Tre Stelle adds cream cheese to its product portfolio The Arla brand is leaning into baking occasions and colourful, differentiated packaging to take on an entrenched global player. It’s a question of which cream cheese rises to the top with Tre Stelle’s latest product innovation, a new competitor for dominant category player, Philadelphia. The Arla brand is out with a five-SKU cream cheese lineup. The launch is being supported by in-store information provided at the grocery shelf, signage hanging from store ceilings and $1.50-off coupons to drive purchase. According to the Tre Stelle cream cheese senior brand manager, its point-of-sale signage, like its packaging, is bright and vibrant to attract eyeballs. The new Tre Stelle cream cheese messaging, “tastes like more,” is centred around indulgence, and it is focusing on holiday occasions, particularly cheesecake baking. The design is meant to be distinctive with a rectangular pack, to further stand out from the competitive set which are typically in bricks or round tubs. Previously, Arla had its own branded cream cheese. However, given that Tre Stelle is a trusted brand with 60 years of brand equity, the new branded line is a “perfect extension to our existing portfolio.” The cream cheese category is dominated by one major competitor. However, Tre Stelle’s differentiator is that it has none of the stabilizers or artificial ingredients typically found in other mainstream cream cheese brands, making Tre Stelle the cleanest category choice. The company recently invited five foodie influencers to amplify the Tre Stelle Cream Cheese “Tastes like more” positioning, part of a campaign that came to market in September. It was launched across social and included an influencer campaign that rivaled legacy brands for taste and spreadability. The Arla brand also created a “Tre Stelle Café” sampling program, partnering with popular cafes in major Canadian cities to offer cream cheese with a bagel. Arla partnered with PC Express for a sample initiative to include its product to consumers in their online grocery orders. Tre Stelle Cream Cheese comes in a variety of flavours including Original, Organic, Light, Lactose-Free and Herbs & Spices. It is widely available in stores like Metro, Walmart, Loblaw, and others across Canada. Tre Stelle Cream Cheese can be found for about $3.99 for a 200g package, about the same price as the leading, national brand.
QUESTIONS:
1. What type of channel is Arla using for their cream cheese? Explain one of the functions that this channel provides for Arla.
2. List and describe at least 2 ingredients of the promotional mix that Tre Stelle is using. Outline another ingredient that you would suggest that Tre Stelle use and explain why they should use it.
3. What branding strategy is Arla using? Why did they choose this strategy? What benefits do they gain by using it?
4. Outline the pricing strategy that Tre Stelle is using (use at least one example from the article to back up your answer)? Is this the right strategy? Support your answer based on the PLC stage of the product.
5. What kind of new product is the cream cheese? Why is it important to Arla?
Arla is utilizing a multi-channel strategy for distributing its cream cheese products. This strategy involves using various distribution channels to make the products available to consumers. One of the channels they are using is traditional brick-and-mortar retail stores, such as Metro, Walmart, Loblaw, and others across Canada. This channel provides the function of physical accessibility, making the product readily available to consumers when they visit these stores. It allows customers to see, touch, and evaluate the product before making a purchase decision. Additionally, this channel facilitates in-store promotions, like the bright and vibrant packaging, point-of-sale signage, and coupon distribution mentioned in the article. By leveraging this channel, Arla aims to attract consumer attention, drive purchases, and create a strong presence in the retail environment.
Influencer Campaign: Tre Stelle is using an influencer campaign to amplify its “Tastes like more” positioning. This involves partnering with foodie influencers to create content that showcases the cream cheese’s taste and spreadability. This ingredient of the promotional mix leverages the influencers’ credibility and reach to effectively communicate the product’s benefits to a wider audience.
Sampling Programs: The “Tre Stelle Café” sampling program and partnership with PC Express for online grocery orders are examples of sampling initiatives. These programs allow consumers to experience the product firsthand and build a positive perception of its quality and taste. Sampling is a persuasive promotional tactic that encourages trial and reduces the risk associated with trying a new product.
Tre Stelle could consider implementing interactive social media campaigns, such as contests or challenges related to baking with their cream cheese. This would encourage user participation and engagement, creating a sense of community around the brand. Additionally, user-generated content can serve as authentic testimonials, boosting brand credibility and awareness.
Arla is using a brand extension strategy by introducing a new cream cheese lineup under the Tre Stelle brand. This strategy leverages the existing brand equity of Tre Stelle, which has been trusted for 60 years. By extending the brand into the cream cheese category, Arla benefits from the established reputation and customer loyalty associated with Tre Stelle. Consumers who already have a positive perception of Tre Stelle’s products are more likely to try the new cream cheese offerings. This strategy also allows Arla to diversify its product portfolio while minimizing the risk often associated with launching a completely new brand. The benefits include reduced marketing costs due to leveraging the existing brand’s recognition, a head start in building consumer trust, and quicker adoption in the market.
Tre Stelle is using a competitive pricing strategy for its cream cheese products. The article states that the price of Tre Stelle Cream Cheese is about $3.99 for a 200g package, which is approximately the same as the leading national brand, presumably referring to Philadelphia cream cheese. This pricing strategy is intended to position Tre Stelle as a direct competitor to the dominant player while signaling to consumers that they can get a similar quality product at a comparable price. This is a suitable strategy for the growth stage of the product life cycle. At this stage, market competition intensifies, and consumers are looking for alternatives. By offering a competitive price, Tre Stelle can attract price-sensitive consumers and capture a larger market share.
The new product, Tre Stelle Cream Cheese, is a line extension within the cream cheese category. It includes a variety of flavors like Original, Organic, Light, Lactose-Free, and Herbs & Spices. This product is important to Arla because it allows them to tap into the growing demand for cream cheese products, particularly during baking occasions like cheesecake making and holiday celebrations. The cream cheese category is dominated by a major player, and introducing a differentiated product like Tre Stelle Cream Cheese enables Arla to carve out a niche by offering a cleaner and more natural option. The launch also aligns with the trend of consumers seeking healthier and more transparent food options, which can drive sales and enhance Arla’s market share. The use of the trusted Tre Stelle brand and strategic promotional efforts positions Arla for success in this competitive market.
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