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Essay / Research Paper Abstract
A 3 page paper discussing the case of Colombo frozen yogurt and General Mills’ experience in dealing with the market shift from independent shops to impulse purchasing in a variety of locations. The paper provides a table more realistically assigning shipping and merchandising costs to each market type to reveal greater profitability than was apparent under a non-ABC approach to allocating costs. Bibliography lists 1 source.
Page Count:
3 pages (~225 words per page)
File: CC6_KSmktgABC.rtf
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Unformatted sample text from the term paper:
The old clich?, "Figures dont lie, but liars figure" summarizes some of the differences that can be "created" in cost figures according to the method used to create them.
In the case of General Mills, Inc. (GMI) in its acquisition and subsequent operation of Colombo frozen yogurt, differences in approaches to costing various aspects of the sales effort highlights
the fact that apparent profitability and actual profitability can be very different in the light of the realities of costs. The purpose here is to apply the principles of
activity-based costing (ABC) to marketing costs. Colombos Competitive Environment Colombo existed and operated in an environment that represented a declining market. Though
it had gained early success as a healthy alternative to ice cream, by the time that GMI acquired the brand in 1994, many consumers had decided that they would retain
some of their small luxuries and economize in fat and calories elsewhere. They preferred ice cream to frozen yogurt, and special trips made for the sole purpose of securing
a frozen dessert increasingly did not include yogurt shops as the destination. Colombo competed against not only the fast-growing TCBY franchise, but also against competitors such as Baskin-Robbins or
Swensens, which focused on ice cream in their independent shops. Though the independent shops segment was declining, the impulse market was expanding rapidly.
Retailers whose primary business was neither frozen yogurt nor ice cream were offering Colombo products as an add-on to their primary business. These impulse outlets typically were located
in convenience stores, college food service locations and other similar locations where Colombo frozen yogurt could serve as an impulse treat or where it could fill the role of providing
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