Free Essay Benecol Case Study

T Pain · Uploaded by **T Pain** on Jan 6, 2006

Benecol Case Study

In this case analysis I will address issues facing the Raisio group�s potential threats and opportunities. I will also include suggestive actions I believe to be the best for the firm. Raisio�s new product Benecol margarine is a functional food product which helps lower the LDL-cholesterol value of humans by approximately fifteen percent. This health argument is the main feature of the product. Raiso was under pressure from competitors, and needed to penetrate the market quickly. Introducing Benecol as a food would be a lengthy process. This led to the introduction of Benecol as a dietary supplement. The FDA was a threat to Raisio, stating the product was a food and not a dietary supplement. The U.S Food and Drug Administration regulate their name: food and drugs. They do not, however, deal with dietary supplements. Raisio cleverly devised a marketing plan around the FDA, by calling it a dietary supplement. It looks and tastes like margarine; but it is not food, it is a supplement. The FDA obviously disagrees with this form of thinking. The new margarine is controversial, not because of health concerns but because of the way it is being marketed. I believe the reason for the delay of Benecol is based on poor marketing decisions and strategy. To succeed, this product would have required a major change in the behavior of consumers. Benecol, a product to lower cholesterol, required eating a large quantity of margarine to benefit from the active ingredient. This was a behavioral change that should not have been expected realistically from US consumers trying to lower high cholesterol. These are the same consumers who have been conditioned to lower their consumption of margarine. The science behind the benefit of Benecol�s active ingredient had been proven in Finland, which had a higher usage of margarine compared to the US. The marketers of Benecol not only missed this essential flaw, but also they priced the product at an expensive level, which ignored the typical US consumer practice of choosing margarine based on price. These marketing mistakes led to a delay in what could have been a very lucrative market.

In my opinion the Raisio group needs to focus on the food additive path. They also need to establish approval from the FDA and launch a dominant marketing program to help acquire a safe brand name. After the FDA approval I would possibly associate myself with a well-recognized partner. This might only be needed in the countries in which there is still some controversy over the name Benecol. These implications would receive two of the most important things necessary for a product to survive: a strong brand name and marketing strategy. In this analysis I focused on what the company�s threats and opportunities were. I discovered the complications of introducing a new product and how it is planned to penetrate the market. The implementation of business decisions can significantly alter the path of the product and how long it will last. Raisio made some decisions I am sure they wish they could withdraw. I would consider looking at the mission statement for this company. Business will lag unless sufficient sales are made and company objectives are met. Goals can be achieved through the implementation of effective sales and marketing programs that are backed up by conscious and continuous planning and management. Raisio should reflect on the mistakes they have made, to prevent future complications and develop competitive actions.