MKT 500 Week 6 Scenario Setting the Right Price and Deciding on D.docx

MKT 500 Week 6 Scenario: Setting the Right Price and
Deciding on Distribution Channels and Logistics
Slide #
Scene #
Narration
Slide 1
Scene 1
[Ed, Samantha – Ed’s Office]
Ed and Samantha meet in the morning to discuss the next steps
in the tablet PC launch.
Display formula:
Profit = π = (price x demand) – (fixed costs) – (variable costs x
demand) = [(price – variable costs)] x demand – (fixed costs),
then profits increase as price increases.
MKT500_6_1_Ed-1: Hello, Samantha. How are you this
morning?
MKT500_6_1_Samantha-1: I’m doing great, thanks. I saw that
you were in Carl’s office earlier. What did he have to say about
our progress?
MKT500_6_1_Ed-2: Well, now that we have our strategy for
managing the tablet’s product life cycle, he agrees that next we
need to examine how we are going to price the new tablet. We
also need to start considering the distribution channels and
logistics.
MKT500_6_1_Samantha-2: Yes, these are all important issues
that need to be addressed prior to launch. Something else to
think about is our strategy for distributing the tablet to our
target market as our tablet gains in popularity.
MKT500_6_1_Ed-3: Hmm. I assumed that we would use our

current distribution channel for the tablet product. Isn’t that
what we agreed upon?
MKT500_6_1_Samantha-3: Yes, you’re right. I do recall our
discussion on this topic, but we should probably address pricing
first.
As you know, pricing provides the company a mechanism of
obtaining value back from customers. It is also used as a
segmentation tool, as we discussed in previous meetings. We
have to understand how customers perceive prices and price
changes such as promotions to know how prices will be received
and affect demand. Also remember, we are targeting the
innovators for the first segment of our tablet launch.
MKT500_6_1_Ed-4: You’re absolutely right. You’ll also recall,
then, what occurs in each stage of the product life cycle and
how this affects prices.
Pricing typically varies over the course of a product’s life
cycle. Willingness to pay varies across segments, so a firm
might offer differential prices to those different segments.
The impact of changing price is easier to measure than
modifications of the other 4Ps.
MKT500_6_1_Samantha-4: I remember having a discussion
about pricing in school. Pricing plays an important role in
sending a signal to customers, competitors, and collaborators
regarding the positioning and image of the brand.
MKT500_6_1_Ed-5: You’re absolutely correct. Pricing also has
a huge impact on profit.
Profit can be defined according to this formula.
(Display formula on screen)
Fixed costs are those costs that are recurring every month, like

our mortgage and utility bills. Variable costs are those that vary
with the production of our computers, including materials and
labor. Understanding these costs is important for Golds Reling.
MKT500_6_1_Samantha-5: What does this mean for the tablet
launch?
MKT500_6_1_Ed-6: Based on the profit formula, we will need
to forecast demand. One way we can do this is to review the
inverse relationship between price and demand.
(Display Demand curve figure)
(Display Demand Scenarios)
(Display Demand Curve figure)
Take a look at this demand curve.
The demand curve is a graph depicting the relationship between
the price on the Y axis and quantity demanded on the X axis of
a certain commodity, and the amount of it that consumers are
willing and able to purchase at that given price.
It is a graphic representation of a demand schedule. The demand
curve for all consumers together follows from the demand curve
of every individual consumer: the individual demands at each
price are added together. The red arrows represent movement
along the demand curve.
MKT500_6_1_Samantha-6: So, based on the demand theory as
shown in the figure, movement along the demand curve
typically occurs as price decreases and the demand moves to the
right of the graph and increases.
MKT500_6_1_Ed-7: Right. Furthermore, Golds Reling’s profits
will increase as fixed or variable costs decrease.

MKT500_6_1_Samantha-7: Ed, if price is a function of demand,
how do you propose we set price at the launch of the new
tablet?
MKT500_6_1_Ed-8: Samantha, that is a great question. Let me
discuss the concept of elasticity or price sensitivity. One way
to describe elasticity is this: if a company drops prices on a
product, there should be a volume increase, and the question is
whether enough additional units will be sold to “stretch” and
cover the profits lost due to the price decrease.
Another popular interpretation of elasticity is from a
consumer’s point of view: if there is a price drop, or increase,
just how much does demand increase or decrease? If demand is
barely affected, the demand is inelastic; whereas if demand
bounces around, it is elastic.
(Display Demand Scenarios)
This figure shows two demand scenarios. The left plot shows
relatively elastic demand. The right scenario shows inelastic
demand.
Inelastic demand means that a particular item will be purchased
by many even if the prices are raised.
The figure also shows that elasticity is characterized differently
depending on the slope of the lines. Elasticity is defined as the
proportion change in quantity compared to the proportion
change in price.
MKT500_6_1_Samantha-8: I see. Can you tell me how elasticity
is determined?

Interaction
Click the tabs to learn more about elasticity.
The equation for determining elasticity is given as:
(Display Equation)
(
)
(
)
1
2
1
1
2
1
1
1
2
1
1
2
P
P
Q
Q
Q
P
P
P
P
Q
Q
Q

E
-
-
=
-
-
=
Note: Elasticity is always computed to be negative.
1. If elasticity, or E, is greater than one, demand is said to be
elastic. Price and revenue go in opposite directions. With a
price drop, revenues shoot up; with a price increase, revenues
fall off.
2. If zero is less than or equal to elasticity and less than or
equal to one then demand is inelastic. Revenue follows price in
the same direction. If price goes up, revenue goes up; if price
goes down, so do revenues.
3. If elasticity is equal to one, demand is said to be “unitary”.
Price goes up or down, but revenues remain about the same.
Ednarrates:
MKT500_6_1_Ed-9: Click the tabs to learn more about
elasticity.
MKT500_6_1_Ed-9_Tab A: If elasticity, or E, is greater than
one, demand is said to be elastic. Price and revenue go in
opposite directions. With a price drop, revenues shoot up; with
a price increase, revenues fall off.
MKT500_6_1_Ed-9_Tab B: If zero is less than or equal to
elasticity and less than or equal to one, then demand is
inelastic. Revenue follows price in the same direction. If price
goes up, revenue goes up; if price goes down, so do revenues.
MKT500_6_1_Ed-9_Tab C: If elasticity is equal to one, demand

is said to be “unitary”. Price goes up or down, but revenues
remain about the same.
Slide 3
Scene 1, cont.
MKT500_6_1_Samantha-9: So, based on the elasticity formula,
Golds Reling has to set prices for the new tablet to the
innovators and early adopters assuming inelasticity demand. In
other words, we have to build a lot of value and promote the
quality of our new tablets so that price is not a primary issue.
MKT500_6_1_Ed-10: Exactly right!
MKT500_6_1_Samantha-10: Thanks, Ed. Your pricing and
demand formula makes sense to me. Now, let’s put our data
together to share with Carl.
MKT500_6_1_Ed-11: Sounds like a plan!
Slide 4
Scene 2
[Ed, Samantha, Carl – Conference Room]
Ed and Samantha meet with Carl in the conference room to
share the next steps for the tablet launch covering pricing and
distribution.
(Show as breakeven point graphic)
MKT500_6_2_Ed-1: Hello, Carl. Hope you had a good lunch.
We have a lot to share with you regarding the product pricing
and distribution of our new tablet.
MKT500_6_2_Carl-1: Yes, I had a great lunch, pasta and
meatballs at a new Italian restaurant up the street. What do you
have for me, Ed and Samantha?
MKT500_6_2_Ed-2: Well, our thoughts are that no matter how

well Golds Reling thinks it knows a marketing system, we are
still dealing with human beings. Even if the purchase seems
simple, there are seemingly endless factors that contribute to
consumers’ decisions. Pricing is obviously one of these factors.
Much of our pricing formula is derived from economics, and it’s
sort of complicated.
MKT500_6_2_Samantha-1: We feel first and foremost that a
competitive price needs to be established, and of course, we
also determined the breakeven point for our new tablet. A Golds
Reling product price is often associated with quality. Counter to
the anticipated economic effect of higher prices causing a
decrease in demand, for some products and services, higher
prices can actually make a purchase seem more appealing.
MKT500_6_2_Ed-3: For some purchases, like our new Tablet,
customers will use price as a cue to quality, implicitly
reasoning that our new Tablet brand can command a high price
because its quality is so good. So, we have decided to start out
with a fifteen hundred dollar suggested manufacturer price, and
then allow our retailers to offer rebates and use the loyalty
programs already in place for the purchase of the new Tablet.
(Ed points to breakeven point graphic)
Based on our company strategy of market skimming, a high
price of fifteen hundred minus rebate is set because we are
seeking profit margin, not volume. We feel that the customers
who will buy our brand at a high price are the ones who really
want it - the innovators and early adopters we discussed in
previous meetings. There are a lot of these types of consumers
in our domestic and international markets.
MKT500_6_2_Samantha-2: So, based on our plan, during and
after our launch we will incentivize our retailers and
distributors with money bonuses, discounts, and training to get
our retailers and distributors excited about the new tablet.

As our marketing channels proliferate, increasing care must be
taken to coordinate and integrate across their efforts, data, and
customer touchpoints, and so forth.
We are trying to understand customer behavior, to see what
marketing channel attributes are important, and what impacts
customer choices. We are also trying to be strategic,
considering how an additional channel and the increased use of
our e-commerce efforts will impact sales and profits, and
therefore, how to allocate resources across channel options.
MKT500_6_2_Ed-4: Remember, our marketing channels are
supposed to make access easier for customers so that we can
focus on the customer buying behavior for our products.
Channel design is an integral part of marketing strategy and
positioning, and it needs to be consistent with all the other
marketing elements. The extensiveness of our distribution
channels is also related to the brand’s life cycle and Golds
Reling’s reputation and maturity in the marketplace.
Furthermore, we have to decide whether the channel design
allows a push or pull strategy.
MKT500_6_2_Carl-2: You’re right. Tell me, what information
have you gathered around which strategy would be best for
Golds Reling?
Slide 5
Interaction
Click the images to learn more about push / pull marketing
strategies.
In a pull marketing strategy, Golds Reling can temporarily
reduce pricing, or enhance size or quantity. The company can
offer trials or free samples, coupons or rebates, financing, and
points toward rewards in loyalty programs. The company still
must manage its relations with distributors and retailers, but
pull strategies are targeted to the end-user, to engage the

consumers’ awareness and loyalty.
Push marketing strategies would involve Golds Reling offering
incentives to distributors to sell product to end-users. While the
manufacturer targets the channel member rather than the
consumer, push marketing tools resemble those of pull. For
example, the company can offer its distributor or retailer
temporarily reduced pricing, an allowance to help cover
marketing activities, a discount for purchasing larger quantities,
financing a payment for several months, and so on.
MKT500_6_2_Ed-5: Click the images to learn more about push
/ pull marketing strategies.
MKT500_6_2_Ed-5_A: In a pull marketing strategy, Golds
Reling can temporarily reduce pricing, or enhance size or
quantity. The company can offer trials or free samples, coupons
or rebates, financing, and points toward rewards in loyalty
programs. The company still must manage its relations with
distributors and retailers, but pull strategies are targeted to the
end-user, to engage the consumers’ awareness and loyalty.
MKT500_6_2_Ed-5_B: Push marketing strategies would involve
Golds Reling offering incentives to distributors to sell product
to end-users. While the manufacturer targets the channel
member rather than the consumer, push marketing tools
resemble those of pull. For example, the company can offer its
distributor or retailer temporarily reduced pricing, an allowance
to help cover marketing activities, a discount for purchasing
larger quantities, financing a payment for several months, and
so on.
Slide 6
Scene 2, cont.
MKT500_6_2_Ed-6: I also have a short video here that explains

more about push / pull marketing.
Slide 7
Push vs. Pull Marketing | Katie Wagner Social Media
http://www.youtube.com/watch?v=w6rBBVuXEPw&feature=yo
utu.be
Slide 8
Scene 2, cont.
MKT500_6_2_Carl-3: Thanks, Ed. Which strategy did you and
Samantha decide Golds Reling should use for our tablets?
MKT500_6_2_Ed-7: We will adopt the push strategy. Golds
Reling will offer incentives to our distributors to sell our
products to the end-users during the initial launch of our
Tablets. We will support our top-tier distributors with pre-
launch quantity discounts when they order, along with point-of-
purchase displays that will be used to display our Tablets in the
retail stores.
MKT500_6_2_Samantha-3: Ultimately, we believe that our
current distribution channels are well designed, and our partners
are happy. However, this is an important launch and the first
Tablet introduction for Golds Reling so we have to be careful to
monitor the distribution channels throughout the launch.
MKT500_6_2_Carl-4: The pricing and distribution strategies
that you two have come up with are very impressive. Golds
Reling is in good hands with the both of you in charge of this
launch. I’m eager to see your plans for the next steps of
advertising and promotions. Good work!
Slide 9
Check Your Understanding
ChanC Channel design is an integral part of all of the

following EXCEPT:
a.
marketing
b.
strategy
c.
positioning
d.
pricing
Incorrect answer A: Marketing is a big part of channel design,
and therefore should be included in selecting a channel member.
Incorrect answer B. Strategy plays a huge role in how the
channel is designed and where the producer will use intensive
or exclusive distribution strategy.
Incorrect answer C: Position is a consideration for designing the
channel, as highly positioned products may require exclusive
distribution and low price. Lower quality products usually
require intensive distribution.
Correct answer D: Pricing is not a decision point for designing a
channel, but relates to the product.
Slide 10

Scene 3
[Ed, Samantha – Hallway]
MKT500_6_3_Samantha-1: Everything seems to be coming
along very well. We’ve set a price using the pricing and demand
formulas with consideration for our target market of the
innovators and early adopters. We’ve also determined our
distribution channels, a vital part of our marketing strategy.
MKT500_6_3_Ed-1: Yes. Next we’ll need to examine
advertising for our tablet. However, for now, you can complete
the e-Activity and the weekly threaded discussion, where we
can discuss pricing and distribution channels further. See you
next week!
_1378121002.unknown
MKT 500 Week 5 Scenario: The Stages of the Product Life
Cycle
Slide #
Scene #
Narration
Slide 1
Scene 1
Ed and Samantha meet in the morning to discuss the next steps
in the tablet PC launch.
MKT500_5_1_Ed-1: Hello, Samantha. How are you this
morning?
MKT500_5_1_Samantha-1: I’m doing fantastic. I’m really
excited about this project. I felt energized after our meeting
with Carl last week when we presented our ideas for our
branding strategy.
MKT500_5_1_Ed-2: I’m glad to hear that! I just left Carl’s
office, and he had some valid questions. The most important

question for us to consider next was, “Once we launch the new
tablet and enjoy the honeymoon period, what is in store for
Golds Reling in the years that follow?”
MKT500_5_1_Samantha-2: I see, so Carl wants us to focus on
the life cycle of the product next?
MKT500_5_1_Ed-3: Correct. As you may recall from various
Strayer marketing classes, the product life cycle is a popular
metaphor in marketing to describe the evolution and duration of
a product in the marketplace.
MKT500_5_1_Samantha-3: Yes. I recall that the stages within
this life cycle are market introduction, market growth, maturity,
and decline.
Sales and profits behave predictably during the different stages,
and the marketing actions that are thought to be optimal during
each stage are also clearly prescribed.
MKT500_5_1_Ed-4: You’re absolutely right. You’ll also recall,
what occurs in each stage of the product life cycle.
Slide 2
Interaction
Click the stages of the product life cycle to learn more about
each.
Market Introduction: During this stage a company brings a new
product, including both goods and services, into the
marketplace with heavy marketing spending. Promotion
techniques used include advertising, samples, coupons, et
cetera.
Strategically, prices might start low, a strategy known as
penetration, but they often start high in order to recoup
development costs, a strategy known as skimming. The company

uses limited distribution and sales are also low.
Market Growth: This stage is characterized by accelerated sales,
rise in profits, stronger customer awareness, greater distribution
channel coverage, and entry of competitors. The company might
be able to begin increasing prices. Advertising is intended to
persuade customers as to the brand’s superiority compared to
competitors.
Market Maturity: During this stage the advertising continues to
persuade customers about the brand’s relative advantages and
serves as a reminder to buy the product; products may
proliferate to a fuller product line to satisfy more segments of
customers. There is more competition; sales grow but profits
decline; strong competitors gain market share and weaker firms
begin to fall out of the marketplace; and the product offerings
of different firms often begin to homogenize. Instead of
reducing prices, the firms should try to find new benefits and
either increase, or at least maintain current prices.
Market Decline: This phase is characterized by declining sales
and profit. New products start replacing older ones. The firm
may divest, harvest, or rejuvenate the old product.
The lengths of product life cycles vary a lot. The length of
product-category life cycles tends to be longer than those of
individual brands.
MKT500_5_1_Ed- 5: Click the stages of the product life cycle
to learn more about each.
MKT500_5_1_Ed-6:
Market Introduction: During this stage, a company brings a new
product, including both goods and services, into the
marketplace with heavy marketing spending. Promotion
techniques used may include advertising, samples, and coupons.
Strategically, prices might start low, a strategy known as

penetration, but they often start high in order to recoup
development costs, a strategy known as skimming. The company
uses limited distribution, and sales are also low during market
introduction.
MKT500_5_1_Ed-7:
Market Growth: This stage is characterized by accelerated sales,
rise in profits, stronger customer awareness, greater distribution
channel coverage, and entry of competitors. The company might
be able to begin increasing prices as the product is accepted by
the target market. Advertising is intended to persuade customers
as to the brand’s superiority compared to competitors.
MKT500_5_1_Ed-8:
Market Maturity: During this stage, the advertising continues to
persuade customers about the brand’s relative advantages and
serves as a reminder to buy the product; products may
proliferate to a fuller product line to satisfy more segments of
customers. There is more competition; sales grow but profits
decline, typically because of pressures from competition; strong
competitors gain market share and weaker firms begin to fall
out of the marketplace; and the product offerings of different
firms often begin to homogenize. Instead of reducing prices, the
firms should try to find new benefits, and either increase, or at
least maintain, current prices.
MKT500_5_1_Ed-9:
Market Decline: This stage is characterized by declining sales
and profit. New products start replacing older ones. The firm
may divest, harvest, or rejuvenate the old product.
The lengths of product life cycles vary a lot. The length of
product-category life cycles tends to be longer than those of
individual brands.
Slide 3

Scene 1, cont.
MKT500_5_1_Ed-10: I also have a video here with a bit more
information about the product life cycle.
Slide 4
Traditional Product Life Cycle
http://www.youtube.com/watch?v=wYeXCeBZhjE
Slide 5
Scene 1, cont.
(Displayed on screen)
MKT500_5_1_Samantha-4: Thanks for that summary of the
stages of the product life cycle, Ed. Thinking about the
introduction stage, a product such as ours needs a lot of
promotions for the launch.
MKT500_5_1_Ed-11: Exactly. We have to cut through all of the
clutter out there and make our tablet the first one that customers
think of when they are considering their purchase. We have to
create good top-of-the-mind awareness, not just spontaneous
awareness.
MKT500_5_1_Samantha-5: Remind me again of the difference
between the two?
MKT500_5_1_Ed-12: Top-of-the mind awareness is the first
brand that a customer thinks of when asked an unprompted
question about a particular product category. Companies that
are well known advertise heavily and have attention-getting ads

that tend to receive the highest top-of-the-mind awareness
scores in ad tracking studies. I am sure that we can think of
some products that fall into this category. Let's think of some...
When I say, “gaming system”, what do you think of?
MKT500_5_1_Samantha-6: Xbox. How about, “foreign car”?
MKT500_5_1_Ed-13: BMW. I’ve got one: “education”.
MKT500_5_1_Samantha-7: (Laughing) Strayer University!
What can you tell me about spontaneous awareness?
MKT500_5_1_Ed-14: Well, spontaneous, or unaided, awareness
refers to the other brands a customer thinks of when asked an
unprompted question about a particular category. For example,
when asked about cereal, a customer may first think of
Cheerios, so Cheerios would have top-of-the-mind awareness.
However, the customer may next think of Apple Jacks, meaning
Apple Jacks has spontaneous awareness.
For top-of-the-mind awareness, consider this question, “When
the need arises for a particular service or product, what is the
first thing, name, company, or store that comes to mind?”
Whether it's a person or a business, whoever pops into your
mind first has successfully achieved top-of-the mind awareness.
The goal of PR, and all of marketing, is to park your product in
your customers' minds right next to the “need” button; this
button rests right at the top of their mind.
MKT500_5_1_Samantha-8: That makes perfect sense! Can you
explain a little more about the purposes of top-of the mind
awareness and spontaneous awareness?
(Display graph on screen)
MKT500_5_1_Ed-15: Top-of-the-mind awareness is an
important purchase driver, but spontaneous awareness is
important for brand recognition, which establishes a customer’s

trust in the product and removes any associated risk with
making a purchase.
The more buzz about a product or service, the more awareness
exists. The more awareness exists, the higher the probability of
being in that top-of-the mind position.
MKT500_5_1_Samantha-9: So how can we here at Golds-Reling
go about creating buzz for our new tablet launch?
MKT500_5_1_Ed-16: Creating buzz and awareness is done by
many things, such as an Internet blog or website, usually all
working together synergistically.
Getting that label and moniker starts with announcing to the
world, usually announcing to your particular target market, that
you are in business. We would do this with a press release that's
sent to the media, handed out to prospects and customers, or
used as a direct-mail piece. We could also post the press release
on our website, which has been a very effective form of
communication for us in the past.
MKT500_5_1_Samantha-10: Yes, I remember from my classes
at Strayer University that top-of-the-mind awareness is often
difficult to achieve for a new product.
MKT500_5_1_Ed-17: Right. The primary purpose of our
advertising, PR, and social media efforts will be to create top-
of-the-mind awareness.
(Display figure on screen)
Here is a diagram that will help explain how consumers adopt a
new product. In addition to the marketing actions underlying the
product life cycle, during these phases, marketers have also
developed a theory about what customers are doing.
Marketers are of the opinion that when a new product is
introduced, the person to try it first goes and shows it to others;
the others appreciate it, buy it, and then tell others. This word-

of-mouth or “viral marketing” helps activate the process of the
diffusion of innovations.
Slide 6
Interaction
Click the sections of the Diffusion of Innovation figure to learn
more about each group.
MKT500_5_1_Ed-18: This figure shows the diffusion process as
a normal curve and partitions the customer base into five
groups.
MKT500_5_1_Ed-19: Click the sections of the Diffusion of
Innovation figure to learn more about each group.
MKT500_5_1_Ed-20: The innovators are the first three to five
percent who like to try new ideas and are willing to take risks.
MKT500_5_1_Ed-21: The early adopters are the next group, or
the ten to fifteen percent who are even more influential as
opinion leaders, primarily because they are a bigger group.
MKT500_5_1_Ed-22: The early majority, who make up thirty-
four percent, are more risk averse than the first two groups.
MKT500_5_1_Ed-23: The late majority, who make up thirty-
four percent, are even more cautious, often older and more
conservative, and wish to buy only proven products.
MKT500_5_1_Ed-24: The final group, the laggards or non-
adopters, who account for five to fifteen percent, are the most
risk averse. They are typically skeptical of new products and
stereotypically lower in income.
Slide 7

Scene 1, cont.
Display formula here:
nt = [ p + q (Nt – 1 / M)] (M – Nt – 1)
MKT500_5_1_Samantha-11: And the innovators are who we
want to target with our advertising, PR, and social media during
our launch. Correct?
MKT500_5_1_Ed-25: Absolutely. In fact, I have a formula right
here that I think will be helpful for a successful launch.
(Display formula on screen)
In the equation given in the figure, we are trying to forecast n
subscript t, which is, the number of units we will sell during
time period, t. N subscript T minus one represents the number
of units we have sold so far, or cumulative sales in units. M is
the max on the likely market potential. The term on the right, M
– N subscript t minus one, means “how we are doing so far?”:
what is the difference between what we could sell, M, and what
we have sold so far, which remember, is N subscript t minus
one. p is called the coefficient of innovation—it’s the likelihood
that someone will buy or adopt the new product due to
information obtained from the marketer. q is the coefficient of
imitation—the likelihood that someone will buy or adopt the
new product due to word-of-mouth information obtained from
another consumer.
MKT500_5_1_Samantha-12: Hmmm…I can think of two
different ways we can use this diffusion model. First, we can
observe early sales data, fit the model, and make predictions
about the future. Alternatively, we can use past results on
products similar to ours and plug in those numbers to make
predictions about the future even before launching the product.

MKT500_5_1_Ed-26: That’s correct, Samantha! The imitation
effect, or q is usually bigger; p in ratio to q is about one to ten.
The percentage of innovators and early adopters, the customers
who are driving p, is about ten to fifteen percent of the market,
whereas the remainder of the market is eighty-five to ninety
percent, and they are driving q. We can speed up innovators;
that is, make p bigger, by introducing price decreases early, or
speed up imitators; that is, make q bigger, by introducing price
decreases later.
We need to interact with our customers throughout these phases.
During the new product launch, we will heighten awareness
through advertising.
In the diffusion process, word-of-mouth increases the size of q,
the imitation effect. Thus based on our formula, we need to do a
lot of buzz marketing aimed at innovators and early adopters,
which comes by the way of our website and PR.
MKT500_5_1_Samantha-13: This is excellent research, Ed, and
I believe that Carl will be impressed with your efforts, but how
do we know that our new tablet is hitting the mark and will be
accepted in the marketplace?
MKT500_5_1_Ed-27: Well, we began our new product plan
internally, by identifying the corporate and marketing missions
and objectives to be achieved via the new product or service.
We’ve been careful to remember that customers are important in
the feedback they provide in the new product development
process.
However, a number of factors influence the customers’
acceptance of new products and the diffusion of the innovation
throughout the marketplace. Consumer acceptance tends to be
higher when the new product:
A. Has a clear relative advantage over existing products

B. Is compatible with the customer’s lifestyle
C. Is not overly complex, or the complexity is masked by a
user-friendly interface
D. Is easily tried or sampled, to facilitate initial assessment
MKT500_5_1_Samantha-14: I see. Utilizing the factors of
compatibility tends to make acceptance of innovations better, so
I’m convinced that this will help make the launch of Golds
Reling’s new tablet very smooth.
MKT500_5_1_Ed-28: Exactly. We had better start organizing
our data if we want to be ready for our update meeting with Carl
this afternoon.
MKT500_5_1_Samantha-15: You’re right. Let’s get started.
Slide 8
Scene 2
share the next steps for the tablet launch.
MKT500_5_2_Ed-1: Hello, Carl. I hope you had a good lunch.
We have a lot to share with you regarding the product life cycle
of our new tablet.
Much like the personalities of people, the product life cycle and
the diffusion of innovation process will vary. Some companies
are innovators, whereas others are reactors. Golds Reling is an
innovative company.
MKT500_5_2_Carl-1: I agree.
MKT500_5_2_Ed-2: Our research shows that the first to market
is often the first to fail because a new concept takes a while to
sink into the minds of customers. By comparison, first movers
may have advantages in launching new products because there

is less risk. In either case, after the first to market, the next few
“early follower” firms have approximately the same survival
risks when launching either totally new or incrementally new
products. Next generation products such as ours are easier to
launch because there is an existing customer base, channels of
distribution, and much more predictability.
MKT500_5_2_Samantha-1: So, based on our research after
completion of the test marketing process, prior to our launch,
this data will be used in an attempt to predict the tablet’s likely
success. If the predictions of sales are not promising, this stage
is the last opportunity for Golds Reling to abort before
launching. If the predictions are promising, we will proceed to
commercialize.
Here is the formula that we will use to make our predictions.
Slide 9
Interaction
Click the segments of the equation to learn more about sales
predictions.
$SP = MP x PI x Pr.
MKT500_5_2_Samantha-2: Click the segments of the equation
to learn more about sales predictions.
MKT500_5_2_Samantha-3: We have constructed a forecasting
model, and it will be used to estimate the sales potential, or
dollar sign S.P.
MKT500_5_2_Samantha-4: The first estimate needed for this is
market potential, known as M.P., which is how many units we
might possibly sell. We will use some data from our previous
launches to decide on potential unit projections. Secondary data
or other relevant benchmarking data are also used.
MKT500_5_2_Samantha-5: Next, P.I., the estimate of the
purchase intention, or the likelihood that the target segment will

buy the product, has to be determined. This number comes from
the most recent marketing research that was conducted.
MKT500_5_2_Samantha-6: Finally, the component we need to
consider which is under our control is Pr., the price the
company intends to charge. All of these components are put into
the equation: dollar sign SP equals market potential times
purchase intention times price charged.
Slide 10
Scene 2, cont.
MKT500_5_2_Carl-2: This is very impressive, and Golds
Reling is in good hands with both of you in charge of this
launch. I’m eager to see your plans for the next steps of setting
the price and determining the distribution channels. Good work!
Slide 11
Interaction - Check Your Understanding.
Select the answer that best completes the sentence.
During the introduction stage of the product life cycle, sales
grow slowly and____:
A. competition becomes tough
B. profit is minimal
C. more product is needed
D. advertising expenditures are low.
E. the promotion is complete.
A: Incorrect Feedback: Competition becomes tough in the
growth stage.
B. Correct Feedback: Profit is minimal because the company has
invested heavily in research and development.
C: Incorrect Feedback: Product development has already

occurred.
D: Incorrect Feedback: Advertising expenditures are really high
during the introduction stage.
E: Incorrect Feedback: Promotion is a big part of the growth
and maturity stages.
MKT500_5_2_Ed-3: Select the answer that best completes the
sentence.
Slide 12
Scene 3
[Ed, Samantha – Hallway]
MKT500_5_3_Samantha-1: I’m glad Carl appreciated the
research we’d done for each stage of the tablet’s product life
cycle. I really do believe that with the right strategies, Golds
Reling will be able to achieve both top-of-the-mind and
spontaneous brand awareness with the new tablet.
MKT500_5_3_Ed-1: I agree. With buzz marketing, we’ll attract
the innovators and early adapters that we identified in the
diffusion model, and we’ll be able to successfully penetrate the
market.
Remember that we have an e-Activity and the weekly threaded
discussion on new product development and the product life
cycle where we can discuss this further. See you next week!
MKT 500 Week 4 Scenario: Branding Your Product
Slide #
Scene #
Narration
Slide 1
Scene 1
[Ed, Samantha, Carl – Hallway]

MKT500_4_1_Carl-1: Good morning, Ed and Samantha.
MKT500_4_1_Ed-1: Good morning, Carl.
MKT500_4_1_Samantha-1: Good morning, Carl.
MKT500_4_1_Carl-2: So, we have accomplished a lot during
our previous meetings, and I believe that we are going to have a
successful upcoming launch of the tablet computer.
MKT500_4_1_Ed-2: You’re right, Carl. We have come a long
way in the past few weeks, and both Samantha and I feel
confident that this will be a successful launch.
MKT500_4_1_Carl-3: Excellent. Have you started thinking
about the best strategy to brand our tablet?
MKT500_4_1_Ed-3: Well, we did look at branding when we
selected our target markets.
MKT500_4_1_Carl-4: Have you accounted for a strategy to
transition from our current brands to the new tablet brand?
MKT500_4_1_Samantha-2: We have gathered some preliminary
branding ideas, but we intend to investigate them further today.
MKT500_4_1_Carl-5: Sounds good. I look forward to seeing
your work later.
Slide 2
Scene 2
Ed and Samantha meet to discuss the branding strategy for the
tablet launch.
MKT500_4_2_Samantha-1: Ed, before we get into too many
branding details for this specific launch, could we talk about the
concept of branding strategy? Brand strategy is a part of the

marketing management process that I struggled with a bit while
I was in school.
Ed: I have a short video here that we can watch. I think it will
be helpful.
Slide 3What is Brand Strategy?
http://youtu.be/H-RaxV2as8s
Slide 4
Scene 2, cont.
MKT500_4_2_Samantha-2: Thanks, Ed. This video was great. A
brand is so much more than just the logo we associate with the
product.
MKT500_4_2_Ed-1: Exactly. When we’re thinking about how to
brand our tablet, we need to intentionally and thoughtfully
ensure that we are communicating a consistent message within
the company as well as to our customers.
As part of our branding strategy, we need to develop brand
associations, which you may recall are the feelings, beliefs, and
knowledge that customers have about a particular brand. Since
this is a new product in our portfolio, we also need to discuss
how we are going to implement our brand extensions. Then we
can use Golds Reling’s brand equity to leverage our good name
in the electronics market in order to get customers to buy our
new tablet. We can tackle this by creating a brand association
map.

MKT500_4_2_Samantha-3: I remember that brand association
maps are similar to perceptual maps, like the one we created for
Carl in our last meeting.
MKT500_4_2_Ed-2: Right. The primary purpose of a brand
association map is to illustrate a new strategic overview of our
brand's associations and to depict our brand’s strategic meaning
in a comprehensive visual presentation.
(Brand map displayed on screen)
As you can see by the Samsung brand map, the nodes in the
network include elements, attributes, and abstract benefits about
the brand. The links between the nodes indicate the connections.
Some of the connecting lines are more prominent than others.
The idea that the figure tries to convey is that customers store
quite a lot of information about a brand in their memory, and
when the brand name is activated, the brand associations - such
as service, quality, or product reliability - are subsequently
triggered.
As for the practical implications, our strategic brand association
map process provides us with a very clear, consumer-driven,
strategic view of the associations our brand has and how those
associations may, or may not, be serving to differentiate our
brand.
Additionally, the strategic brand association maps serve as an
excellent diagnostic as to the overall health of our brand. It can
also provide actionable insight for better understanding of
strategic reasons why a particular brand may be under-
performing against expectations.
Furthermore, brand associations are one of the fundamental
cornerstones of brand value. Brand associations serve to
differentiate and create meaning for brands.

Better understanding and managing a brand's associations are
fundamental roles of brand managers. The brands map process
illustrates a new way to give brand managers strategic,
consumer-driven insight into their brand's associative network.
MKT500_4_2_Samantha-4: I see! So when we are thinking
about marketing the tablet, we need to have our customers relate
to our brands by creating a brand personality. In other words,
we should try to attribute personality traitssuch as
“seriousness”, “warmth”, or “imagination” to a brand as a way
to achieve differentiation in the market. These types of
personalities capture information specific to our brand, as well
as holistic perceptions about the brand and company position in
the marketplace that we have communicated through items such
as our advertising and packaging.
Golds Reling’s brand strategy has to attain a certain personality,
and if customer perceptions concur that the brand has achieved
those characterizations, then we can consider the branding and
marketing efforts successful. If the brand manager does not like
the brand’s current profile, then new marketing initiatives may
be taken to reposition the brand.
MKT500_4_2_Ed-3: Exactly. We can conduct a consumer panel
to help determine our brand personality.
MKT500_4_2_Samantha-5: How will that work?
MKT500_4_2_Ed-4: Well, a consumer panel is a sample group
of consumers in a target market whose buying behavior is
believed to be representative of the entire market. By studying
and defining the brand preferences, buying patterns, attitudes,
and opinions of a consumer panel, marketers can extrapolate the
behavior of the total market. For example, Apple used consumer
panel research to launch its iPhone 5 to determine whether trial
usage of a new product could lead to adoption.
MKT500_4_2_Samantha-6: Hmmm, but Carl wants this
information by this afternoon. How are we going to put together
a consumer panel that quickly?

MKT500_4_2_Ed-5: Well, in Google’s new tablet launch, they
used a consumer panel. The results of the panel research are
now available on Google’s website.
MKT500_4_2_Samantha-7: Why would we use Google’s
research data for our product launch?
MKT500_4_2_Ed-6: The Google tablet is very close to ours; so
we can review the results of their consumer panel to see which
aspects of Google’s research apply to our brand.
See, brand personality is a lot like a human’s personality, and is
usually described using effective and catchy adjectives. This
method was used in our previous launches to establish a
branding statement for our XY Two computer.
Here’s a list of adjectives commonly used to describe people’s
personalities. We can ask ourselves, is our new product:
· Conservative or progressive?
· Urban or outdoorsy?
· Casual or professional?
· Funny and playful or serious?
· Big or small?
· Leader or underdog?
· Stylish and fashionable or plain and practical?
· Thrifty or affluent?
· Outspoken or reserved?

· Dynamic or stable?
· Predictable or surprising?
· Stable or fluid?
MKT500_4_2_Samantha-8: I’m not sure all of these apply to
our product though.
MKT500_4_2_Ed-7: We can narrow down the list after we
conduct the consumer panel, and use these results to finalize our
brand personality statements. However, for now, we can focus
on those adjectives that most closely describe our target market
the Experiencers and Innovators - who are both trendy and seek
out new and exciting experiences.
Tell me, which adjective do you think would be the most
beneficial brand personality attribute for marketing the new
tablet?
Slide 5
Interaction.
Based on the information Ed shared with Samantha, select the
most beneficial brand personality attributes for marketing the
new tablet?
A. Urban
B. Dynamic
C. Leader
D. Progressive
Correct Feedback: A – Urban. This adjective relates most
closely to the Experiencers and Innovators profile of being
trendy, new-experience seekers.
Incorrect Feedback: B – Dynamic. Although the target segment
lives in a dynamic environment and are thrill seekers, this

adjective really doesn’t cover the branding statement.
Incorrect Feedback: C – Leader. This adjective is too over-used
in the computer industry and; therefore, it would not distinguish
Golds Reling’s new tablet from others on the market. If the
product does not stand out, Experiencers and Innovators most
likely would not take notice of it.
Incorrect Feedback: D – Progressive. Although the consumers
purchasing a tablet want to purchase from a progressive
company, this adjective is not targeting Experiencers and
Innovators, who are motivated more by self-expression and
image.
MKT500_4_2_Ed-8: Based on the information I shared with
Samantha, select the most beneficial brand personality attribute
for marketing the new tablet.
Slide 6
Scene 2, cont.
MKT500_4_2_Samantha-9: I think we should use the “urban”
adjective in our branding statement because it most closely
relates to the lifestyle characteristics of our target market.
MKT500_4_2_Ed-9: Yes, I agree. But, first we’ll need to check
with our legal department to see if any of our competitors have
used “urban” in their branding statements.
MKT500_4_2_Samantha-10: You’re right. I had forgotten about
intellectual property rights. In the U.S. and Europe, there are
regulations as to what can be said in ads and on product
packaging. This would be of particular importance for our
trademark.
MKT500_4_2_Ed-10: I’ll go check with Legal now, so we can
get started writing the branding statement for our new tablets.
MKT500_4_2_Samantha-11: Sounds good!I want to be sure we
have everything we need for our meeting with Carl later.

Scene 3
discuss their branding materials.
Display Brand Map
MKT500_4_3_Carl-1: Good afternoon, Ed and Samantha. What
did you come up with for a branding strategy and brand
statement?
MKT500_4_3_Ed-1: As you know, at Golds Reling we believe
that our brands have value above and beyond the benefits of the
product itself. Our brand is not just a well-known name, but it
projects images that our name invokes. While a brand begins
with the name that we choose to label our new product, a good
brand is a portfolio of qualities associated with that name. The
brand associations begin with qualities under our control.
Companies such as ours build associations via classical
conditioning in consumer learning - for example, through a
jingle, slogan, or spokesperson.
MKT500_4_3_Samantha-1: At Golds Reling, we have two areas
to cover for our branding strategy.
For our customers:
Our brands must convey information to customers. Brands can
gain reputations for being bad, but the goal of our strategy is to
create a product that is reliable, or predictable in quality.
Brand building is based fundamentally on the predictability of
the item being purchased. When the brand name is an assurance

of reliable quality, the customer’s decision is made easier.
There is less perceived risk associated with the choice among
the products offered in the marketplace when the customer
knows which brands are good. Risk is essentially a measure of
variability, whereas reliability implies a consistency or
predictability in the performance of the product. We feel that
our current brands also serve as status symbols.
For our company:
Our new brands must induce loyalty.
If customers appreciate the reliability, high quality, and status
of a brand that we have already built like the XY two, then they
will willingly pay premium prices for it.
The mechanism that gives our current and new brands meaning
is the set of associations that are linked to the brand in the
customer’s mind. These associations are created through a
number of sources. They are built from:
· Our company’s advertisements and communications in the
marketplace.
· Our customers’ own experiences with the current brand and
company and the customers’ experiences with competitors’
brands.
· The stories related about the brand by other customers through
word-of-mouth.
MKT500_4_3_Carl-2: Do you know the attributes our customers
seek?
MKT500_4_3_Samantha-2: (pointing to brand map) I’m glad
you asked that, Carl. We have created a brand map for you that
reveals the attributes in a graphical format.
The attributes we believe align most with the our tablet
computers are:

· Affordable
· Urban
· Sophisticated
· Fun
· Hi Tech
· Easy-to-use
· High Quality
MKT500_4_3_Carl-3: Well-conceived. Do you both believe this
aligns with our intended target audience?
MKT500_4_3_Ed-2: Yes. Based on the data we extracted from
industry research and our own experience with the XY Two
computer, we believe these attributes are correctly aligned.
MKT500_4_3_Carl-4: Excellent. Have you crafted a branding
statement that includes the brand name, logo and features?
MKT500_4_3_Samantha-3: Yes. Ed and I came up with a couple
of statements and names.
We have a few versions to show you, but we are still in the
process of gathering the consumer panel information.
Display Mockups
Slide 8
Interaction
Hover your mouse over the images to see the branding
statements.
Gold Reiling_logospics of tablets.docx
MKT500_4_3_Ed-3: Hover your mouse over the images to see
the branding statements.
Slide 9

Scene 3, cont.
Gold Reiling_logospics of tablets.docx
MKT500_4_3_Carl-5: Okay, these are great mock-ups. I like the
“Golds Reling’s X- Tab - The Urban Legend!!” version the best.
However, I’m not sure if I like the type style. We need
something that denotes action, and that sounds hip and cutting
edge.
MKT500_4_3_Ed-4: Exactly, Carl.We are working on that.
MKT500_4_3_Samantha-4: What do you think of our initial ad
mock-ups?
MKT500_4_3_Ed-5: Samantha and I have been working with
our creative department. Our idea is that the Gold Reling’s
brand affords our customer the cyber world.
Insert ad mock-ups here.
MKT500_4_3_Carl-6: I like what the both of you have done.
You have created a branding strategy, logo, and tagline that will
really have an impact. Let’s send your ideas to our creative
department to work on some refined mock-ups.
Slide 10
Scene 4
[Ed, Samantha - Hallway]
MKT500_4_4_Ed-1: I’m glad Carl likes our ideas. We have
worked hard on this project. Let’s recap some of the key points
we went over today.
Slide 11
Interaction – Check Your Understanding
Match each phrase with its definition.
Brand Strategy – Generating and influencing brands carefully,

intentionally, and thoughtfully with a corporate viewpoint.
Brand Associations - The feelings, beliefs, and knowledge that
customers have about a particular brand.
Brand Extensions – A strategic use of a brand’s equity, in which
the marketer leverages the brand’s good name to get customers
to buy something new.
Brand Personality - The attribution of human personality traits
to a brand as a way to achieve differentiation.
MKT500_4_4_Ed-2: Match each phrase we reviewed today
related to branding with its correct definition.
Slide 12
Scene 4, cont.
[Ed, Samantha - Hallway]
MKT500_4_4_Samantha-1: Thanks, Ed. I really appreciate your
guidance during this project.
MKT500_4_4_Ed: You’re welcome, Samantha. Don’t forget to
complete your e-Activity and participate in this week’s threaded
discussion on core market offerings and defining the product.
I’ll see you next week!
TROPICANA:
SOCIAL MEDIA TEACH MARKETERS A
BRANDING LESSON
Colleen P. Kirk, Mount Saint Mary College
Karen A. Berger, Pace University
This critical incident was prepared by Colleen P. Kirk and
Karen Berger, and is intended to be used as a basis for class
discussion. The views presented here are those of the authors

based on their professional judgment and do not necessarily
reflect the views of the Society for Case Research. Copyright ©
2011 by the Society for Case Research and the authors. No part
of this work may be reproduced or used in any form or by any
means without the written permission of the Society for Case
Research.
Neil Campbell, president at Tropicana North America in
Chicago, part of PepsiCo Americas Beverages, sat with his head
in his hands. He had been reviewing a barrage of emails from
his key marketing staff indicating significant consumer
displeasure with the newly-launched packaging for the
division’s flagship product, Tropicana Pure Premium orange
juice. The new product design packaging had been on store
shelves less than six weeks, and the Internet had already been
flooded with articles, postings, and comments regarding the new
product packaging. The company had invested $35 million in
the new package design and associated advertising campaign,
yet sales had dropped precipitously since the new packaging
was launched. What went wrong? What should Tropicana do
now?
Tropicana Brand History
Tropicana was the largest orange juice brand on the market
when PepsiCo purchased the product line from Seagram Co.
Ltd. in 1998. PepsiCo felt Tropicana was a superb addition to
its beverage portfolio, competing with and surpassing Coke’s
Minute Maid orange juice brands. Further, while orange juice
margins were thinner than those of soft drinks, sales of orange
juice products were expanding at a much faster 8% rate than the
soft drink beverage business, due in part to a growing awareness
among adults of the health benefits of orange juice (Light,
1998).
At the time of the acquisition, Tropicana’s 42% orange juice
market share dwarfed the 24% share owned by Coke’s Minute
Maid orange juice brand. However in 2001, Coca-Cola

responded by launching a new premium orange juice line called
“Simply Orange.” By 2006, Tropicana found its market share
dropping steadily from 42% in 2006 to 33.6% in 2009, while
that of Simply Orange grew from 8.1% to 14.8% during the
same time period. It was clear that Coca-Cola’s focus on the
fresh-squeezed orange juice experience of Simply Orange
(Anonymous, 2001) was resonating with consumers, and
Tropicana needed to react.
Tropicana’s Packaging
The iconic orange and straw graphic pre-dated PepsiCo’s
purchase of the Tropicana brand, and was originally
conceptualized as part of Pixar’s first animated television
commercial, produced for Tropicana in 1989 (Pixar, 2010).
When the Coleman Group incorporated the “straw in an orange”
graphic into the Tropicana juice carton in 1997, EVP Jonathan
Asher noted “We recognized we could strengthen the brand
franchise by building on existing design equities, and create a
more distinctive and ownable brand identity” (Anonymous,
1997).
On January 8, 2009, PepsiCo announced a package re-design
and accompanying new marketing campaign for the Tropicana
product line (Zmuda, 2009). Research showed Tropicana that
about half of consumers thought orange juice contained added
sugar, and brand managers felt that the fact that Tropicana was
pure, natural, and 100% squeezed from fresh oranges needed to
be highlighted. Noted Tropicana president Neil Campbell, “We
wanted to create an emotional attachment by ‘heroing’ the juice
and trumpeting the natural fruit goodness” (Hein, 2009).
The redesign was spearheaded by the Arnell Group (Arnell.com,
2010), and in a press conference launching the new packaging,
Peter Arnell noted the agency wanted to leverage the biggest
single billboard available – the product’s package (Levins,
2009). Tropicana packaging had never shown the inside of the
orange, and designers felt that they could better emphasize the
purity of the juice by displaying the juice itself. Arnell also

explained “We no longer wanted to work with assets or parts
that were not clear to the consumer. They might have identified
with the orange and the straw on the old packaging but no one
knew why it was there” (Hein, 2009:1).
According to Arnell, the design team was instructed to use
“design language that was clear, simple and profound” (Hein,
2009 1). Thus, the words “100% orange pure and natural” were
positioned front and center on the carton (Hein, 2009).
Additionally, the carton’s new cap was designed to mimic the
outside of an orange, both in appearance and texture, and
designers felt opening it implied the squeezing of an orange
ergonomically. Arnell explained that, in keeping with the theme
of Tropicana’s new $35 million advertising campaign, the new
package design drew on the power of love through a squeeze or
hug (Levins, 2009). (Note: images of the old and new Tropicana
package designs can be found online (e.g., Edwards, 2009)).
The Blogosphere Reacts
The new package design hit the shelves in early January, and
consumer response was immediate, calling the new design
“ugly,” “stupid,” and “resembling a generic bargain brand”
(Elliott, 2009). Internet bloggers were particularly vociferous in
their online postings about the new packaging, noting that “…a
large, juicy, fresh orange with a straw stuck right into it…
screamed freshness, while the new box looked like “a no-name
brand orange juice made out of concentrate” (Meydad, 2009).
Criticisms leveled by Matt Everson, founder of Astuteo, a
design firm in Madison, Wisconsin, included the difficulty in
distinguishing product variations (such as pulp, calcium, etc.),
the “cold and corporate” logotype, and the scrapping of the
“practically famous,” “straw in the orange” (Everson, 2009).
Online readers of blogs and articles joined the fray, providing
fuel for a blogosphere fire. Some of the more gentle reader
postings included: “Even store clerks talk about how hard it is
to see what’s on the shelf”; “Do any of these people actually
shop for orange juice? Because I do and these new cartons

stink”; “This generic redesign doesn’t have half the appeal of
the ‘straw in the orange’ [Peter Arnell] so casually dismisses…
Simply Orange will have the last laugh…” (Brandweek, 2009).
Not everyone agreed that Tropicana’s new package design was a
disaster. Brandweek’s Todd Wasserman felt that Tropicana’s
redesign was “terrific” and that making the carton look like a
private-label brand was a “brilliant strategy” to reinforce the
idea of value in a tough economy (Wasserman, 2009).
The Decision
Neil Campbell was lost in thought. Had Tropicana made a major
mistake in changing its package design? In an interview just a
few weeks earlier to discuss the new packaging, he had
commented that “The straw and the orange have been there for a
long time, but people have not necessarily had a huge
connection to them” (Elliott, 2009). However, it appeared
Tropicana had underestimated the emotional response to the
disappearance of the old design. He noted that “what we didn’t
get was the passion this very loyal small group of consumers
have. That wasn’t something that came out in the research”
(Elliott, 2009).
Campbell realized that with the Internet and social media,
consumers can communicate with marketers more easily and
quickly than ever before. In the six weeks the new packaging
had been on store shelves, consumers had been able to declare
their opposition in a manner impossible before the Internet.
However, he wondered, was this simply a case of a small but
vocal minority of consumers expressing their negative attitudes
towards the new packaging through the easy availability of
social media, or was there really something more fundamentally
wrong with the new packaging?
He wondered what to do next. The company had invested $35
million in the new package design and new advertising
campaign, which featured shots of the new packaging (Young &
Ciummo, 2009). However, initial sales figures appeared to be
declining, not rising. Should Tropicana move forward with their

existing advertising plans and press on with the new packaging,
assuming consumers would grow to like it? Should they try to
tweak the new redesign in some fashion? Or should they scrap
the new package redesign completely, returning to the old
“straw in the orange” theme?
References
Anonymous. (1997). Tropicana carton gets a facelift.
Paperboard Packaging, 82(3), 8.
Anonymous. (2001). A Closer Look. Dairy Foods, 102(6), A.
Arnell.com. (2010). Arnell. Retrieved October 12, 2010, from
http://arnell.com/
Brandweek. (2009). Reader Responses, Packaging and Design
Blog. Retrieved November 1, 2010, from Brandweek (2009).
www.brandweek.com/bw/content_display/news-and-features
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