Reference no: EM133925285
Assignment:
Favia is from a family of entrepreneurs; her father and grandfather successfully operated a grocery shop and a mini-supermarket in Kingston and St. Thomas. Shortly after high school, Favia, who has a "sweet tooth," decided to launch a home-made syrup on the market, and she aptly called it Flava's Syrup. At first Flava's syrup came only in strawberry then after a few months she added a cherry, a lemon and an orange flavor, which all performed fairly well on the market. During her fourth year in business, Favia launched a new lime juice, not surprisingly labeled Flava's Lime Juice.
After ten years in the business, the innovation itch has once more infected Favia; this time she is planning to introduce to the market a new flavoured mineral bottled water - in natural, melon and lemon flavours. While Favia is excited, she also has some concerns: how will the mineral water performs? How could it possibly impact her existing product line? What about the profit potential of her existing products? She calls on you for advice. Read the case study above and answers questions above with examples where necessary.
1. Explain to Favia ANY THREE (3) individual product decisions that she will have to make about the new mineral water.
2. What is brand sponsorship? Advise Favia how this applies to her new product.
3. Differentiate between brand extension and line extension. How are these concepts related to Favia's business?
4. Should Favia adapt a value-based or a cost-based approach to pricing the new product? Justify your answer.
5. For the new mineral water, should Favia use direct or indirect marketing channels? Discuss the pros and cons.