...The marketing mix is designated by the common phrase penned by Jerome McCarthy (1960) as, “The 4 P’s of Marketing.” The 4 main “P’s” are Product, Price, Place, and Promotion. They are the foundation to the marketing mix. However, in this day and age the marketing mix has extended to 3 more P’s. They are People, Process, and Physical Evidence (Packaging). Positioning is also sometimes known as one of the P’s in the marketing mix. According to Mullins et al (2005:201), it is the perception of a product by a consumer, relative to their needs and competing products and how the company in charge of this product, aims to achieve this mindset [pic] Figure 1: Adapted [online] The Times 100 business case study (A Mcdonald’s Restaurants Case study) As seen in Figure 1 above, all four components which are inextricably interrelated, features potentially infinite number of variables. These variables creates the marketing mix combination management usually sets as part of the objectives to realize its vision and mission for the company. Product Product is a key element in the overall market offering (Kotler & Amstrong 2011: 237). A product is anything that is capable of satisfying customer needs. The means of deriving satisfaction from a...
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...nes Student’s name College Nestle is one of the world’s largest food and beverage corporation in the food industry. It commands wide brand name recognitionand significant influence with customers, businesses, and also governments. Its products range from ice cream, water, coffee, and baby food to performance and also healthcare nutrition, pet care,confectionery, pharmaceuticals and others. Nestlé’s major brand names comprise of Toll House, Nestea, Lean cuisine, Perrier, Nescafe, and Perrier. Nestle’s share price has experienced an eighteen-fold increase over the last 20 years. From 1970 to 2000, Nestle shares outperformed the Morgan Stanley Capital Index of Swiss blue chip stock companies by over 250% and the Morgan Stanley World Blue Chip Stock Index in USD terms by 25%. For decades, Nestle has had consistent, stable and accelerated growth in overall turnover. In terms of current performance, the year 2001 was once again a record year for sales, net profits and dividends to shareholders, with CHF 84.7 billion in sales, CHF 6,681 million in net profit and 4.4% real internal growth. According to Stern Stewart’s Wealth Added Index (WAI), Nestle is among the top 15 companies worldwide in creating shareholder wealth in a ranking of the 5069 largest quoted companies. Stern Stewart calculates that between June 1996 and June 2001 Nestlé’s wealth added to shareholders amounted to USD 43.8 billion. The WAI rankings emphasize the notion that companies increase the money’s worth...
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...Brief Overview of Company Kettle Chips UK (2010) explains that in 1978 “Cameron Healy founded Kettle Foods in Salem, Oregan, USA with the aim of providing high quality, naturally sourced products.” They then go on to tell how in 1987 Cameron discovered that the British loved crisps, encouraging him to establish Kettle Foods in the UK, one year later Kettle Foods in the UK was launched in Norfolk – in order to be as close as possible to potato growers. They also state how in 2008 they were not only “…the 6th fastest growing grocery brand in the UK but …also identified as one of the country’s Top 100 Grocery Brands (source: The Grocer).” In 2010 Kettle Chips were acquired by Diamond Foods; whose food brands include Emerald snack nuts, Pop Secret popcorn and Diamond of California nuts. (The Oregonian, 2010) Introduction Kettle Chips managed to maintain their top position in the premium crisps segment, with an estimated 4% market share in 2010 of the total crisp market – giving them a total of 23.8% rise in value shares in crisps and snacks from 2008 to 2010. (Mintel Oxygen, 2011) Mintel (2011) explains that although Kettle Chips maintained its lead as the only brand of size in the premium segment, competition is rapidly increasing from other companies such as Tyrrells and Walkers’ Red Sky, causing their sales growth to slow down in 2010. Although Kettle Chips are an international brand this report will mainly be focusing on their UK business. Approach This report...
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...Diamond Foods, Inc.: Anatomy and Motivations of Earnings Manipulation Mahendra R. Gujarathi ABSTRACT: Diamond Foods is America’s largest walnut processor specializing in processing, marketing, and distributing nuts and snack products. This real-world case presents financial reporting issues around the commodities cost shifting strategy used by Diamond’s management to falsify earnings. By delaying the recognition of a portion of the cost of walnuts acquired into later accounting periods, Diamond Foods materially underreported the cost of sales and overstated earnings in fiscal 2010 and 2011. The primary learning goal of the case is to help students understand the anatomy and motivations of earnings manipulation. Specifically, students will have the opportunity to (1) apply the FASB’s Conceptual Framework to a real-world context, (2) determine the nature of errors and compute their numerical effects on financial statements, (3) understand motivations for earnings management and actions needed for managing earnings of future years, (4) explain the anatomy of financial reporting fraud by reconstructing journal entries, (5) prepare comparative financial statements for retroactive restatements, (6) explain the rationale for clawback provisions in compensation contracts, and (7) understand the difference between the real and accrual-based earnings management. Keywords: earnings management; financial statement fraud; restatements; error correction; clawback provision; Conceptual Framework...
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...Diamond Foods Accounting Scandal BACKGROUND: Founded in 1912 as a walnut grower cooperative, Diamond Food’s primary business involved buying walnuts from local California growers, processing the product, and reselling it. The San Francisco-based company converted from a cooperative to a public corporation in July of 2005, issuing its initial shares for $17. By 2010, Diamond Foods (DMND) had expanded and acquired a number of snack food companies including Kettle Brand® Chips and Pop Secret® popcorn and was negotiating the acquisition of the Pringles brand from the Procter & Gamble Company (Diamond Foods, 2014). The addition of the Pringles brand would make Diamond the second-largest global snack foods company behind PepsiCo, Inc., owner of the Frito-Lay brand (Byron & Ziobro, 2011). Although the new ventures took precedence, Diamond’s walnut business remained the highest commodity cost to the company. In order to maintain relations with the growers, Diamond had to assure they offered a competitive price for the product; however any recorded increase in walnut price would decrease both the company’s reported earnings and their reported earnings per share (EPS). Despite rising walnut prices, the company consistently posted EPS that defied analyst projections. Between the 2010 SEC Form 10-Q second quarter filing and the SEC Form 10-K of FY 2011, the price of Diamond stock jumped from $39 dollars per share to $90 per share (SEC, 2014). On January 9, 2014, the Securities and...
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...Case Study: Diamant Foods Company Diamant Foods Company produces a variety of food products, including a line of candies. One of its most popular candy items is Divine Diamonds, a bag of dozen individually wrapped diamond-shaped candies made primarily from a blend of dark and milk chocolates, macadamia nuts, and a blend of heavy cream fillings. The item is relatively expensive, so Diamant Foods produces it only for its eastern market, encompassing urban areas such as New York, Atlanta, Philadelphia, and Boston. The item is not sold in grocery or discount stores but mainly in specialty shops and specialty groceries, candy stores, and department stores. Diamant Foods supplies the candy to a single food distributor, which has several warehouses on the East Coast. The candy is shipped in cases of 60 bags of the candy per case. Diamonds sell well, despite the fact that they are expensive, at $9.85 per bag (wholesale). Diamant uses high-quality, fresh ingredients and does not store large stocks of the candy in inventory for very long period of time. Diamant’s distributor believes that demand for the candy follows a seasonal pattern. It has collected demand data (i.e., cases sold) for Diamonds from its warehouses and the stores it supplies for the past 3 years, as follows: Demand (cases) |Month |Year 1 |Year 2 |Year 3 | |January |192 |212 |228 | |February...
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...In February 2010, Diamond Foods Inc.’s then-Chief Financial Officer Steven Neil asked his team of accounts an unusual question. How much could the snack-food company pay for walnuts that year and still top Wall Street estimates? According to the complaint released by the Securities and Exchange Commission, the answer was 10 cents less than the expected 82 cents that the company was expected to pay. To cover the difference, Mr. Neil devised a plan to put the extra cost into the following year which all the company the report better-than-expected results. The alleged fraud gave the company a string of earning beats and a strong rise in its stock. It also allowed Diamond Foods Inc the necessary currency needed to clinch a deal to buy the Pringles snack brand from Proctor and Gamble for $2.35 billion. Everything unraveled after the Wall Street Journal and some skeptical investors questioned the company’s accounting. According the Diamond Foods Inc, they conducted an internal investigation and ultimately restated its finances for the 2010 and 2011 fiscal years. The restated numbers showed the stock price per shared dropped from $90 a share to $13 a share. The fraud also had a negative impact on acquiring the Pringles snack brand. Diamond fired Mendes and Neil in early 2012 and restated its earnings after an internal probe concluded that the accounting was improper. (Hamilton, 2014) On January 9th 2014, the Securities and Exchange Commission charged Diamond Foods and its former SFO...
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...Agricultural Revolution: Greatest Achievement or Greatest Failure? Jared Diamond challenges his readers to think critically about how our modern society obtains its food and the havoc it has wreaked on humankind. His title “The Worst Mistake in the History of the Human Race” clearly rings of passion but is it hyperbole? And what is the subject of his scrutiny? The adoption of agriculture. Modern American society is encultured in what he calls the “progressivist” mentality which is the belief that “human history over the past million years has been a long tale of progress” (Diamond, 1987). As explained by Diamond, progressivists celebrate the agricultural revolution crediting it with our ability to enjoy a variety of foods, have more leisure time, create art and build empires, lead long and healthy lives without the daily worry and trouble to find wild foods and avoid starvation. But Diamond brings forth some troubling news to rain on the progressivist’s parade. Those recent archaeology discoveries (now outdated) attempted to discredit the long held beliefs that the human race is better off because of adopted agriculture. “The adoption of agriculture, supposedly our most decisive step toward a better life, was in many ways a catastrophe from which we have never recovered. With agriculture came the gross social and sexual inequality, the disease and despotism, that curse our existence.” (Diamond, 1987). The support for this hypothesis is in the findings of indirect...
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...ACCT 4400 Case Set 1 Case Set 1 covers Ethics and Professionalism in Auditing, and consists of the following cases: Case 1-1: Accounting Scandal Case 1-2: Audit Dilemma Case 1-3: Independence Case 1-1: Accounting Scandal This case focuses on the Diamond Foods accounting scandal. To complete this assignment, you should first conduct research using the Internet to better understand Diamond Foods and its fraud. Second, answer the following questions. Questions: 1. What was the motivation for the Diamond Foods scandal? Be specific, simply stating “greed” is insufficient. 2. (a) In general, what is a conflict of interest? (b) What role did the board of directors at Diamond Foods play in creating conflicts of interest at the company? (c) How should an auditor have responded to the conflicts of interest at Diamond Foods? 3. (a) What are momentum payments? (b) What was the role of momentum payments in the Diamond Foods scandal? 4. How did Diamond Foods fund its aggressive growth strategy of multiple acquisitions during a short period of time? Case 1-2: Audit Dilemma Assume that you have just started as a staff auditor at a large accounting firm. For your first audit, you are assigned to E&K books, a public company. Your firm has been auditing this client for several years, and has always given E&K clean opinions. A senior, Ella, will lead fieldwork on the E&K audit. You are glad to be working with Ella because...
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...Diamant Foods Company – Case Study MGT - 9710 Diamant Foods Company – Case Study MGT - 9710 Ankit Kadakia Victor Hang Fung Monnica Honrade Bojan Grozdanic Ankit Kadakia Victor Hang Fung Monnica Honrade Bojan Grozdanic Background Diamant Foods, a company focused on producing food products, specializes in producing an exquisite line of candies. One of its most popular candy items is Divine Diamonds, a bag of dozen individually wrapped diamond-shaped candies made primarily from a blend of dark and milk chocolates, macadamia nuts, and a blend of heavy cream fillings. The company only sells Divine Diamonds in specialty stores in urban areas in the Notheast America. The candy is shipped in cases of 60 bags of the candy per case. Diamonds sell well, despite the fact that they are expensive, at $9.85 per bag (wholesale). Since the company uses only high quality and fresh ingredients, the company does not store large inventory of the candies for a very long time. The 3 year data provided in this case follows a seasonal pattern, using regression we determine the demand for the fourth year which is as follows Distributor Order Quantity | | Month | Forecasted Demand | Jan | 235 | Feb | 249 | Mar | 244 | Apr | 305 | May | 270 | Jun | 238 | Jul | 226 | Aug | 234 | Sep | 320 | Oct | 440 | Nov | 311 | Dec | 334 | Year | 3404 | Based on the above the annual demand is 3404/year. The annual carrying cost is $116...
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...(Richards, 1993). In a sense, the young people were all but pushed into the path of the RUF as a means to escape the poverty and squalor they found themselves in. In a way, they found it within themselves to capitalize on their grievances and succumb to their greed. Diamonds then became a kind of incentive for violence. This applied not only to RUF fighters, but eventually to their opponents also. There were very few ‘traditional’ battles fought during this war, but the ones that did occur were always in and around diamond rich areas. Keen notes that, “thousands of civilians were expelled and kept away from diamond-rich areas… rebels often forced diamond prospecting work to continue and then took diamonds” (CITE KEEN 2005). A women whose home...
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...Diamond Foods Financial Fraud Scandal Adrienne M Somers David F McCormick Acct 320 February 27 2012 In April 2011, Diamond Food Inc (DMND), the nation's largest walnut processor and maker of Emerald nuts announced plans to buy Pringles from Proctor and Gamble for $1.5 billion in stock (Reuters, 2012). This move was part of the company's aggressive growth strategy to become a leader of the snack food industry. Former chief executive officer, Michael Mendes, and former chief financial officer, Steven Neil, spearheaded this effort. However, plans were postponed as questions arose about two large payments that were made to walnut growers in August of 2010 and September 2011 for $20 million and $60 million respectively. An internal audit of the financial records found that these payments were improperly booked into the wrong accounting period, which artificially reduced the company's costs, and boosted earnings in that period making the company look more profitable than it actually was. It is a technique known as earnings management. Because of the probe, Michael Mendes and Steven Neil were removed from their positions as CEO and CFO (Dalai, 2012). The financial records for 2010 and 2011 were found to be unreliable meaning that would have to restate their financial results for both these years. This scandal caused Diamond Foods Inc shares to fall by 40 percent. It seriously damaged the reputation of the company and the trust of their shareholders. It also ruined any chance...
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...Conflict Diamonds and the Kimberly Process What this case is about was that ion the 2000’s, a common concern emerged among members of the diamond industry, the United Nations, several governments and Human Rights campaigners who all wished to end the trade in Conflict Diamonds which were gemstones that were being mined or stolen by rebels fighting internationally recognized governments. To end this, they embarked an unusual collaboration called the Kimberly Process. The Kimberly Process was a scheme for tracking diamonds all the way from the mine to the jewelry shop, so that consumers could be assured that the gems they were buying were conflict free. 1. Conflict Diamonds are diamonds that are illegally traded to fund conflicts. In recent times, conflicts in some of the poorest parts of Africa have often focused on rebels controlling their country’s natural resources and assets, for example, oil, wood, minerals and also diamonds. They are diamonds that had originated from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments. Conflict diamonds came to the attention of the world media during the extremely brutal conflict in Sierra Leone in the 1990s. The groups that were benefited from the trade in conflict diamonds were the combatants, including the Revolutionary United Front. Diamonds played a key role in obtaining funds to provide these...
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...In early 2014, Diamond Foods Inc. paid $5 million to settle its accounting fraud. The company’s CFO manipulated the cost of walnuts by pushing some of the cost to a later period. This practice led to higher income and misled investors in 2010 and 2011. Diamond restated its 2012 financial statements. In reviewing the SEC filing of Diamond Foods, Inc., I found that its auditors at first issued an unqualified opinion on its 2012 financial statements. “In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Diamond Foods, Inc. and subsidiaries as of July 31, 2012 and 2011 …” However, due to the discovery of the accounting scandal, the firm subsequently restated its opinion in its 2013 audit report: “Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of July 31, 2013 …” In the company’s restated financial statements of 2012, the company stated that an internal investigation was launched and found sufficient evidence that payments for Walnut was recorded in the wrong period, and quarterly estimates of its walnut cost was also wrong. In addition, the company’s accounts payable and accrued expenses related to the walnut business is also misstated for the previous 2 years. The company performed an extensive review of its invoices and made this determination. It’s important to notice that in 2007, the auditor issued...
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...Rwanda’s Genocide is an educative chapter written by Jared Diamond educating the reader that in the case of Rwanda’s collapse, the critical circumstances like lack of farming land, hunger, poverty, war, lack of natural resources etc. were caused by population pressure. Overpopulation being the major causes, it brings plenty of problems with it. Diamond starts off the chapter by talking about his family’s visit to East Africa where they saw overpopulated streets of poor people especially poor children at the side of the road begging for a pencil. Diamond talks about how “population problems such as those of East Africa are often referred to as Malthusian theory” which is population grows exponentially compare to food production increases arithmetically. (Diamond 312) Then, Diamond discusses about Rwanda’s people that was dominated by Hutus, principally farmers, and Tutsis who were minority. Both did not like each other and therefore; Hutus army with weapons started the killing of Tutsis and “within six weeks, an estimated 800,000 Tutsis, representing about three quarters of Tutsi population in Rwanda”. (Diamond 317) Later, Diamond presents many surveys, samples, statistics and examples such as, overpopulation in Kanama causing population consuming less than average daily required calories, to inform readers about different regions becoming the victims of population pressure. At the end of the chapter, Diamond thinks that overpopulation had immense influence on the Rwandan...
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