Marketing Mid Term Notes

MK351 COMMENTS ON SUNSHINE FOODS AND QUESTION #8 MIDTERM EXAM

Sunshine Foods is typical of a production-oriented company. “We make it; you buy it.” Its facilities can be used for only a short period of time when crops are ripe. This works against the company, however, because it must accept the market price. This leads to operating at full capacity, although it might mean little or no profit. There is little, if any, product differentiation between Sunshine and other producers who each has a commodity product. Think of your own grocery shopping, if you want a bag of frozen peas. Which do you purchase? Probably the lowest price. Do you care about the brand? Probably not. Now, if Sunshine can differentiate its products from those of others, then there are possibilities—peas in sauce, peas and carrots, buttered peas, “gourmet” items, and such. Same with frozen potatoes and other items. Go to a supermarket, if one is available, and look at the variety of frozen potatoes, for example. Why are there so many? Do you remember differentiated products, branding, segmentation, demographics, and satisfying different needs? Of course, other producers have similar ideas; Sunshine is just slow to understand this.

The other problem is line-forcing. Requiring every dealer to carry everything is--well--a stupid idea. Again, in your grocery shopping and travels around various geographic areas, think of the local preferences. Clam chowder is popular in the Northeast, but not in the Southwest. Probably every grocery store in the United States sells Campbell tomato soup, but every store probably does not sell every Campbell soup. Yoplait makes fourteen flavors and types of yogurt but, again, every store does not sell all fourteen varieties. The grocers in this case, and in the real world, are simply carrying the items that they expect to sell. Sunshine must recognize this and change its policy. Good old demographics at work! Sunshine needs to...