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WIIKANO ORCHARDS Case Solution & Answer

WIIKANO ORCHARDS Case Solution 

Executive summary

Wiikano is a family-owned business that is offering pure 10% natural apple juice and value-added products for consumers. The company is using density tree production for products. Currently, the trend in the USA is changing, preferences and needs of the new generation vary. Along with that due to health issues consumers are switching towards fruits and vegetables blend juices rather than sugar added products. Wiikano is among the companies in the market that offer 10% natural apple pressed juice for consumers. But due to a lack of promotional activities, Wiikano is not able to communicate it properly to its potential consumers. As the president is reviewing a proposal to make a final decision and present it in front of a board of directors. The proposal suggested the company re-brand its product, redesign its packaging and website, and along with that proposal also suggest that the company should design promotional activities that present the proper image of the product. After analysis, we recommended that the company should accept the proposal but make a few changes that are suggested in the proposal i.e. Company should go for rebranding, but it should not change its brand name because it can make consumers switch the other brands. The company should increase its availability on social media because the young generation is mostly available on social media. It is a vital source to attract consumers through social media and collaborations as part of promotional activities.

Introduction

This case discusses issues of the organization i.e. decrease in demand in the commodity industry. It is a family-owned business and due to the decrease in demand, the president is thinking of rebranding Wiikano’s apple juice through promotions and increasing its price as well. She was reviewing business proposals to make final decisions and convince the upper management. This proposal acceptance will cause retailers and wholesalers to pay more for the juice. The Wiikano case focuses on product differentiation complication-sand also talks about branding, pricing, and marketing communications(Shapiro, 2018). It also addresses issues that SME business owners face by utilizing an easy and convenient product and distribution system.

Company Background

Wiikano Orchards is a family-owned business with a 120-acre apple orchard and apple juice processing plants in the Ohio River Valley. In 1928, the Yazzie family purchased a 32-acre orchard, and in 1968, the family changed the company’s name to recognize its Shawnee Native American roots. The production of apple juice is consists of costs i.e. land maintenance, land preparation, plantation, orchard maintenance, harvesting cost, pest management cost, labor wages cost, machinery cost, and orchard development cost. The agricultural development sciences allow the company for dense tree plantation per acres in commercial orchards. The tree density of trees shifted from 150 to 250 trees where it shifted from 500 to 1000 trees per acres (Michael Parker, 2017).  This density increases the production capacity of production and also increases the returns on investment. Along with that it also takes less time in the production cycle. Increased density of orchards created the tree training need and also increased the usage of water. Wiikano high density was started in 2008 and the company invested $850 per acre to meet the cost of the land preparation. The company also invested $15800 for tree plantation costs and produces 908 trees per acre. The company predicted that it will manufacture at full scale in 2028 but due to less trained staff orchard only produced 818 per acre in 2016 and it was less than 6% yield per acre. For one-year apple was stored in a controlled atmosphere. The company had planned to do well in the industry but due to the way the trends functions and an intense competition in the industry; the need for rebranding and pricing had-raised. It was important for the company to increase the revision of the strategies in order to sustain in the market and to gain consumer’s loyalty.

Industry Overview

The apple Juice industry in the United States is growing but the preferences of consumer is changing. People are now more health conscious in 2016 US production of apples was 5.4 million. There are 7500 apple producers in the industry that offer 100 varieties of the apples. The industry is consist of various different groups i.e. Apple growers, packers, processors, shippers and brokers. Processors in apple juice production industry can use apples o press apple juice or apple cider. Around 85% of apple juice was consumed in the United States. The price competition in the industry is increasing. And the demand of organic juice is increasing. There are very few producers who offer 100% fresh pressed apple juice. Wiikano in the industry have advantage of producing fresh pressed apple juice. Along with that now to meet the new trend all apple juice producers are making efforts to capture the market share and meet consumers demand.

Problem Statement

The competition in the industry was increasing and the company is facing issues i.e. low investments in marketing a direct consumers promotions. Along with that the packaging and labeling were old and less attractive for the consumers. The distribution channel was very small because it was selling through small wholesalers who were selling to retailers. The company was offering various discounts for wholesalers and retailers that are also causing a decrease in company revenues, Moreover, the company was not emphasizing on the product’s advantages, i.e. the company was selling natural juice that was made from freshly compressed apples rather than apple’s essence as its competitors were doing, in order to sell the juice at high prices;however, it was currently being sold at a low price. Furthermore, there was also no brand loyalty, and consumers used to buy the brand for its low price.  The apple juice consumption trend in the industry was declining because consumers were becoming more health-conscious and were avoiding sugar-based juices. Young consumers prefer to consume juices that area blend of fruits and vegetables with good taste and health-rather than sugar-based juice.

Market Mix

Product

  • Wiikano Company was selling natural and fresh-pressed apple juice with no added sugar, whereas the cost of each bottle was 6 pounds. The company started to sell fresh apples and other value-added products i.e. apple cider and apple butter direct from the farmers market. The company was generating 90% of its revenues from the sale of apple juice.
  • The company started to sell bottled apple juice with its brand name, i.e. Tuwa and the company’s 70% sales were from bottled apple juice…………………
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