Research for Marketing Decisions

Case Analysis of

General Mills Yoplait Custard Style Yogurt

Submitted to

Prof. Patrali Chakrabarty

Indian Institute of Management, Bangalore

Submitted By

Leela Bharath G (1011032)

Ashok Katta (1011159)
Priya Mouli (1011190)
Teja Ande (1011290)
Syed Hussain (1011365)
PART A 3
BASES: 3
Advantages: 3
Disadvantages 3
Mini Market: 3
Advantages 3
Disadvantages 4
Full Scale test 4
Advantages 4
Disadvantages 4
Analysis and Recommendations 4
Marketing issues 5
Final product specs: 5
PART B 6
Situational Analysis 6
Consumer Dynamics study: 6
Need for the BASES test: 7
BASES Tests 7
Comparison of Mini-Market test and BASES – Volume predictions (% of Original-style yogurt) 8
Comparison of Mini-Market test and BASES – Market Share predictions (Total U.S) 8
Copy testing: 8
Recommendations 9
PART A

Yoplait, currently the no. 2 yoghurt brand in the US, has decided to go in for a market test before
launching its Custard Style yoghurt product. We need to help them decide whether they should do a
mini test or a full test. Also, it wants to decide whether it has to go in for a test market simulation such
as BASES, before a field test market or go directly into the field test market.

Yoplait should go in for BASES before field test market, because of advantages listed below.

The pros and cons of various tests in the present situation are explained below.

BASES:
Advantages:
1. Low investment
2. Fast results(20 weeks)
3. Provide sales estimate for the first 2 years of the product with 66% confidence with an error
range of max 10%.
4. Finished commercials and packaging are not required.
5. Can be considered to a full market test as the test obtains info on a large no. of parameters like
media interest, weight of the can, cannibalization of other products etc.
6. If the product receives a negative image, it will not be attached to other products of the
company.
7. Full time production of the product is not required as the test samples can be produced with the
present pilot plant.

Disadvantages
1. Can’t measure price sensitivity of the consumer
2. Actual media exposure can’t be found .
3. Effect of distributive network can’t be found out as the product is distributed directly to selected
consumers
4. Logistics of transport and storage are not considered.
5. Validity of BASES test for this product was not substantiated as this is an entirely new product
category (consumables having a product life of 30 days)

Mini Market:

Advantages
1. Cost significantly high compared to bases test (around 10 times more) but significantly less
compared to full market (around 8 times less).
 2. This market test will give the experience of a full market test.
3. The chance of leakage of ideas to competitors is very less.
4. Less completion time around 20 weeks
5. The effect of cannibalization can be measured more accurately
6. Price sensitivity of the customer can be measured.

Disadvantages
1. The test results can’t be up scaled to the entire U.S market because of the presence of regional
differences in the Yogurt market.
2. The distribution channels and sales support of the company can’t be measured perfectly.

Full Scale test

Advantages
1. The results obtained will correctly predict the sales.
2. Many attributes of buying like price sensitivity, product packaging, media selection etc can be
found out.
3. The efficiency of the logistics and sales people can be measured clearly
4. The future investments required can be predicted in much accordance to the actual release

Disadvantages
1. Very high investment(both for test and to improve the production facility)
2. Long completion time (54 weeks)
3. High probability for the competitors to plagiarize the idea
4. Failure losses after using this test are rocket high

Analysis and Recommendations

According to our view in the present situation the factors of investment, ip safety (the product
formulation is new and must be kept secret from competitors) and finding various attributes of product
are important to findout. The logistics and additional investment are not required now as they are
clearly found out from any of the tests (as the distribution network used in test is the marketing
company’s distribution network).The distribution network may not be excessively tested as the present
original style product is a similar one. Due these factors we propose the following plan of action.

The company prepared to go for BASES test. After receiving feedback from the customers must prepare
the product, pricing, commercials and packaging, then must go for a mini market test in 1 or 2 markets
which contains population similar to target consumers (metropolitan areas of east and west where the
literacy rate is high). If the results are satisfactory the company can go for a direct launch. Here care
should be taken to do at least one mini market test after BASES test.
For the initial market test the product concept of snack and 6 oz pack must be used. During mini market
test it should be priced .045$ and packed in Vernon pack.Based on the feedback from the consumers if
they are willing to spend .045$ or .30$ then the packaging options must be found out using mini market
test.

This initial formulation is decided based on the results found during concept fulfillment test and creative
group interviews.

In regards to the product name Crème de Yogurt must be used for the tests. The reason is many people
did not remember Yoplait name

Product Name: Crème de Yogurt (This name change is primarily because many consumers did not
remember the name YOPLAIT. Crème de Yogurt sounds French and hence can clearly indicate that
Yoplait’s yoghurt is made in the French and not American way

Also for field test market, tho it costs higher, ful test should be done which costs 1700 K rather than
mini test (200K) ,coz full test meant marketin in 2 to 4 nationally representative markets through normal
distribution channels with the General Mills sales force selling the test product to the trade. Since
DISTRIBUTION is key to Custard – Style’s margin target, since the more available yoghurt is the more it is
consumed, (pg. 7, 2nd para, 2nd line) we can’t rule out its importance (wich is the case with mini test)

Marketing issues

Positioning: Custard Style should be positioned for its smooth texture and its unique Vercon packaging
(conical, plastic cup)

Pricing: It could be priced same as that of the regular 6 oz. Yoplait

Final product specs:

Product formulation: Full fat (since its snack and concept test result was good for this)

Package size: 6 oz. (not 4 or 8 oz, they would be too little and too much resply) (since itssnack and
concept test result was good for this)

What kind of food – lunch/snack/dessert: Snack,

However dessert could also be targeted later. Lunch is ruled out coz its full-fat and many people prefer
fewer calories in the US!
Product Name: Crème de Yogurt (This name change is primarily because many consumers did not
rember the name YOPLAIT! (Pg 9 3rd para); Crème de Yogourt sounds French and hence can clearly
indicate that Yoplait’s yoghurt is made in the French and not American way

PART B

Situational Analysis
After two years of development and numerous consumer tests consistently proving the high potential of
the product, time has come for the test market confirmation of Custard-style yogurt. But, given the
budget & time constraints and also production capacity limitations, Bruce Becker decided to go for a
Mini-Market test in Wisconsin market instead of a full-scale market.

Limitations of Mini-Market test: The results of a limited test market in Wisconsin could not be projected
nationally because the U.S yogurt market was highly regional.

Advantages of Mini-Market test: The test can be easily managed due to the small size of the market and
its proximity to the location of General Mills headquarters. This saves a lot of time and effort for the
market research department to conduct the test and overcome the limitations like unavailability of
refrigerated warehouse, lack of production experience and capacity.

Marketing variable for the Mini-Market test:

 Radio, Newspaper advertising, product sampling and trade deals were used as marketing
support for Custard-style product.
 Radio was used instead of television to control costs and minimize wasted impressions.
 Product sampling was a major consumer promotion tactic used for generating trial.
 Three trade deals each lasting 6 weeks were offered during the test and the average Custard-
style volume in stores that accepted one or more deals was 52% higher than those that
accepted none.

The market share and volume estimates will be presented at the end of the report, comparing it with
the estimates from BASES test.

Consumer Dynamics study:

In addition to the weekly store audit, a consumer dynamics study of yogurt was also conducted during
the test during which respondents were asked questions on products likes, dislikes and usage. The study
indicated strong consumer satisfaction of the Custard-style product.

User classification of Custard-style yogurt

Type of user Percentage of total users

Exclusive Custard-style 20
 Exclusive Original-style 20
Bothe Custard and Original style 60

 The study also indicated that Custard-style users were primarily past buyers of Original-style
(38% for trial and 41% for repeat) and Dannon (33% for trial and 27% for repeat).
 Market share predictions indicate that the market share gain by Custard-style is mostly from
Dannon and that it does not cannibalize Original-style (Ref to Exhibit 2)
 Other insights from the study indicate that Custard-style buyers were mainstream yogurt
consumers and that Custard-style would not be merely a secondary brand among its consumers.
 Acceptors indicated that they would ear Custard-style on the same occasions as other yogurts.
 Overall, the mini-market test results were encouraging for the management.

Need for the BASES test:

Though the mini-market test results were encouraging and estimated the total Yoplait volume to be
doubled by the addition of Custard-style, some Yoplait executives were skeptical that the test results
could not be used to project the product performance to other regions in US as the test was too
localized. So, the management wanted to get national and regional estimates of the product volume
potential and its impact on Original-Style’s volume before they make any decision on the introduction of
Custard-style yogurt. To address these concerns, a BASES simulated test market was conducted.

BASES Tests

The BASES test was more comprehensive than the tests earlier done. The test was conducted across 12
dispersed cities distributed equally among the three regions i.e. East, West and Mid-West. The target
respondents were all women above 18 who were principal household shoppers. Both custard users and
non-users were included. Respondents were shown a color print advertisements with a picture of
Custard style product, concept statement and the price and were then asked various questions
regarding the product. In addition to these results, a few other inputs such as volume estimation model,
target markets, consumption indexes of each city, year one distribution and out-of-stock estimates and
marketing expenditure for each quarter were provided.

Marketing Variables:

Three Spending plans were simulated. The plans were based on the spending proportionate to Original
Style yogurt’s spending. Plan A (100%), Plan B (50%) and Plan C (40%)

Summary of Results

 Under plan B, Custard-Style was estimated to grow by 43% with 3.5MM cases sold in year 2.
  Custard-Style volume was sensitive to spending with volumes under Plan A 34% higher than Plan
B in Year 2
 Sales varied across regions. Sales were highest in West and sales in East were higher than
Original Style. However there was no variation in % of sales per flavor.
 Overall, Custard-Style would cannibalize on Original-Style and would gain 22% of the share. The
other significant losers would be Dannon (22%) and Knudsen (6%)
 40% of respondents said they were definitely or probably willing to buy Custard-Style. Also 68%
of people, who tried the product, were willing to buy it again. All the reported figures were
approximately on par with industry norms
 Before use, health/nutrition was the major attribute that respondents liked in the product.
However after the test, taste was reported as major attribute. At the same time taste followed
by price were the most disliked attributes.
 Incremental consumer promotion was more efficient in increasing sales than incremental media
spending

Overall the test indicated that Custard-Style had potential for high volume sales.

Comparison of Mini-Market test and BASES – Volume predictions (% of Original-style

yogurt)
ACV assumed\Type of test Mini-Market test BASES test

80% 97%
109%
90% 110%

Comparison of Mini-Market test and BASES – Market Share predictions (Total U.S)
Type of test Custard-style Total Yoplait
Mini-Market test 23.1% 48.0%
BASES (Sanford commercial) 21.8% 43.7%

Copy testing:
After the BASES test, a copy test was planned with four television commercials. The test involved 300
respondents from 9 locations. Four copies were used in the test

1) Custard Style with Yoplait tag and no celebrities (Police execution)

2) Custard Style with Yoplait tag and a celebrity (Sanford execution)
3) Integrated Custard and Original Style without celebrities (Secretary execution)
4) Integrated Custard and Original Style with celebrity (Lasorda/Brothers execution)
The target respondents were females over 18 who had bought yogurt two or more times in the previous
three months. The respondents were shown the video and later asked about their likelihood of buying
the product. The copies were then scored based on the responses. The Sanford copy scored highest
overall across all geographies.

Recommendations

Based on our analysis of the case we suggest the following recommendations

1) Since Price was an attribute that many disliked (2 nd after taste), Custard Style yogurt should be
sold at the same price as Original Style yogurt. Also, since the tests indicate little cannibalization
on Original Style, charging the same price would not significantly affect the sales.
2) The tests indicate that Custard Style would steal an insignificant share from Dannon (15%) and
more than Original Style (22%). Also the sales for Custard style were very high in West compared
to other regions. Hence the product should be launched in the West first.
3) Since the Sanford execution scored highest overall across geographies, this copy should be
rolled out for promotion.