Which, if any, of the three products should be introduced to the G·R·E·E·N line? Why?

Question

What will be an ideal response?

Answer 1

Students should prepare a quantitative and qualitative answer to this question. Many of the quantitative criteria required—namely, retail price and cost data, projected annual sales in units and dollars, total gross margin, and sensitivity analysis—are outlined in the introductory section of the case. As well, cannibalization should be considered (particularly where the source of sales is likely to come from—corporate or national brands) along with market share and profits. Exhibit TN–1 provides a quantitative analysis and comments for the three proposed products.
On a qualitative basis, the following criteria could be considered: “greenness,” store managers’ reaction, company objectives (e.g., gaining a greater share of a category for corporate brands), possible reaction of environmental groups, advertising potential, contribution to Loblaws’ “green” image, competitive reaction, and positioning possibilities.
Some comments on each of the three products follow:
• Light bulb.?A green product in that it conserves energy but is also ideally suited for applications where it is on for long periods of time. It probably should be included in the G·R·E·E·N line, regardless of its profit potential, because it symbolizes the type of product that increases consumers’ awareness of environmental issues and enhances Loblaws’ “green” image. It is possible that store managers might resist carrying this product, so the task may be to “sell” store managers on its benefits. For more details on this product, read the “What Happened” section of this teaching note.
• Toilet tissue.?The fact that Loblaws is already marketing this product under the No Name line creates the opportunity for an interesting discussion. In particular, the possibility exists for Loblaws to repackage the product as G·R·E·E·N and charge a higher price. The product’s recycled feature allows it to be considered a “green” product, and Loblaws can enhance its image by promoting it as such. The interesting issue here is whether Loblaws is a socially/environmentally responsible company if it repackages the product and charges a higher price? If it doesn’t charge a higher price?
• Breakfast cereal.?At best, this is a “pale” green product. The debate should focus on whether “healthy lifestyle” products should be packaged as G·R·E·E·N. Environmental groups are probably not very enthusiastic about positioning this type of product as green. The product does offer the opportunity to gain a greater corporate share (and corresponding profits) for Loblaws.