GMAT Essays (AWA)

The following appeared in an Excelsior Company memorandum:
“The Excelsior Company plans to introduce its own brand of coffee. Since coffee is an expensive food item, and since there are already many established brands of coffee, the best way to gain customers for the Excelsior brand is to do what Superior, the leading coffee company, did when it introduced the newest brand in its line of coffees: conduct a temporary sales promotion that offers free samples, price reductions, and discount coupons for the new brand.”

The explanation in the memorandum sounds logical & using a strategy used by the leading company to attract customers is definitely a good practice. Before entering into any market it is essential to make an in depth study about the product's customers, existing competition, pricing in the market & any seasonal variations. In this case, it is not wise to simply replicate Superior's strategy without any analysis.

The Excelsior Company should actually have a study about the target customers on whom Superior had tried out temporary sales promotion. Products like coffee can have a seasonal demand & it is important to determine the right time to launch a product. It also needs to study the pricing at which coffee was marketed by superior as part of the plan & the relative cost of other brands at that point. Just like we judge a person based on the first impression, Excelsior should make sure that the first impression is the best impression.

Sales promotion alone by itself cannot gain customers, but it has to be substantiated with good quality so that the customers get the value for their money. Since coffee is expensive, customers will be very choosy when making their decision & will be skeptical while trying out new brands. Though free samples & price reductions will make them try the product once, good quality assurance will only make the customers “stick” to the product. Good quality assurance, reasonable price, attractive offers & value for money such be the mantra for any product to sustain in the market.

Thus I would agree that incorporating the best practices of a company seems like a good idea, provided a detailed study is done before making this move. Every customer will be willing to try out free samples which can be made available across shopping malls, coffee places & public gatherings. Price reductions can be used as the next step to gather customers who will come back after they have tried out the free samples. Using the discount coupons will make the customers to use the coupon & buy with a discount. The details of the study should be utilized to introduce the product at the right timing & to the right group.