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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.
