Green Giant

Analysis of Green Giant Case

1. What studies should Green Giant buy?

The studies selected for this analysis need to provide the necessary information to take the decision while being cost effective. Our analysis suggests that the studies that Green Giant should buy to make a informed decision related to launch of the product in Quick Thaw Packaging are as follows:

Tests	Vital information captured
Market Data	· Frozen fruits have only 2% in the market which is very less. · Around 60 % in frozen fruits is from vegetables and fruits. · Retail grocery stores spending on frozen fruits have grown only 8 %. While frozen vegetables growth is 38%.These tables give us an idea as to what the market is for frozen fruits like.
Consumer Attitudes: Frozen Fruits	· To increase popularity ‘CONVENIENCE OF STORAGE’ and ‘ACCEPTANCE OF VARIOUS CANNED FRUITS’ has to be increased. · Long thawing time is a disadvantage as per table 5B.So bringing in "Quick thaw" will increase acceptance which is an important factor influencing popularity as per Table 5A.
Two City Taste Test	· Birds Eye is the preferred brand amongst all the respondents. · 65% of homemakers mentioned dislike for Green Giant frozen fruits and main reason was the taste(12%) ,they felt it was very sweet. · Mellon Balls is not accepted as a product.(39%) · Birds Eye Cherry product has a major dislike.(71%). · Green Giant should not invest in Mellon and Cherry. · Method of preparation is an advantage for Green Giant.
Consumer Package Preferences	· In case the company wants to launch Strawberries, Peaches, Blueberries they should not launch it with cream sauce. Syrup sauce and quick thaw pouch is preferred.
Three City Taste Test	· People have readiness to buy Mixed Fruits, so Green Giant can consider it as a product to be launched.
Package Test	· Quick Thaw packing is highly favored irrespective of the brand.
Pricing Study	· Pricing should be done 31-40C as max respondents are in that category.
Competitive Information	· As per table 26A and 26B it appears that chief competition Birds Eye has reached saturation in promotions and advertising.
Nielsen Data and Projections	· Sales data, to project the profitability.

2. Will Quick Thaw expand the market for frozen fruit?

Yes, quick thaw will expand the market for frozen fruits because of the following observations:

a) Table 5b suggests that consumers think “long thawing time” as a disadvantage. This will be comparatively less for quick-thaw packaging.

b) Table 11 suggests that 72% interviewees preferred quick-thaw packaging method.

c) Table 18 suggests that consumer reaction was positive for Strawberries, Peaches, and Blueberries packed with quick thaw pouch.

3. If quick –thaw expands the market for frozen fruit, who will the major competitors and what may Green Giant expect?

Green Giant will face a major competition from Birds Eye as their test marketing has already begun for Quick Thaw packaging. Following points provide illustration to this:

a) Table 11 suggests that majority respondents prefer Quick-Thaw packaging with 72% in favor of that. And Birds Eye has already launched tests in the market for the same so Green Giant would be facing tough competition in it.

b) Green giant might also come up with syrup sauce and quick thaw pouch as it has got favorable responses for this category from consumers as shown in table 18.

4. Will frozen fruits in the quick thaw pack be profitable for green giant?

Quick thaw packaging has high levels of acceptance as explained in the above description. This means that the chances of success of this packaging are high. Balance sheet of 2007 as compared with 2006 indicates that capacity in terms of plant and equipment has been upgraded by raising new capital in the current fiscal year.

In terms of profitability of the quick thaw packaging, analysis of the cost structure versus the pricing in the market shows that it would be profitable for green giant to sell frozen fruits in quick thaw packaging.

Capturing the market sales trend (table 30b) for the frozen fruits market gives us a prediction of sales for the month of August – September 07.

YoY, With a decrease of 10% in units and 5% in retail sales, projected sales is 57575 units and total retail $21900 going by the trends, as depicted by the graph below.

Delivery cost per case is 6.25 to 7. As one case contains 24 units of 16 ounce of fruits, this makes per unit cost for the company at nearly 26cents. Pricing study provides information that per doz cost would be $4 to $4.55, i.e., after retailer markup of 25% to 30% would make the per unit selling cost of 29 to 30cents. This shows that selling one unit of quick thaw packed fruit will give nearly 3 to 4 cents profit.

Keeping the projection for near future and the profit per unit, it can be deduced that the product would generate profit for the company.

Annual volume sales quick thaw of bird eye for the current year is 8.4 million ref: (table 30a). Assuming that Green Giant is considering bird’s eye as a close competitor, it would require production of nearly 7.5 to 8 million cases. This would call for plant expansion by 7 million. But the company already has expanded its plant this year by investing 7.15million. Hence further expansion would not be required. This will avoid any further fixed cost to the production.

From the market survey quick thaw packing is going to be accepted by the market. Launching would be advised through mixed fruit and strawberry flavors. Once these two products grow, other flavors can be introduced one by one.