CASE BASED PRESENTATION

Route 11 Potato Chips

Presented By-

Muhammad Anowar

INTRODUCTION

•The world wide sales of US potato chips industry has

surpassed $16 billion annually.

•Employed more than 65,000 people.

• Despite the dominance of the big chip makers, smaller

chip makers had surfaced to fill niche markets, touting

their better made, higher quality potato chips over the

mass produced chips that lined the big grocery stores.

•One such smaller companies included Cohen’s Route 11

Potato Chips.

Introduction cont..

•Route 11 Potato Chips was opened by Sarah Cohen in April 1992 in Virginia.

•In 2011, Route 11 produced 7 flavors in 2-oz. bags (Lightly Salted, Barbeque, Dill

Pickle, Sour cream & Chive, Chesapeake Crab, Salt & Vinegar and Mama Zuma’s

Revenge ).

• In 2010, Route 11 sold about 3.3 million 2-oz. bags and 600000 6-oz. bags.

•The Lightly Salted flavor was by far its best seller, comprising about 40% of total

sales.

THE CASE: ANALYSIS

Product Line Rationalization

• This is the aspect where Route 11 failed to balance.

• One way that Route 11 had attempted to increase cash flow was to reduce the

breadth of its product line.

• There were hard-to-quantify costs that slow-moving flavors imposed.

Cont..

•It was nearly impossible for Route 11 to detect and monitor stockouts at the retail

level and how these affected sales.

•They couldn’t even produce fewer flavors as it would decrease the number of

flavor-related changeovers the production line had to make.

•Route 11 Chips struggled with having to reduce the number of flavors it markets.

•Additional flavors added operating costs, but management believes that certain

scents are important for the image of the brand Route 11, and that pruning can cause

damage to the line brand.

Cont..

• For this reason, Route 11 had discontinued some of its slow movers.

• For them it was difficult to know exactly how this product-line trimming affected sales.

• But as the pressure to increase cash flow mounted, Route 11 was considering further cuts in its product line.

• It struck at the heart of what Route 11 stood for a company.

Cont..

•Route 11 tried to solve the problem by showing retailers the different flavors.

•But it didn’t work in favor of the retailers because for each slow moving flavors of

Route 11, the retailers would be forced to hold too little inventory of the big sellers.

•Route 11 never attempted to quantify the cost of changeover time, but it was clear

that it cut into overall production efficiency.

SUGGESTIONS

1. Know your products well. Unnecessary expansion of products doesn’t

always works in favor.

2. Learn about the competition in the market and the potential sales for your

products.

3. Build a strong response and feedback base from retailers and consumers.

4. Jump-start your brand image..

Cont..

5. Proper maintenance of sales records with respect to each and every product

6. Analysis of the sales records and implementations with respect to it.

7. Proper pricing strategies for distributors and retailers.

8. Be prepared.

Thank you