Colombo Soft-Serve Frozen Yogurt Case Solution

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Colombo Soft-Serve Frozen Yogurt Case Solution General Mills acquired Colombo Frozen Yogurt to increase net sales with little additional marketing cost. Frozen yogurt is sold through independent shops and impulse locations. The GMI sales force focused on the impulse segments, and its price promotion lifted its sales volume. 1. Competitive environment for Colombo Independent shops: Colombo mainly distributed through independent shops in the early 1980’s. However, in the early 90’s, the emergence of franchise operations such as TCBY and Freshens put many of the independent shops out of business. This situation raised red flag for GMI, indicating that its sales would be damaged if shops could not survive from the competitive environment. In the late 90’s, Shops began to increase sales by product innovation and made their living from the soft-serve business. Impulse locations: The market changed as Foodservice operators added soft-serve yogurt to business in the early 90’s. By the late 90’s, impulse locations occupied 2/3 of the soft-serve market, which made impulse locations a very important sales segment for GMI. Since the soft-serve trade is only performance topspin for impulse locations, they are unwilling to take any risks on new product innovation. As a result, potential sales from impulse locations are limited; although, they are the main distribution segment for GMI. GMI’s marketing strategy * The Foodservice sales force serviced both Shops and Impulse locations. Customers were reassigned to salespeople. The reaction of the salespeople to products was varied. And many salespeople spent a lot of time helping customers understand how to use the machinery. * GMI provided the same large scale merchandising to both Shops and Impulse locations and didn’t

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