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For this case, you will need to incorporate the following components in your Memo as a simple marketing plan (that addresses the questions). KEY COMPONENTS: Launch Decision + Positioning Statement + Marketing Mix Proposal · Launch Decision: Delay and More Research, Test Market, Regional Rollout or National Launch · Strategy and Target Market Identification · Novel Positioning Statement · Marketing mix recommendations appropriate for situation and positioning (alignment) QUESTIONS TO ANSWER: 1. What should the positioning be for the product? 2. What should the brand name be for the product? 3. What flavors for launch? Do additional flavors need to be considered? 4. What should be emphasized on the packaging? 5. Should the packaging be in bars or squares, or some other shape? What size? 6. What kind of promotion should be used? What does launch look like? 7. How should the product be priced? What should it be priced? Should the price vary base on the type of fruit? 8. What kind of distribution should the product target? What stores? What outlets? needed: · Case Brief (10 points) - Memo · Marketing Plan (10 points) - PPTX Brief Cases - Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? ________________________________________________________________________________________________________________ HBS Professor John A. Quelch and Professor Diane Badame of the Marshall School at the University of Southern California prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental. Copyright © 2013 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. J O H N A . Q U E L C H D I A N E B A D A M E Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? In October 2012, Andrea Torres, director of new product development at Montreaux Chocolate USA, was poring over data from a recent Nielsen BASES II test. Over 15 months had passed since the Consumer Foods Group (CFG) of Apollo Foods had purchased the rights to distribute Montreaux’s European chocolate products in the U.S. as a means of increasing market share, in pursuit of upscale market segments. Torres was now satisfied with the research and methodology that her New Product Development (NPD) team had employed to assess market opportunity in the U.S. to date. A board meeting was scheduled for December 10, at which Torres would be expected to make a solid, comprehensive, and compelling presentation on the status of the acquisition/assimilation of Montreaux and plans for the launch of the new product in the U.S. David Raymond, her division manager, had committed to a set of aggressive sales forecasts that placed even greater significance on the accuracy and adequacy of the research and its application. As a result, Torres was carefully and pragmatically evaluating her options: do further product testing, launch in selected test markets, stage a regional rollout, or launch nationally? Corporate and Company Background Apollo Foods, a Los Angeles, California-based, global consumer packaged-goods powerhouse, offered an unrivaled portfolio of brands, manufactured confectionery, biscuits, snacks, beverages, cheese, and convenient meals, as well as an array of packaged grocery items for distribution in 170 countries. It reported 2011 revenue of $54.4 billion and net income of $3.5 billion, to which the CFG, 9-914-501 A U G U S T 4 , 2 0 1 3 For the exclusive use of M. Harthi, 2022. This document is authorized for use only by Mashor Harthi in BA 590 Marketing Management (2022W CHEN)-1 taught by Johnny Chen, Oregon State University from Dec 2021 to Jun 2022. 914-501 | Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? 2 BRIEFCASES | HARVARD BUSINESS SCHOOL one of four operating divisions, contributed $19.1 billion in revenue and $1.26 billion in net income. Twelve of the company’s iconic brands generated revenues of over $1 billion annually and some 80 brands exceeded $100 million annually. The CFG, which was responsible for all confectionery products, managed three of those brands. Apollo knew its consumers well and had been successfully feeding their hunger for bold flavors, easy meal solutions, and “better-for-you” offerings with more than 70 new product innovations over the past three years. In June 2011, Apollo acquired the exclusive rights to manufacture and market Montreaux chocolate products in the U.S. from the well-known Swiss company Montreaux Chocolate Company S.A. Montreaux had long sought to expand to the U.S. but lacked the resources. Apollo was seeking a greater presence in the lucrative chocolate market and an opportunity to grow its confectionery share in the U.S., especially as it enjoyed a number-two position in the global confectionery business, largely due to products other than chocolate, such as gum and candies. This rights acquisition was the most expeditious method for both entities to achieve their goals and, given mutual reliance, offered the opportunity of an enduring and mutually rewarding relationship. Shortly after entering into the agreement, Apollo had considered the purchase of a chocolate manufacturing facility in Pennsylvania to support the unique manufacturing processes of Montreaux’s chocolate products and to serve the anticipated growth in Montreaux’s sales, but decided to wait until the NPD group provided a definitive launch strategy and timeline. Apollo delegated management of the arrangement to the CFG, which formed a new division, Montreaux Chocolate USA, to operate the business. David Raymond, formerly a marketing director in the New Business Division, was named division manager. He committed to achieving aggressive goals by year-end 2015, based on Apollo’s successes and marketing expertise and Montreaux’s reputation as a high-quality chocolatier in Europe. The goals included: 1. National distribution of the new Montreaux product line (referring to the degree to which a given product is available for purchase or the percentage of stores carrying a given product) 2. $115 million in annual sales 3. Be in the top 25 in revenue (0.60% market share; see Exhibit 1 for volume projections) Montreaux personnel from Switzerland came to the U.S. and worked closely with Apollo personnel to develop Montreaux Chocolate USA’s technical expertise. One engineer from Switzerland was assigned to support Torres for two years, to assist in product development and process engineering. When Apollo first acquired the rights, it considered marketing the products through Montreaux’s existing broker network but opted instead to employ Apollo’s large sales force to maximize the opportunity by leveraging existing relationships. This plan of action would allow Apollo to penetrate the traditional retail channels, including “big-box” supercenters, supermarkets, drug stores, and convenience stores. The Chocolate Confectionery Market Chocolate is made by roasting, crushing, and refining cocoa beans. Dark chocolate is typically at least 55% cocoa; higher-quality products contain at least 70%. Milk chocolate, on the other hand, For the exclusive use of M. Harthi, 2022. This document is authorized for use only by Mashor Harthi in BA 590 Marketing Management (2022W CHEN)-1 taught by Johnny Chen, Oregon State University from Dec 2021 to Jun 2022. Montreaux Chocolate USA: Are Americans Ready for Healthy Dark Chocolate? | 914-501 HARVARD BUSINESS SCHOOL | BRIEFCASES 3 typically contains a maximum of 50% cocoa, to which milk is added. The higher concentration of cocoa in dark chocolate is the source of its claimed health benefits. Chocolate was the most lucrative segment of the global confectionery market, accounting for 52.6% of the market’s total value. Europe captured the largest regional share of the global confectionary market in 2011 at 45.2%, with the Americas following at 33.9%.1 The U.S. confectionery market reported total revenues of $35.648 billion in 2011, representing an annual compound growth rate of 2.8% between 2007 and 2011. Total revenue for the chocolate segment in 2011 was $17.664 billion, a 1.9% increase over 2010. The U.S. chocolate market was expected to grow almost 2% annually through 2015.2 Consumers’ focus on fitness and health in the U.S., which sharpened over the past three decades, prompted Montreaux Chocolate USA to consider expanding its chocolate offerings to include products that featured a healthy focus. As the emphasis on healthy eating habits heightened, however, so had the number of competitors and the rate of new product introduction. Fishers, Inc., a Dallas, Texas-based firm, was the leading global player in 2011, generating a 16.8% share of the market’s value. Apollo Foods solidly held second place at 15.4%, with Swiss food giant Cornelius S.A. following at 9.1%. None of these companies, however, was the leader in the U.S. chocolate market; that honor went to Lancaster Company, with a 34.8% U.S. market share. Fishers closely followed with a 34.4% share. The chocolate market in the U.S. is composed of seven product segments, with the top four accounting for 94.4% of market value: 1. Bar/bag/box (3.5 oz.+): $7,149 million, with 7.6% growth between 2009 and 2011 2. Seasonal chocolate: $4,407 million, with 9.9% growth 3. Bar/bag/box (less than or equal to 3.5 oz.): $3,479 million, with 18.5% growth 4. Snack-size chocolate (less than or equal to 0.6 oz.): $2,522 million, with 10.8% growth Other segments include gift box, sugar-free, and novelty chocolate.3 The overall market for chocolate in the U.S. is segmented by mass market and premium, with the mass market accounting for 80.3% of sales and premium for 19.7%. The premium segment is further segmented into everyday gourmet/affordable luxury, upscale premium, and super premium, which