Grenadier Marketing Case Analysis

Marketing Plan

Grenadier Chocolate Company Limited:

The Milk Mate Decision

Company Description:

Grenadier Chocolate Company is a midsize firm that was founded in 1973 by Mr. Ronald Berg with the aim of developing and marketing Milk Mate milk flavoring. This product is a new, milk modifying, instant chocolate syrup for household use. This is a premium product and a first of its kind. Milk Mate is a syrup as opposed to the competition which is all powder form. This quality along with great taste, texture, color, and convenience all make Milk Mate brand the very best when it comes to milk flavoring. The company believes that this product will succeed in national distribution after its initial introduction.

Grenadier Chocolate company stands behind its product and believe that the high quality and higher price strategy will prove to be successful.

Strategic Focus and Plan

The mission of Grenadier Chocolate Company is one that entails high quality and fair prices to the consumer. Consumer satisfaction is the number one priority and the company revolves around this principle while at the same time offering a challenging and fair work environment for its employees.

The goals of Grenadier Chocolate Company include:

1. To become the brand that is synonymous with high quality pertaining to the market it competes in.

2. To achieve market penetration in its introductory market.

3. To achieve national distribution within a period of 2 years.

4. To keep up and set the pace with innovative products.

Financial Goal

1. To achieve 10% growth in subsequent years

Situation Analysis

Industry

Milk modifiers are used by consumers to create a flavored milk drink. The products are sold as a powder that is to be mixed with milk. Chocolate flavor accounts for about 80% of the total milk modifier sales. In 1974 there were 23 million pounds of milk modifiers sold. The market itself is very stable and has a growth rate that is roughly in proportion with the population increase. Sales are divided into 5 provinces/territories and their respective percentages of total sales: British Columbia (10%), Pralines (14%), Ontario (38%), Quebec (30%), and Atlantic Provinces (8%). There has recently been a spike in sugar prices so we are sure to see an overall increase in retailer prices due to sugar being 85% of manufacturers ingredients cost.

Competitors

Well known brands and their respective percentages of market share include Nestle Quik (50%), Hershey (20%), Cadbury Choc-O (10%) and various other regional brands holding the other 20%. The major brands sold to retailers at a price of $10.00 per case of 12 one pound packages and the retailers sold those individual packages at $0.99. However, with the sugar spike the prices are expected to increase to trade price of $11.50 per case.

Customer Analysis

Milk flavorings are usually purchased by females and especially ones who are homemaker with children to care for. Milk flavorings are non-essential food items so we must keep in mind that children will make up a high percentage of our market, however it will be the parent (most likely the mother) who will be buying our product. We are not looking for any specific income demographic since our prices will be reasonable and there is not much disparity in purchases between lower income and higher income families who use milk flavorings.

Product-Market Focus

Points of difference (between Milk Mate and Competition)

Ð'* The first milk flavoring that comes in syrup form

Ð'* Dissolves instantly and completely

Ð'* Easier mixing

Ð'* Leaves no residue in glass

Ð'* Less sugar per proportional use

Ð'* Premium taste

Ð'* Better color

Positioning

Past products required mixing of powder with milk; Milk Mate eliminates this by providing a syrup form. Taste is also premium. We want the consumers to see this brand as high quality milk flavoring that is easy to use and convenient while being reasonably priced.

Marketing Program

Product Strategy

Unique Product Quality: Along with the ease and convenience of use due to the syrup form, Milk Mate also has proportionally less sugar then the leading brands. This results in lower prices for ingredients. Sugar makes up 85% of ingredients costs so any drop in the use of sugar will greatly lower our ingredients costs and overall variable costs. The lower sugar that the product uses can also be used as a marketing strategy by saying that our product is thus healthier and lower in fat. Also we know that children drink a lot of milk flavorings so wouldn't you want you child to consume less sugar while experiencing the same great taste?

Price Strategy

The product will sell for $13.45 per case (how this figure was arrived at can be found in the appendix under pricing). Each case will contain twelve 20oz containers. This is a reasonable price as compared to competition. The top brand will sell their cases for around $13.34. We are marketing our product for its convenience, ease of use, and taste therefore making it a premium product which leads to a higher price level. Coupons will also be widely available to help create even less of a discrepancy between prices.

Promotion Strategy

Promotion will be done with the help of 5 sales agents that are kept on salary and work specifically and only for Grenadier Chocolate Company as to keep a high level of expertise and service on hand. There will be significant advertising geared toward the Ontario region. The use of television,