The document discusses launching a new chocolate product called Euphoria Pomegranate by Healthy Cravings in the American market. It considers branding, target customers, distribution channels, and sales projections. A regional rollout is selected as the launch plan to gather market insights before a full national launch. The goal is $115 million in annual sales and 0.6% market share by 2015.

1. “Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”

2.  Situation
 Big Questions
 Ideal Corporate Targets
 Thought Framework
 Recommendation
 Supporting Evidence
› Qualitative and quantitative
 Revisiting Corporate Goals
 Summary
 Supplementary Information

3.  Apollo acquires rights to Montreaux for
America on June 2011
 Consumer Food Group (CFG), a
subsidiary, forms Montreaux USA
 Andrea Torres, director of new
development, is faced with multiple
decisions

4.  Next steps for Montreaux
USA?
› How are we launching the
product
 Time to upgrade logistics?
› Pennsylvania factory

5.  American or European branding?
› Heritage
› New product line
 Brand
 Sub-brand
 New product name?

6.  National distribution of Montreaux
product line
 $115 million in annual sales by 2015
 0.60% market share
› Top 25 in revenue
 Acceptable hurdle rate of $30MM
› Needed for full national rollout

7.  Support each
decision with
evidence
 Calculate
projections
 Pros and cons
matrix
 Nielsen’s 12
Product Success
Factors

8.  Name
› Euphoria by Healthy Cravings
 Branding
› Apollo sub-brand
 Features
› 70% Cocoa
› Pouch Bag Format
› Premium chocolate
› Health positioning
 Slogan
 Flavours
› Pomegranate
› Blueberry
› Cranberry
 Price
› $4.49 MSRP
 Acquire Pennsylvania factory
“Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”

9. Further Testing The
Market
Launch in Selected Test
Markets
Stage a Regional Rollout National Launch
Pros • Fine-Tune Consumer Insight
• Gather Additional Consumer
Insight
• Middle-Of-The-Road
Approach
• Display Commitment to
Retailers
• Most Limited Liability and Risks
• Most Representative of Market
Condition
• Average Expenditures
• Biggest Opportunity to
Increase Market Share
• Discover New Opportunities • Limited Liability and Risks
• Greatest Revenue
Opportunity
• Begin Market Share
Dominance
Cons • Possibly Redundant Data
• Long Result Reading Time (1
Year)
• Conservative Strategy • Very Expensive
• Delaying Market Entrance • Delaying Market Entrance • Potential Lost Opportunity • Requires New Factory
• Difficulty In Finding Suitable Test
Markets
• Less than 100% Commitment
to Market
• Greatest Resource
Commitment
• Convincing Retailers for Limited
Batch Purchases
• Requires New Factory
• Most Expensive ($3 MM) • Poor Regional Selection
• Limited Production Capabilities SELECTED LAUNCH PLAN

10.  Market Trends
 Product Choices
 Capturing the Market
› The Ideal Customer
 Mainstream Distribution Channels

11.  Low-calorie options such as reduced fat and aerated
chocolate
 Premium chocolate products moving to mainstream
channels (i.e., supermarkets, mass merchandisers)
 Dark chocolate popularity rise
 Packaging transition to stand-up pouches and bigger
sizes
 New labeling with terminology emphasizing
shareability, portion control, and saving a piece for
later
 Increases in pricing attributable to rising commodity
costs

12.  70% Cocoa concentration
› Preferred taste versus 90% in
qualitative testing
› Emphasize health positioning
 Bold Flavours
› Blueberry, pomegranate, cranberry
 Narrowed from top five ‘winners’
 Pouch format
› Shareability, portion control,
economical
› 3.5oz – less unique, less revenue
generation
 Healthy Cravings – Apollo sub-
brand
 Confusion in European credibility
“Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”

13. Socioeconomic
Status
Consumer
Type
Gender Differences
Age
 Cater to as many
demographics as
possible
› 45-64 Age group
› Everyday
sophisticates
› Brand loyalists
› Women

14.  Older aged upper-middle class female
 45-64 age group
 Motivations
› Personal health considerations
› Luxurious reward
› Mood enhancement
› Enjoys trying out new flavours

15.  Purpose
› Identifying ideal launch path
 Calculating Sales Projections
 Chocolate Market’s Future
› Relation to Corporate Goals

16.  Explaining the details
Further Testing The
Market
Launch in Selected Test
Markets
Stage a Regional Rollout National Launch
Pros • Fine-Tune Consumer Insight
• Gather Additional Consumer
Insight
• Middle-Of-The-Road
Approach
• Display Commitment to
Retailers
• Most Limited Liability and Risks
• Most Representative of Market
Condition
• Average Expenditures
• Biggest Opportunity to
Increase Market Share
• Discover New Opportunities • Limited Liability and Risks
• Greatest Revenue
Opportunity
• Begin Market Share
Dominance
Cons • Possibly Redundant Data
• Long Result Reading Time (1
Year)
• Conservative Strategy • Very Expensive
• Delaying Market Entrance • Delaying Market Entrance • Potential Lost Opportunity • Requires New Factory
• Difficulty In Finding Suitable Test
Markets
• Less than 100% Commitment
to Market
• Greatest Resource
Commitment
• Convincing Retailers for Limited
Batch Purchases
• Requires New Factory
• Most Expensive ($3 MM) • Poor Regional Selection
• Limited Production Capabilities SELECTED LAUNCH PLAN

17.  Calculated all possible sales volumes
scenarios using methodology formulas
› Market-adjusted trial rates, repeat volume, etc.
› 3^3 = 27 Possible Scenarios
› Determined sales volumes
 Combination of three factors
› Awareness type
 Marketing campaign effectiveness
› ACV type
 Market reach effectiveness
› Product quality
 Repeat rate of consumer

18.  Calculating repeat volume
Type Awareness Type ACV
# of Trial
Households (MM)
Quality of Product
% of Households
Repurchasing
Repeat Purchase
Occasions
Repeat Volume
(MM)
Low
Low
2.82 Mediocre 28% 4 3.16
2.82 Average 33% 4 3.72
2.82 Excellent 38% 4 4.29
Medium
3.05 Mediocre 28% 4 3.42
3.05 Average 33% 4 4.03
3.05 Excellent 38% 4 4.64
High
3.71 Mediocre 28% 4 4.16
3.71 Average 33% 4 4.90
3.71 Excellent 38% 4 5.64
Medium
Low
2.82 Mediocre 28% 4 3.16
2.82 Average 33% 4 3.72
2.82 Excellent 38% 4 4.29
Medium
3.71 Mediocre 28% 4 4.15
3.71 Average 33% 4 4.90
3.71 Excellent 38% 4 5.64
High
4.51 Mediocre 28% 4 5.05
4.51 Average 33% 4 5.95
4.51 Excellent 38% 4 6.85
High
Low
3.42 Mediocre 28% 4 3.83
3.42 Average 33% 4 4.52
3.42 Excellent 38% 4 5.20
Medium
4.36 Mediocre 28% 4 4.89
4.36 Average 33% 4 5.76
4.36 Excellent 38% 4 6.63
High
5.30 Mediocre 28% 4 5.94
5.30 Average 33% 4 7.00
5.30 Excellent 38% 4 8.06

19. $-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
5.98
7.10
7.09
7.87
9.35
6.54
7.86
9.35
10.46
7.26
8.63
10.12
11.24
13.36
Salesin$MM
Number of Purchases in MM
Retail Sales Value
($ MM)
Montreaux Sales
Volume ($ MM)
Acceptable
Hurdle Rate
 Band range
of ACV,
Quality and
Awareness

20.  Corporate 2015
goals overly
aggressive
› Despite double
annual market
adoption rate
 Accomplished
national rollout
2012 Market 2015 Estimate
Aggressive
2015
Chocolate
Market Size
(BN)
$
17.664
$
19.120
$
19.120
Annual
Growth Rate
2% 4%
Average
Montreaux
Sales (MM)
$
39.02
$
42.24
$
45.65
Market Share 0.22% 0.22% 0.24%

21.  Acceptable
downsides
› Taste
 Findability
› ACV focus
 Product
delivery and
loyalty
› New factory
› Perpetual
improvement

22.  Market goals
› Nielsen’s 12 Success Factors
› Accomplished national rollout
 Expand manufacturing capabilities
› Pennsylvania
 Montreaux USA marketing plan
› Target demographics
› Focus on supermarkets
 Product specifications
› Euphoria by Healthy Cravings
› Pouch
› 70% Premium Cocoa
 American credibility
› Sub-brand of Apollo
“Introducing Euphoria
Pomegranate by
Healthy Cravings –
Reward yourself with
happiness and good
health”

24.  Opportunities
› Partnering with other
firm than the Big Two
› Develop better
infrastructure
 Perhaps more factories
and manufacturing
centers
› Product specifically
targeted to men
› Virtual integration with
Suppliers
 Mexico
 Risks
› Introduction of
superior rival product
› Product not well-
tested
› Manufacturing
capabilities not up to
par
› Ability to Scale

25. Competitive
Rivalry Within
Industry
Bargaining
Power of
Buyers
Threat of
New
Entrants
Bargaining
Power of
Suppliers
Threat of
Substitutes
 Bargaining Power of Buyers
› Low to moderate
› Large volume orders
› Lack of threat of backward
integration
› Reliance on industry product
 Threat of
Substitutes
› High
› Alternate
confectionery
available
› Competition
during holidays
 Threat of New Entrants
› Low
› Very expensive manufacturing
costs
› Lack of distribution channels
› Regulatory restrictions
› Confectionery and chocolate
market relatively saturated
 Bargaining Power of
Suppliers
› Moderate to high
› Supplier group is concentrated
› No threat of forward integration
› Industry is important customer to
supplier
Source: http://jmfrrell.blogspot.ca/2011/06/chapter-4-industry-analysisporters-five.html
 Competitive
Rivalry Within
Industry
› High
› Equally capable
competitors
› Slow growing
› High storage and
fixed costs
› High exit barriers

26.  Go through
retail channels
› Supermarkets
and grocery
focus
 Premium
chocolate
moving into this
distribution
channel
15.8%
11.7%
9.0%
8.8%
54.7%
Distribution Channels Breakdown
Supermarkets/Gr
ocery
Convenience
Stores
Drugs Stores
Big-Box
Supercenters
Other

27. Bar/Bag/Box
(>3.5 oz),
7.149
Seasonal
Chocolate,
4.407
Bar/Bag/Box(
<3.5 oz), 3.479
Snack-size
Chocolate,
2.522
Market Share Revenue ($ in MM)
Bar/Bag/Box (>3.5 oz)
Seasonal Chocolate
Bar/Bag/Box(<3.5 oz)
Snack-size Chocolate