Giant Consumer Products Case

Section 1:

1. D16 should be the focus of the sales promotion with the Dinardo’s brand. However, Natural will have the best benefit, overall, because there is no risk with cannibalization and has the highest return on marketing investment.

2. D32 should use a value-added technique for the promotional strategy to promote additional sales at the time of purchase.

D16 should use coupons to price cut for their promotional strategy to increase sales without cannibalizing their other serving size.

Natural should use coupons to cut price for their promotional strategy to increase brand awareness with a premium product.

Section 2:

1. D16 should be the focus of the sales promotion on the Dinardo’s brand because of the distinct positive effect on top line revenue between D32 and D16. There will be an increase in revenue of $2,775,637 if the sales promotion is used on D16 where there will be a decrease in revenue of $1,197,278 if the sales promotion focuses on D32. You can see this effect even more concretely when comparing the average monthly volume between the two products given a potential sales promotion with each. D32 will take a sales volume hit of $1,434,015 if D16 has the sales promotion, while D16 will take a sales volume hit of $3,374,294 if D32 has the sales promotion. Clearly, there is drastic cannibalization that happens with the promotion of D32 over D16. Natural is definitely the best choice of the three as there is no risk of cannibalization as it occupies a different market. There is the risk of tarnishing the brand through sales promotions due to it being a premium product. Natural has the highest return on marketing investment and as such, is the best choice, overall.

2. D32:

When looking at the sales promotion tactics for D32 sku in 2009, initially it appears that a price cut strategy would be the best, as the product has low consumer involvement. However, the brand has strong franchise strength as they represent 43% of the market for frozen...