Giant Foods Case Analysis

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1 OUTLINE I. II. III. IV. V. VI. VII. VIII. IX. X. XI. XII. XIII. XIV. XV. EXECUTIVE SUMMARY COMPANY ORIENTATION COMPANY PORTFOLIO ISSUES TREATED PROMOTION OR NO PROMOTION? CANNIBALIZATION BRAND EQUITY EROSION FORWARD BUYING PASS-THROUGH STOCKPILING ENGEL’S LAW GENERAL REASONS TO CONDUCT A SALES PROMOTION PROMOTION FOR WHICH ITEM FINANCIAL ANALYSIS THANK YOU NOTE 2 EXECUTIVE SUMMARY:  Frozen food division (FFD) is the key contributor to Giant Consumer Product 's (GCP) profits which have successfully grown over the past 30 years. The company has two main products lines, Italian frozen dinner “ DinardoTM”, and organic frozen foods “Natural mealsTM ”. However, recently FFD has encountered a shortfall in sales volume and…show more content…
For price-conscious consumers, cutting prices would attract them more. Also, the company enjoys strong credibility, retaining its loyal customers who were simply buying less. So, reducing prices would stimulate sales. 12 FORWARD BUYING  Forward Buying: is when retailers purchase a large quantity of the product while it’s available at a lower price–to-retailer (PTR). It is somehow problematic because retailers could either raise the price-to-customer (PTC) back to the regular price level after the intended period of the promotion and pocket the difference, or they could continue to sell the product at a lower PTC beyond the intended period and thereby condition customers to expect prices to remain lower. 13 FORWARD BUYING (CONTINUED)  This issue can be solved and the company can avoid forward buying through putting certain conditions in the contract with retailers such as a limited range for prices (minimum and maximum) that retailers cannot cross within certain periods of the year. 14 PASS-THROUGH  Pass-Through: Having retailers receive products at a discounted PTR and then not passing along the savings to consumers through a discounted PTC.  This retailer-related threat can also be prevented through including certain conditions that specify the obligation of the retailers to reduce prices for
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