Calambra Olive Oil Case Study Essay

1700 Words Apr 25th, 2013 7 Pages
I. Situation Analysis

A. Mission Statement: Calambra utilizes California’s Central Valley, Oroville olives coupled with seventh-generation expertise to produce hand-pressed, extra virgin olive oil, providing connoisseurs with the highest quality and best tasting olive oil in the world. B. Production Capacity: The year is 1993 and is the first year of operations for Calambra. Partnering with Gino Ambrano, a seventh-generation olive-oil presser of Sicilian descent, Calambra had purchased 800 gallons of Gino’s olive oil to test the market potential. Because the mission of the organization is to provide the highest quality, best tasting olive oil on the market, only Ambrano’s olive oil may be used for this venture. For personal
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It is the first year of the venture’s existence and the goal is to prove there is sufficient demand for Calambra olive oil to continue business. Because it has been only three months since the venture was launched, it is impossible to know if a viable market segment actually exists. Unfortunately the decision about next year has to be made now. If Calambra is able to sell all of the 1993 oil before the 1994 shipment arrives, the 1993 test will have been a success and everything will be as planned. If the 1993 sales fail to materialize then it will be unlikely demand would increase in 1994 and Frank will be out of business and left with thousands of dollars in losses (Appendix A). III. Alternative Solutions 1.) Offer a sales promotion in the form of discounted prices to Williams-Sonoma and Neiman Marcus to ensure inclusion into their Christmas catelogs. Neiman Marcus is thinking of including a bottle of Calambra Olive Oil in each of its Christmas baskets and talking about purchasing 100 cases. Williams-Sonoma was thinking about listing Calambra directly in its catalog and is considering 30 cases. With this solution Frank should purchase 3000 gallons of olive oil for 1994 as he would expect to sell all of the 1993 olive oil. 2.) Increase promotional and advertising efforts at the store level to enhance consumer awareness and demand to foster re-purchases by the retail stores. 3.) Lower price on the

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