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Situational Analysis

After two years of development and numerous consumer tests consistently proving
the high potential of the product, time has come for the test market confirmation of
Custard-style yogurt. But, given the budget & time constraints and also production
capacity limitations, Bruce Becker decided to go for a Mini-Market test in Wisconsin
market instead of a full-scale market.
Limitations of Mini-Market test: The results of a limited test market in Wisconsin
could not be projected nationally because the U.S yogurt market was highly
regional.
Advantages of Mini-Market test: The test can be easily managed due to the
small size of the market and its proximity to the location of General Mills
headquarters. This saves a lot of time and effort for the market research
department to conduct the test and overcome the limitations like unavailability of
refrigerated warehouse, lack of production experience and capacity.
Marketing variable for the Mini-Market test:

Radio, Newspaper advertising, product sampling and trade deals were used
as marketing support for Custard-style product.
Radio was used instead of television to control costs and minimize wasted
impressions.
Product sampling was a major consumer promotion tactic used for generating
trial.
Three trade deals each lasting 6 weeks were offered during the test and the
average Custard-style volume in stores that accepted one or more deals was
52% higher than those that accepted none.

The market share and volume estimates will be presented at the end of the report,
comparing it with the estimates from BASES test.
Consumer Dynamics study:
In addition to the weekly store audit, a consumer dynamics study of yogurt was also
conducted during the test during which respondents were asked questions on
products likes, dislikes and usage. The study indicated strong consumer satisfaction
of the Custard-style product.
User classification of Custard-style yogurt
Type of user

Percentage
of
total users
Exclusive Custard-style
20
Exclusive Original-style
20
Bothe Custard and Original style 60
The study also indicated that Custard-style users were primarily past buyers
of Original-style (38% for trial and 41% for repeat) and Dannon (33% for trial
and 27% for repeat).

Market share predictions indicate that the market share gain by Custard-style
is mostly from Dannon and that it does not cannibalize Original-style (Ref to
Exhibit 2)
Other insights from the study indicate that Custard-style buyers were
mainstream yogurt consumers and that Custard-style would not be merely a
secondary brand among its consumers.
Acceptors indicated that they would ear Custard-style on the same occasions
as other yogurts.
Overall, the mini-market test results were encouraging for the management.

Need for the BASES test:


Though the mini-market test results were encouraging and estimated the total
Yoplait volume to be doubled by the addition of Custard-style, some Yoplait
executives were skeptical that the test results could not be used to project the
product performance to other regions in US as the test was too localized. So, the
management wanted to get national and regional estimates of the product volume
potential and its impact on Original-Styles volume before they make any decision
on the introduction of Custard-style yogurt. To address these concerns, a BASES
simulated test market was conducted.
BASES Tests
The BASES test was more comprehensive than the tests earlier done. The test was
conducted across 12 dispersed cities distributed equally among the three regions
i.e. East, West and Mid-West. The target respondents were all women above 18 who
were principal household shoppers. Both custard users and non-users were
included. Respondents were shown a color print advertisements with a picture of
Custard style product, concept statement and the price and were then asked
various questions regarding the product. In addition to these results, a few other
inputs such as volume estimation model, target markets, consumption indexes of
each city, year one distribution and out-of-stock estimates and marketing
expenditure for each quarter were provided.
Marketing Variables:
Three Spending plans were simulated. The plans were based on the spending
proportionate to Original Style yogurts spending. Plan A (100%), Plan B (50%) and
Plan C (40%)
Summary of Results

Under plan B, Custard-Style was estimated to grow by 43% with 3.5MM cases
sold in year 2.
Custard-Style volume was sensitive to spending with volumes under Plan A
34% higher than Plan B in Year 2
Sales varied across regions. Sales were highest in West and sales in East were
higher than Original Style. However there was no variation in % of sales per
flavor.
Overall, Custard-Style would cannibalize on Original-Style and would gain
22% of the share. The other significant losers would be Dannon (22%) and
Knudsen (6%)

40% of respondents said they were definitely or probably willing to buy


Custard-Style. Also 68% of people, who tried the product, were willing to buy
it again. All the reported figures were approximately on par with industry
norms
Before use, health/nutrition was the major attribute that respondents liked in
the product. However after the test, taste was reported as major attribute. At
the same time taste followed by price were the most disliked attributes.
Incremental consumer promotion was more efficient in increasing sales than
incremental media spending

Overall the test indicated that Custard-Style had potential for high volume sales.
Comparison of Mini-Market test and BASES Volume predictions (% of
Original-style yogurt)
ACV assumed\Type of test
Mini-Market test
BASES test
80%
90%

109%

97%
110%

Comparison of Mini-Market test and BASES Market Share predictions


(Total U.S)
Type of test
CustardTotal Yoplait
style
Mini-Market test
23.1%
48.0%
BASES (Sanford
21.8%
43.7%
commercial)
Copy testing:
After the BASES test, a copy test was planned with four television commercials. The
test involved 300 respondents from 9 locations. Four copies were used in the test
1) Custard Style with Yoplait tag and no celebrities (Police execution)
2) Custard Style with Yoplait tag and a celebrity (Sanford execution)
3) Integrated Custard and Original Style without celebrities (Secretary
execution)
4) Integrated Custard and Original Style with celebrity (Lasorda/Brothers
execution)
The target respondents were females over 18 who had bought yogurt two or more
times in the previous three months. The respondents were shown the video and
later asked about their likelihood of buying the product. The copies were then
scored based on the responses. The Sanford copy scored highest overall across all
geographies.
Recommendations
Based on our analysis of the case we suggest the following recommendations
1) Since Price was an attribute that many disliked (2 nd after taste), Custard Style
yogurt should be sold at the same price as Original Style yogurt. Also, since
the tests indicate little cannibalization on Original Style, charging the same
price would not significantly affect the sales.

2) The tests indicate that Custard Style would steal an insignificant share from
Dannon (15%) and more than Original Style (22%). Also the sales for Custard
style were very high in West compared to other regions. Hence the product
should be launched in the West first.
3) Since the Sanford execution scored highest overall across geographies, this
copy should be rolled out for promotion.