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Du Darsft Case Analysis

Essay by   •  May 23, 2011  •  1,185 Words (5 Pages)  •  1,052 Views

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Problem Description

The German subsidiary of Unilever, Union Deutsche Lebensmittelwerke has positioned itself in the "quality" segment of the food products. The company, in light of the following factors had decided to develop and test market low calorie versions of the food products:

1. The success of low-calorie products in the United States

2. The increase in the number of such products in German health food stores.

3. The growing concern over excess calorie intake voiced by various government organizations, medical associations, and other groups.

Moreover, the low calorie food products market appeared to be threat to their existing product line. Marketing research suggested that a significant number of consumers were getting conscious about their weight and this number was also increasing over the years.

So company decided to launch a range of low-calorie food products while taking care of the following points:

1. Tasted like the generic products they were intended to replace.

2. Could be consumed in the same way as the basic product.

3. Would offer the regular consumer of a number of items in the range a significant calorie-saving.

4. Were to be priced at a slight premium and distributed through super-markets

The primary market was considered to be among women between the ages of 30 and 50 years with no or few children in the household, living in urban areas and with a household income of over DM 1,250 per month.

There was complete agreement among the product managers about the above point and also the brand name, using super-markets as a distribution channel and showing products as group in multi-shelf separating Du Darfst units.

Key Decision Issues

There was disagreement regarding the advertising strategy to be chosen for this new line of product range. Following two different approaches had been suggested by the team members:

1. Members who had been with the product since inception wanted to promote the combination of appetite and health appeal

2. Other approach being suggested was tapping the market by advertising it as essentially a cosmetic product

Hence the main decision has to be taken about the positioning of the product range. Also we need to evaluate which category of consumers we are targeting - people who are health-conscious or those who are more conscious about their looks. Another issue is whether we want to promote consumers who will stay with the product for long or entirely new users who may be faddish and change their preferences from time to time.

Development of Decision Choices

The arguments given in favour of first alternative for advertising approach are given below:

 Building a solid brand franchise and obtaining loyalty would require positioning on taste.

 The product has taste advantages over competitor's products

 The promise of drastic weight-loss by the product can't be delivered

 Distribution through super-markets may fall weak on account of handling seasonal variations observed in cosmetic products.

 Many products using the alternative positioning are already available in market.

The arguments given in favour of second alternative approach were:

 The real reason for buying the product is to become more beautiful.

 Hence, this strategy will increase total sales rather than getting core group of customers which is important since dieters are usually faddish in nature.

 Market of other low-calorie products and weight-reducing gadgets is strong in early spring when women start thinking about looking good in bathing suit.

Evaluation of Choices:

 According to the case taste is a definite USP for the product as it has been developed with the view of providing a low calorie food without compromising on taste. Hence it makes sense to advertise this fact because it presents a definite edge over the other products in the low calorie food market. Also there is the fact that this range does not cut as many calories as its competitors because developers gave taste precedence over high calorie-cutting ability. The product line development also ensures that there is enough variety in the range of food products offered, so that consumers do not have to

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