Cowgirl Chocolates Case



Today’s business world is very competitive and dynamic. Companies often end up failing because of the lack of good planning. Many businesses end up making losses not because the business ideas backing up the product are poor or weak but simply because the business planning and strategy formulation process was not the best or the most appropriate for the company and its products (Lancaster & Withey, 2006). Entrepreneurs/businessmen should make plans that will cover all functional areas within their business if they want to succeed. Strategies mean short and long-term plans that intend to achieve mission and its objectives. Policies are also included in the company’s planning process because they are used as guidelines for decision making. Tactics are specific actions that are used to realize strategic goals (Campbell et al. 2002).

Strategies and tactics

Corporate strategies are the main company’s goals that define the specific direction that a company should follow in order to realize the objectives. These strategies include the following but are not limited to: ensuring stability, achieving economic growth, retrenchment, etc. The overall strategy of Marilyn in Cowgirl Chocolates is to breakeven and stay in business. It is therefore true to say that Marilyn intends to stabilize his/her business. Such a strategy will involve pausing and proceeding with caution or sometimes not making changes in the business model in order to realize profits. This kind of strategy is very popular among small scale business owners (Wheelen & Hunger, 2002). Furthermore, a retrenchment strategy can be carried out on particular products. A retrenchment strategy is a strategy pursued by companies which clearly understand that their products have a weak competitive position and therefore have low sales and profits. These products which are dragging the company down are chopped off to help the company improve its performance. Under these strategies a turnaround strategy or divestment can be used (Frey, 2008).

It is vital to understand that along with setting good strategic goals it is also important that entrepreneurs develop appropriate tactics that will strengthen subsequent strategies covering the 4 P’s (i.e. price, product, promotion and place).The success of the corporate strategies strongly depends on how the product is marketed to the public. Marilyn’s case of Cowgirls Chocolates is quite complex, multiple problems exist in almost every area due to poor planning especially in the field of marketing. Since it is evident that Cowgirl Chocolates have a product design problem, and many consumers including retail managers who intended to stock the problem have complained that the chocolates are very spicy, it is Marilyn’s responsibility to improve the recipe of the chocolates. According to Kotler (2006) business ideas may fail or underperform not only because the idea is poor but because the product is not properly designed. Many consumers may reject a good product because of its shape, size, color, scent and so on as this was the case with The Coca-Cola Company that introduced the new Coca-Cola which failed miserably after the return of classic Coca-Cola (Charles, et al. 2002)

Marilyn’s idea of spicy chocolates is nice but it does not mean that chocolates should be too spicy, therefore Marilyn should reduce the amount of chili in their recipe. Adding too much chilly in Cowgirl Chocolate will diminish the total market potential that the chocolates can serve. For instance, a lot of women and children do not like too spicy or chilly foods. Marilyn will therefore increase the total number of prospect markets which consist of consumers if she goes ahead to change and improve the recipe. Such a step will be rather effective and will probably boost the sales of Cowgirl Chocolates (Kotler, 2003).

It is also vital that Marilyn comes up with an overall competitive strategy that Cowgirl will pursue in order to compete with other producers. According to Michael Porter’s generic competitive strategies participants within an industry can adopt strategies that concentrate on a narrow or a wider perspective of the total market and at the same time focus on a low cost strategy or a high differentiation approach (Porter, 1990). The choice of competitive strategies has an impact on the price strategy followed by an organization. Companies that do not adopt a differentiation approach can use a mass market strategy as well pursuing a market penetration strategy which is basically a pricing strategy that aims to sell affordable, low priced products. When companies follow a differentiation strategy they are most likely to adopt a skimming/milking price strategy which involves establishing high rates for a product in order to recover extensive funds that may have been involved in the process of product research or at the stage of the product design and development (Lancaster & Withey, 2006).

Often companies that have a poor understanding of the specific target market they want to cover or just do not know how this market should be covered effectively can send mixed signals. Marilyn should take into consideration that strategies which intend to differentiate products are quite expensive, and therefore end up in selling products for premium prices and most of the time such a tactic may result in consuming a lot of resources, therefore it is risky for small businesses that have limited resources. The best tactic in order to gain a larger market share will therefore require Marilyn to use a tactic that will make Cowgirl Chocolates follow a general mass market strategy that targets a broader range of the consumers. A particular choice of strategy should precisely match with the resource capabilities of Cowgirl Chocolate.

A mass market approach is the most promising competitive strategy that may boost sales and revenues for Cowgirl Chocolates. A mass market approach does not require high levels of innovation and therefore a producer is more likely to enjoy higher levels of income. This approach also helps to save on costs which can be invested into other strategic business units that require more resources (Lancaster & Withey, 2006). Merilyn should therefore conduct a quantitative and qualitative research that would enable her get rid of all redundant flavors and product lines that may have dragged down the Cowgirl brand. One of the reliable ways for Marilyn to get the relevant data boils down to visiting local high end and low end stores and examining which flavors and brands are the most popular, and then develop recipes that will fit consumer’s tastes and preferences.

For some time, Marilyn should stop or halt producing the caramel sauce product and instead concentrate on the other product lines that have more potentials. The reason for this is the fact that less than 10% of the total caramel manufactured could be sold effectively despite the fact that a lot of money was invested into this product. It is obvious that a newly organized business cannot take up the risk of investing critical resources into products that are not paid off well. The money spent on this product lines could have been invested into other product lines that offered more potential for generating revenue streams and would be more interesting for consumers. If it is a must for Marilyn to continue with this product line, she should make it for consumers who pre-order the product or restrict the quantity of the manufactured product.

Relative competitive position

In the diagram above, Marilyn should look up the company’s figures and decide what to do with divestitures and further investment. In case the products have a high business growth rate and a low relative competitive position, it means these products should be given special attention because if the company blindly invests in them, it involves a lot of risk. On the other hand, if the products have a low business growth rate and also a low relative composition, it means these products are not in demand and Marilyn should not further invest in them. Marilyn should definitely put more effort in products which have a strong competitive position and manage them well to make more profits (Kourdi, 2009).

Small and large business owners like Marilyn should understand that there are a lot of risks involved in holding large amounts of inventory. Innovations greatly depend on the capital, and therefore cash flows of companies are severely affected. Besides, companies are always facing risk of incurring losses when dealing with inventories. That is why many entrepreneurs decide to use the J.I.T (Just in Time) method to acquire inventory. This method proved to be efficient because it ensures that companies work with low budgets and save on holding costs, reducing in this way unnecessary expenditures (Jaber, 2009). Marilyn, for instance, went ahead to produce 2000 cases of caramel sauce but she managed to sell only 70 cases which means that Marilyn suffered sufficiently and lost a lot of money by holding up cash in inventory that did not bring the desired revenues.

It is quite risky for companies to enter into exclusive distribution agreements that give a supplier the ability to control the overall distribution of the product. Thus, Marilyn should delegate all distributing responsibilities to a company that is willing to handle the distribution and promotion of Cowgirl Chocolates. Furthermore, Marilyn should exploit some other channels to spread information about spicy Cowgirl Chocolates. The use of internet should be highly encouraged since various social networks and the recently developed concept of viral marketing can be really effective for a product promotion. The use of Twitter, Facebook and other popular websites can be used at the advantage of the company because they are cheap and can serve as channels of promotion and distribution. If, like in the case with a biscuit business owner who liked Marilyn’s chocolates, then it would be better for Marilyn to enter into collaborative agreements with such individuals that have similar ventures, mergers and franchises to help these individuals acquire and stock Marilyn’s Cowgirl Chocolates in order to increase her sales and revenues (Lancaster & Withey, 2006). Marilyn being desperate to increase her business expansion should not take such risks that may involve her spending huge sums of money on advertising in other countries (Kourdi, 2009).

Branding is a critical part of the product identity and service. A brand “speaks” about products and services, it is the main medium by which information about the product reaches the consumer. Brand identity elements such as color, logo and tagline can send positive or negative vibes to existing and prospect consumers (Balmer & Greyser, 2006). In this case the slogan “Sissies stay away” may be considered somewhat harsh and rough thus giving Cowgirl Chocolates bad attributes that may affect negatively the overall sales performance. It is recommended for Marilyn to come up with a more stylish and less controversial slogan that will have more positive effects on the brand identity of Cowgirl Chocolates.

Promotion is a key to a successful brand, that is why entrepreneurs and companies should use properly various elements of the promotion mix in order to increase the sales of the product. Promotional activities aim to educate, inform, remind, persuade and encourage repeated purchases of the products and brands (Holm, 2006). A good promotion mix should always target the consumers and sellers. Consumer promotional activities encourage customers to buy more, and trader promotional activities encourage traders to stock the product. Promotional activities are not cheap, therefore companies should choose them carefully and make sure they match the resource capabilities of their companies. Furthermore promotional activities should be implemented within the year to stabilize the volumes of demand and supply in the company’s product lines. (Kotler, 2003). Marilyn’s decision to invest $ 3000 in a single advertisement was not a wise decision. Marilyn should therefore use any available funds to transfer any benefits to the consumers directly or to the traders by offering them discounts and other incentives. What is more, Marilyn should invest in outdoor adverts and sale displays that will help to create massive brand awareness (Kitchen, 2005).

Many businessmen whose companies are at their starting stages often arrange promotional activities that involve eat free offers. This allows to attract people who live in a specific market area, select them randomly and invite to taste the product. Assuming that Marilyn’s Cowgirl Chocolates have won numerous awards it is quite possible that consumers may be impressed by the product. Oral presentations are very good methods of promotion as well because people tend to believe those who they can associate a product with. Furthermore free avenues of promotion turn out to be rather effective because they are not assertive or aggressive to the consumer, thus more trustworthy (Kotler, 2003).


To sum up, a strategy is a comprehensive plan that explains how a company will formulate and implement short, mid and long-term goals. Tactics can be defined as more specific and detailed plans that show what exactly should be done in order to realize strategy and therefore the overall mission and vision of the company. Marilyn needs to carry out the above-mentioned tactics in order to cover all losses and stay in business. Tactics presented above aim to reduce unnecessary expenditure and at the same time elevate revenue streams. This will help the company achieve its objectives and prosper in the future (Frey, 2008).


Balmer, J. M. T. & Greyser, A. S. (2006). Corporate Marketing. Integrating Corporate Identity, Corporate Branding, Corporate Communications, Corporate Image And Corporate Reputation. European journal of marketing, vol 40 (7/8), 730-741.

Campbell, D., et al. (eds). (2002). Business Strategy an Introduction. Banbury Rd: Elsevier Butterworth-Heinemann.

Charles, W. et al. (2002). Essentials of Marketing. Natorp Boulevard: South Western Cengage Learning.

Frey, R. S. (2008). Successful strategies for Small Businesses: Using Product Knowledge, 5 edn. Norwood: Artech House Inc.

Holm, O. (2006). Intergraded Marketing Communication: From Tactics to Strategy Corporate Communication Objectives. An international journal, vol11 (1), 22-33.

Jaber, Y. M. (2009). Inventory Management: Non classical views Volume 11 of Industrial Innovation Series. Florida: CRC Press.

Kitchen, P. J. (2005). A reader in Marketing Communication. London: Routledge.

Kotler, P. (2003). Marketing Insights from A to Z: 80 Concepts Every Manager Needs to Know. New Jersey: John Wiley & Sons Inc.

Kourdi, J. (2009). Business Strategy: A Guide to Effective Decision Making, 2 edn. New York: Economist books.

Lancaster, G., & Withey, F. (2006). Marketing Fundamentals: CIM Course Book. London: Butterworth-Heimann.

Porter, M. E. (1990). Competitive advantage. Northampton, MA: Free Press.

Wheelen, T. L. & Hunger J. D. (2002). Strategic Management and Business Policy. New Jersey: Prentice Hall.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *