Reference no: EM133525600

Case Study: Tre Stelle adds cream cheese to its product portfolio The Arla brand is leaning into baking occasions and colourful, differentiated packaging to take on an entrenched global player. It's a question of which cream cheese rises to the top with Tre Stelle's latest product innovation, a new competitor for dominant category player, Philadelphia. The Arla brand is out with a five-SKU cream cheese lineup. The launch is being supported by in-store information provided at the grocery shelf, signage hanging from store ceilings and $1.50-off coupons to drive purchase. According to the Tre Stelle cream cheese senior brand manager, its point-of-sale signage, like its packaging, is bright and vibrant to attract eyeballs. The new Tre Stelle cream cheese messaging, "tastes like more," is centred around indulgence, and it is focusing on holiday occasions, particularly cheesecake baking. The design is meant to be distinctive with a rectangular pack, to further stand out from the competitive set which are typically in bricks or round tubs. Previously, Arla had its own branded cream cheese. However, given that Tre Stelle is a trusted brand with 60 years of brand equity, the new branded line is a "perfect extension to our existing portfolio." The cream cheese category is dominated by one major competitor. However, Tre Stelle's differentiator is that it has none of the stabilizers or artificial ingredients typically found in other mainstream cream cheese brands, making Tre Stelle the cleanest category choice. The company recently invited five foodie influencers to amplify the Tre Stelle Cream Cheese "Tastes like more" positioning, part of a campaign that came to market in September. It was launched across social and included an influencer campaign that rivaled legacy brands for taste and spreadability. The Arla brand also created a "Tre Stelle Café" sampling program, partnering with popular cafes in major Canadian cities to offer cream cheese with a bagel. Arla partnered with PC Express for a sample initiative to include its product to consumers in their online grocery orders. Tre Stelle Cream Cheese comes in a variety of flavours including Original, Organic, Light, Lactose-Free and Herbs & Spices. It is widely available in stores like Metro, Walmart, Loblaw, and others across Canada. Tre Stelle Cream Cheese can be found for about $3.99 for a 200g package, about the same price as the leading, national brand.

QUESTIONS:

1. What type of channel is Arla using for their cream cheese? Explain one of the functions that this channel provides for Arla.

2. List and describe at least 2 ingredients of the promotional mix that Tre Stelle is using. Outline another ingredient that you would suggest that Tre Stelle use and explain why they should use it.

3. What branding strategy is Arla using? Why did they choose this strategy? What benefits do they gain by using it?

4. Outline the pricing strategy that Tre Stelle is using (use at least one example from the article to back up your answer)? Is this the right strategy? Support your answer based on the PLC stage of the product.

5. What kind of new product is the cream cheese? Why is it important to Arla?