Cow Wow should focus on the right target customers in order to maximize the profit.
Objective: Cow Wow should target on the right customers in order to maximize the profit. Based on the historically data, as Cow Wow raised its price about 20% higher than other brands’ flavored milks, Cow Wow is losing its sales. In this way, Cow Wow maybe should think about focusing on other target customers.
Alternative 1: Keep focusing on children.
As children is the original target customer, Cow Wow already achieved a good amount of revenue and market share in the past. In this way, Cow Wow minimized the advertising cost and maybe can keep the children market.
Advantages: The original market share may be kept. The present advertisement could also be kept.
Disadvantages: Due to Cow Wow’s price is higher than the same type of products on the market, Cow Wow is already losing market shares. There is a possibility for Cow Wow to keep losing the market share of children’s market. Children has almost no spending power. As most of the things children are buying are from their parent’s pocket, Cow Wow mostly are bought by children’s parents. Parents most likely may choose the products has a moderate price, in this way, Cow wow is losing the market share.
Alternative 2: Focusing on high school and college students.
As high school and college students are the section that learned about Cow Wow, they the potential customers. As in May 2014, the Cow Wow in Santa Monica College got sold out in the first week, this is a great signal for Cow Wow to focusing on the new target customers, which are the high school and college students.
Advantages: As Cow Wow is so popular among the high school and college students, Cow Wow can make revenues from these new target customers. Also, other flavored milks have not touched this market yet. This is a great opportunity for Cow Wow to open new market. Also, high school and college students have more buying power than children, they can buy Cow Wow without asking their parents.
Disadvantages: Cow Wow needs to make new advertisement and maybe change the package in order to fulfill the high school and college students needs and wants.
Conclusion and Recommendation
Cow Wow should take Alternative 2,
which is focusing on high school and college students. As high school and college students has more spending power and Cow Wow is popular among them, Cow Wow could focus on this new target customers with getting more revenues by making new advertisement and make new packages. Cow Wow is opening the new page.