Reference no: EM133527171
Question: You have been hired by Kawartha Dairies a Canadian manufacturer of traditional ice cream with retail locations focused in Ontario and a healthy wholesale network selling their products nationally in the major chains such as Costco, Sobeys, Zehrs, Food Basics, & Longos.
Kawartha Dairy focuses on traditional ice creams and sorbets along with the basics of milk butter and cream. Their products are positioned and perceived to be of high quality.
The vice president of Marketing is contemplating extending their product line into the Gelato segment. Gelato is an ice cream originating in Italy and seems to be an emerging segment. He is trying to decide if Kawartha Dairy should extend its product line into this segment and if so how to approach the product line extension.
You have been tasked with conducting an environmental assessment of the Gelato Market for Kawartha Dairy and make a recommendation as to whether you believe they should enter the market segment and if so the best way.
Recommendation:
You will recommend ONE of the strategic alternatives based on your analysis with supporting rationale for your recommendation.
Top of Form
Based on the analysis and evaluation of the strategic alternatives, the recommended strategic alternative for Kawartha Dairy is:
Market Segmentation and Targeted Marketing.
Rationale:
- Market Potential and Growth: The Gelato market is an emerging segment with growing popularity. By targeting specific customer segments, Kawartha Dairy can tap into the increasing demand for Gelato while focusing their resources on the most promising market opportunities.
- Competitive Advantage: Kawartha Dairy's reputation for high-quality products can be leveraged to position their Gelato offerings as premium and health-conscious options. By emphasizing their commitment to quality ingredients and creating unique flavors, they can differentiate themselves from competitors and build a strong brand identity.
- Financial Viability: Market segmentation allows for more focused marketing efforts, enabling efficient resource allocation. By targeting specific customer segments, Kawartha Dairy can potentially command a price premium, leading to higher profitability and return on investment.
- Customer Acceptance and Preference: With targeted marketing campaigns and tailored messaging, Kawartha Dairy can educate customers about the unique qualities of Gelato and the benefits it offers. By aligning their Gelato products with customer preferences, such as low-sugar or dairy-free options, they can generate positive customer feedback and drive repeat purchases.
- Resource and Capability Alignment: Market segmentation and targeted marketing can be implemented without significant disruptions to Kawartha Dairy's existing resources and infrastructure. It builds upon their expertise in product development and allows them to leverage their distribution channels and customer base while expanding their product portfolio.
- Risk and Uncertainty: While there are inherent risks in any market entry, focusing on targeted customer segments can help mitigate risks by narrowing the scope of operations. By understanding the preferences and needs of the selected segments, Kawartha Dairy can reduce uncertainties and make informed business decisions.
- Long-term Sustainability: Market segmentation and targeted marketing provide a solid foundation for long-term sustainability. It allows Kawartha Dairy to establish a loyal customer base and build strong relationships with specific segments, positioning them as a trusted Gelato brand. The approach aligns with their commitment to quality and customer satisfaction, supporting their long-term strategic goals.
Overall, the market segmentation and targeted marketing approach offers the best balance of market potential, competitive advantage, financial viability, and alignment with Kawartha Dairy's resources and capabilities. It allows them to differentiate themselves in the Gelato market while efficiently utilizing their existing strengths and customer base.