Big Red, Ltd.

Abstract

This case addresses two frequently heard questions in real-world business settings: “Why are sales going down?” and “What decisions must we make to reverse the sales decline?” These questions were directed to Dr. Felix Wilder, a professor of Marketing, by the senior management of Big Red, Ltd., headquartered in Waco, Texas, after sales reports indicated a significant decline in year-over-year sales in the Louisville, Kentucky, market region. This region represented one of Big Red’s most important market areas for soft drinks outside of its home base in Texas. Members of Big Red’s senior management team were unable to identify the specific factors that had contributed to the sales decline. As a result, they commissioned Dr. Wilder to conduct an extensive marketing research project to determine the factors contributing to the erosion in sales. Dr. Wilder proposed a multifaceted exploratory research project that involved an extensive review of industry and trade literature, in-depth interviews with grocery store and super center store managers, an in-store consumer survey of Big Red customers, and a consumer focus group. The research design focused on the marketing mix variables, environmental factors, the target market, and changing consumer purchase behavior and lifestyle issues as possible sources contributing to the sales erosion. The results of Dr. Wilder’s investigation conflicted with Big Red management’s preliminary hypotheses and revealed unexpected factors that may have contributed to the downward drift in sales.  Based on the research, Dr. Wilder presented management with various alternative courses of action to correct the sales decline.