What strategy should Greg Demadis formulate to strengthen Carvel’s position in the Beijing market?
What will be an ideal response?
From the information supplied in the case, it appears a premium positioning will make sense for Carvel products. However, to justify the premium positioning, the company needs to take the following measures to increase sales. First, new channels should be developed (even those that traditionally did not sell ice cream). For example, high-class hotels, restaurants, clubs, and colleges can be explored as new possibilities. Second, the company should work with a vendcart manufacturer to develop good quality carts in China itself. They should be used solely to sell Carvel products in nice neighborhoods. Third, the company should develop new products to mark important occasions such as the Chinese New Year. Fourth, the company should streamline the operations to cut costs. One measure, if feasible, would be to reduce the number of permanent employees and hire services on an ad hoc basis. Fifth, despite the poor sales performance, the company needs to undertake an advertising campaign to reinforce the premium positioning.
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Indicate whether the statement is true or false.