A Letter about Introduction of Sweet Dream - Essay Example

I would like to continue our conversation that we had last Friday afternoon about the committee’s decision not to authorize a national rollout of Sweet Dream. I realize that perhaps I was a bit forceful in terms of my opinions that day, but now that I have had more time to go over my data, I feel that some points should be made first before the new product is completely discarded. I respectfully understand the decision of the committee, who have the best interests of Paradise Foods at heart, but they need to be aware of some potential problems that LaTreat may encounter shortly, as well as the possibilities that Sweet Dream has to be a success in the market.

I believe that Paradise Foods should discontinue its promotion of LaTreat and instead get behind the concept of Sweet Dreams. Barbara Mayer has her self-interest at heart when she says that LaTreat should be the sole focus of the company’s strategic efforts. LaTreat has now been established in the market for a few years, but the product’s growth rate is slowing down.

The frozen desserts market has expanded significantly since LaTreat first entered the market, and in fact, the market has since outgrown the product. This can be evidenced by the fact that revenues for the product did not grow at all in 1986 and 1987. My recommendation to you is that neither LaTreat nor Sweet Dream is discarded, but rather both products are promoted together.

While this may seem to cannibalize both products can work in tandem to pick up customers who fall through the cracks. From the BehaviorScan data, I have managed to break down the customers of LaTreat into four main categories: Loyalists, Trial Users, Accelerators, and Switch-on-Deal customers. Currently, LaTreat is only picking up customers of the latter two categories. Many of the current customers of LaTreat do not feel any long-term loyalty toward the brand or only make purchases when promotions are on offer.

For any product to grow long-term, these are not the types of customers who will help contribute to this success. This is, however, where Sweet Dream comes in and fills a gap. Loyalists and Trial Users are extremely hard to pick up through using an already existing product because the “wow” factor has gone. However, Sweet Dream is a brand new product to the market and is likely to experience a “honeymoon” period during the first few months after release. The customers who remain loyal to one brand for a sustained period of time are highly sought after, so everything should be done to not only attract them, but keep them as loyal customers.

The initial data that I have gathered around Sweet Dream suggest that the product has the potential to be a hit. The data show that Sweet Dream received a three market share in Midland and Pittsfield after only six months. The trial rate was 15 percent, while the repurchase rate was 45%. These figures are all astounding, and even if the product could not sustain these numbers over the long term, it would still capture a significant portion of the market share