Case Memo #4: Premium Brand vs. Distribution Expansion

Case Memo #4

Instructions

Weekly Case Memo Assignment

Pricing & Marketing Channels

Case Title: Premium Brand vs. Distribution Expansion

Case Scenario

Aurora Sparkling is a mid-sized beverage company positioned as a premium brand.

Its strategy has focused on:

·       High-quality ingredients

·       Minimalist packaging

·       Selective distribution (specialty stores, boutique grocers)

Current retail price: $4.99 per bottle

Problem Situation

Growth has recently stalled.

Aurora is now facing new opportunities and pressures:

·       Large retailers (e.g., supermarkets, big-box stores) want to carry the product

·       However, they demand:

o   Lower wholesale prices

o   Promotional discounts

o   Prime shelf placement

At the same time:

·       Competitors are priced lower ($2.99–$3.49)

·       Competitors are expanding distribution rapidly

Internal Strategic Options

Aurora’s leadership is considering three options:

·       Option A: Expand distribution
→ Enter large retailers, lower price, increase volume

·       Option B: Maintain premium positioning
→ Keep price and selective distribution, accept slower growth

·       Option C: Hybrid strategy
→ Use different pricing and channel strategies across segments

Assignment Instructions

Prepare a ONE-page Case Memo addressing the following:

 1. Core Problem (2–3 sentences)

Clearly identify the underlying strategic problem.

·       Do NOT state symptoms (e.g., “sales are declining”)

·       Focus on the core tension the firm must resolve

 2. Concept Application (Required)

Apply:

·       At least 2 Pricing concepts

·       At least 2 Channel concepts

Examples include (but are not limited to):

Pricing:

·       Value-based pricing

·       Cost-based vs. competition-based pricing

·       Price signaling

·       Margin / break-even considerations

Channels:

·       Selective vs. intensive distribution

·       Channel conflict

·       Channel power

·       Retailer vs. manufacturer incentives

* Concepts must be applied to the case, not just defined.

3. Strategic Choice (Mandatory)

You must choose ONE:

·       Expand distribution

·       Maintain premium positioning

·       Hybrid strategy

❌ “It depends” is not acceptable
❌ Do not present multiple options

 4. Actionable Recommendations

Provide at least 3 specific actions, including:

·       Pricing decisions

·       Channel structure decisions

·       Execution (e.g., promotions, placement, segmentation)

Recommendations must be clear and realistic

Submission Format (Required)

Structure your memo exactly as follows:

[1] Core Problem
(2–3 sentences)

[2] Concept Application
(Bullet points)

[3] Strategic Choice
(1 sentence)

[4] Recommendations
(3–4 bullet points)

Grading Criteria