United Cereal Lora Brills Eurobrand Challenge Case Solution

Europe has been a tough ride for UC because of the vast variation in market trends and customer preferences in different countries of the continent. The data suggests that the variations are so vast that developing a sustainable business model becomes a challenge. Like UC, most of its competitors are operating via local subsidiaries, and this has been a successful strategy to cater the need of different trends in different European countries.

This decentralization at the management level has lead to increased pressure of cost and minimized the profitability of the company as evident in Exhibit 1 and 2. Europe is not a densely populated region; therefore, having diverse brand positioning in different countries with different people responsible for the brand’s success has increased the cost significantly without a sizeable increase in profitability. To counter the situation, Lora Brill has come up with the idea of centralization and implementing a coordinated product marketing strategy which would help in cost reduction.

In order to be successful in European market, Brill has also come up with the idea of Euro-brand team which would comprise of brand managers from each country and representatives of centralized functional departments (R&D, operations, purchasing and logistics etc.) with a team leader selected from one of the brand managers. Brill believes that since each country’s brand manager will be part of the team; hence, any decision taken by this group will be owned by the whole team, and there will be a coordinated effort for the success of the Euro-brand.

The decision, which has now become a headache for Brill is either to launch the new product in French market with the current organizational structure or delay the launch, reassign the new roles and then launch the product as a Euro-brand for the first time in UCs European operation’s history.

2. Case Questions

i. As Lora Brill, United Cereal European VP, would you authorize Jean-Luc Michel’s request to launch of Healthy Berry Crunch in France? Be sure to analyse both sides: Launch and delay launch; summarize in a table format and then discuss.

Based on the available data, market situation and experiences of the company in Europe, as UC’s European VP; I would not authorize the immediate launch of Healthy Berry Crunch (HBC) in France. Following table analyses both sides of the immediate launch requested by Jean-Luc Michel:

Jean-Luc Michel is definitely an enthusiastic CM; however, it appears that he is either not well aware of UCs corporate values or deliberately wants to rush the European VP into a decision about which necessary research and data analysis has not been done. His claim that there is a serious “need” of a healthy berry-flavoured breakfast cereal needs to be bolstered through a verifiable independent source i.e. customer survey or focus group results (Bstieler, 2012).

Exhibit 3 showing the results of test market and consumer panel results, clearly indicates that the market share has declined from 1.5% to 1.0% and even though the customers are well aware of the advertisement and brand, only 3 of the 188 respondents have actually bought the product with their own money. Moreover, the response on the repurchase question can be misleading as the sample includes people who have actually purchased the product and also who have only consumed it during free trials. Even after including the “free tasters”, the intent to repurchase the product is below the company’s par of 64%.

Apart from this, the sample size of 188, 126 and 126 against the awareness, attitude and repurchase intent parameters respectively, is very low and insufficient for deciding country wide product launch (Chen & Shyu, 2006).

ii. Does United Cereal represent an example of centralized or decentralized international management? Discuss in the context of corporate values, policies and practices and then discuss UC organizational process.

As far as the corporate values, policies and practices are concerned, UC is an example of centralized international management. It is evident that the historic values of “commitment, diligence and loyalty” have made the UCs progress possible throughout the century and is still the continuous process within UCs values structure. 

If we take the example of French market given in case, the policy of “Listen to the customer” is clearly reflected as full scale test launch was done and then the customer’s feedback was obtained. This is a clear sign that UC’s policy has been consistent towards gauging the customer’s priority and then introducing or modifying its products as per customer’s liking (Poddig & Varwig, 2013).

Even though UC has positioned its different brands, quite contrarily in different markets, this has nothing to do with the corporate values and structure i.e. one cannot say that the company has different policies for different countries. The policy is consistent throughout; however, as the policy is itself dependant on the external factors like customer priority, market trends and need for innovation; therefore, the execution of the policy takes different shapes in different markets depending on market dynamics.

Another core value of the company is pioneering the concept of “brand management”. This idea has been successful as the people involved with a brand own it completely. As it can be seen that the brand managers are the leaders of cross-functional teams and hence they are not only able to measure customer trend but also communicate them to the internal organizational staff. This helps the company to get the desired output in the form of a product and ensures that every brand launch, relaunch or repositioning is successful (Berk & Gurler, 2011).