United Cereal: Lora Brill’s Eurobrand Challenge case analysis

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United Cereal: Lora Brills Eurobrand Challenge case analysis

Question 1. As Lora Brill, United Cereal European VP, would you authorize Jean-Luc

Michels request to launch of Healthy Berry Crunch in France? Be sure to analyze both

sides: Launch and Delay Launch (summarize in a table format and then discuss).

Question 2. Does United Cereal represent an example of centralized or decentralized

international management?

Question 3. What do you think of Brills Eurobrand proposals? Should she authorize the

launch of Healthy Berry Crunch as the Eurobrand? What concerns do you have? How do

you resolve them? Be sure to analyze both sides: Launch and Delay Launch (summarize in

a table format and then discuss).

Question 4.a. How might United Cereal implement your recommendations? 4.b. What do

you think of the Eurobrand Team proposal? 4.c. How can you make the Team work?

Introduction

The case gives a brief idea about the companys confusion over a new product launch in

Europe. United Cereal was first established in the year 1910 in Kalamazoo, Michigan, It

also stepped in to the market of other markets such as beverages, frozen food, and baked

food. But the breakfast cereal trend soon set in. And it was very necessary for the company

to do a full research before launching a new product. The company had strong values and

policies, which it needed for its managers to follow. Breakfast cereal market was a

potential market and there was only one major competitor, Kellog. With the growing

demand of the ready to eat cereals, the company was now in a highly competitive industry.

To develop a new brand, was both expensive and time taking. The company had now

stepped into European market after 30 years in the business. It first acquired the local

market distribution, and then grew it by introducing American products. European market

was becoming a complex market to handle.

The market varied to a great extent in each of these countries. There were a variety of

breakfast traditions and national tastes that differed from each other. Distribution channels

were also different for these countries. Over the time the margins came under pressure due

to recession. This led to achieve lower prices with more efficient processes. Lora Brill

faces a challenge in launching a new product for the European market.

Question 1. As Lora Brill, United Cereal European VP, would you authorize Jean-Luc

Michels request to launch of Healthy Berry Crunch in France? Be sure to analyze both

sides: Launch and Delay Launch (summarize in a table format and then discuss).

Answer 1.

Launch Healthy Berry Crunch

Delay Launch

Pros:- Customers interest in healthy breakfast foods growing in France;- The test results

for Healthy Berry Crunch blueberry version has shown: 64% intention to repurchase which

was very promising, shipments exceeded target and average share was over target;- The

consumer panel results in Germany and Benelux are also in favor of Healthy Berry

Crunch;- There is an opportunity for UC since EU has loosened the regulation of labeling,

advertising and marketing practices;

– As there is only one competitive product in France (The Kelloggs Special K), it is a

second mover/fast follower advantage for UC;

– Potential to preempt Cereal Partners, if they also plan to introduce Berry Burst Cheerios

in France;

– The launch clearly follows The UC way (Listen to the customer and Continuous

innovation).

Cons:

– Stiff competition with Kellogg (and maybe Cereal Partners, too);

– Market growth of cereal industry less than 1%, which makes UCs margin growth under

pressure;

– Cost and risk of the new product launch ($20 million in France *€“ over their budget);

– Unclear about the market size and potential (lacked the validated full test-market data UC

policy required).

Pros:- Giving the company more time to research on the market due to the unclearness of

market size and potential;- There is a lack of validated full test-market data that UC Way

policy required.- The cost and risk of new product launch is over the budget.Cons:

– The company cant wait more time for any full-scale test and the budget cant support $2

million of testing costs;

– One of the companys policy is continuous innovation, so it is the right time to renew its

brand image;

– Loosing opportunity to gain market share for organic fruit-based cereal, since there are

rumors that Cereal Partners are planning to introduce Berry Burst Cheerios in France.

Yes, we would authorize Jean-Luc Micheals request to launch of Healthy Berry Crunch in

France. Based on our analysis of the pros and cons of launch and delay launch above,

[private_membership]we think that the opportunities are higher than threats of launching

Healthy Berry Crunch and there is a high percentage of success in French market. The

following facts also support our decision.

First, there is customers interest in healthy breakfast foods growing in France. The test

results for Healthy Berry Crunch blueberry in 6 French cities had 64% intention to buy

which is an exceptional number considering this as a new product. Besides, the consumer

panel results in Benelux and Germany are also in favor of Healthy Berry Crunch. The

trend of the industry is moving to more healthy food, which gives an opportunity to UC.

Moreover, EU has loosened its regulations of labeling, marketing practicing, which is also

another opportunity to UC.

Second, as there is only one competitive product in France (The Kelloggs Special K), it is

a second mover/fast follower advantage for UC meanwhile there are rumors about the

launch of Berry Burst Cheerios in France by Cereal Partners, another competitor. Thus, the

product should be launched in France first.