Running head: CASE STUDY 1

Developing a New Product – Case Study

Name

Institution
CASE STUDY 2

Developing a New Product – Case Study

Introduction

The development and introduction of new products in the market calls for in-depth

analysis and informed decision. Markets are generally dynamic and expectations tend to be

diverse among different potential customers. In this regard, understanding the market,

knowing what consumers expect in relation to their needs as well as desires are integral to the

successful launching and positioning of the new product in the market. Marketing can be

understood as an exchange endeavor in which both parties benefit from one another;

consumers expect satisfaction of their needs in the manner that they prefer, and the

organization expects expanded market base and increased returns in terms of sales and

income (Gurbz, 2018, p. 58). Therefore, there are certain variables that need to be part of the

new product development process in order to guarantee the intended success. It is on this

same notion that the Montreaux Chocolate USA should base its practices and processes for

product development.

Key Challenges and Marketing Issues to Address

The case study features an array of challenges and marketing issues that must first be

addressed for the success of the product. First, the product should consider addressing

barriers to new entrants as one of the key challenges. In any business industry, any attempt to

develop and launch a new product is subject to resistance from the existing substitutes, some

of which may be already well-established. For the Montreaux Chocolate’s case, according to

the case study, the new product was considering launching a new value to the market; as most

existing players we focusing on taste, a characteristic that has been associated with chocolate

products for years, Montreaux Chocolate was considering health.

Secondly, the product name, Montreaux or Apollo Chocolate, is also a challenge that

needs to be addressed first to ‘smoothen’ marketing endeavors. From the case study, Apollo

was undoubtedly a key figure in the United States (US) market. The brand held an estimate of

15.4% share of the US market, a portion that placed the firm second only to Fisher back in

2011 (Quelch & Badame, 2013, p. 3). However, it is also important to consider that Apollo

was venturing into a new association with its chocolate business intention. In this regard, it

would be a challenge to decide which brand, either Montreaux or Apollo, to use for the

chocolate product. Pioneering in the black chocolate business is also a challenge since there

is now support with which benchmark intentions and approaches.

Last but not least, deciding on the appropriate packaging framework and pricing

mechanism and establishing a competent channel of distribution are challenges that need

addressing before any launching activity is executed. Quelch and Badame argue that size and

packaging are some of the key marketing challenges that call for deeper study of the target

market.

Recommendations and Rationale – Market Mix (4 Ps)

The intended new black chocolate product should employ a competent market mix with

elements that reflect the awareness of the market needs capacity to meet them. In this regard,

the product, place, price, and promotion elements should be appropriately linked to the needs

of the target market. The following recommendations detail what should underpin each

element of the mix to ensure success:

Product: a high-quality product that is strategically positioned in the market would influence

and attract the target market. According to the case study, Quelch and Badame argue that the

Montreaux Chocolate targeted adults between the age of 45 and 64 years old (p. 4). Concerns

about health and weight, college education, a relatively high income of $50,000+, and of the
CASE STUDY 4

value of family are some of the characteristics of the market that the Montreaux Chocolate

targeted (Quelch and Badame, 2013, p. 4). Therefore, a product that features low calories and

appropriately applied flavors would be appealing to the market.

Place: the fact that the Montreaux Chocolate targeted mainly adults that are educated,

understand the need to stay healthy, and also value family is an indication that boxed

chocolate would be a better suit. In this regard, making the product available in health-related

business facilities, supermarkets, and similar stores, and nutrition restaurants are important.

Promotion: the advertising and promotional activities should leverage tools and methods that

utilize the knowledge that the company has about the target market. The target market, as

mentioned earlier in the previous subsection, features educated middle-aged adults with

families thus, both traditional and modern advertising approaches would be suitable. A

positioning statement that reflects the product's commitment to meet consumer needs should

also be part of the promotion. For example, Montreaux Chocolate focuses on health and

family thus, “producing and delivering nutritious and quality chocolate products which

promote a healthy lifestyle” is a competent positioning statement. The Montreaux Chocolate

should consider leveraging billboards, TV, radio, social media, and event sponsorships as

some of the major promotional activities.

Price: according to the case study, snack-size chocolate preference grew by 10.8%, boxed

chocolate by 18.5%, and seasonal chocolate by 9.9% within a span of 2 between 2009 and

2011 (Quelch & Badame, 2019, p. 3). Moreover, the case study also argues that convenience

in terms of size, availability, and affordability also drove preference and attitude among

consumers during this time (Quelch & Badame, 2013, p. 4). Therefore, charging $4.49 for a

pack with 5 ounces is not only affordable but the packing is also convenient for consumption,

especially when it comes to sharing among family members or friends.

Sales Forecast

The case study depicts projections that significantly depend on the scenarios as key

determinants. The three different scenarios that the firm employed to project its potential in

the market definitely attracted different results from the market concerning sales. For

example, if the target market is aware of the determinant of healthy chocolates that would

promote their health and wellbeing, then the Montreaux Chocolate would have high

penetration and high repeat purchases thus, high sales. Therefore, the achievability of the

Montreaux Chocolate on the trends of the previous years, such as the growth rate of 2.8% that

was realized between 2007 and 2011 during which cocoa gross income was $17.664 billion.

In this regard, if this trend is employed in the projection of sales based on the high scenario,

then the following represents the projection.

Trial rate = definite * 80% + probable * 30% = 36.48

Marketing-adjusted trial rate = 36.48 * .2 * .79 * .92 = 5.3

Repeat volume = (5.3 * 120) * 38% * 4 = 967

Sales volume = 967 * 4.49 = $4,341.8

Therefore, sales $4,341.8 * 12 months = $52,101.6

The Reasons why the BASES II Test Results are Mediocre

The BASES II test results are arguably mediocre due to a range of reasons. Firstly, the

success of the Montreaux Chocolate arguably depends significantly on the Apollo brand

name, which has gained prominence all across the US market over the past years. In this

regard, such widespread recognition is likely to optimize customer awareness about the

product thus, a high level of ACV. Secondly, the product's success also depends on its ability

to meet the health and flavor elements within the ratings of $4.49 thus, price, as well as
CASE STUDY 6

quality, would determine the success of the Montreaux Chocolate. However, the trial

purchase rate, even for the probable purchase, is below average at 40% (Quelch & Badame,

2013, p. 13). Also, consumer awareness, which is also a key determinant of the Montreaux

Chocolate’s success, rates 20% at its highest, and repeat rate by-product is also 38% at its

highest. All of these 'stats' when weighed against the primary intentions of $115 million in

annual sales; the BASE II test results are only average.

Conclusion and Recommendations

In conclusion, the Montreaux Chocolate may penetrate the market and expand its

market share. The success of the product in the new market would depend on its healthy

lifestyle promises for consumers who are concerned with weight and health, the popularity of

the Apollo brand, and the knowledge or awareness among the target consumers. However,

the BASES II tests results are only average because many of its considerations are based on

assumptions. Concerning the decision of whether to launch or not, the Montreaux Chocolate

should launch. Montreaux is arguably second after Fisher in the market and a global

confectionery market which is also rising over the past years. With the US chocolate market

projected to grow, the Montreaux Chocolate should launch to begin leveraging its key

success-factors and expand its customer base and market share.

References

Gürbüz, E. (2018). Theory of New Product Development and Its Applications. Marketing,

57-75.

Quelch, J. A., & Badame, D. (2013). Montreaux Chocolate USA: Are Americans Ready for

Healthy Dark Chocolate?.