Questions list. 1. Summarize the proposal that Tahki Yazzie submitted to the board. 2. Do a SWOT analysis relating to her proposal. 3. Propose another solution that relies on the reduction of costs and not rebranding the product. 4. Identify the areas that costs can be reduced effectively and calculate the impact it will have on profitability.

1. Case Report
Wiikano Orchards
MGMT361 Marketing Management
Spring 2018
Group 4
Elizabeth Keshishyan
Liana Ghalumyan
TigranuhiHarutyunyan
Anahit Babayan
LilitHarutyunyan
Davit Vardanyan

2. 2
1. Summarize the proposal that Tahki Yazzie submitted to the
board.
Tahki Yazzie developed a proposal mainly based on the rebranding of Tuwa brand. The
goal was to propose a product that was.
1. Meaningful to the customers - focus on the benefits the customers want and
connect those to the values of the customers, i.e. health benefits, no sugar,
hydration
2. Distinct from the competitors - differentiate the product through different features
and emphasize them, i.e. 100% Apple Juice, no chemicals, 100% U.S. product
3. Authentic - demonstrate the CSR the company practices and also the roots and
values of Wiikano Orchards., i.e. Native American, Family Owned.
The proposal itself included 3 types of recommendations concerning branding, digital
marketing and in-store promotions.
Branding
The main suggestions of the proposal included the change of the name of the brand to
Nepi Orchards, which supported the authenticity of the brand emphasizing its Shawnee
heritage and also the change of the packaging design. The latter one was all based on
the market research conducted through 15 focus groups with the consumers. They were
asked to provide a feedback on Tuwa’s current packaging and to give a
recommendation for making the packaging meaningful and appealing to themselves.
Based on these suggestions the production cost per unit was increased by $0.01.
Digital Marketing
As of 2016 Wiikano had no social presence and a very primitive website. This was a
major weakness, because engaging in digital marketing could be a very good way to
promote the brand. The proposal included 3 main key areas for digital marketing.
1. New, improved website including carefully designed content and visuals and also
fan clubs with games and contests. The cost for maintaining the website was
$10,000.
2. Active social media presence including Facebook, Twitter and Instagram. The
cost for managing social media platforms was $10,000.
3. Promotional items including the rewards earned from games and contests, such
as coloring books, t-shirts, reusable grocery bags (emphasized the CSR of
Wiikano), lunch coolers and tumblers. Promotional items accounted for the
$5,000 of the whole budget dedicated to the digital marketing.

3. 3
In-store Promotions
In order to emphasize the CSR of Wiikanoand also raise the awareness of the product
in the point of purchase Tahki Yazzie recommended to use hangtags 3 times per year
and also organize philanthropic activities ($0.10 donation for every purchase). This
could also make Wiikano more authentic as a brand and make it different from its
competitors, because according to the retailers, few apple juice brands actually
practiced philanthropy. According to the market research conducted among the
consumers, the majority was willing to buy a product with a cause. $40,000 of the
proposal budget was allocated to hangtags and donations.
2. Do a SWOT analysis relating to her proposal.
Strengths:
● Customer-centric packaging, based on the market research conducted through
15 focus groups
● Brand identity which will be a roadmap toward building a competitive advantage
● Differentiation strategy
● Modern promotional channels (social media)
● Practice of the contextual marketing through the newly improved website
Weaknesses:
● Higher production costs i.e. labels and bottles
● Higher promotional costs i.e. donations, website, etc.
● There is no quantitative proof for the proposal. In addition, the qualitative
research was conducted by a group of undergraduate students and not by
experts, therefore there is a possibility that the collected data can be inaccurate
Opportunities:
● Exhibit 2 shows that the segment for 100% natural juices in the US constitutes
4.6% of the whole Juice Production market. This means that there’s a niche for
Wiikano, and they need to focus on acquiring and keeping that niche as the
demand elasticity is low (there is a little number of loyal customers)
● New brand with superior quality might create a strong brand loyalty and a new
and larger target market
Threats:
● Mergers and acquisitions due to decreasing market prices. This would increase
the purchasing power of buyers and pose a threat on Wiikano.
● International market increased the competition, decreased brand loyalty and
threatened the local producers as a result of price war.
● Decrease in per-capita consumption of juice.
● Fear of the unknown (customers might not be willing to purchase a new and
unknown brand)

4. 4
3. Propose another solution that relies on the reduction of costs
and not rebranding the product.
The key issue to be addressed in this report is the apple tree orchard care, in order to
maximize Wiikano’s per acre harvest. The problems with current practice of ineffective
training and pruning clearly result in a lag between budgeted costs and actual costs.
The latter mentioned mispractice resulted in reduction of the expected number of trees
per acre, which in its place caused the reduction of harvested number of apples. Due to
the fact that the trees were densely planted, they required to have proper care and
pruning in order to be well exposed to the sun, which had a major contribution to the
growth of the trees and their crops. In a few words, the company spent solid amount of
funds and resources on the employees who were supposed to take care of the orchard,
yet desired result was not achieved.
The Exhibit 7 clearly states that 89% of the total cost is variable. Therefore, in order to
reduce costs it is reasonable to look at the variable components and find the ones which
were hinted in the case as problematic. According to the mentioned-above statements,
there was a major issue with the quality of work the labor performed. The main variable
costs concerning the labor were maintenance and harvesting costs. Thus, our
suggestion is to reduce these expenses and simultaneously improve the quality of
orchard care by either outsourcing the job or by hiring only highly qualified experts, who
will perform the job in a better quality and for lower prices. This will result in higher
harvest numbers and cost reduction, thus leading to increased profits. The average
price for outsourcing pruning is $800-$1000 according to the HomeAdvisor
International. The rough estimates with the calculations are provided in question 4.
.

5. 5
4. Identify the areas that costs can be reduced effectively and
calculate the impact it will have on profitability.

6. 6
Looking at the first picture gave us an idea that the labor maintenance and harvesting
costs are the highest ones among the variable costs. This could be okay if the actual
performance of the labor justified those high costs. However, due to the mistakes done
by inexpert labor, the costs of the company increased. This is the major reason why we
decided that it would be better for the company to outsource its labor operations to more
specialized people. While doing a secondary research, we found out that outsourcing
reduces the costs associated with labor, by decreasing the maintenance cost from
$970.65 to $800, and harvesting from $1,510 to $1,000*. According to our calculations,
the total costs per acre decreased from $5228.60 to $4547.95 and by that reduced the
cost per unit from $6.39 to $5.56.
As for the profitability, due to reduction of total cost per acre the company earned profit
of $66,458, compared to the incurred loss of $15,220 in the actual income statement of
the year 2016.
*Note - Please, consider that these are just rough estimates and the real numbers may be slightly
more or less. The numbers are taken from the HomeAdvisor International.

7. 7
Additional notes
a)
b)

8. 8
Alternative to reducing cost or rebranding the product for increasing profits is
approaching the production cycle from environmental standpoint. Above, you can find 2
flowcharts of apple juice production. They both clearly show that many apple juice
manufacturers turn a significant amount of processed outputs into a waste without
realizing that it can be reused for an actual juice or by-products production.
1. One solution is to practice efficient and eco-friendly production of apple juice, by
collecting the apple waste from the production (such as ovary-the core or even
ovary- outlined by the curve) and reuse it for making apple juice.
2. Another solution is to produce other complementary products from apple juice
production waste, i.e.drinking straws. This will not reduce the costs, rather may
increase the sales of Wiikano and may have a positive impact on the brand
image by showing that the company is environmentally friendly.
3. In addition, Wiikano may produce healthy apple chips from the apple waste,
under the same brand name, increasing the profitability of the company.