Montreaux chocolate USA Case

Group-9

Synopsis:-

Company background
Apollo held a 15.4% share in US and its confectionery markets, making it 2 nd highest in
market share after Fisher’s in 2011.
Name Apollo Foods
Location LA, California
Products Confectionary Items
Distributor 170 world wide

About Montreaux Chocolate:-

It’s a Chocolate product from the well known Swiss-company who’s rights were purchased
by Apollo Foods. The higher concentration of cocoa in dark -chocolate is claimed for its
health benefits.

Challenges Faced:-
1)To introduce a new product
2) Product name ( Apollo V/s Montreaux)
3) Positioning
4) Distribution channels
5) Packaging

Objective set:-
They have set an objective of National distribution with a 115 million dollar annual sales and
at the same time be in top 25 in revenue.
For this they opted Apollo’s large sales force to maximixe the opportunity by leveraging
existing relationships instead of marketing the product through Montreaux’s existing broker
network.

Target Audience:-
Female audience(94%-90%), aged 45-64 who are concerned about health and weight and
married and have children.
Collage educated
Household income 50000+.

They have started with 45 ideas through idea generation and after they did BASES Idea
screening test in which they were narrowed down to 12 of which incorporated dark
chocolate with fruit.
In concept testing only 5 concepts were finalized evaluated by 200 consumers per concept.

Their Marketing Mix:-

1)Product :- high quality chocolate with good taste comes in varieties of flavours (with 3.5
ounce candy bar and 5 ounce stand up pouch packing).
70% cocoa.
2) Price :- 5-ounce is priced at 4.49 dollar.
3) Place:- USA /super centres / drug stores/ convenience stores.

1)Discuss the key challenges and marketing issues Andrea Torres must address at this
time. Why do you feel these challenges are key to the success of the new product line?

Answer:- There are some challenges and marketing issues that Andrea Torres would be
address-
 It isn't easy for company expansions into the new market in the U.S.
 The unfamiliarity of the new people with the latest product
 Pricing and packaging would be complicated for suitable people.
 The more credibility the company will have
 Segmentation of several groups
 It also has an option to launch the product in the selected test market.
 It would be challenging to choose a name
 Marketing would be challenging for a healthy product with managed good taste.
. Hence, these issues are the key to the success of this new product line because if the
customers are not satisfied, the corporation may have to face these challenges. In addition to
this, there was also a presence of many options displays as well. If we take time to launch a
new product, it is very easy to copy by the competitors. That is also a big issue.

competitors may take over

and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
nderstanding consumers’
needs is very difficult, but
at the same time is vital
for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
nderstanding consumers’
needs is very difficult, but
at the same time is vital
for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
nderstanding consumers’
needs is very difficult, but
at the same time is vital
for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
nderstanding consumers’
needs is very difficult, but
at the same time is vital
for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
nderstanding consumers’
needs is very difficult, but
at the same time is vital
for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
nderstanding consumers’
needs is very difficult, but
at the same time is vital
for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and challenges are
the “key” to achieve
important goals for the
company and
I would say for its
consumers as well.
is very difficult, but at the
same time is vital for a
company that want to
expand, be successful and
lead the market, because
competitors may take over
and steal your spot on the
market. However, these
issues and chal
2) Evaluate the achievability of the company objectives for Montreaux USA.
Identify the most salient aspect of the chocolate confectionery industry,
globally and domestically, that bears on a new product introduction. Provide
support for your conclusions.

Answer :- In the given case, the objectives that Montreaux USA wants to achieve in the
coming three years are
1)National distribution of the new Montreaux product line
2)$115 million in annual sales, and
3)To be within the top 25 in revenue (0.60% market share).
Accounting for 52.6% of the market, chocolate is the most profitable segment of the
confectionery industry. There seems to be a perfect time for Montreaux USA to introduce
their new, healthier dark chocolate in the US market. Also, Apollo being having the number
two position in the global confectionery business in the US market can be a plus point for
introducing the new product. Healthy, low-calorie, dark chocolate are some of the salient
aspects of the confectionery industry. Apollo-Montreaux should give more focus on the
ingredients of the new product to attract maximum consumers. With Apollo’s resources and
Montreaux’s chocolate expertise, they should have no problem introducing their product and
achieving their company objectives.

3)After analysing consumer attitudes, usage, motivations, and benefits of

chocolate products to consumers, how viable are the recommended new
product concepts? Should others be explored?

The percentage of chocolate-consuming population was very high with 92% adults
and 95% children eating chocolate. Gender, age and income also impacted the
consumption pattern of chocolate. The new product concepts recommended was in
the dark chocolate category. Typically, dark chocolate had at least 55% coca and
they were planning new product to have coca content of 70% and higher which
would be seen as much healthier option. After initial idea screening test the strong
potential products that came up where dark chocolate with fruit. Fruit would have
additional health benefits to the product.
The recommended new product concepts are viable because of the increased focus
of consumer on fitness and health. Women consume slightly more chocolate than
men and they reacted very positively to new ingredients and flavours. Also due to
increased awareness for health issues consumer started preferring mini and snack
size packaging. Premium chocolates were believed to be healthier than mass-market
offerings because of low quality. Since Montreaux has a reputation of quality product
maker it would help the new dark chocolate.

4) Use the forecast model of the healthy dark chocolate product with fruit tested in the
BASES II test August 2012 ,What is your forecast demand for the product ?
Reference: Exhibit 5
 Trial Rate = “Definites” *80% + “Probables” *30%
= 23%*80% + 40%*30%
= 30.4%

Assumption: % Awareness: Medium support, %ACV: Medium, % Repeat Purchase:

Average Product
 Marketing Adjusted Trial Rate = Trial Rate *% Awareness * % ACV * penetration
= 0.304 *0.17*0.65*0.92
=3.09 %
 Trial Households = Households* Marketing Adjusted Trial Rate
= 120*0.039
= 3.70 MM
  Repeat Volumes = Trial Households *% of Households Repurchasing * Repeat
Purchase Occasions
= 3.70 * 0.33*4
= 4.89 MM
 Total Purchases = Trial Purchases + Repeat Purchases
= 3.70 + 4.89
= 8.59 MM
Demand for the product is 8.59 million units.

5) Evaluate the effectiveness and efficiency of the new product development

process to this point. What, if anything, would you change? Develop a
comparative assessment of the research alternatives under consideration.
Which one or which combination of research techniques would you
recommend? Please explain.
The new product development process which places different possibilities with respect to
ACV, Repeat rate and awareness gives us conditions to meet projections when more focus is
placed on them and increase involvement of these factors

The changes that we would like to incorporate would be increase repeat rate, repurchase rate
and penetration and even higher rate compared to current 65% MSRP would be good

● Different Research Alternatives

BASES: Usually employed for forecasting and shortlisting processes. To filter out viable
options among given set of ideas
BASES Idea screening Test;Filtering
BASES Snapshot Concept Test;Shortlisting
Second BASSES concept Test;Positioning
BASES II Test;viability

NDP Group: This is used more for qualitative analysis like the penetration model,
awareness model and to test forecasting available. It is a long and time consuming
process

● To proceed I would be willing to go forward with Second BASES concept test

and BASES ii test in order to understand the market and as to leverage it to
increase factors of repetition, awareness and penetration