The Case of the Test Market Toss-up
The Case of the Test Market Toss-up In this case, the top management put the new frozen dessert--- Sweet Dream on ice; however, the product manager felt it was not a correct decision and tried to persuade the top managers to reconsider. The company of Paradise Foods didn’t realize the threat on LaTreat and the opportunities on Sweet Dream. They didn’t embrace the concept of using analytical marketing research based on computer technologies as the premise of the right decision. The issues are:
1. The research data on Sweet Dream seemed to steal the share from LaTreat.
2. The top managers didn’t really understand the meaning of the analytical numbers which Bill got from the marketing research and only considered that the return was low so that decided to stop Sweet Dream and try another new concept.
3. The company didn’t recognize the threat on LaTreat and the chance of Sweet Dream; Bill has cleared up the data that the sales of LaTreat was only on promotion and was interested in persuading the committee to continue Sweet Dream. The company should put the position of LaTreat in perspective and distinguish the different positioning of LaTreat and Sweet Dream. According to the “Product Life Cycle”, LaTreat has already been in the area of maturation and the company should launch a new product or exploit a new market to make more profit. Moreover, the company should adjust the promotion of LaTreat in case that the strategy of lower prices would ruin the value of the brand. In contrast, the product manager should do a simple and easy understanding report to the top managers because of the communications difficulties and related misunderstandings. LaTreat was the first “super premium” in the Paradise Foods’ history. As more and more new entrants enter the frozen specialties market, the competition has stiffened. The demand of LaTreat is getting saturation, so the market needs another new product, or the sales would be down sooner or later. The 18
1. The research data on Sweet Dream seemed to steal the share from LaTreat.
2. The top managers didn’t really understand the meaning of the analytical numbers which Bill got from the marketing research and only considered that the return was low so that decided to stop Sweet Dream and try another new concept.
3. The company didn’t recognize the threat on LaTreat and the chance of Sweet Dream; Bill has cleared up the data that the sales of LaTreat was only on promotion and was interested in persuading the committee to continue Sweet Dream. The company should put the position of LaTreat in perspective and distinguish the different positioning of LaTreat and Sweet Dream. According to the “Product Life Cycle”, LaTreat has already been in the area of maturation and the company should launch a new product or exploit a new market to make more profit. Moreover, the company should adjust the promotion of LaTreat in case that the strategy of lower prices would ruin the value of the brand. In contrast, the product manager should do a simple and easy understanding report to the top managers because of the communications difficulties and related misunderstandings. LaTreat was the first “super premium” in the Paradise Foods’ history. As more and more new entrants enter the frozen specialties market, the competition has stiffened. The demand of LaTreat is getting saturation, so the market needs another new product, or the sales would be down sooner or later. The 18