see attachment 2 assignments
Strategic Marketing Management
Part I: Case Study - Got Milk?
Review the case "Management Decision Case: Got Milk? What Kind?" found at the end of Chapter 7 in your textbook following the "Application Questions." After reading the case, answer the following questions:
What methods of segmentation would be ideal for alt-milk products? Based on your ideal segmentation method, how would you position these products? What value does segmentation add from the perspective of marketing research?
What are your thoughts on plant-based milks? Do you consume these? Why, or why not?
Do some research on generational differences related to milk consumption. How does your consumption compare to others? Based on your research, which target marketing approach would you choose for alt-milk products and why? Compare and contrast how targeting is used from the perspective of consumers and businesses.
How do flavored and enhanced milks appeal to you? Will sustainability increase consumer demand? How would you design an ad campaign focused on sustainability? Please use examples here.
Part II
Review the information about Values Attitude Lifestyles Survey (VALS) by going to the following Strategic Business Insights webpage: https://www.strategicbusinessinsights.com/vals/ustypes.shtml
Once there, review all of the U.S. VALS Types.
After you have reviewed eight VALS Types, please answer the following:
What do you feel to be your primary and secondary VALS type?
Choose four of the eight U.S. VALS types (innovators, thinkers, believers, achievers, strivers, experiencers, makers, and survivors) and describe how the targeted marketing and ad campaign in the alt-milk case would need to be modified to better reach each group.
You must utilize at least two peer-reviewed or academically reliable sources to support your responses.
Do not respond to the questions in question-and-answer format but instead respond in essay format. Use subheadings to logically organize both parts into a single paper.
Adhere to APA Style when constructing this assignment, including in-text citations and references for all sources that are used. Please note that no abstract is needed.
Part 1 Reading : MANAGEMENT DECISION CASE
Got Milk? What Kind?
Times are not easy for American dairy farmers. A drop in milk consumption, climate change, the trade war with China, soaring sales of nondairy alternatives, and the coronavirus have all impacted business. Urban and suburban dwellers are especially unconnected from the lives of dairy farmers.66 Seven percent of consumers even think that chocolate milk comes from brown cows, according to a survey by the Innovation Center of U.S. Dairy. The 500-pound gorilla in the room has to be the threat of the plant-based milk industry that had $2 billion in sales in the U.S. in 2019.67
Since 1970, fluid milk consumption in the U.S. has dropped by roughly 47 percent, from 273.8 pounds per person in 1970 to 146 pounds. Dairy sales are relatively flat due to the increase in sales of milk-based products such as cheese and yogurt. Americans even eat much less ice cream than in 1946. Improvements in technology have allowed for dairy farmers to get more milk per cow, which has them looking for a competitive edge in other ways. Licensed dairy herds declined by 20 percent from 2013 to 2018, from 46,975 to 37,468. Milk is a commodity with prices set by the federal government. The USDA has supported marketing programs such as the famous “Got Milk” campaign, as well as provided subsidies to dairy farmers. In 2018, the safety-net program was almost $254 million.68
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Why are we Americans drinking less milk? “Clean eating”—a phrase that describes a plant-based diet free of processed food—is driving the demand for plant-based milks. Celebrities such as Gwyneth Paltrow promote a diet of no dairy, and women’s media promote the idea that giving up dairy will help you lose weight, be less bloated, and have healthier skin.69 Some consumers are allergic to dairy, but others believe alt-milk products are better for Mother Earth than dairy milk products. In his acceptance speech for Best Actor at the 2020 Academy Awards, Joaquin Phoenix appealed to the audience to fight for animal rights. He argued against feeling entitled to “artificially inseminate a cow and when she gives birth, we steal her baby, even though her cries of anguish are unmistakable. And then we take her milk intended for her calf and put it in our coffee and cereal.”70 These are strong sentiments from an influencer like Phoenix.
According to the Good Food Institute, Almond Milk is the best-selling plant milk with sales of $1.3 billion in 2019. Soy is in a distant second place at $202 million. Rounding out the category are Blends ($118 million), Coconut ($93 million), Oat ($84 million), Cashew ($51 million), Pea ($38 million), Rice ($36 million), and Other ($66 million). Plant-based milk accounted for 14 percent of all dollar sales of retail milk with over 620 million units sold. Refrigerated plant-based milk increased 6 percent over the prior year, making up 89.5 percent of sales. Shelf-stable milk sales declined 5 percent, making up just 10.5 percent of the category.71 However, during the COVID-19 crisis shelter-in-place time, demand for shelf-stable products increased. Oat milk sales is the fastest-growing product to follow. Oatly, a Swedish import, is planning to build a U.S. plant. It became the favorite product of baristas for lattes because of its thicker consistency. Quaker Oats is betting on oat milk as well, using the supply chain of its parent company PepsiCo to muscle into the market.72
Are plant-based milks actually good for you? The answer, of course, is it depends. Sixty-five percent of adults have difficulty digesting lactose, the sugar in cow’s milk, so finding an alternative is helpful. Consumers looking at plant-based milks should think about their nutritional needs, how they use the milk, and how they like the taste. “Many of these milks, like oat, rice and almond milk, require things to be added to make them smoother, emulsified, so they’re more even (in consistency) and more like the milks you are used to,” says Ilene Fennoy, a pediatric endocrinologist and nutrition specialist.73 Additionally, plant-based milks are fortified with calcium, which may not be absorbed into the body. Vitamins and minerals may settle in the container, requiring them to be shaken before consumption. Stabilizers such as xanthan gum and others may irritate the gut. Cow’s milk still ranks number one for bone health, with 8 grams of protein per serving. Soy and pea milk also rank high in protein.
Dairy is fighting back against alternative milk. Blue Diamond had a lawsuit against it dismissed for labeling its products “milk.” The Ninth Circuit Court of Appeals ruled that consumers would not be confused by the labeling. The FDA, however, is looking to producers and other experts for information that may in the future change product labeling guidelines.74 In July 2018, Dr. Scott Gotlieb, a commissioner of the FDA, created quite a stir when he said, “An almond doesn’t lactate.”75 This has become a rallying cry for dairy. However, in a survey conducted by the International Food Information Council Foundation, 72 to 75 percent of 1,000 consumers said plant-based beverages are not dairy products. It is worth noting that 20 percent were not sure. The Council, which includes food companies, recognizes the challenge of consumer education.76
Big Dairy is now taking the fight to the national and state levels. A bipartisan bill that had failed, called the Dairy Pride Act, was reintroduced into the U.S. Senate in March 2019. Louisiana, Maryland, and North Carolina have all introduced bills relating to alt-milk labeling. And, by the way, plant-based meat products such as Impossible Burger and Beyond Burger face similar challenges for using the word “burger.” Cauliflower, broccoli, butternut squash, and other vegetable “rice” are under attack as well.77
As the COVID-19 crisis shut down the economy beginning in March 2020, many people began working from home and kids were homeschooling as well. Restaurants all over the country had to comply with state and local laws and many were closed for weeks and months. Where people consumed milk shifted to home, and consumers sought whole milk, organic milk, and value-added milk. The last of these is an exciting new category. For instance, Danone North America introduced Horizon Organic Growing Years aimed at children 1 to 5 years old. Protein Plus from Phoenix-based Shamrock Farms brought Rockin’ Protein Plus to market, a milk-based beverage with the benefits of anti-inflammation and antioxidants from fruit juice, as well as protein from milk. It has two flavors: Cherry Crème and Blueberry. Other seasonal milks to come to market include flavors of Easter Egg Nog, Cotton Candy, Banana Taffy, and Pumpkin Holiday Spice.78
Milk producers are also engaging consumers with innovations in packaging and sustainability. Maple Hill Creamery introduced a shelf-stable 100% organic grass-fed aseptic milk in late 2019. The Horizon brand intends to be carbon-positive by 2025 and Darigold carbon-neutral by 2050. After years of declining sales, the milk industry at retail seems to have begun a turnaround in 2020. During the 52 weeks ending September 6, 2020 dollar sales in the overall category rose 7.8 percent and unit sales increased 1.5 percent., according to data from Chicago-based market research firm IRI. The big challenge for dairy farmers will be to maintain consumers’ interest as they transition back to work and school.79
