What are the arguments for positioning Carvel as premium ice cream in the Chinese market?
What will be an ideal response?
Following are pros and cons for positioning Carvel as a premium product in China.
Pros
• This will create a niche where competition may not be keen.
• As the market grows, a higher price, which the premium positioning will make feasible, should increase
revenues.
• The growth prospects for a premium ice cream, particularly in a large city like Beijing, are much higher as the
Chinese economy continues to grow and more people enter the middle class.
• Higher margins should permit making investments in plant and equipment to introduce new products.
• As the prestige image is established, it will be easier to recruit new distributors (for example, department stores).
• Competition will shift to nonprice factors where Carvel has an advantage over other companies.
• The company’s profit economics require setting the price higher.
• It will keep the company’s image globally intact.
Cons
• Premium positioning will require raising the price, limiting the market.
• Under Carvel’s high price umbrella, lower price competitors will grow, limiting growth opportunities for
Carvel.
• Premium positioning will require advertising investment that the company can ill afford.
You might also like to view...
Which ethical principle asks you to assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise?
A. the Golden Rule B. the Slippery Slope C. the Social Contract Rule D. No Free Lunch
Differential benefits set products apart from competitors' products by providing something unique that customers want
Indicate whether the statement is true or false
In the student retention case study, which of the following variables was MOST important in determining whether a student dropped out of college?
A) high school GPA and SAT high score math B) college and major C) completed credit hours and hours enrolled D) marital status and hours enrolled
Operations management is applicable
A) mostly to the service sector B) to services exclusively C) mostly to the manufacturing sector D) to all firms, whether manufacturing or service E) to the manufacturing sector exclusively