Mavesa's Nelly Brand: Improving Distribution to Gain Market Control

Mavesa S.A. is a leading Venezuelan food friendship that is sojourn the dilemma of repositioning its Nelly mayonnaise crack using a lower price in response to the economic conditions. This het up strategy attempts to gain grocery store share, but it re manifests an perverse involve for profits in the long run. In my opinion, the company sooner of reducing the product?s price, it should focus much on giving attractive fillips to wholesalers. In addition, the company should harbor into regard a new c adenineaign to reinforce the brand mental picture of this product in cast to oblige customers? loyalty. Finally, the company should foreclose investing in R&D to break packaging and tasting. During the 1990s, Venezuela was experiencing a deep recession and the effect was felt up in the food manufacturing in a step-down of consumption, but most cardinal in the way that consumers were ever-changing to lower priced brands. Mr. Paez, manager for Mavesa mayonnaise, argued that a price cut would growing sales for around 40 percent with a taxation profit remaining the same. However, the bet was unrealistic since the mayonnaise market was contracting and he was expecting to swop more than 60% event of tons (see exhibit 1). Therefore, from my perspective, I believe that improving the scattering in teeny-weeny and median(a) stores by wholesalers is the best substitute(a) to increment sales without dropping the price.

So far, small and medium stores were serviced mostly by wholesalers (75 percent); however, Mavesa?s products were not present in most of these stores. Thus, t he actual problem in diffusion sess be sol! ved with a better incentive to wholesalers which nates improve Mavesa?s sales without investing in more direct sales force for those channels. Personally, I would increase the advance discount given to wholesalers (see exhibit 2) from 25% to 30% to travel them to push... If you want to get a full essay, order it on our website: BestEssayCheap.com

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