Market-Product Grid Paradise Kitchens, Inc. was started by cofounders Randall F.
ID: 343269 • Letter: M
Question
Market-Product Grid
Paradise Kitchens, Inc. was started by cofounders Randall F. Peters and Leah E. Peters to develop and market Howlin' Coyote Chili, a unique line of single serve and microwavable Southwestern/Mexican style frozen chili products. The Howlin' Coyote line of chili was first introduced in the Minneapolis-St. Paul market. Two years later, it expanded to Denver, and two years after that, it spread to Phoenix.
To the company's knowledge, Howlin' Coyote is the only premium-quality authentic Southwestern/Mexican style frozen chili sold in grocery stores. Its high quality has gained fast, widespread acceptance in these markets. Paradise Kitchens attributes the success of the Howlin' Coyote line in part to the rapidly growing Hispanic market. The Hispanic market is growing faster than any other minority market, now representing 15.1% of the U.S. population, according to the Census Bureau. The company believes that the Howlin' Coyote brand can be extended to other categories of Southwestern/Mexican food products such as tacos, enchiladas, and burritos.
Paradise Kitchens believes its high-quality, high-price strategy has proven to be successful. Since the Howlin' Coyote line of Southwestern/Mexican foods has successfully expanded into 15 markets across the United States, but primarily focused in the Southwest, Paradise Kitchens is currently drafting a marketing plan to support their newest product line extension, Earth Coyote Organics (ECO), an extension of the Howlin' Coyote line with a focus on organic ingredients and earth-friendly marketing.
A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization. In a complete market-product grid analysis, each cell in the grid can show the estimated market size of a given product sold to a specific market segment.
While completing this activity, please refer to Appendix A in your textbook for additional information on Paradise Kitchens and Building an Effective Marketing Plan.
Read the case below and answer the questions that follow.
Developing a market-product grid means identifying and labeling the markets (horizontal rows) and product groupings (vertical columns). Howlin' Coyote's current target market, household size, ethnicity, and geography have been used to segment its market. Additionally, the ECO line will include a number of individual serving frozen organic Southwestern/Mexican food items including chili, tacos, enchiladas, and burritos which could be consumed at any meal: breakfast, lunch, or dinner.
The size of the market in each cell (the unique market-product combination) of the product-market grid was then estimated. For ECO, the increasing purchasing power of the Hispanic market, geographic demand for Southwestern/Mexican food, sales of Mexican entrees, hectic lifestyles of two working spouse couples, premium price point for the ECO line, organic food market size, and popularity of prepared frozen meals were considered in assigning the market size estimates.
Paradise Kitchens must take care to choose its target markets carefully. If it picks too narrow of a segment, it may fail to reach the volume of sales and profits it needs. If it selects too broad of a set of segments, it may spread its marketing efforts so thin that the extra response exceeds the increased sales and profits.
Paradise Kitchens must now choose its primary and secondary target market using the product-market grid.
1. Earth Coyote Organics' frozen meals will be packaged in single-serving microwavable containers. This product decision favors _______ households.
medium
small
large
2. Paradise Kitchens began in Minneapolis-St. Paul, expanding to Denver and Phoenix shortly thereafter. The later markets Paradise Kitchens added included Dallas, San Antonio, Houston, Albuquerque, Oklahoma City and Southern California. These markets now have a well-established distribution network and brand recognition for the Howlin' Coyote brand. The company's current geographic coverage favors introducing Earth Coyote Organics to the _______ region.
Southwest
Midwest
Northeast
3. A key criteria often used in selecting target markets is expected growth. Based on expected growth, the _______ market would be the most attractive for Paradise Kitchens.
Caucasian
Hispanic
African-American
4. The least attractive target market for Earth Coyote Organics is the _______ market.
non-Hispanic, large household, Southwest
non-Hispanic, large household, non-Southwest
non-Hispanic, small household, non-Southwest
5. The most attractive target market for Earth Coyote Organics is the _______ market.
Hispanic, small household, Southwest
Hispanic, large household, Southwest
Hispanic, small household, non-Southwest
Products: Meals Market Segments Break fast Lunch Dinner Hispanic Market Large household, SW Small household, SW Large household, non-SW Small household, non-SW Non-Hispanic Market Large household, SW Small household, SW Large household, non-SW Small household, non-SW Large household = household size >=4 Small household-household size 1-3 SW- Southwvest region Large market 2-Medium market -small market 0 No marketExplanation / Answer
1) Earth Coyote Organics' frozen meals will be packaged in single-serving microwavable containers. This product decision favors _______ households.
Answer: Small households
2) Paradise Kitchens began in Minneapolis-St. Paul, expanding to Denver and Phoenix shortly thereafter. The later markets Paradise Kitchens added included Dallas, San Antonio, Houston, Albuquerque, Oklahoma City and Southern California. These markets now have a well-established distribution network and brand recognition for the Howlin' Coyote brand. The company's current geographic coverage favors introducing Earth Coyote Organics to the _______ region.
Answer: Southwest region
3) A key criteria often used in selecting target markets is expected growth. Based on expected growth, the _______ market would be the most attractive for Paradise Kitchens.
Answer: Hispanic market
4) The least attractive target market for Earth Coyote Organics is the _______ market.
Answer: Non-Hispanic, large household, non-Southwest market
5) The most attractive target market for Earth Coyote Organics is the _______ market.
Answer: Hispanic, small household, Southwest market