Several years ago Standard Brands, a major marketer of margarine (Blue Bonnet is


Several years ago Standard Brands, a major marketer of margarine (Blue Bonnet is its leading brand), decided that one way to sell more margarine would be to use it as an ingredient in a new product. Executives decided to focus on the prepared gravy market, which was valued at almost $100 million and which everyone agreed had enormous growth potential. The resulting product, named Smooth & Easy, was marketed as a refrigerated gravy bar that consumers could slice like margarine, then heat in the pan with water to yield a quality-tasting gravy.
Three flavors of the product were offered: brown gravy, chicken gravy and white sauce. It was priced at .69 cents per bar. One year after introduction – and after spending $6 million to promote the new product and having converted a margarine plant to manufacture it – Standard Brands’ executives decided to remove Smooth & Easy from the market because of its poor sales performance.
QUESTIONS TO ADDRESS AND JUSTIFY WITH EXTERNAL RESEARCH:
1) Describe 3 possible reasons for the failure of Smooth and Easy.
2) For each reason provided in the response to #1 – what assumptions were made? Which of these assumptions are “safe” and which aren’t?
3) Based on the limited information provided in the details, what could Standards Brands have done to increase the chance of success? Clearly explain why this course of action would increase the likelihood of success. Use external resources to justify your answer.
include intext cites where appropriate.


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