Stage of the PLC Paradise Kitchens, Inc. was started by cofounders Randall F. Pe

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Stage of the PLC

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 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, Paradise Kitchens is currently drafting a marketing plan to support its newest product line, Earth Coyote Organics, an extension of the Howlin' Coyote line with a focus on organic ingredients and earth-friendly marketing.

Consumer demand for organic foods has grown by double-digits every year since the 1990s. Sales of organic food and non-food products in the United States broke another record in 2014, totaling $39.1 billion, up 11.3 percent from the previous year. Organic sales now near a milestone 5 percent share of the total food market. The vast majority of American consumers purchase organic food products—a recent Consumer Reports survey shows that 84% of American consumers purchase organic food.

Paradise Kitchens' cofounders are now in the process of formulating the marketing strategy and tactics that will support the launch of the Earth Coyote Organic line for their marketing plan, using the product life cycle for guidance.

Products, like people, are viewed as having a life cycle. The concept of the product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. The product life cycle graphs total product revenue over time.

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.

Paradise Kitchens is currently working on a marketing plan that will support its newest product, Earth Coyote Organics (ECO), an extension of the Howlin' Coyote line with a focus on organic ingredients and earth-friendly marketing. Earth Coyote Organics will build on the success of Paradise Kitchens' first product line, Howlin' Coyote, the only premium-quality authentic Southwestern/Mexican style frozen chili sold in grocery stores. Paradise Kitchens will launch the Earth Coyote Organics line with frozen, single serve, microwavable meals crafted from the finest organic ingredients. The frozen meals will have a premium price to cover the increased expense of the organic ingredients and to signal the quality of the product.

Consumer demand for organic foods has grown by double-digits every year since the 1990s. Sales of organic food and non-food products in the United States broke another record in 2014, totaling $39.1 billion, up 11.3% from the previous year. Organic sales now near a milestone 5 percent share of the total food market. The vast majority of American consumers purchase organic food products—a recent Consumer Reports survey shows that 84% of American consumers purchase organic food.

Paradise Kitchens' cofounders are now in the process of formulating the marketing strategy and tactics that will support the launch of the Earth Coyote Organic line for their marketing plan, using the product life cycle for guidance. Paradise Kitchens is deciding between an awareness strategy and a differentiation strategy for Earth Coyote Organics' promotional messages, given the lifecycle stage for the organic food market.

1. Category sales for organic foods are

remaining flat.

growing.

decreasing.

2. The growth stage of the product life cycle is characterized by _______ in sales and competition.

rapid increases

little increase or decrease

a gradual decrease

3. During the _______ stage of the product life cycle, sales grow slowly and profit is minimal, often due to significant costs in new product development.

growth

introduction

maturity

4. During the introduction stage of the product life cycle, the goal of promotion is to _______; however, during the growth stage, the goal of promotion is to _______.

inform and educate; stress points of differentiation

inform and educate; remind customers about the product

stress points of differentiation; inform and educate

Stage of the product life cycle Introduction Growth Maturity Decline Total industry revenue Total industry profit

Explanation / Answer

Q1) Category sales for organic foods are growing

Q2) The growth stage of the product life cycle is characterized by rapid increases in sales and competition

Q3) During the introduction stage of the product life cycle, sales grow slowly and profit is minimal, often due to significant costs in new product development

Q4) During the introduction stage of the product life cycle, the goal of promotion is to inform and educate; however, during the growth stage, the goal of promotion is to stress points of differentiation

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