Title: Celtic Chocolate Company Ltd$.$

Mr$.$ Ronald Begg founded Celtic Chocolate Company Limited under which he

engineered a new product called Milk Mate. The new product is basically a milk

modifier. Milk Mate was introduced into a market largely controlled by large

companies, such as Nestle with a market share of $50\%,$ Hersey with a market share

of $20\%,$ Cadbury at $10\%,$ and the remaining $20\%$ shared by other smaller players in

the region.

The introduction of the new product into the market was the major problem for the

newly founded company. Firstly, Mr$.$ Ronald Begg was concerned about the pricing

of the product. Key factors for consideration in the pricing of the product included the

profit margins that the company targeted, the competitiveness of the price in

comparison to the market leaders in the industry, and the pricing of the product with

respect to what the customers were willing to part with. The second major problem

regards the approach that the firm ought to adopt in the penetration of the market, as

well as the channels of distribution. Key factors of consideration in the determination

of the marketing strategy and distribution of Milk Mate include the competitive

environment, the access and availability of funds for the marketing campaign, and for

the hiring of the sales team. In connection with this, the company must determine

whether to use commission$-$based hiring system for the sales persons or to employ

the sales team on a salary$-$based system. Lastly, the company has to determine how

to select the distribution channels and the market segmentation mechanisms based

on the available data. In the following sections of the paper, the focus will be on

answering some of the questions raised in the Celtic Chocolate Company marketing

case.

The market is geographically segmented. Analysis of data from the case study

indicates that the region roving the largest market share for the milk modifiers is

Ontario with a market size of $38\%.$ Quebec contributes $30\%$ to the total market share

while Prairies contributes $14\%.$ The last two on the list of the geographically

segmented market are British Columbia with $10\%$ and Atlantic Provinces with $8\%.$

The importance of this data is in the determination of the regions on which the

company should spend more in marketing. The analysis of data as herein presented

recommends that the geographical segmentation of the market should be used in the

allocation of advertising and distribution costs of Milk Mate.

Analysis of the geographical market data in relation to the data on the chains

distribution reveals that chains operate in Ontario and across other major regions in

Canada. The distribution should be used in approaching the heads of the chains for

the product to be listed by the firms. The recommended approach is to begin with

Dominion Stores, which has $228$ stores in Ontario, $109$ stores in Quebec, $14$ in

Prairies, and $43$ in Maritimes. The importance of beginning with Dominion Stores is

that it gives the company access to four of the five major markets for the milk

modifiers. Other chains that the company should consider includes Mac$$s Milk with a

network of $432$ chains overall and Becker Milk with a network of $411$ stores overall.

The objective is to get the product as close to the people as possible. However, this

will be subject to the conditions offered by each of the chains. The advantages of

focusing on the chains is that they already have a strong brand and attract many

customers as compared to the voluntary and cooperative groups. If the cost is found

to be prohibitive, the company should consider the voluntary and cooperative

groups, starting with those that have a large network in Ontario and Quebec.

Celtic Chocolate Company Limited conducted a market study in which it tested Milk

Mate against a competing brand. The analysis revealed various factors on the

buyers in the milk modifiers market. The analysis indicated that $52\%$ of the surveyed

market would definitely purchase the product if it was priced the same as leading

powder. Only $43\%$ of the surveyed population was ready to purchase the product if

the price was raised by $$0\mathrm{.}1$ per pound higher than the leading powder brand. From

the pricing data discussed elsewhere in this price, the maximum price acceptable to

the market stands at $$21\mathrm{.}2,$ considering the base price of $$20$ for the $12$ pound

product. The observation indicates that the ease of mixing only makes sense to the

customer if the price is equal to that of the competition. Secondly, the buyers are

more interested in the taste, flavor, and sweetness of the new product in the market.

The observations indicate that the company has the potential to influence the buyers

by capitalizing on the sweetness of the liquid mil modifier $(64\%).$ The buyer is

inte

$1.$ How will the company make money?

$2.$ Evaluate the revenues including break even analysis, the potential costs and

the sales prices of the company