Frozen yogurt is sold through two distinct segments — independent shops and impulse locations such as cafeterias, colleges, and buffets.
The GMI sales force focused on the impulse segments and pricing promotions were believed to be driving volume increases. The salespeople varied in their reaction to the product. GMI chose not to charge for merchandising and to provide the same large scale merchandising to both Shops and Impulse locations.
However, volume in the shop segment declined at alarming rates and there was widespread dissatisfaction in the sales organization. Customers were reassigned to salespeople who already serviced that geographical area.
Colombo yogurt was added to this product lineup and the Foodservice sales force covered both Shop and Impulse locations. However, Shops were aware of the promotions and took advantage of them.
GMI marketing knew price was not a major decision factor for Shops and they did not target pricing promotions to them. Many spent a lot of time helping their impulse customers understand how to use the machinery.
Earnings increased slightly and then dropped each year even though sales volume was relatively flat. GMI believed they could add Colombo frozen yogurt to their existing product lineup to increase net sales with little addition in marketing cost. And the market changed as Foodservice operators such as cafeterias, colleges, and buffets started to add Colombo frozen yogurt yogurt to their business.
The situation was ripe for a clearer look using ABC methods. The Shops make their living from the soft-serve business and must innovate or go out of business as thousands have done in the last decade.
Instead costs were allocated based on sales dollars. GMI made price promotions available to both segments of the market. These firms are unwilling to take any risk new equipment or extra labor to serve highly differentiated products like smoothies or granitas. On the other hand, the Impulse locations make their living from other items and the soft-serve trade is only performance topspin.
Some found shops easy to sell to while others avoided the shops despite the possible lost commission. Colombo traditionally charged the Shops for merchandising that was large scale and eye popping neon signs. The Shops used these signs to draw customers inside.
In total, merchandising costs dropped, while pricing promotion rates escalated.Colombo yogurt was the first U.S.
yogurt brand. It got its start in when Armenian immigrants Rose and Sarkis Colombosian began jarring and selling their family yogurt in Andover, Massachusetts.
The yogurt they made in America was the same they had made in the old-country, and based on a traditional Armenian recipe. Advanced Management Accounting - Colombo Frozen Yogurt Advanced Management Accounting – Colombo Frozen Yogurt Colombo Frozen Yogurt was acquired by General Mills Incorporated (GMI) in so GMI could strengthen its product line-up with a small addition to marketing costs.
COLOMBO® SOFT SERVE FROZEN YOGURT: Quality product manufactured by General Mills, Minneapolis, Minnesota Ready to be used, no mixing required. • Lowfat. Unfortunately, Colombo’s share in the frozen yogurt was heavily impacted in the early ’s when franchise firms such as TCBY and Freshens started to streamline the frozen yogurt business with the apparent advantages of uniformed brandings and.
InGeneral Mills Incorporated, a $6 billion consumer goods company, acquired Colombo Frozen Yogurt. General Mills Inc. (GMI) believed they could add Colombo frozen yogurt to their existing product lineup to increase net sales with little addition in marketing cost.
Frozen yogurt is sold through two distinct segments – independent shops and impulse locations [ ].
Colombo entered the ice cream market with an innovative frozen yogurt product, which was considered a healthier alternative to ice-cream. Competitive Environment Shop Locations Originally Colombo chose to market mainly to independent shop owners (Jane Suly, pg.