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2017|Case No.M368| Length 8 pgs.
Maria Almaden was considering the launch of a new business that would use traditional cheesemaking techniques to produce high-quality vegan cheese. Eager though she was to embark on her new endeavor, she first had to solidify her market entry strategy and determine the best price to charge for her product.
Almaden’s business idea initially involved replacing milk (which contains proteins that form cheese curds) with a combination of specific sugars and USDA-approved yeasts to produce a vegan cheese that would surpass the quality of similar products on the market. Almaden had already registered a company called Cheese.io, purchased a few essential patents, identified a potential yeast supplier, and negotiated a price for the yeast supply.
But subsequent research convinced Almaden that making vegan cheese and selling it to end consumers might prove overwhelming. Instead, it would be more feasible to sell a yeast-based, milk-replacement product to existing cheesemakers, focusing first on cheddar producers. She was hopeful her product would ultimately prove to be a significant cost-saver; but she also knew it would oblige the cheddar manufacturers to introduce significant changes to the cheesemaking process. These changes would impact their reaction to her product and played a critical role in determining her pricing and entry strategy.
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Learning ObjectiveThis case is for use in a course on marketing management. It is most appropriate for MBA students or others with previous professional experience. The learning objective is for students to assess the risks and opportunities of launching a new product in a business-to-business setting. The case enables students to consider the financial incentives of potential customers as a way to inform pricing decisions and provides an opportunity to become familiar with basic quantitative marketing analysis.