BASIC MARKETING 18th Edition by Jerome McCarthy William Perreault, Joseph Cannon

Exercise 10

River Ridge Mills, Ltd.*
*This case was adapted from one written by Professor Roberta Tamilia, University of Windsor, Canada.
Nicole Vichon, marketing manager of River Ridge Mills, Ltd.-a Canadian company-is being urged to approve the creation of a separate marketing plan for Quebec. This would be a major policy change because River Ridge Mills' international parent is trying to move toward a global strategy for the whole firm and Vichon has been supporting Canada-wide planning.
Vichon has been the marketing manager of River Ridge Mills, Ltd., for the last four years-since she arrived from international headquarters in Minneapolis. River Ridge Mills, Ltd., headquartered in Toronto, is a subsidiary of a large U.S.-based consumer packaged food company with worldwide sales of more than $2.8 billion in 2007. Its Canadian sales are just over $450 million, with the Quebec and Ontario markets accounting for 69 percent of the company's Canadian sales.
The company's product line includes such items as cake mixes, puddings, pie fillings, pancakes, prepared foods, and frozen dinners. The company has successfully introduced at least six new products every year for the last five years. Products from River Ridge Mills are known for their high quality and enjoy much brand preference throughout Canada, including the Province of Quebec.
The company's sales have risen every year since Vichon took over as marketing manager. In fact, the company's marketshare has increased steadily in each of the product categories in which it competes. The Quebec market has closely followed the national trend except that, in the past two years, total sales growth in that market began to lag.
According to Vichon, a big advantage of River Ridge Mills over its competitors is the ability to coordinate all phases of the food business from Toronto. For this reason, Vichon meets at least once a month with her product managers-to discuss developments in local markets that might affect marketing plans. While each manager is free to make suggestions and even to suggest major changes, Vichon has the responsibility of giving final approval for all plans.
One of the product managers, Jackie Provence, expressed great concern at the last monthly meeting about the poor performance of some of the company's products in the Quebec market. While a broad range of possible reasons-ranging from inflation and the threat of job losses to politics-were reviewed to try to explain the situation, Provence insisted that it was due to a basic lack of understanding of that market. She felt not enough managerial time and money had been spent on the Quebec market- in part because of the current emphasis on developing all-Canada plans on the way to having one global strategy.
Provence felt the current marketing approach to the Quebec market should be reevaluated because an inappropriate marketing plan may be responsible for the sales slowdown. After all, she said, "80 percent of the market is French-speaking. It's in the best interest of the company to treat that market as being separate and distinct from the rest of Canada."
Table 1 Per Capita Consumption Index, Province of Quebec (Canada 5 100)*

*An index shows the relative consumption as compared to a standard. In this table, the standard is all of Canada. The data shows that per capita consumption of cake mixes is 7% higher in Quebec and pancake consumption 13% lower compared to all of Canada.
Provence supported her position by showing that Quebec's per capita consumption of many product categories (in which the firm competes) is above the national average (see Table 1). Research projects conducted by River Ridge Mills also support the "separate and distinct" argument. Over the years, the firm has found many French-English differences in brand attitudes, lifestyles, usage rates, and so on.
Provence argued that the company should develop a unique Quebec marketing plan for some or all of its brands. She specifically suggested that the French-language advertising plan for a particular brand be developed independently of the plan for English Canada.
Currently, the Toronto agency assigned to the brand just translates its English-language ads for the French market. Vichon pointed out that the present advertising approach assured River Ridge Mills of a uniform brand image across Canada. Provence said she knew what the agency is doing, and that straight translation into Canadian-French may not communicate the same brand image. The discussion that followed suggested that a different brand image might be needed in the French market if the company wanted to stop the brand's decline in sales.
The managers also discussed the food distribution system in Quebec. The major supermarket chains have their lowest market share in that province. Independents are strongest there- the mom-and-pop food stores fast disappearing outside Quebec remain alive and well in the province. Traditionally, these stores have stocked a higher proportion (than supermarkets) of their shelf space with national brands, an advantage for River Ridge Mills.
Finally, various issues related to discount policies, pricing structure, sales promotion, and cooperative advertising were discussed. All of these suggested that things were different in Quebec and that future marketing plans should reflect these differences to a greater extent than they do now.
After the meeting, Vichon stayed in her office to think about the situation. Although she agreed with the basic idea that the Quebec market was in many ways different, she wasn't sure how far the company should go in recognizing this fact. She knew that regional differences in food tastes and brand purchases existed not only in Quebec but in other parts of Canada as well. But people are people, after all, with far more similarities than differences, so a Canadian and, eventually, a global strategy makes some sense too.
Vichon was afraid that giving special status to one region might conflict with top management's objective of achieving standardization whenever possible-one global strategy for Canada, on the way to one worldwide global strategy. She was also worried about the long-term effect of such a policy change on costs, organizational structure, and brand image. Still, enough product managers had expressed their concern over the years about the Quebec market to make her wonder if she shouldn't modify the current approach. Perhaps they could experiment with a few brands-and just in Quebec. She could cite the language difference as the reason for trying Quebec rather than any of the other provinces. But Vichon realizes that any change of policy could be seen as the beginning of more change, and what would Minneapolis think? Could she explain it successfully there?
Evaluate River Ridge Mills, Ltd.'s present strategy. What should Nicole Vichon do now? Explain.