market. In order to make an informed decision on this complex issue, it is prudent to first evaluate the advantages and disadvantages of launching the product, access whether now is the optimal time to launch, and reflect on what can be gained by waiting.
The most attractive advantage of launching the product now is the strong market penetration that could be gained from being a first-mover in the market. In this market segment, where the only other competing product is Kellog’s Special K, Healthy Berry Crunch is presented with a window of opportunity to build a sizeable market share. By launching early, the company could preempt competitors and gain a competitive advantage. Moreover, with growing consumer interest in healthy food, United Cereal could revitalize stagnant sales of its existing “Healthy Crunch” product by introducing a novel and more exciting alternative. Lastly, to carry out another full-scale market testing is expensive – costing another $2 million in expenses. Launching the product now could save costs in times where profit margin is already squeezed tightly.
Unfortunately, the drawbacks of launching a product without adequate market development and testing also abound. Firstly, the results from the full-scale test market in Lyon do not seem promising, with