Jet 24 Essay
MEMO Subject: Concerning Jet 24
General Mills plans to introduce a new product into the beverage market. The product, Jet 24, is a fruit-flavored beverage that is created by spraying a concentrate into an 8 ounce glass of water. Market research was conducted through 3 different studies:
1. Female heads of household and their children
2. Female heads of household with at least 1 child 3 14 years of age
3. In-home tests under actual usage conditions
Research indicated various concerns with regard to Jet 24's success. Some of these are the need for a vitamin C additive, the fact that it is perceived mainly as a kid's drink, that it may be messy and sticky, and that people doubt the fact
that it will produce 24 servings.
However, the main problem is that General Mills wants to market the product as a fruit beverage that is great for kids as well as the whole family. The target market should be narrowed; I recommend that General Mills market it specifically as a kid's drink. That is how test groups first perceived it in two out of three studies: as an alternate satisfier for Koolaid-type drinks. General Mills should first focus on this market segment and test the response before deciding to market the drink to adults. This leads to the conclusion that the better advertising strategy to pursue is the less expensive one focusing on children during Saturday morning cartoons and comic strips (cost $3,855,000). In addition, I recommend that the product's name be changed to something more fun that children will identify with. This new name should omit 24 from the title; this should alleviate some of the skepticism surrounding the serving capacity per can.
After examining the findings regarding potential sales volume, I have concluded that even at optimum sales levels, earnings will not support the expense of pursuing the family advertisement option (cost $7,862,000). Based upon forecasts, at optimum sales levels profits before fixed costs (advertising) will be more than $3 million dollars less than the family advertisement option. At minimum sales levels, profits before fixed costs (advertising) will be $1 million dollars less than the Saturday morning cartoon option which is the lower-priced alternative. General Mills will only make a profit if it chooses the less expensive advertising plan, but please take into account that minimum projected sales levels do not provide enough gross profit to cover even this.
General Mills plans to introduce a new product into the beverage market. The product, Jet 24, is a fruit-flavored beverage that is created by spraying a concentrate into an 8 ounce glass of water. Market research was conducted through 3 different studies:
1. Female heads of household and their children
2. Female heads of household with at least 1 child 3 14 years of age
3. In-home tests under actual usage conditions
Research indicated various concerns with regard to Jet 24's success. Some of these are the need for a vitamin C additive, the fact that it is perceived mainly as a kid's drink, that it may be messy and sticky, and that people doubt the fact
that it will produce 24 servings.
However, the main problem is that General Mills wants to market the product as a fruit beverage that is great for kids as well as the whole family. The target market should be narrowed; I recommend that General Mills market it specifically as a kid's drink. That is how test groups first perceived it in two out of three studies: as an alternate satisfier for Koolaid-type drinks. General Mills should first focus on this market segment and test the response before deciding to market the drink to adults. This leads to the conclusion that the better advertising strategy to pursue is the less expensive one focusing on children during Saturday morning cartoons and comic strips (cost $3,855,000). In addition, I recommend that the product's name be changed to something more fun that children will identify with. This new name should omit 24 from the title; this should alleviate some of the skepticism surrounding the serving capacity per can.
After examining the findings regarding potential sales volume, I have concluded that even at optimum sales levels, earnings will not support the expense of pursuing the family advertisement option (cost $7,862,000). Based upon forecasts, at optimum sales levels profits before fixed costs (advertising) will be more than $3 million dollars less than the family advertisement option. At minimum sales levels, profits before fixed costs (advertising) will be $1 million dollars less than the Saturday morning cartoon option which is the lower-priced alternative. General Mills will only make a profit if it chooses the less expensive advertising plan, but please take into account that minimum projected sales levels do not provide enough gross profit to cover even this.