United cereal’s response to the high cost of developing products for single market in Europe was first introduced by the then UC European VP Arsen Olsen. He linked the companies R&D scientists with subsidiary technologist testing products in the market. He created an European Technical Team (ETT) which was a union of this two groups of people. This team worked on reviving one of the companies failing product a fruit juice. The team planned to create a standard version of the juice which would be sold across Europe with the same marketing, promotion and advertising strategy. This did not go as planned because the country managers thought this strategy was doubting their competency and so the country managers reluctantly followed the instructions of Arsen Olsen. This eventually caused Arsan’s strategy to fail. The product sale strategy was back to being the responsibility of the country managers.
At some point in the 90s there was an increased demand for healthy foods. UCs competitors had rolled out some products by 2003 in Uk and by 2007 in France. There was only one brand with such product in France and the country manager observed there was market share available for UC to step in. Jean-Luc Michel the French country manager contacted the ETT and started a product development of Healthy Crunch one of UCs products by adding blue berries.
After creating the product, he had to conduct tests to determine to viability of this product in accordance to UC WAY. The test result showed a 56% re-purchase intent which was below the standard of 60%. The product was then modified and a second test was done on a focus group, results showed there was a 64% repurchase intent. The country manager had thought this was a good result even though it didn’t conform with the company test population size. Michel then waited approval to launch from the European VP. Instead of modifying the product and retesting, Michel wanted to launch because he thought it was a growing category and if the company didn’t not enter early enough, another brand might go in and take their space.
The newly appointed European VP Loral Brill was aware of his intentions but asides that she had an Euro brand idea which was similar to that of Arsen Olsen. She had estimated having a coordinated European marketing strategy would require less staff and cut the product development and marketing costs by 10% to 15%. This new product to be rolled in France was a perfect opportunity to try out her idea of the euro brand. Brill just had to convince the board of directors in order to get approval for the euro brand idea. The decisions she had to make were i) should the healthy berry crunch product be launched in France? ii) should this new product be used to as the pioneer for the euro brand idea? and iii) what structure should be put in place to achieve this idea? Considering the criteria of reducing product development and marketing cost in order to increase margin Brill needs to make decision for the brand otherwise this will cost them their market share and revenue.
