Questions: 1. Should the management push through with the launching of a new brand to boost sales? 2. To increase profits, what recommendations would you give BCC's management concerning the marketing of the product, particularly advertising and sales promotion?I. CASE STUDY ( 1. The Binangonan Confectionery Corporation. Mr. Edgardo Salero, advertising manager of Binangonan Confectionery Corporation (BCC) was hopping mad. " I can't stand it anymore!" he declared. "If they don't change their attitude, I'll resign within the month!". It was June 1998, and he was talking to his friend, Albert Rofino, the production manager of BCC. "Take it easy," said Rofino. "It's true they're blaming you for the lower sales of our Menthol Glow candies, but surely they realize you're not entirely to blame. The market has become more competitive. More brands are there fighting it out. Our sales and distribution network isn't all that hot. To top it all, the whole economy's in pretty bad shape. Many companies are laying off their workers. I myself was asked to reduce our production level by 50%. That means I have to lay off people too!" 'So why blame it all on me?" wailed Salero. "First of all they cut my advertising budget from P1,000,000 to only P500,000. What can I do with that? Secondly, they want to expand sales and distribution of Menthol Glow from Visayas, Mindanao, and Metro Manila to the rest of Luzon. How can I support that effort with only P500,000 to play around with? To make matters worse, they want to launch another brand, but they say they can't afford to support that launch with an advertising budget. Either our sales, marketing and general managers think I'm a miracle worker, or they're all equally crazy!" Rofino laughed. "It's not that bad, Ed," he said. "Remember they're pretty desperate. We're all pretty desperate in this situation. I think you should play it cool. Try to begin looking at things from their point of view. We need profits to survive. Our sales volume has begun to go down. The profits aren't coming in as expected. Look, here's my advice to you. Put your thinking cap on, and imagine you own this company. What, really, should you do? Maintain the present brand, launch a new brand, or what? To answer that, you should take three steps. First, consult Sony Chang, our finance guy, and ask him about the cost-volume-profit relationship of all our brands, starting of course, with Menthol Glow. Next, consult our ad agency, and ask their opinion about the adequacy of our fantastic ad budget of P500, 000. Third, and finally, I think you should consult our market research agency. If after you've gone through those threes exercises, you still don't see you way clear to a solution, then go ahead and resign!"
