Assignment
Mrs. Bernatha Cobden 2 DECIDING ON A MARKETING APPROACH
Ten years ago, confronted with the need for making a living after the death of her husband, Mrs. Bernatha Cobden undertook to develop a catering business for church groups and women's clubs in the vicinity of Santa Ana, California. For the first two years, she was kept reasonably busy and was able to make a modest living. But in the latter part of the second year, a new, attractive restaurant was opened on a highway leading to Santa Ana, and a number of her customers began to hold organization dinners there. As a result, she was forced to look for some other way to augment her income. For some time, she had made a specialty of serving an orange marmalade of exceptional quality at her catered dinners, and it occurred to her that she might package this marmalade and market it profitably. The marmalade was translucent and amber in color. She had discovered a method of imbedding an orange or lemon blossom in each jar of marmalade with a treatment that kept it from turning brown, and of adding a little synthetic lemon fragrance. Because there was considerable hand labor involved in inserting the blossom, her costs were relatively high.
Early the next year, she bought a supply of two-ounce glass containers and made up small quantities of marmalade to see whether she could sell it profitably. As a result of her own calls on various kinds of stores in and around Santa Ana, she found that she could get several gift shops and several stores selling souvenir merchandise to tourists in Santa Ana and in Laguna Beach to stock small quantities of marmalade on consignment. With a retail price of 50 cents a jar and a 40 per cent margin for retailers, she was able to clear 10 cents a jar over her costs of materials, fuel, and the wages of one woman hired on a part-time basis. This margin of 10 cents included compensation for her own work in preparing and selling the marmalade and her profit. In this year, although her accounting methods were not exact enough to determine accurate results, it appeared that she had broken even. In the following year, she earned $347. At the beginning of the next year, she offered the marmalade not only in single two-ounce jars but also in attractive but inexpensive Mrs. Bernatha CobcUn 39 redwood boxes containing three two-ounce jars at $1.75.
Her total revenue above costs for that year was $463, and about 40 per cent of her volume was accounted for by the boxes of three jars. The individual jars had merely a decorative top with no other information than that required by law. But the redwood boxes were labeled "Cobden's California Conserve" and carried her Santa Ana address. Two years later, she began to get mail orders from various parts of the United States, chiefly before Mother's Day, Thanksgiving, and Christmas. As a result largely of the mail orders, her revenue for the year increased to $793. During the period in which she had merely sold small quantities of merchandise to local stores, she regarded the revenue from the marmalade as supplemental to her income from catering. But as unsolicited mail orders began to arrive, she felt that she might have a product of promising marketability.
She had had little business experience other than that acquired through her catering and through the small-scale selling of the marmalade through local stores, and she had no appreciable amount of money to invest in developing a wider market for the product. Although she believed that her marmalade was of as high a quality as could be manufactured, she realized that its high price precluded its use as a staple item of food, and believed that it would continue to be a gift and holiday item. For guidance, she called on several executives of grocery store companies in nearby Los Angeles and on the advertising manager of her local newspaper. They told her that she might attempt to build up a steady mail order business and called her attention to the mail order advertising that regularly appeared in such magazines as House Beautiful, American Home, Better Homes & Gardens, and the magazine section of the New York Times. They also suggested the possibility of using food brokers in major eastern cities. Most of them suggested that she attempt to find a partner with some capital and specific experience in the food field. Although Mrs. Cobden did some advertising in several western newspapers under the classification of "Business Opportunities," she was unable to locate anyone willing to enter into a partnership with her; finally she decided to attempt to build a larger market without outside help. She could not, however, determine what her most promising approach to the market might be.
1. Would the demand for Mrs. Cobden's marmalade be limited primarily to the category of a gift and holiday item? Are there other potential demands which might be profitable?
2. What would be the important basic factor that would determine Mrs. Cobden's approach to the marketing of her product?
3. Do you believe Mrs. Cobden should attempt direct distribution of the marmalade? If not, would food brokers serve as satisfactory outlets?
4. From the information in the case, does it appear that there is an adequate demand for this product? How significant is the fact that she has received unsolicited mail orders?
5. What are some of the major marketing problems that Mrs. Cobden must solve?
6. How important is the fact that Mrs. Cobden has developed a superior product?
7. What marketing procedures would you recommend?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.