Casablanca Kids Case Essay

1401 Words Jun 22nd, 2012 6 Pages
The most pressing issue facing Casablanca kids is a declining net income which has resulted from supply chain and production issues. Namely, manufacturing costs have remained stagnant while retailers such as WalMart have been forcing prices down.
Casablanca Kids is confronted with the interesting opportunity of redesigning their distribution channels. Effective distribution channel restructuring will allow the company to overcome their issue of declining net sales and therefore lead to a sustainable business. By developing a solution in a timely manner, the company has real potential to thrive.

DECISION CRITERIA The company’s main objective is to increase brand recognition in the domestic market as well as
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Big box stores did stock some mid-range products whose price was in the range of $9.99 to $12.99 per CD. Although big box stores did stock mid-range products, buyers who shopped at big box stores tended to buy low-end products compared to mid-range. Specialty store such as Mastermind had high-end CDs which came under $16.00 to $19.99 per CD range.

Casablanca Kids’ has number of direct and indirect competitors. But the largest direct competitor is Disney, who is famous for producing best known products in the industry and has an estimate of 30 % of total market share for children’s music. Since Disney is such a large and well-known organization, it possess great potential to reduce Casablanca kids’ market share. Other major competitors include: Branded television characters, “tween” entertainers, budget compilation CDs consists of collections of songs by unknown artists, selling for $1-$2 and video/early learning games.
Out of those four, budget compilation CDs is what Casablanca Kids’ should be more worried about. Currently, the price at which Casablanca kids’ product is being sold is much higher than budget compilation CDs, $9.99-$12.99 compared to $1-$2. So even though Casablanca kids’ have been able to maintain the current market share, if steps are not taken to reduce the price than they might start losing market share, as in the children’s music market the primary factor driving the consumer purchase decision is price.

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