Marketing, MKTG 1200, Assignment #3

20 marks (5% of overall grade)

“Cow Wow” a NYT Case Study

Assignment Background:
In weeks 7 – 11, you are exposed to marketing topics: market research, consumer behaviour & segmentation and targeting. (Chapters 3, 4 & 6 in your textbook). This assignment will reflect your understanding of the reading and in-class lecture material.

Group assignment:
You will use this assignment to showcase your ability to problem solve and apply critical thinking. As a team, you will be given the case study, “Cow Wow” to analyze and answer questions. Detailed instructions and the case study can be found below. (Groups can be 3-4 people max).

Assignment Details:
1) Read through the case, “Cow Wow Cereal Milk”
2) In a brief paragraph, identify the main issue/problem outlined within the case.
3) Identify the market segments/clusters presented and any other relevant segments not mentioned in the case.
4) Based on the issue presented, what type of market research methods would you choose to validate your position/decision? State your approach and complete the chart below to detail your approach.

Textbook Example (Pg. 111):

5) Using the table provided, fill-in the market variables (Psychographics & Behaviouristics) of the target market profiles based on the marketing segment/target market you’ve identified.
Psychographics Personality Traits
Lifestyle values and approaches
Leisure activities, hobbies, and interests
Media habits
Technology usage
Behaviouristics Main occasion for product use
Main product benefit sought
Primary and secondary product usage
Frequency of use
Frequency of purchase
Product usage rate
Product usage status
Product loyalty status
Textbook Example (Pg. 152):

6) Based on the information presented in the case and your analysis, what would you do if you were Christopher Pouy? a) Stay the market segmentation course, b) change course, c) choose both segments to target (hybrid option) or d) go down a different path? If you choose to select a different path, what other market segment would be more appropriate to serve as Cow Wow’s target market?

Assignment submission: MKTG 1200 students are to submit their completed assignment to the Dropbox by 11:59:00pm on November 19th, 2015. Late assignments will be docked 20% per day.

Each assignment must be formatted to:
– Have a title/cover page and numbered pages
– Maximum 1,000 words
– Double spaced and 1″ margins
– Use Arial or Calibri font

**Please refer to Chapter 3, 4 and Chapter 6 in your ebook and class lecture notes to help craft your assignment**.

The Case:
COW WOW CEREAL MILK is a two-year-old company that makes milk in breakfast cereal flavors. Founded by Christopher Pouy, a former advertising copywriter seeking to capitalize on a childhood love, it is based in Los Angeles and employs 10. By putting a child-friendly cow on the package and giving his flavors names like Fruity Trudy and Chocolate Chip Cathy, Mr. Pouy branded his product for 5- to 12-year-olds.
Christopher Pouy founded Cow Wow Cereal Milk to capitalize on a taste he loved as a child: cereal-infused milk. Annie Tritt for The New York Times
THE CHALLENGE Targeting the right customers. Following unexpected publicity from media outlets and promising sales on a college campus, Mr. Pouy found himself second-guessing his audience — even though he knew that to sell to high schoolers and college students, he would have to rethink his whole brand.
THE BACKGROUND Schooled in the advertising business at Secret Weapon Marketing, the company that linked a pink bunny to Energizer batteries, Mr. Pouy, 38, worked at big ad agencies and ran his own shop called Chicken Pox — “to spread ideas virally” — for more than a decade. Then his enthusiasm dwindled. “I’d done the same kind of projects so long, I was no longer getting the gratification,” he said. “I wanted to create something I had a stake in and reignite the passion and excitement.”
Mr. Pouy asked himself: “What can I make that’s not already out there? What would I like?” Those questions led him back to his childhood breakfast table, where the best part of his morning cereal came when he put down his spoon, lifted the bowl to his lips and gulped the remaining milk infused with the flavor of Froot Loops or Cocoa Puffs.
Why not give children a more exciting, vibrant range of flavored milk than the Neapolitan palate of chocolate, vanilla and strawberry? Knowing he’d be selling to parents and wanting to “do it in a responsible way,” Mr. Pouy insisted on 1 percent organic milk, no artificial flavors or colors, and organic cocoa powder and cinnamon. With six grams of added cane sugar, each 8.5-ounce serving had 150 calories. For packaging, he chose Tetra Paks that did not need refrigeration and had a shelf life of up to a year.
With $175,000 of his own money, he made his first 9,000 cases in late 2012. A distributor landed some of his milk in convenience stores and gas stations in Southern California, and Mr. Pouy got Cow Wow into Legoland and the Los Angeles Zoo. Then, in April 2013, with the product still in limited local distribution, Cow Wow went viral, much to Mr. Pouy’s surprise and joy — at least initially.
Proclaiming that Cow Wow “tastes like heaven,” the late-night TV host Jimmy Kimmel riffed on the product for nearly a minute. “Just when the Twinkie dies, we come up with cereal-flavored milk. I’ve never been prouder to be an American,” he said. In June 2013, Cosmopolitan magazine displayed the Fruity Trudy package and hailed Cow Wow as the lead “fun item” in a list of fun stuff. And in September 2013, BuzzFeed included Cow Wow in its list “27 Reasons It’s the Greatest Time to Be Alive.”
It was great publicity. But there was one problem: the age of the viewers and readers. Mr. Pouy said he quickly realized “these are not the people I’m trying to sell my product to.” That disconnect nagged at him as he began talks with an investor, the owner of an incubator, who would ultimately acquire a majority stake in Cow Wow and become a silent partner, leaving Mr. Pouy as president.
By November 2013, still aimed at children, Cow Wow was being put on shelves in the first of 900 Kroger supermarkets. Because Mr. Pouy lacked the resources to offer discounts and coupons, his milk was priced about 20 cents higher than flavored milks in Tetra Paks offered by Organic Valley and Horizon Organic. His sales did not meet expectations. “I was groomed on the more conceptual, marketing side of things, not on pricing or how to enter a market,” Mr. Pouy said. “What I found out was, Mom is the most frugal shopper of them all, and price made more of a difference than I thought it would.”
Then in May his local distributor, who happened to serve Santa Monica College as well, got Cow Wow into the school’s food court. Fifteen cases sold in the first week. The next week, Mr. Pouy stood near his product and watched. “Pretending to be a teacher, I saw people taking all three flavors,” including the new Cinny Minny, he said, “and that’s all they bought.”
THE OPTIONS Two days later, he met with his partner to discuss three possible paths:
■ Stay the course. Stick with young children, who are, by far, the biggest consumers of milk. This option was appealing because high schoolers and college students are notoriously fickle. What if Cow Wow was a fad? To pursue this option, Mr. Pouy’s next step would be to target private and charter schools and expand national sales in Kroger and other grocery stores with a marketing push to educate mothers about the benefits of flavored milk and alert children to Cow Wow’s flavors. The expected cost: $100,000.
■ Change course. Follow the buzz and the sales and pitch the product to millennials. To pursue this option, Mr. Pouy would rebrand, redesign, repackage and reformulate. He would try to hook 18- to 35-year-olds with hipper cows and a larger package with a resealable cap instead of a straw. To cut costs, he would switch to a nonorganic formula, “since millennials are less concerned about nutrition than mothers.” He would focus on selling to colleges and convenience stores. Cost: $100,000.
■ Adopt a hybrid strategy. Try to market to both age groups simultaneously. To pursue this option, Mr. Pouy would need to create two distinct marketing campaigns, one targeting mothers, the other millennials. With little overlap, the cost would double to $200,000.
WHAT OTHERS SAY Seth Goldman, co-founder and chief executive of Honest Tea: “At 150 calories per 8.5 ounces — roughly 50 percent more calories than low-fat milk — this isn’t a product that should be marketed to kids. Mr. Pouy is better off promoting his drink toward the millennials that are already gravitating toward his drinks. He should invest in field marketing efforts on campuses where students can enjoy the drinks as an occasional chance to reconnect with their childhood.”
Kara Goldin, founder and chief executive of Hint, a brand of flavored water: “I recommend focusing on a single target market. A cereal-flavored milk for the college market? I doubt it. But if that is your market, move out of the Tetra boxes and into a wide-mouth resealable bottle. And millennials young and old do care about ingredients, not just calories. And don’t settle for just any space in the stores you get into. If moms are your market, be where moms will look in the store. In the milk section is O.K., but how about in the cereal aisle? Or in the baby/kid food section?”
Doug Hall, founder and chief executive of Eureka Ranch, a consulting firm that helps companies create innovative products: “My advice is to stop being greedy. You have found a group of people who love Cow Wow. Focus 100 percent of your energy on millennials. Our research has found that presweetened cereals would have a hard time being introduced today. They exist only because they are ‘grandfathered in’ through the memories of older people. Let millennials adopt and own it. Then let diffusion of the innovation pull the product to the mass market.”
Assignment Rubric
Criteria Poor
1 point Fair
2 points Good
3 points Excellent
4 points
1. Research Approach Does not show understanding of how to select a research approach. Is unable to clearly identify and provide examples of secondary and primary data sources. Identifies some primary and secondary data sources. No rational for sources provided. Somewhat identifies primary and secondary data sources. Rational for response could use additional key sources. Clearly identifies the research approach and primary and secondary data sources. Explanation is thorough, understandable and reasonable.
2. Market Segmentation Limited and inaccurate information provided on the market segmentation. Identifies the market segmentation(s) but does not consider all the key components. Identifies the market segmentation with limited rational provided in the response. Identifies the market segmentation and thoroughly reports on rational for responses.
3. Analysis Case study analysis is lacking. Market variables are missing /incomplete. Some elements of the market variables are identified but overall analysis is lacking. Market variables and analysis for the most part, are clearly described/ presented. Clearly identifies the market variables. Analysis is thorough and reasonable.
4. Recommendations
Very limited recommendation are provided. Some of the content is inaccurate. Recommendations are provided, but there is a great deal of potentially important information missing. Recommendations for the most part, are thoroughly and clearly reported. Some critical information may be missing. Recommendations are thoroughly and clearly reported, including: what direction the company should take and which segment(s) should be chosen.
5. Spelling, Grammar and Format There are a number of major errors in punctuation, grammar and/or spelling which make it difficult to read. There are 1 or 2 major errors in punctuation, grammar and/or spelling which interrupt the flow for the reader. Format requirements were not considered. There are 2 or 3 minor errors in punctuation, grammar and/or spelling which do not break the flow for the reader. Some format requirements have been met. There are no grammatical, spelling or punctuation errors and all format requirements have been met.

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