New England Soup Company: Business Overview Essay

On January 11, 1991, William Kolander, president of the rising(a) England Soup beau monde of Boston, Massachusetts, was reviewing a query report he had received from a Boston-based interrogation house. The report pre directed the findings of a study on the pixilateds in the buff cooking of Kolanders Chowder brand of canned soup. The study had also been sent to the stiffs sales manager, Kirk George, and the deed manager, Edward Corey. A meeting was schedule for January 12 with the research firm and the naked as a jaybird England Soup connection management. The exercise of the meeting was to discuss the research findings and to make decisions concerning Kolanders intersection point offerings.The CompanyThe New England Soup Company was a small firm that produced and distributed a line of specialty canned soup products to both the institutional and sell grocerys. Approximately 62 percent of their 1990 sales volume went to the institutional securities industry ($68,526), and 38 percent went to the retail grocery ($42,102). The familiarity was founded by William Kolander in 1957. Kolanders father was a successful owner of several(prenominal) restaurants in the Boston area that were famous for their chowder. The young Kolander convinced his father in 1956 that there was a commercialise to sell the chowder to local institutions (restaurants, hospitals, etc.) in the New England area, and he developed a canned chowder under his fathers supervision. Production facilities were acquired in the same year. after(prenominal) losses in the set-back few years, the business turned profitable in 1960. At this time, Kolander opinionated to enter the retail market with Kolanders Chowder brand. Both the institutional and retail business grew rapidly during the 1960s, as did the firms profitability. Expanded production facilities were built in 1968, and two additional specialty soup lines were introduced in 1970. These lines experienced limited success at retail but were sensibly profitable in the institutional market.Current SituationThe last phoebe bird years had been a period of level and then declining sales for Kolanders Chowder (1987 -6943 cases, 1988 5676 cases, 1989 5101 cases, and 19901 4900 cases). Kolander attributed this decline in sales to the market entry of two new canned chowders in 1986 and 1987 (see supplement A). The new competitors were Fishermans rape Chowder and mantelpiece Cod Chowder. Both brands were produced locally and appeared very similar in conceptualisation to Kolanders Chowder. Both of the new competitors had entered the market with a evenhandedly lower selling price than the Kolanders brand. Distributors were also attracted by the sparingly higher margins plus the desire to carry a competitive substitute(a) to Kolanders Chowder. Several large retailers had advertised the Fishermans enjoy brand as a weekly special at 43 cents per can.Management ObjectiveKolander recognized that the firm face d a weighty competitive threat from the two new brand entries. While there were several long-term issues he was considering, his immediate concern was one of ontogenesis a competitive strategy to counter the sales decline of Kolanders Chowder. Specifically, he wanted to recover the lost distribution of the brand and swap customers from competitive brands back to the Kolanders brand. This was to be accomplished within the attached 12 months. While increased distribution outside the reliable market area was a possibility, Kolanders immediate objective was to improve the market location of Kolanders Chowder at retail within the New England are.Estimated from 1989 company records.The Research ProjectIn October 1989, Kolander contacted a local research firm. after a number of meetings, the research firm recommended that a series of gathering interviews be conducted with modern users of the two competitive chowder brands in rewrite to research reasons for the product usage, reac tions to the brands, and perceived product exits. Through chemical group sessions of this nature, the research firm believed that the cause of declining sales of Kolanders Chowder could be established and dominance solutions identified. The results of the group sessions suggested that an important proportion of the competitive canned chowder users favored a chowder that was thicker and creamier than the current Kolanders Chowder brand formulation. Of the former Kowlanders Chowder users, the desire for a creamier formulation was the predominant reason for switching. Many of these chowder users had switched to either Fishermans make whoopie or Cape Cod Chowder.Based on these findings, the research firm recommended that further research be conducted to evaluate changing Kolanders Chowder to a creamier formulation. For purposes of the interrogation, it was recommended that two creamier formulations be developed, a chromatic version and an extra chromatic version. These two n ew formulations would be evaluated in a taste interrogatory along with Kolanders current chowder plus the two competitive brands.After several meetings on specific aspects of the proposed research design, Kolander decided to approve the project. Appendix B presents the results of this study.Case QuestionFocusing on the retail market, what product line does the research suggest Kolander should produce? Guidelines for 3-Slide SubmissionSlide 1 Analyze the data in Table 1 and make a product line recommendation Slide 2 Evaluate the commission group and the taste test and judge the quality of data from each(prenominal) Slide 3 What would you have done differently if you had guided the research process for this problem?APPENDIX A New England Soup Company, audited account of Retail Food Outlets (Tables from the Report) Fifty retail food outlets in the New England market area have been audited annually since 1975. These are deemed representative of the potential distribution outlets of canned soups for the New England Soup Company.APPENDIX B rating of Two New Formulations of Kolanders Canned Chowder Research ObjectivesTo evaluate the discernment for two new chowder formulations among users of Kolanders Chowder, Cape Cod Chowder, and Fishermans Delight Chowder.Research Design and ProcedureTwo hundred manlike (n=100) and female (n=100) canned chowder users were selected from four geographic locations representative of the New England market area. The subjects were selected using a probability sampling procedure involving a telephone-administered measure up questionnaire. Each subject was paid $5 for participating in the test.The subjects came to one of four test locations (local churches). They were tested individually in 30-minute sessions. Subjects were brought into the testing get on and seated at stalls. An instruction sheet explained that the subject was to evaluate several samples of chowder, that the test would consist of trine parts, and that they would be required to taste a total of 15 cups of chowder. Normal taste-testing procedures were followed.The first part involved gustation phoebe bird samples of chowder and associationing them from most preferred to least preferred. The five chowders were Kolanders regular chowder, Fishermans Delight, Kolanders creamy (version 1), Cape Cod, and Kolanders extra creamy (version 2). The second and third parts of the test involved tasting five samples again. The samples had different code letters and the subjects were not told the samples were identical to the previous five. After tasting the five samples, the subjects were again asked to rank order the five samples. For each subject, the test procedure resulted in three taste sensation orderings of the five chowder samples. The preference orderings were combined to form a building complex ordering for each subject, a procedure that resulted in a more(prenominal) reliable measure of each subjects true preference ordering.ResultsThe data set consisted of 200 preference orderings of the five chowders. Table 1 presents 20 preference orderings which are representative of the entire data set. The difference between male and female preference orderings was not statistically meaningful.The data set was analyzed by calculating the average rank order of each chowder and scaling the chowders on a five-point scale ranging from most preferred (1) to least preferred (5). Table 2 presents the results of this analysis.passport and DiscussionRecommendation Change the current Kolanders Chowder formulation to the version 1creamy formulation and develop a new label which makes this change palpable at point of purchase. The table 2 results clearly indicate that the current Kolanders Chowder formulation and the extra creamy formulation ranked significantly (.05 level of significance) lower than the two competitors brands and the creamy formulation. These findings suggest that the market position of Kolanders Chowder can b e improved by a formulation change to the creamy version, which ranks higher than the two competitors and should recapture a significant share of sales lost to the Cape Cod and Fishermans Delight brands.