Title

Are Americans ready for healthy dark chocolates: MONTREAUX CHOCOLATE USA

Group 4Alok A Jahagirdar Ankur ChughRohan GuptaRohit Deo ShrinetShiven KalelkarVivek Agarwal

IIM Calcutta|IIM Calcutta0The SituationApollo acquires rights to Montreaux for America on June 2011Consumer Food Group (CFG), a subsidiary, forms Montreaux USAAndrea Torres, director of new development, is faced with multiple decisions

|IIM Calcutta1DilemmasThe Brand name puzzleRollout DilemmaFacility confusion: To buy or not to buyNext Steps

2|IIM CalcuttaIdeal Corporate TargetsNational distribution of Montreaux product line$115 million in annual sales by 20150.60% market shareTop 25 in revenueAcceptable hurdle rate of $30MMNeeded for full national rollout

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4Apollo Foods: is a credible name in confectionery business in USA but it never sold chocolates. For customers It will be challenging to associate Apollo with chocolate.

Montreaux: No Brand building for Apollo.

Healthy Cravings: an altogether new brand name.

BRANDING|IIM CalcuttaMontreaux: even when association with chocolate is there; ExpertiseSelective 4The packaging should display key product messages and be eye catching for the consumer |IIM Calcutta6

A swiss montreaux productApollo healthy cravingsBRANDING|IIM Calcutta

7OptionsConsProsRecommend further testingBases II testing is extremely time and resources consuming. Risk of possible competitor entering the market.Low Risk; More insight before launch.Select test MarketSignal for competitors to move quickly. They don't have to invest in the production facility. They can use existing set up (R&D) to launch.Regional RolloutThere is no city which is complete representative of US consumer population for this product.Less potential of damage to brand equity; Lower scale so risk associated with the rollout is less.National RolloutHigh Risk - Higher Capital Investment.

Quick move to market; Maximum benefit from innovative offering; First mover advantage Market capture; Counter the competition; Strategic sense.Rollout Dilemma|IIM Calcutta

8In-house Production v/s Imports Our suggestion In-House Production Facility

Easy to scale up production.

Absence of in-house production in U.S could necessitate setting up a production facility overseas, such as in Europe.

Can avoid additional costs which would be incurred in imports .

|IIM CalcuttaCalculating Projections - MethodologyCalculated possible sales scenarios using methodology formulasMarket-adjusted trial rates, repeat volume, etc.In total there are 27 Possible ScenariosDetermined sales volumes for above scenarioCombination of three factors Awareness typeMarketing campaign effectivenessACV typeMarket reach effectivenessProduct qualityRepeat rate of consumer

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10ResultsBest case scenario v/s worst case scenario -$42.39 Mn v/s $22.35 Mn. Exhibit 5 Purchase volume estimate using Bases II testing.The hurdle rate of $ 30 Million is met , but the corporate goals are overly aggressive .

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Existing Positioning Map|IIM Calcutta12Suggestions to Reach Corporate TargetsThe segmentation of the Market can be improved by dividing the market in to following segments :Healthy eatingGiftingTaste requirement

The company can increase its sales by targeting additional segments such by focusing on the needs of men:Looking at developing a product which is affordable and convenient and packaged into smaller sized packs of 0.25 to 0.6 oz.

Additionally, company should look at Affordable premium opportunity to provide higher quality product to mass market.

|IIM CalcuttaSummaryMarket goalsNielsens 12 Success FactorsAccomplished national rolloutAcquire manufacturing capabilitiesMontreaux USA marketing planResegment and targetProduct specificationsPouch70% Premium CocoaAmerican credibility and Swiss heritageSub-brand of Apollo

Introducing Apollo Healthy Cravings Filled with happiness and good health |IIM Calcutta13