“United Cereal: Lora Brill’s Eurobrand Challenge“
INTRODUCTION
The case is focusing on European division of a giant multinational breakfast food company, which describes a launch decision for a new cereal product. United Cereal (UC) was established in 1910 by Jed Thomas. It was known in the industry, eventually diversified into snack foods, dairy products. Breakfast cereal market was a potential market and there were several major competitors. With the growing demand of the ready to eat cereals, the company was now in a highly competitive industry. UC entered European market in 1952 by acquiring an English baked goods company, and then growing it by introducing products from the U.S. line. By 2009, Europe accounted for 20% of UC’s worldwide sales. But at the same time, European market was becoming a complex market to handle. The market varied to a great extent in each of these countries. There were a variety of breakfast traditions and national tastes that differed from each other. So Lora Brill pursue an idea which she referred to as the “Eurobrand” concept that could be adapted for product marketing. Crunch in other European markets with the Eurobrand approach, continuing with Germany and Benelux, as those countries are also in favor of Healthy Berry Crunch. Lora Brill faces a challenge in launching a new product for the European market.
Pros of the French Market with Healthy Berry Crunch
Healthy Berry Crunch began for Lora, to begin her Eurobrand strategy starting with France where market research had begun under the UC’s principles of centering decisions on the customer’s wants and needs. Not to mention that we are now in an era where everything is about being organic and green. France made about 21% of the total sales realized in Europe by UC. Clearly, the mass launch of this cereal should be centered in this market due to its importance and somewhat extensive research conducted.

Cons of the French Market with Healthy Berry Crunch
Healthy Berry Crunch is being displayed as a product extension which significantly reduces the costs of putting it out there. Branding it in France could be unsuccessful if don’t appeal the healthy consumer (according to research). Furthermore, if United Cereal does enter France with Healthy Berry Crunch, it should be aware of the small supermarket share of sales in cereal. Thus, it should place heavy focus on specialty stores and local markets to capture rapid market share.

Pros of Eurobrand market
With SG&A costs in Europe being 25% higher than in the U.S., cost cutting can increase profitability dramatically. If successful, Eurobrand can decrease costs in 3 years by about 10-15% in marketing and product expenses. Through the use of Eurobrand teams, the organization can increase their information involving the similarities and differences across cultures, and then implement that into their product-making and distribution strategies. Another benefit of developing a Eurobrand is obviously achieving higher economies of scale by becoming even more of a power house across Europe through standardization. This permits for more money to aggressively go after more market share across Europe. Instead of completely making brand new products, the ETTs permit for minor changes allowing for cheaper product extensions at many levels.
Cons of Eurobrand market
The Eurobrand comes with a very high check. In a recession, money isn’t readily available as before, especially with declining profits. The diluting of power of the CMs can disturb the peace in the organizational structure causing a lot of valuable people to possibly leave, or be unmotivated. Eurobrand is undermining “the UC way” which can prove costly when it comes to politics and money. As VP in Europe, Lora doesn’t want to be in bad terms with the guys at Michigan. Furthermore, the risks of mistakes can be very costly. Taking power away from CMs can lead Eurobrand into unprofitable sectors. It isn’t a good idea to disregard local cultures and markets because in order to compete with Kellogg’s, competitive advantage will be achieved through obtaining shelf-space, distribution chains, as well as the branding within the community. Another issue brought up by the Division VP in UK and Scandinavia was that all this organizational change just created confusion. He felt that instead of efficiency, chaos was being created.
My decision
If I was Lora Brill, I will launch of HBC in France. Based on the pros and cons of launch and delay launch which I have analyzed above, overall the opportunities are higher than threats of launching HBC in French market and as the Eurobrand. What’s more, as many European countries are recovery from the recession, it’s good time for launching Eurobrand and this will give UC first mover over its competitors, increasing its competition in European market. Furthermore, UC will be able save costs by 10% to 15% over 3 years by launching Eurobrand, which is a huge advantage in price strategy to its competitors.