Montreaux Chocolate : 8 Steps of

New Product Development

Presented by
Madhur Kakade- 2020PGP189
Swastika Dash- 2020PGP446
Sarthak Shirsat-2020PGP374
Dinal Patel-2017IPM044
Step 1: Idea Generation

● Launch of Dark Chocolate in US market, due to increasing health focus of US

consumers
● Increase the share of confectionery in US market
● 45 ideas related to product
Recommendation: If more than 45 ideas would be selected and more options would
be made available at the early stage, buying percentage could have been more than
23 which could have resulted in increase in sales volume
If some expert from US would have joined the Apollo team rather than from
Montreaux who did not have idea about US market, the concept testing and further
ideation could have been different.

Step 2: Idea Screening

● Narrowing down to 12 ideas on the basis of distinction, attention, desire/needs

and advantage (Foundational Strengths)
● Combination suggested : Dark chocolate with fruit
Recommendation: Instead of 12, if they could have narrowed down on few more
ideas and tested further, they could have got more clarity on product specification
Step 3: Concept Development and Testing

● Concept, messaging, varieties and price of the product

● Feedbacks from 200 customers on each concept
● Based on responses, 5 concepts were recommended
● Dark chocolates in 3 flavours with 70 and 90% cocoa
● Flavours : Blueberry, pomegranate and cranberry
Recommendation: More options could have been tested for same set of individuals
rather than just one.

Step 4: Marketing Strategy and Development

4Ps of Marketing
● Product: Dark Chocolate in 3 flavours with 70% cocoa
3.5 ounce bar candy and 5 ounce pouch, with Health and Taste benefits
● Price : 5 ounce pack at $4.49. Sold at 65% of MSRP.
● Place: Supercentre, supermarket, drug and convenience stores
● Promotion: Health benefits and quality
● Sensitivity awareness of consumers was tested. 23% will buy, amongst which 80% will
definitely buy and 40% will probably buy.
Recommendation: Dark chocolate with candy mix could be added as they are 2nd big player
in the confectionery market, also pack size of 3.5 ounce bar can be added as it has growth of
18.5% year over year
Step 5: Business Analysis

● Hurdle Rate : $ 30Mn

● Sales Range : $ 39 to 17.5 Mn
Recommendation: Strategic marketing to achieve at least 20% consumer
awareness, increase counter sale or cover more number of shops to increase ACV,
maintain the excellent product quality in order to get repeat rate by product at least
38% (Kindly refer attached excel for calculations)

Step 6: Product Development : New Product Development Process

● 4 refined fruit dark chocolate products with 70% cocoa

● Alternative Positioning (Health and Taste)
● Pack size 3.5 ounce bar vs 5.0 ounce pouch
Recommendation: Multiple concept testing could be done with those 200 people so
as to get clear perspective on all the product types rather than testing single concept
Step 7: Test Marketing

● Final trial depending on the interest of people based on their intent to buy in future, and product
experience, sample were tested for final feedback

Step 8 : Commercialisation

● Dark chocolate in 3 flavours with 70% cocoa in the pack size of 3.5 ounce bar and 5.0 ounce pouch
● Price for 5 ounce pouch is $4.49
Recommendation: This chocolate can be positioned as an American brand and not European brand,
since Apollo Foods enjoys more brand recognition. But, the packaging should also contain the name of
Montreaux Chocolates so that consumers know that the product belongs to it, and it will also help build a
brand equity for Montreaux in the US market.
Product Testing
Pros:

1. More accurate data can be collected which will help in stronger positioning
2. Any defects in product can be eliminated before the actual launch of product

Cons:

3. Launch will be delayed

4. Competitors are also looking for concept testing so there is a threat to market share
 Test Marketing
Pros:

1. Critical feedback is received about the product

2. Helps spots defects
3. Risk of a full-scale launch eliminated

Cons:

4. Huge cost of $3 million

5. Take one year of time
6. Delay the product launch by total 3 year
7. Competitor will get advance notice of Montreaux chocolate USA
8. Difficult to find cities that fully representative of the U.S consumer population
Launch Product
Pros:

1. First mover advantage and opportunity to grab large market share and greater market penetration
2. Reaching the wider scale of people will help Apollo get early feedback and improvise the product

Cons:

3. Risk of full scale launch

 Branding
Launch under Apollo name:

Pros: Americans prefer a US based brand and not outsider

Cons: Apollo doesn’t have any experience in chocolate market

Launch under Montreaux name:

Pros: Since Montreaux is an established brand, it will be easily recognised, also loyal customer base ia
available for Montreaux

Cons: Americans prefer a US based brand and not outsider

Launch under another band or sub-brand name:

Cons: Since Apollo and Montreaux are established brands, they will be easily recognised which is not
possible if we go with some other brand name
Final Recommendation
Since Apollo is looking for large market share, by launching the product right away will give Apollo a first
mover advantage. As other competitors in the market are also doing concept testing of dark chocolate
with fruit and not far away from introducing the product, so there is threat to Apollo’s market share.
Adapting other strategies like further product testing and market testing will cost Apollo extra dollars and
delay in launch so we recommend that Apollo should launch the new product right away rather than
delaying it. As the representative cities are not available, going for regional launch won’t give that
valuable feedback hence we recommend national launch to cover the scale. This dark chocolate with fruit
flavours can be branded as Apollo’s chocolate as US people prefer american brand. To keep the
business profitable, we recommend Apollo should maintain high quality of product in order to maintain
repeat rate and also go for aggressive marketing so as to increase awareness of the product. To increase
the net sale volume, Apollo should cover more number of counters for selling in order to increase all
category volume.

If net sale is not surpassing the hurdle rate, they should scrap the product. According to excel
calculations, Net sales is over the hurdle rate for an optimistic projection, hence if the market scenario
supports such numbers, then the product can be launched, else not.