Caselet1 Cool Heads Cool Heads was established in 1985 to manufacture, distribute and market pharmaceutical soft drinks. It was purely an Indian company and had to face tough competition from multinational companies during the initial years. The company in last decade, with the help of effective market strategies, has set up a place for itself, amongst leading pharmaceutical companies in the country. In 1995, the managing director of the company stressed the need for diversification and addition of new products its existing product range. He floated the idea of manufacturing and marketing coffee with milk, coca and sugar.
His advisors suggested that such products, enriched with cocoa, would be desirable and should be a big success, especially in view of its competitor’s brand. Marketing research department of the company also gave the green signal to the project after conducting a brief survey. The company promoted its Choco-coffee brand name. It was supplied in a 400gram pack at the price of Rs. 74/-. The product was heavily advertised in newspapers, health magazines, radio and television. The target audience was middle class who it was believe could afford ‘Choco – coffee. The ordinary coffee was available in the market at the rate of Rs 30 to Rs. 40/-. The thrust of Choco-coffee in the promotion campaign was that this coffee contains cocoa, milk and sugar. The company has 50 stockists covering the entire country with a sales force of about 150 representatives, for promoting its products, through supermarkets and shops. To promote the coffee, its representatives gave discount per packet of 400 grams. The scheme continued for about six months. Despite heavy advertisement and canvassing by its representatives, the product was unable to atteract customers.
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It was observed that launching of this product did not affect the market position of other branded coffee at all which was being sold at Rs. 90/- for pack of . 275 gm. Rather, it was observed that the sales of the other brands of coffee increased marginally consequent to the advertisement campaign by Cool Heads. The company could achieve only 25% of its sales target in the first year and it remained almost static for the next year. Questions: 1. Suggest a suitable sales strategy for increasing the sales volume of the company. 2. Being the part of sales team will you suggest any changes in the sales promotion?