Supermarket

Introduction

Wm Morrison is a well known leading supermarket in the UK with over 400 stores as well as being listed in the FTSE 100 market. Acquisitions and mergers play a big role in the success of various companies across the globe only if the acquisition being made is of good performance (Leepsa, & Mishra, 2013, p.40).

The factors to be considered in the case of Wm Morrison acquisition vary from political, social, economic and even environmental factors as well as the financial factors of the business. OneStop supermarkets is facing a lot of problems and hence the need for the acquisition of the Wm Morrison so that it can enhance its performance. The need for acquisition has been brought about by the reasons that OneStop PLC has been staggering in terms of performance which to a greater extent has been as a result of poor product portfolio that meets the needs of the customers of the company (Depamphilis, 2011, p.29).

The other issues which have prompted the need to acquire new business are due to the reason that OneStop have faced a lot of criticism which has not been good for the image of the business (Leepsa, & Mishra, 2013, p.39). Various accusations have been laid against the company that it does not allow its employees to have union representation, allegations of racism within the company, and issues of low health insurance rates for the employees of the company (Sherman, & Sherman, 2011, p.155). The various accusations which have been made have greatly affected the business hence the need to make new acquisition so that the business can be able to meet its objectives.

The other motives which have propelled to the idea of the acquisition of the Wm Morrison is because Morrison PLC is nearly the same match as the OneStop in terms of the particular skills involved in the running of the business and the various capabilities which are need to conduct the business (Sherman, & Sherman, 2011, p.157). The various skills and capabilities which are available at Morrison will help in boosting the target value of Morrison and also assist in increasing the sales of the company beyond the performance of OneStop PLC when it is on its own.

This implies that the acquisition of Morrison will boost the image, the performance and the long run stability of OneStop PLC and help it achieve its main objectives (Katz, 2013, p.20). The other motive which influence the need for the acquisition of the Wm Morrison is the reason that when the two companies are combined together, OneStop will help in reducing the targeted predictions on the cost of sales of the companies whereby the ratio of sales to sales will be reduced by about 0.7% while that of the administrative costs to sales ratio will be reduced by about 15%.The need to diversify and improve the image of OneStop Ltd has also led to the need for the acquisition of the Wm Morrison.

From previous researches which have been conducted on acquisitions and mergers it has been observed that there are various factors which companies must put into consideration whenever they plan to make an acquisition or even merge with another company (Sherman, & Sherman, 2011, p.158).

Political

When planning to make an acquisition, especially in a different country from where the main company is, there is need to consider the political atmosphere where the company or business to acquired operates in. Political stability is of great importance since it determines how a business will operate in addition to whether the business will be able to survive in that particular country (Sherman, & Sherman, 2011, p.159).

Legal

There are various legal aspects that influence businesses that must be considered when acquiring, starting or even merging with other businesses (Bruner, 2011, n.p). The legal structure within the UK must be able to support the acquisition of the business so that the acquisition can be of any benefit to OneStop PLC.

Economic Environment

The competition within the business environment must be considered to find out whether the business is able to cope with the competition or not and whether the competition is fair enough for the survival of the company to be acquired.

Financial Performance

Researches that have been conducted also suggest that it is important to consider the financial performance of the company to acquire since that is of great importance (Bruner, 2011, n.p). A company that is not performing well may be a greater risk which may affect the acquiring company.

In the case of Morrison, its share prices have been not been constant which means that the shares of the company in the stock market may not be good performers although it has maintained a mark of between $2.5 and $3. The company is also rated as one of the leading food retailer in the UK, which is quite a good thing for a business since it means the company is able to fight stiff competition. The previous research also adds that the performance of the company helps to identify whether the company is profitable or simply a losing company (Bruner, 2011, n.p). It helps to determine the worth of the company hence it is important the financial performance is considered when wanting to make any acquisition

Research that has been previous conducted show that the food retail industry has grown quite a lot and people have come to appreciate the industry in a big way (Sherman, & Sherman, 2011, p.159). There have been great developments in the industry in terms of the products that are being offered as well as the number of competitors in the industry have also increased. People have become more conscious of what they eat in the food industry with any of them moving towards healthy eating habits hence influencing the industry to adopt healthy food product portfolios (Katz, 2013, p.20). The deal may fail to deliver results due to the strong competition that exists in the UK market as well as the major shareholders of Wm Morrison may not be willing to let go of the company unless they are offered to an attractive bid.

Valuation

When wanting to acquire another business as part of the expansion program for any given company, it is important for a valuation of the company to be acquired to be done.

In the case of OneStop Ltd, it is important to conduct a valuation of the Wm Morrison supermarkets and determine whether the acquisition will be of value to OneStop or it will be a waste of money. In this case, it is to be assumed that the financial statements of Wm Morrison are accurate and no other adjustments are required on them (Cooper, & Finkelstein, 2011, p.1).

The information to be used in this valuation will be obtained from the income statement, the balance sheet as well as the cash flow statement, with regard to the last two years, 2012 and 2013. The most important aspects to be considered are the profitability of the company, the liquidity status of the company as well as the return on investment for the shareholders (Cooper, & Finkelstein, 2011, p.1). This will require an analysis of the ratios of the company to determine if it is a profitable investment or not.

Valuation Calculations

Ratio Analysis

This is done to simply determine the profitability of the company as well as the ability of the company to perform and meet its main objectives. The tables below illustrate the ratio analysis for year 2012 and 2013 as the most recent years of business for Wm Morrison. Figures adapted from: (http://finance.yahoo.com/q/is?s=WM+Income+Statement&annual)

From the above figures, the profit margin of the company for two consecutive years is about 5% which is quite low although it is not making losses. The debt to equity ratio of the company increased in 2013 to 0.45 hence meaning that the company acquired more debts although it is still below the recommended rate of 1. The low current ratio indicates that Wm Morrison may not be in a position to meet all its financial obligations when they are due and in good time due to negative working capital.

The benefit of this ratio analysis method is simply helpful in determining whether a company that is to be acquired makes profits. The main objective of businesses is to make profits hence acquiring a company that does not make profits is quite risky. Furthermore, this method of valuation helps to ascertain whether a company to be acquired is capable of meeting its financial obligations or it will be an added burden to the acquiring company.

Tangible Book Value Method

Using the tangible book value method of valuation is the calculation based on the total assets of the company less the liabilities of the company to obtain the net assets. This means that it is the net assets of the company although if there are preferred stocks then also should be subtracted. Tangible book value will also involve deduction of the intangible assets from the net assets of the company as illustrated in the figures below

The benefits of the tangible assets value method of valuation is that it makes it possible to ascertain whether there are any assets which can be sold or converted to cash in case of liquidation due to financial problems.

Net Current Assets Value

The other method of valuation that can be used is the Net Current assets Valuation which simply involves the use of the current assets of the company to be acquired, in this case Wm Morrison and the total liabilities of the company as illustrated in the table below (figures adapted from: http://finance.yahoo.com/q/bs?s=WM+Balance+Sheet&annual)

This value is used to measure the liquidity of Wm Morrison whereby it gives an estimate of the amount of finances or cash that the company can be sold at in case the company was to go out of operation or business.  The assumptions made are that the values or figure obtained from the various financial statements of the company are accurate and no alterations have been made on them. From the above valuations conducted on Wm Morrison, it may not be a good form of investment although there are other influencing factors which need to be considered such as he reasons for the acquisition. If the reason for the acquisition is not to maximize profits, then Wm Morrison is a better option to acquire.

Financing Alternative

Businesses need various resources for the company to be able to survive and achieve the main objectives as well as fulfil the missions of the company. This means that for any business to succeed, it must have sufficient and the necessary resources that will enable it to fully operate and make profits in the long run (Cooper, & Finkelstein, 2011, p.4).

One of the main resources that every company needs for it to be able to operate fully and make profits is the financial resources. The financial resources are relevant and of great importance to any business because all decisions within any given company or organization will highly depend on the finances of the company (Leepsa, & Mishra, 2013, p.39). Financial resources are the main determinants of whether a company will expand or simply reduce its operations. In acquisitions and mergers, financial resources are important because they help to identify how a company will be able to finance its operations and meet all its objectives in the long run (Katz, 2013, p.20).

When a company such as OneStop wants to make an acquisition such as Wm Morrison, the management must be able to analyze and identify the various financing alternatives that the company can use to obtain Wm Morrison. There are different financing options which are always available for businesses when they are considering ways of financing their operations or any other activity that is beneficial to the company (Cooper, & Finkelstein, 2011, p.19). In the case of OneStop, the financing alternatives that it will need to consider as a way of financing its acquisition of Wm Morrison will include the following: business loans, issuing of equity/commercial bills, and government loans and incentives.

Business Loans

This is a financing option that OneStop Ltd may take which will involve obtaining loans from a financial institution so that it can finance the acquisition. This will require that the company must have some form of collateral for it to secure the loans from the financial institutions. This is quite risky if the company does not have enough assets that can secure the loans (Cooper, & Finkelstein, 2011, p.10). In addition, the interest rates involved in repayment of loans from financial institutions are always high hence this is not quite a recommendable option for OneStop Ltd.

Issuing of Securities/Commercial bills

Companies, especially large companies can opt to issue securities to shareholders so that it is able to raise finances for financing its projects such as in the case of OneStop. This option requires that the company must be listed in the stock market of the country of origin so that it can be able to trade its securities (Cooper, & Finkelstein, 2011, p.19). This is one option that is recommendable because the company is not required to repay back the money immediately but instead give shares of the company to other shareholders.

The issuing of securities requires quite a long process and considering the performance of the company at the moment, it will be quite a hard task for OneStop to obtain sufficient finances from this financing alternative (Lee, 2013, p.22). Investors prefer well performing companies and in this case, securities of OneStop hold a lot of risks that may not attract investors.

Government Loans/Incentives

In many countries across the world, governments have policies that support businesses and one of those policies involve offering incentives or loans to companies or organizations which want to set up or expand businesses (Cooper, & Finkelstein, 2011, p.8). The loans or incentives offered are always of low interest rates hence quite accommodating for businesses. This is an option that OneStop can consider in its quest to raise finances for the acquisition of Wm Morrison.

Leasing

When a company has quite some assets which it is not making use of, a company has an option of leasing out the assets so that it can obtain finances (Cooper, & Finkelstein, 2011, p.11). This is done for a period of time after which the company can retrieve the assets after the end of the lease period. It is quite a better option because the company does not have to incur any costs in terms of interests to be paid out (Carroll, & Chung, 2009, p.17). The finances from leasing may not be sufficient because may be the company do not have enough assets that can be leased for larger amount of finances to make the acquisition.

Selling of Assets

A company or an organization can also raise finances for its projects through the sale of its assets, especially the assets which the company does not require in its operations. This may include the disposal of some of the fixed but movable assets of the company and to some extent the current assets of the company.

In the case of OneStop, selling of assets may be the last resort because the company is not currently performing well and hence selling assets cannot be the first option (Cooper, & Finkelstein, 2011, p.17). From the above analysis of the various methods or ways of raising finances, the most suitable option for OneStop to obtain finances so that it is able to finance the project of acquiring the Wm Morrison Supermarkets is to obtain business loans as well as obtain government grants or incentives for wanting to expand its business (Perkin, 2012, p.52). Obtaining business loans and grants or incentives from the government offers the company a quicker means of obtaining the finances and the amount that the management of the company have assessed and ascertained will be sufficient for the acquisition.

Recommendations

From the above report and the consideration of various issues which have been mentioned in this report, it is recommended that:

1. The management should do a thorough background check of Wm Morrison to find out why there has been decline in the performance of the company
2. Complete and physical valuation of the Wm Morrison needs to be done because the financial statements may not be very reliable

• The management should ascertain the exert market value of the Wm Morrison shares in the market

1. The management needs to ascertain the amount of resources that will be needed to finance the acquisition.
2. Last but not least it is recommended that the management should consider acquiring the Wm Morrison if the owners will agree to a fair price that OneStop PLC will offer.

References

Bruner, R. F. 2011. Applied Mergers and Acquisitions Workbook. Hoboken, John Wiley &         Sons. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=818880. n.p

Carroll, J, & Chung, P 2009, ‘What’s Your Company’s Best Financing Alternative?’,       Financial Executive, 25, 7, p. 17, Business Source Complete, EBSCOhost, viewed 1   April 2014.

Cooper, C. L., & Finkelstein, S. 2011. Advances in mergers and acquisitions. Vol. 10 Vol.          10. Bingley, Emerald. P.1-19

Depamphilis, D. M. 2011. Mergers and acquisitions basics all you need to know.             Burlington,     MA, Academic Press.         http://public.eblib.com/EBLPublic/PublicView.do?ptiID=648807. Pp.29

Katz, J. 2013, ‘The key to merging corporate cultures? Start early: to mitigate risks during          mergers and acqusitions, cultural integration should begin well before the deal closes.(MERGERS ; ACQUISITIONS)’, Industry Week, 2, p. 20, General OneFile,     EBSCOhost, viewed 1 April 2014.

Lee, A 2013, ‘APAC acquisition financing: the alternative funding sources explained’,    International Financial Law Review, 32, 3, p. 22,

Leepsa, N, & Mishra, C 2013, ‘Do Mergers ; Acquisitions Pay Off Immediately? Evidence      from Mergers ; Acquisitions in India’, South Asian Journal Of Management, 20, 3,           pp. 39-57,

Perkin, N. 2012, ‘alternative financing’, Mechanical Engineering, 134, 7, pp. 52-53,

Sherman, A. J., & Sherman, A. J. 2011. Mergers & acquisitions from A to Z. New York,             American Management Association. pp.155-160

Management Decision Case : Tests Serves Up Japanese Expansion Given the highly competitive nature of the Japanese retail food market and failure of global leaders Wall-Mart and Careful to successfully penetrate the Japanese market, do you believe Deco’s decision to open Tests Express is a good idea? Why or why not? Not a good idea. Why? Cultural differences between the I-J market and the Japanese market for groceries. Japanese doesn’t want change (even Walter and Careful failed).

So, it s difficult to penetrate into Japanese market Tests needs volume (to make profit) due to the operation cost. Japanese only wants their local product (since there is already 40000 convenience store in Japan) Quality & Standard. The reason of Walter n Careful failure was the quality since Japanese is willing to pay for higher-quality food that is convenient. Come with express first but no capability since their model works with bigger supermarket (risky) Japan, the world’s third-biggest grocery market remains a difficult country to make money from as International retailers

How would you describe the retail strategy for Tests Express as it expands in Japan? Unique mix of convenience store and supermarket featuring higher-quality fresh food, ready-made meals, and certain supermarket items found in its larger, traditional Tests Supermarket. Convenience store offering quality, ready-made food and limited supermarket items (not currently served by traditional Japanese convenience stores such as 7- eleven, Lawson, Circle-K Skunks, or the larger more traditional grocery stores such as Neon and Aide) Focuses on the delivery of fresh ready-made foods.

Most of the big supermarkets now offer these services and the UK’s supermarkets are gradually following the ‘American way’ by following the most succesful supermarket in the world, WAL -MART. The traditional supermarket occupies a large floor space on a single level and is usually situated near a residential area in order to be convenient to customers. They also offer the convenience of easy parking and the extended shopping hours. In most cases they will choose to close between 6pm and 8pm but some now even stay open 24 hours.

Supermarkets main aim is to provide consumers with protucts that are good value for money. They do this by purchasing the goods in bulk and purposely set their prices with lower profit margins. In some cases they offer the product at such a low price that they aren’t making any profit at all. Some even making a loss! Examples of these products are bread, milk and sugar. To maintain a profit though, they rely on high overall sales of the products that they are selling with higher profits.

This seems to be currently working as company profits are on the increase. In order for the profits to increase still further, new cost cutting ideas are being introduced. One of the main changes during this transition period is the introduction of self service checkouts. This is completely different to traditional supermarkets where you would pay a member of staff at every checkout. The new self service checkouts require minimal staff to overlook their operation, therefore cutting down on labour costs and potentially increasing profits. Supermarkets have developed a great deal and will continue to do so if they keep on top of their corperate strategy.

Within the food retail business sector there will be many big ‘players’, most noteably, like I mentioned earlier, WAL-MART. This is the biggest and most successful supermarket in the world. Supermarket Structure Wal-Mart was founded by Sam Walton in 1962 and became listed on the New York stock exchange in 1972.  This business has grown and grown and not only is it the number one supermarket, it is also the worlds second largest corporation, behind Exxon Mobil. This is based on Wal-Mart’s 2006 revenue.

Wal-Mart reported a net income of 5.7 billion on �160 billion worth of sales. This gave them a 3.5% profit margin. Their revenue was up �13.5 billion than the previous year which is an incredible increase. It is thought that 20% of the food retail business sales are theirs in the USA.  They are also an international business having stores in Mexico, UK, and Japan. These all have different names but are owned Wal-Mart. Wal-Mart also sold its retail operations to South Korea, Germany, Argentina, Brazil and Canada. These all give Wal-Mart 20.1% of its total revenue. D escribe the size and structure of the food retailing sector

Tesco is the UK’s leading supermarket but is also a very successful international supermarket chain. Its market value is about �29 billion and is the fourth largest retailer in the world. According to TNS superpanal Tesco’s share of the UK’s grocery market in the 12 weeks up to the 18th June 2006 was 31.4%. Tesco’s overseas stores currently accounts for 23% of its total revenue. Tesco’s success is largely down to its ability to diversify into other areas. http://news.bbc.co.uk/2/low/business/4694974.stm

The 2nd ranked UK supermarket is ASDA, the 3rd is Sainsbury’s and the 4th is Morrisons At this moment in time, with the current state of food retail, the public are purchasing most of their goods from large supermarkets, but this was not always the case. Many years ago people would have to walk through the shop front door and ask the shop assistant to retrieve their goods for them. The goods were basic and the stock was minimal. This type of shopping has slowly changed to what we have today and generally seems to change over family generations

Albert Heijn 1602 (Barneveld) History Context Albert Heijn is a big supermarket chain which emerged from a small grocery store that once stood in Oostzaan. The 21-years old Albert Heijn took over the store from his father in 1887. The young Albert Heijn quickly began to expand the store towards other places. Albert also started to sell his self-made cookies and self-burned coffee (Albert Heijn, 2013). Now Albert Heijn is one of the largest supermarket chain in the Netherlands. Quality and customers are of great importance within the formula of Albert Heijn.

For this reason all subsidiaries have to have the same style. In the small village of Barneveld there is also an Albert Heijn. This Albert Heijn was managed by Mr G. Aartsen for more than 15 years. Albert Heijn Barneveld did not experience quite a lot of changes. The only changes where changes of assortment and a small expansion of the shop. Trigger The management of Albert Heijn demands that every supermarket manager is managing for a maximum period of 4 years. This is due the fact that a manager could turn into a friend when staying too long on the same position.

Another reason is the emerging of business blindness. To prevent this from happening, all managers (except for the franchise shops) have to switch places once in a while. For example: the manager of Utrecht goes to Amsterdam after 4 years, the manager of Amsterdam goes to Groningen and so on. Philosophy The manager of Albert Heijn Barneveld was like a father to all the personnel. Mr Aartsen was often called “papa Aartsen” (daddy Aartsen). Mr Aartsen was not just the manager who commands the personnel.

He was a kind guy who often smoked in his office (while this was not allowed), he just had his own rules and it worked. When there was a lot of pressure on the personnel he always helped them. For example, during Christmas time he helped stocking the shelves. Mr Aartsen also had a good relationship with the customers. Change idea Diagnosis Albert Heijn Barneveld had the same manager for 18 years. For this reason the headquarters decided to make some changes. Mr G. Aartsen had to go. This was a big shock for the regular customers and the personnel. Change of strategy

The change of strategy was decided, there were no discussions possible. Mr Aartsen protested towards the headquarters, but their decision was final. Albert Heijn had accepted the fact that Mr Aartsen was the manager for a longer period than 4 years for a long time. However it was time for change. The headquarters wants all the shops to be the same, as well in layout as in the way of managing. Intervention plan The headquarters of Albert Heijn did not really had an intervention plan. They made up the rules and were the boss of Albert Heijn, so Barneveld had to listen.

Albert Heijn did replace Mr Aartsen, however, the headquarters were much more open about where Mr Aartsen should manage after Barneveld. This decision was made together with Mr Aartsen. The other intervention plan that the headquarters had, was the implementation of two managers in Barneveld. This way Barneveld was managed better and with good efforts. Sadly enough, things were not any more than they were. Interventions 1 With the help of the two new managers the intention was trying to introduce a new way of thinking.

However this did not work quite well. After a few weeks the headquarters decided that Barneveld had to do it with one manager again. This time the dissatisfaction was even bigger. Interventions 2 When it turned out that Barneveld did not run as well anymore as it did, the headquarters tried to bring old personnel back. An old assistant manager came back from another subsidiary. This happened to work out. The headquarters decided that Barneveld had to steer itself again. The next step was giving personnel promotions.

This way, people who worked for Mr Aartsen were able to get more influence and help each other to get over the situation. Results of change process The change process for Mr Aartsen has led to overwrought, unfortunately the changes were too big for him. For Barneveld the changes were positive as well as negative (see table 1). Positive changes| Negative changes| Albert Heijn made Barneveld a real Albert Heijn. Barneveld had struggled with the changing process, however now Barneveld was now a real Albert Heijn like all the other subsidiaries. Albert Heijn Barneveld always was a neighbourhood supermarket, now it was one of those mass city supermarkets. The changes caused the dissatisfaction of the most customers. | Table 1, Positive and negative changes Albert Heijn Barneveld Conclusion Albert Heijn headquarters did not much effort steering the change process. Due to the lack of comprehending, the change process took a lot of time. At the end, Albert Heijn headquarters succeeded in making Barneveld a real Albert Heijn. However, the headquarters did not research whether the customers wanted this change or not.

Reed Supermarkets. Spring 2013

Meredith Collins faces the problem of choosing the most appropriate marketing strategy for Reed Supermarkets to implement so that the company increases its market share in the Columbus, OH market from 14% in 2010 to a target of 16% in 2011. This goal should be accomplished in spite of the new competitive challenges posed by the rising prominence of dollar and limited selection stores in the food retailing industry.

SWOT Analysis

Internal Strengths

1. Reed’s quality image and exceptionally attentive customer service;
2. Full range offerings;
3. Attractive stores, long hours, and elegant service? case displays.

Internal Weaknesses

1. Many consumers perceive Reed’s prices are high;
2. Capital expenditure policy freezing; 3. No consensus within management on what strategy to implement for market share growth.

External Opportunities

1. The new consumer is more savvy, health and cost? conscious;
2. Growth of private label merchandise; 3. Columbus’s economic environment is more favorable than state’s and nation’s economic environments;

External Threats

1. Dollar and Limited Selection Stores increasing market share / Aldi’s projected new stores;
2. Economic downturn; . Significant dwindling of customer loyalty.

Reed’s management is currently assessing the following alternatives to increase its market share in the Columbus market:

• Continue its ongoing “dollar special” campaign;
• Terminate the “dollar special” campaign and implement an everyday low pricing model;
• Convey the value created to consumers by reinforcing the range and quality of offerings;
• Increase low priced specials, expand private label brands, and introduce double couponing.

In addition, I would also consider the following alternative: Make an offer to buy some of Galaxy’s troubling Columbus stores.

In evaluating the aforementioned alternatives, Reed’s management will have to take into account that, in order to meet the targeted market share of 16% in 2011, they will have to increase their sales volume by $94 million, which represents a 14% increase compared to 2010 (see appendix). The present “dollar special” campaign was an attempt from Reed’s to change consumer’s perception that they have higher prices. Some Reed’s managers are confident that in another six months they will be able to change this perception while, at the same time, they reinforce customer loyalty.

However, some executives believe also that the campaign detracted from Reed’s quality image as it seemed to be too close to the offering of dollar stores which could damage Reed’s image through association. The scope of this campaign (250 out of 50,000 items) does not seem sufficient to generate the additional sales required. Other executives suggest implementing an everyday low pricing model in order to tackle, in a more aggressive fashion, the high? priced image that Reed carries. This would likely require a complete switch of the company’s positioning from a high? nd store to a medium, more value? focused positioning. Reed’s image, as a quality and customer service oriented, could be extremely damaged by such a switch. Additionally, it would be expected that other discount stores would be reacting aggressively to this strategy. Another option is to reinforce Reed’s current positioning as a high? end store by emphasizing the range and quality of its offerings. Such strategy appeals to the more affluent households, which are more keen on premium private labels and organic produce.

This customer segment has been the backbone of Reed’s growth in the past 20 years, and the company wants to be ready to satisfy its upscale tastes as the economy recovers. Operations Director Jane Wu offered yet another alternative: increase low? priced specials, expand private label brands, and introduce double couponing. The new consumer that emerged from the 2007? 2009 recession is more savvy and cost? conscious, which is demonstrated by the increasing share of wallet captured by dollar and limited selection stores.

By acknowledging this new reality and resorting to the strategy suggested by Director Wu, the company can potentially attract new customers and appeal to both fill? in “trippers” and full grocery “runners”. This seems to be a sound strategy in order for the company to capture, in the short? term, the $94 million additional sales required to meet the target market share. It is unclear, however, if this strategy could hurt the quality image recognized to Reed’s supermarkets and as a result drive high? nd customers away. On the other hand, during difficult economic times, such as the downturn of 2008? 2011, consumers tend to opt for value. Finally, we should not discard the introduction of new stores as a strong alternative for increasing sales. The company has consistently expanded the chain in the past, with the new stores accomplishing similar results to existing ones. Reed’s management has made it clear that it does not wish to have capital expenditures in form of new stores in 2011.

But, a struggling Galaxy chain in the Columbus market could represent an interesting opportunity for Reed to acquire some of its stores at a discounted price, and this way meeting the sales volume required for the 16% market share. Given the resistance from Reed’s management to resort to additional capital expenditure, my recommendation is that the company implements the alternative suggested by Director Wu, i. e. increase low? priced specials, expand private label brands, and introduce double couponing. For the

Table of Contents Introduction2 Main Issues3 Company Background3 Natureview’s Profile Products4 Market Trends Analysis for organic product4 Yogurt Market Trends5 Yogurt Market Segmentation by Packaging6 Yogurt Market Segmentation by region7 Yogurt Market Segmentation by Competitors8 Yogurt Market Segmentation by Distribution Channel10 SWOT Analysis10 Analysis of Strategic planning Options11 Recommendations14 References14 Introduction Fundamentally, this paper is about our findings of the Natureview Farm’s case study.

In order to understand comprehensively about this company, we need to investigate further for the company’s past and current activities which is it will affect future growth of the company. All of this information is imperative to us in decision making process. Moreover, we could also make a decision what is the best strategy for the Natureview Farm. To understand thoroughly about the company, we need to: * Analyze the company’s history, development, and growth. * Analyze the external environment. * Evaluate the SWOT analysis. Explain each option of the Natureview Farm based on qualitative and quantitative analysis. * Make recommendations. Main Issues Currently the company faced a new challenge situation – to identify the best marketing plan in order to grow revenues by over 50% before the end of 2001. The main focus of the company was whether to expand into the supermarket channel to achieve their expected revenue. A decision which would represent a major departure from the company’s established channel strategy and which would impact every aspect of Natureview’s business.

Company Background Established in 1989, Natureview Farm is a small yogurt manufacturer which emphasizes the use of natural ingredients and a special process that gave the yogurt its unique smooth, creamy texture without the artificial thickeners which produces high quality yogurt. The yogurt was manufactured at the Natureview farm production facility in Cabot, Vermont started with 2 sizes of cup in two flavours- plain and vanilla. The sizes of cup are 8-ounce (Oz) and 32-ounce (Oz).

Natureview Farm’s revenue had growth from less than $100,000 to 13Millions as reported in income statement 1999. Because of the emphasize of natural ingredients and it strong reputation for high quality and great taste help the company to grow up to national distribution went on to attain leadership in nature food. By the year 2000, the company producing 12 refrigerated yogurt flavours in 8-Oz and 4 flavours in 32-Oz. The company had also started exploring Multipack yogurt products for the child package in 4-Oz cup and yogurt package in tubes.

Even though in 1997, Jim Wagner as Chief financial Officer has recommendation to arrange for an equity infusion from a venture capital firm to fund strategic investments are successful, the investor now needed cash out of its investment in Natureview. Now Natureview management has faced critical problem and need to find another investor itself because their current goal is to increase revenues to $20 million before the end of 2001. * Natureview’s Profile Products Yogurt is a dairy product, the result of milk fermented in a carefully controlled environment.

Special bacteria added to the milk change its texture and give yogurt its unique health properties – it is a good source of calcium and improves digestion. Below are the criteria of the nature’s product: 1. Natureview yogurt flavour and texture was the company’s founder’s family yogurt recipe, the recipe used natural ingredient and no artificial thickeners which produce great and high quality taste. 2. The company used milk from cows untreated with rGBH, an artificial growth hormone that increased milk production. 3.

Because of their special process and ingredient, Natureview life p on the shelf was 50 days longer compared to other competition’s only 30 days. 4. Natureview has 12 refrigerated yogurt flavour in 8-Oz and four flavours in 32-Oz cups. Market Trends Analysis for organic product 1. The organic foods market, worth $6. 5 billion in 1999, was predicted to grow to $13. 3 billion in 2003. 2. Generally, organic product consumer tended to have higher incomes, have more education, and live in the Northeast and West. 3. 67 % of U. S. ouseholds specify that price was a barrier to their purchase of organic foods and 58% of consumer expressed that they would buy a more organic product if it were cheaper. 4. 44% of consumers want a wider selection of organic product in supermarkets. 5. Below are market trend findings : * Yogurt Market Trends A comprehensive analysis must be applied in order to understand and evaluate the market trends of yogurt product. It is important for the management to focus on the areas that are needed for improvement especially on customers’ satisfaction because it will yield greater profitability for the company.

For instance, the management should know better on what are the current market trends and their customers’ wants from their product. In addition, some factors in purchasing decisions that are made by customers should be analyzed by the company. Several factors in purchasing decisions are such as packaging, flavour, price, freshness and ingredients of the yogurt. Such product measurements are imperative not only to maintain the quality of the product itself, but it also will retain and attract more customers for choosing Natureview Farm’s yogurt rather than competitors’ yogurt. * Yogurt Market Segmentation by Packaging

Based on the market trends, the most popular sizes of yogurt cups were in 6-oz and 8-oz which contributed to 3% of the segment’s growth per year. In addition, these also were representing 74% of total category supermarkets sales in U. S. dollars. Women especially bought 8-oz yogurt cups because of their health consciousness. The second largest segment is multipacks size which represented 9% total category supermarkets sales with 12. 5% growth per year. This second largest segment customarily consumed by children because of their mothers concern about their health and fastest growth.

The last segment which is 32-oz. cup size represented 8% of total category supermarkets sales and was growing at a modest of 2%. Normally, the buyers of 32-oz. were heavy yogurt consumers. They are either consumed the yogurt plain, added some ingredients or used it in recipes. Plain and vanilla were the most famous flavours. Buyers also put brand, expiration date and price as important purchase criteria for this size of yogurt. * Yogurt Market Segmentation by Region Based on the market segmentation by region, it could be identified that the West and the Northeast possess high market shares.

The West contributed to 27% whereas the Northeast contributed to 26% of national U. S. market. The main factors that contributed to these high percentages were the shoppers who live in the West and the Northeast have higher incomes and more education. In addition, the Southeast possesses 25% and the Midwest possesses 22% of market shares. Regardless of channel or distribution, the buyers’ habit of buying yogurt depended on their unique characteristics. Some of buyers were more concerned about the quality of the yogurt while some of them were concerned about the yogurt’s price or vice versa. * Yogurt Market Segmentation by Competitors We had identified four close competitors of Natureview Farm’s yogurt. These top four competitors are Dannon, Yoplait, Breyers and Columbo. Dannon and Yoplait are controlling over 50% of the yogurt market share. As indicated in the supermarket Channel’s pie chart, we could see that Dannon holds 33% of yogurt market share whereas Yoplait holds 24%. The sales of these yogurts are conducted through two dominant distributor channels which are supermarket and natural foods channel.

As we could see in the natural foods channel, Natureview Farm was leading which holds 24% of yogurt market. Other than these, these yogurts revenues were also generated through warehouse clubs, conveniences stores, drug stores and mass merchandisers. * * * Yogurt Market Segmentation by Distribution Channel Based on yogurt market segmentation by distribution channel, we could conclude that the distribution channels were divided into supermarkets and natural foods store. 97 % of yogurts were sold in the supermarkets while 3% of yogurts were sold in the natural foods store.

The sales and distribution process of Channels Supermarket Channels Process Supplier aka manufacturer usually sends their product to a large distribution centre, which in turn shipped directly to the supermarket chain’s warehouse. The distributors and retailers charged a mark-up price on product that flowed through their warehouses or store. In order to place the product in the supermarket, manufacturer will required to pay one-off time “slotting fee” for each SKU only in the first year it was introduced and then to participate in regular trade promotions.

If the SKU failed to show any profit for the supermarket within the year, the supermarket would discontinue the product and would require a new slotting fee payment if the manufacturer sought reauthorization of the SKU. Some key points in the distribution of supermarket channel process are as below: 1. The typical distributor margin is 15% and the typical retailer margin is 27% 2. Supermarket would charge in average of $0. 74 for 8-oz cup of yogurt, $2. 70 for 32-o cup of yogurt, and $2. 85 for 4-oz cup of multipack. Natural Food Channels process

Firstly, manufacturer shipped the product to the natural wholesalers and then wholesalers will ship the products to the distributors which responsible to delivered product to the retailers. Distributors would deliver products individually to the retailers, and in some cases even stock the shelves and track paperwork. Lastly customer gets the product from the retailers. Natural Food retailers will charge the manufacturer for one time allotment of one free case of product for every new SKU authorized for distribution in its first year. Some key points in the distribution of natural food channel process are as below: 1.

The typical natural food wholesaler margin is 7%, the natural food distributor margin is 9% and the typical retailer margin is 35% 2. Retailers would charge in average of $0. 88 for 8-oz cup of yogurt, $3. 19 for 32-o cup of yogurt, and $3. 35 for 4-oz cup of multipack. Exhibit: 1 – Length of channel to market Channel Margin Analysis By using Margin analysis , we can identify the profitability of these channels and we can indicate which channel would provide the expected revenues of Natureview Farm. This analysis is based on the given point in the case study and each of the analysis is divided based on type of yogurt size.

The results are as below. 1. Result of Natural Foods Channel | | Unit Cost for 8-oz cup| Contribution Margin Rate| Unit Selling Price| Contribution Margin Unit| % Mark up| Manufacturer| 0. 31| 36%| 0. 48| 0. 17| 56%| Wholesaler| 0. 48| 7%| 0. 52| 0. 04| 8%| Distributor| 0. 52| 9%| 0. 57| 0. 05| 10%| Retailer| 0. 57| 35%| 0. 88| 0. 31| 54%| Customer| 0. 88|  |  |  |  | | | | Unit Cost for 32-oz cup| Contribution Margin Rate| Unit Selling Price| Contribution Margin Unit| % Mark up| Manufacturer| 0. 99| 44%| 1. 75| 0. 76| 77%| Wholesaler| 1. 75| 7%| 1. 89| 0. 13| 8%| Distributor| 1. 9| 9%| 2. 07| 0. 19| 10%| Retailer| 2. 07| 35%| 3. 19| 1. 12| 54%| Customer| 3. 19|  |  |  |  | | | | Unit Cost for 4-oz multipack| Contribution Margin Rate| Unit Selling Price| Contribution Margin Unit| % Mark up| Manufacturer| 1. 15| 69%| 1. 84| 0. 69| 60%| Wholesaler| 1. 84| 7%| 1. 98| 0. 14| 8%| Distributor| 1. 98| 9%| 2. 18| 0. 20| 10%| Retailer| 2. 18| 35%| 3. 35| 1. 17| 54%| Customer| 3. 35|  |  |  |  | 2. Result of Supermarket Channel | | Unit Cost for 8-oz cup| Contribution Margin Rate| Unit Selling Price| Contribution Margin Unit| % Mark up| Manufacturer| 0. 31| 32%| 0. 6| 0. 15| 48%| Distributor| 0. 46| 15%| 0. 54| 0. 08| 18%| Retailer| 0. 54| 27%| 0. 74| 0. 20| 37%| Customer| 0. 74|  |  |  |  | | | | Unit Cost for 32-oz cup| Contribution Margin Rate| Unit Selling Price| Contribution Margin Unit| % Mark up| Manufacturer| 0. 99| 41%| 1. 68| 0. 69| 69%| Distributor| 1. 68| 15%| 1. 97| 0. 30| 18%| Retailer| 1. 97| 27%| 2. 7| 0. 73| 37%| Customer| 2. 7|  |  |  |  | | | | Unit Cost for 4-oz multipack| Contribution Margin Rate| Unit Selling Price| Contribution Margin Unit| % Mark up| Manufacturer| 1. 15| 35%| 1. 77| 0. 62| 54%| Distributor| 1. 77| 15%| 2. 8| 0. 31| 18%| Retailer| 2. 08| 27%| 2. 85| 0. 77| 37%| Customer| 2. 85|  |  |  |  | As you can see, % mark-up in Natural foods channel is higher compared to supermarket channel in all sizes of yogurt in the manufacturer phase which means higher profitability. Natural food channel is able to cost more to the customer compared supermarket channel due to lower price sensitivity among natural foods customers as well as % mark-up from the Natural foods wholesaler. SWOT Analysis The overall evaluation of a company’s strengths, weaknesses, opportunities, and threats is called SWOT analysis.

It’s a way of monitoring the external and internal marketing environment. External Marketing (Opportunity and Threat) Analysis: Opportunities 1. Supermarket channel will provide the company’s noteworthy potential of growth for getting higher revenues. 2. Yogurt sales through natural food stores had grown 20% per year. 3. Through the supermarket channel, the price of the product can be lower. Threats 1. The main competitors in the supermarket channel are getting stronger with the top four competitors which are Dannon, Yoplait, Breyers and Colombo. . Company may have to reposition Internal Marketing (Strength and Weakness) Analysis: Strengths 1. Natureview is a major and trusted brand for the natural food channel and has developed strong relationships with leading natural food retailers 2. Natureview has a strong reputation for high quality and great taste. 3. Natureview’s yogurt has longer average shelf life compare other products. 4. The company has rapid growth revenue from $100,000 to $13 Million within 10 years. 5. Natureview is a leader distributor of natural food channel. 6.

Strong operational efficiency because the company is using creative , low-cost “guerrilla marketing” Weaknesses 1. Natureview will heavily depend on its broker’s knowledge of promotional and merchandising requirement. 2. Inadequate operational capacity because unable to generate the volume requirements needed to meet consumer demand of other distribution channels. 3. Relatively small company compared with other potential competitors in supermarket channel. 4. Natureview only invested 3% of total expenses in research & developments which cause discourage product innovation.

Analysis of Strategic planning Options The company has three options needed to be analyzed and be identified which option will help the company to achieve their goal. Each of the options has their own importance and benefits however they also have some limitation attached on them. Option 1: The first option was strongly advocated by Vice president of sales Walter Bellini. The idea is to expand six SKUs of the 8-Oz. product line into one or two selected supermarket channel regions. Pros: 1. 8-Oz cups have the highest demand in the refrigerated yogurt market and will be able to provide the expected revenues. . Based on other natural food brands success in expanding their product in the supermarket channel has shown significant proves Natureview’s product will have a high chance of success. 3. Natureview is the leading natural’s foods brand of refrigerated yogurt and have uniquely positioned to capitalize on the growing trend in natural and organic foods. 4. Natureview will have the advantage as the first brand to enter the channel due to supermarket channel will likely to give permission only to one natural yogurt manufacturer. Natureview will be the first mover in this channel 5.

Some industry experts predicted unit volume growth of organic product at supermarket will be at 20% per year from 2001 to 2006. Cons: 1. The 8-Oz cups size received the highest level of competitive in trade promotions and marketing budget. 2. The management had estimated for comprehensive advertising plan will cost $1. 2 million per region per year and Natureview’s sales, general and administrative expenses (SG& A) would increase by $ 320,000 annually. 3. Due to Lack of experience in supermarket channel, their broker might take advantage of their relationship with top supermarkets retails chains in Northeast and West. . This option might create direct competition with national yogurt manufacturer. 5. Might create conflict of channel between supermarket and natural food stores. Option 2: The second option was advocated by the vice president of operations Jack Gottlieb. The idea is to expand 4 SKUs of the 32-Oz. Based on the giving points; we can identify the pros and cons as below: Pros: 1. The gross profit margin for the 32-oz cups is higher at 43. 6 % compared to 8-oz cups at 36%. 2. This size of 32-oz cups was potentially become stronger competitive advantage like longer shelf life and lower marketing expenses. 3.

This brand had achieved a 45% share of this size segment in the natural foods channel. 4. The management also assume that the company could sell 5. 5 million incremental units in the first years by expand more in supermarket retails across the united state. Cons 1. This option will have higher slotting fees due to national distribution. 2. There are no guaranteed customer acceptances towards the multi-use size of yogurt. 3. With the additions to sales headcount for the 32-oz,that will increase the SG& A cost to $160,000. 00 4. They also concerned on sales team’s ability to achieve full national distribution in 12 months. . Might create conflict of channel between supermarket and natural food stores. Option 3: The third option was advocated by Walker’s colleague’s Kelly Riley, the assistant marketing director, she supported the idea to introduce two SKUs of a children’s multi-pack into the natural food channel. Based on her arguments, we can identify the pros and cons as below: Pros 1. Natureview Farm is the established leader in the natural food channel and has a strong relationship with the leading food natural food channel retailers. 2. Sales and marketing expenses were the lowest compared to other options. 3.

Choosing this option will allow the company to have more time to prepare before entering the supermarket channel. 4. The financial potential was very attractive with expected high margin of 37. 6%. 5. Natureview product positioning is ideal for the new Multi-pack product launch. Cons 1. Natureview Farm will miss the opportunity to enter the supermarket before competitors. Supermarket retailer would likely authorize only one organic yogurt brand. 2. Natureview‘s marketing department was unprepared to handle the demands on resources and staffing that will be needed once the company entered the supermarket channel.

Option financial Overview Based on the case study, we have analyzed all three options that Natureview Farm tried to include in their future business plan. For the first option, Natureview Farm idea is to expand 6 SKU’s into supermarket channel with 8 – oz cups to get more profit. Refer to appendix 1; Natureview Farm total estimated for investment expenses is quite higher than another option. However, even though Natureview spend more for the investment; we can see that total expected profit is positively increased by annually.

To get expected for this option need For option two, Natureview Farm next idea is to expend 4 SKU’s 32-oz into supermarket channel to their future business planning because their product is longer shelf life. Based on appendix 2, the investment plan is lower than option 1. The investment has divided to four regions for selling. Even through the management estimated that they can sell this brand with higher sold, the cost of the good sold also is quite higher and this is expenses will affect the profitability of goods sold. The last option is Natureview Farm plan to expand 2 SKU’S 4-oz multipack into natural food channel.

Refer to appendix 3, we can see that the cost of goods sold is quite higher even through this idea not involved slotting fee, the estimated annual profit is not shown in positive way. Based on the calculation, the cost of goods sold and estimated annual profit is shown the selling product is lower profitability. Based on the financial analysis, we can identify some trends: The highest Profitability is option 1. Based on the graph, the higher of total investment expenses are option 1. The higher Investment ROI is option 3. Recommendations

After all analysis that we have done in this case study, our recommendation for Natureview Farm for their future planning are option 1. This is because based on our analysis; we can see option 1 is the best choice to get more profitability in 5 years onward as planning. This option is to expand 6 SKU’s of the 8-oz size into eastern and western supermarket regions. Even though the risk of going to supermarket channel is higher, Natureview Farm should expand into this channel because as we can see, two natural food companies expanded into this channel and increased their revenues by 200 %.

To achieve their mission, they need to take the risks for get their estimated projected net profit. In addition, entry to this supermarket channel with 8 –oz size is more viable than option 2 where to expend into this channel with 32 –oz cup size. The 8 –oz size price initially attempt to negotiate retail price more than 32-oz size where the price of product will also affect the consumer choice. This option focuses on regional distribution instead of national, which should make it easier to implement this product information to region consumer.

The level of education and higher income of consumer is also a reason for consumer to buy this natural food product. Natureview Farm can also market their product to this type of consumer with our product advantages such as the product has a longer shelf life, uses natural ingredients and uses only organic ingredients. The next recommendation strategy is, Natureview farms need to utilize more advanced in monitoring the technology and systematic management to keep track the trends so that they always be the consumer choice in natural food products.

To become a successful natural food company in this channel, they need to be more systematic and always have good relationship with media, consumer and retailer. References 1. http://www. investopedia. com/terms/g/guerrilla-marketing. asp 2. http://Prezi. com/natureview – farms. 3. http:// www. slideshare. net/nature -view-case ——————————————– [ 1 ]. Based on investopedia. com, Margin analysis uses the percentage calculation to provide a comprehensive measure of a company’s profitability on a historical basis (3-5 years) and in comparison to peer companies and industry benchmarks. 2 ]. Based on investopedia. com, Mark-up is the difference between an investment’s lowest current offering price among dealers and the higher price a dealer charges a customer. [ 3 ]. Guerrilla Marketing is different than traditional marketing in that it often relies on personal interaction and has a smaller budget, and it focuses on smaller groups of promoters that are responsible for getting the word out in a particular location rather than on wide-spread media campaigns.

Abstract: In this marketing report, I will analyse our product which call Euthymol toothpaste. Firstly, I am going to describe the background of Johnson and Johnson, Euthymol toothpaste is distributed by this company. After that, I will talk about how we did the survey about this product. Then I am going to focus on the product and analyse it by using secondary research and survey results, it includes product, price, place and promotion. Finally, I will give some suggestions to this product. Introduction: Euthymol toothpaste was marked by Warner-Lambert, but now it is distributed by Johnson and Johnson. J&J is an American public company.

It was founded in 1886, there are three founders, they are Rober Wood Johnson, James Wood Johnson and Edward Mead Johnson. The initiative of this company is to encourage people to live healthy and helping the people who care about health, and it has widest health care product in the world. Euthymol toothpaste is an old brand toothpaste, it has strong taste and bright pink color. Most of the consumers are the older people and people who are in the army. On the other hand, there are many people do not like this toothpaste because its taste too strong or other reasons such as the color and the packaging of this toothpaste. Methodology:

In my group, there were three people, Aliyu, Yuko and me. We did the survey of Euthymol toothpaste at Middlesex University, Hendon central and Cricklewood lane on 24 November. We have asked 30 people for answering the questionnaire, but 27 people answered it. There are 16 male respondents and 11female respondents. They came from 7 different countries, such as the UK, Japan, China, Canada and so on. Results and Analysis of Marketing Mix: We have done a survey of Euthymol toothpaste and some research on the internet. Now I am going to analyse Euthymol toothpaste by using the results and information of our secondary research from the internet.

It includes product, price, place and promotion. Product: Euthymol toothpaste is an old brand toothpaste, it was marked by Warner-Lambert, and now it is distributed by J&J. Nowadays, it is not a well know brand of toothpaste. From the results, there are 16 (59%) respondents have never used this toothpaste before, so we decided it is at the point of decline in the product life circle. Euthymol toothpaste has different taste and color between other brands of toothpaste. Most of the toothpastes taste like mints and the color is white.

Euthymol toothpaste is one of the strongest tastes of toothpaste and there are no mints in it. Its color is bright pink, it makes this toothpaste special. As results of the survey, we can see that most of the respondents (48%) like the taste and color of this toothpaste, and some respondents do not care about them. Euthymol toothpaste has an old-fashion and elegant packaging, because this packaging, it stands out from others toothpaste. We found that from the results, there are 16 (59%)respondents do not like the packaging of this toothpaste and 11 (41%) like the packaging. Euthymol toothpaste has some competitor.

As results of the survey, we can see that, Colgate toothpaste and Aquafresh toothpaste are the main competitors, especially Colgate. In the results, there are 12 respondents chosen Colgate toothpaste as their favorite toothpaste. It is about 44% of total respondents. Price: 75 ml of Euthymol toothpaste costs about 2 pounds in pharmacy, supermarket and local store, because it sole in different place, so the prices are slightly different. From the survey results, most of the respondents think this price is average. And there 7 respondents think it is cheap and 8 respondents think it is expensive.

As this result, we can see most of the respondents would not consider the price when they buy this toothpaste, because it is cheap. For these reasons, we can found out that Euthymol toothpaste is an economy product. Place: Euthymol toothpaste only sold in the UK, it is not a famous brand of toothpaste. It sold in some of the supermarkets, local stores and pharmacy. There are 72% of the respondents usually buy this toothpaste in Pharmacy. It seems not easy to find it in the supermarkets and local stores. Promotion: Euthymol toothpaste has not much promotion such as advertising, sales promotion and direct mail.

From the survey results, we can see that advertising is the main promotion of this toothpaste, because there are 13 (50%) respondents know this toothpaste from advertising. And there are 8 (30%) respondents selected other, it means there are quit a lot of people know this toothpaste in other ways. For example, some people started to know this toothpaste from friends’ recommendation. Conclusion: In conclusion, Most of people are satisfied with the taste and the color of this toothpaste, but there 59% of the respondents are not happy with the packaging of this toothpaste.

If the company of Euthymal toothpaste wants to share more market, it has to solve packaging problem. In my opinion, the best solution is to invent other Euthymol toothpaste, it has different packaging and effects between the original one, so it can keep the old customers and attract new customers. The company did a good pricing of this toothpaste, because there are 10 people think this price of this toothpaste is average, even there are 8 people think it is cheap. The place and the promotion are the weaknesses of this toothpaste. Most of people think it is hard to find it in supermarket and local store. 2% of the respondents usually buy it in Pharmacy. I suggest that, this toothpaste should be sold in every supermarket, because people like shopping in supermarket. It could be the way to increase sales of this toothpaste. The other problem is the promotion, many people did not know what Euthymol toothpaste it is, Because they cannot see any promotion of this toothpaste now, such as advertising and billboard. The company should do more promotion on this toothpaste such as buy one get one free and advertising on TV and so on. It is the best way to let people getting to know Euthymol toothpaste and makes it popular.