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question 128

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Use this information for questions that refer to the Sunny Day Foods (SDF) Case.
For six months Kim Wu has been working for Sunny Day Foods (SDF) , a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company. But, she jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix.
Kim spent the first few months on the job trying to better understand SDF, its product line, and marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years.
Her research indicates that among cereal customers there are at least five segments of customers who use SDF products.
a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store.
b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit.
c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week.
d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago the company took a strong stand in a presidential race - and these customers resented it. Now, they boycott all SDF foods because of that incident.
e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names.
In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal.
-What best describes the level of brand familiarity that customers in "the loyalists" segment have with SDF?

Definitions:

Adjusting Entries

Entries made in the accounting records at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Accruals

Adjusting entries for either accrued revenues or accrued expenses.

Deferrals

Adjusting entries for either prepaid expenses or unearned revenues.

Asset's Cost

The original financial value of an asset, including purchase price and any expenses incurred to get the asset ready for use.