Brooks and Company was a food manufacturer established in 1850. Until 1977,
its major product lines had consisted of tomato specialties, such as catsup,
pickles and barbecue sauces. Its consumer products business accounted for
40% of sales; the balance consisted of institutional sales to restaurants,
hospitals, and the armed forces. The company had advertised to the
institutional market but never to final (household) consumers.
In 1977, the company introduced a new line of Italian specialty products aimed
at the final consumer market. The line was composed of a number of prepared
pasta dishes, such as spaghetti, lasagna, and ravioli. Each package contained
all of the necessary ingredients (except meat) including seasoned tomato sauce,
cheese, and noodles.
The idea for the line of Italian pasta products had been conceived by Joe
Brooks, son of the company president. Joe’s enthusiasm for the product idea
was quickly picked up by other executives. The president had married an
Italian woman after World War I and their only child, Joe, had been born in
Naples, Italy. Because they lacked a Neapolitan (a native of Naples)
background, William Johnson, production manager, and Carl Voght, treasurer,
approved of the idea on less emotional grounds. Johnson saw in the Italian line
certain production possibilities that fitted well with the company’s existing
facilities, Mr. Voght had long argued for some type of expansion which would
enable the company to solve a number of financial problems associated with its
inability to attract outside capital.
Many planning meetings were held throughout the summer. These meetings
were attended by both the Brookes, Johnson and Voght. Charles Welch, an
administrative assistant to the president, was instructed to sit in on the
sessions after he returned from vacation on August 1. He acted as informal
secretary for the group. The original thinking of the committee was that the
product line should be introduced at the beginning of the fall food
merchandising season, which started about October 1. This deadline, however,
subsequently proved to be unrealistic. Production of the first items in the line
did not get underway until September 30 and packaging difficulties prohibited
introducing the product before mid-December.
In July, the problems involved in the product introduction were not foremost in
the planner’s thought Many hours were spent discussing the name of the
product line. Finally, the name Velsuvio was adopted as a compromise, but
without enthusiasm from Joe Brooks, who believed that the name such as
Valencia better described the gourmet image, he thought the line should
express. With the exception of the name, the younger Brooks directed most of
the decisions related to the marketing program. From the beginning he argued
that there were already plenty of “middle class” spaghetti products on the
grocers’ shelves. What was needed, he believed, was a prestige – even a
“gourmet” line. The popularity of higher-priced Italian restaurants in many
cities convinced young Brooks of the opportunity to market a prestige line of
Italian food specialties.
Early in the planning it was decided not to limit distribution to those regional
markets in which Brooks had previously established its reputation. National
distribution would be undertaken from the beginning. It was planned that the
Velsuvio line would be marketed in all major food chains except those handling
only private or controlled brands. Sales to chain headquarters would be made
by food brokers handling gourmet products rather than by brokers used to the
handling of high-volume canned goods.
For the first time in its experience, Brooks planned to undertake an extensive
consumer advertising program. A small Los Angeles advertising agency with
slight experience in handling food products was appointed. However, by the
time the agency had been selected and oriented to the marketing program, the
time remaining before the scheduled introduction did not allow for the
preparation of magazine advertisements or filmed television commercials. In
order to break into the consumer market at the time of the scheduled product
introduction on October 1, a consumer advertising program using newspapers,
live television commercials, and radio was prepared. Except for the product
introduction period, however, relatively little thought was given during the
summer planning sessions to the total amount of money required to support
the new product with consumer advertising.
A number of circumstances combined to prevent the introduction of the product
in October as originally planned. No one had assumed personal responsibility
for package design and production was held up three weeks while the company
waited for supplies of packaging materials. Brooks was forced to move very
rapidly to obtain a package, and he was the first to admit that the result was
neither very well designed functionally nor attractive from a promotional point
of view. Time was short, however, and there was no choice but to use this
package or abandon the project for the present season and possibly altogether,
depending on competitive conditions.
A hastily put together advertising campaign was introduced in November.
However, advertising costs had been greatly underestimated, so that the
intensity of the campaign was much lower than Brooks had anticipated, even
with the limited budget. As a result, most of the budget was allocated to
newspapers and radio. Moreover, problems with the scripting of the TV
commercials delayed broadcasting until the beginning of December. Newspaper
advertisements and radio commercials did commence, however, as planned.
The new product was finally launched in mid-December. However, by
February, two major competitors began marketing similar products. Shortly
thereafter, a market research survey was sponsored by Brooks to determine
whether the Velsuvio name made a favorable impression on housewives. The
results of the survey were negative. Only twenty-two percent of the
housewives interviewed could recall the Velsuvio name and of those, only
twelve percent had tried the products. Consumer evaluation of the product
line was far from encouraging. Of those who had tried the product for the first
time, only four percent stated that they would buy it again.
Another indication that worried Brook's management was that few major food
chains showed interest in the line. By mid-year, Brook's product sales were so
poor that management established a special committee to determine without
delay what immediate steps might be taken to reverse the poor sales record of
Velsuvio.
DIRECTIONS:
The questions that follow relate to the preceding passage. Evaluate, in terms of the passage, each of the items given.
Then select your answer from one of the following
classifications and blacken the corresponding space on the
answer sheet.
(a) A MAJOR OBJECTIVE in making the decision: one of the goals sought
by the decision maker.
(b) A MAJOR FACTOR in making the decision: an aspect of the problem,
specifically mentioned in the passage, that fundamentally affects and/or
determines the decisions.
(c) A MINOR FACTOR in making the decision: a less important element
bearing on or affecting a Major Factor, rather than a Major Objective
directly.
(d) A MAJOR ASSUMPTION in making the decision: a projection or
supposition arrived at by the decision maker before considering the
factors and alternatives.