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A/S Dansk Minox, Copenhagen

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A/S Dansk Minox in Copenhagen, specializing in branded vacuum-packed meat and other food products, had for many years sold vacuum-packed sliced pork in gravy, a very popular dish in Denmark. In 1995 the product represented about 15% of the firm's total sales in the country in a product range which comprises 30 products. The Danish house-wife very often serves this dish together with a red cabbage salad. This salad is rather time-consuming to prepare at home and certain competitors of A/S Dansk Minox had recently introduced red cabbage salad in either vacuum-packed, canned, or frozen form. However, A/S Dansk Minox estimated that the major part of the red cabbage sold was still prepared at home, and although sales of ready-made red cabbage salad expanded rapidly, it was felt, and consumer research confirmed this, that there was still a great untapped potential for such a product.

At the end of 1995 A/S Dansk Minox had not marketed vacuum-packed red cabbage salad, but in view of existing market potential, and since it was so often eaten together with sliced pork, company management also considered producing red cabbage salad. A/S Dansk Minox had during the last year considered introducing a specialty line of “complete meals”, which were to be sold in an attractive carton containing vacuum-sealed bags with the different ingredients for the meal. The management decided that the first product in this specialty line was to be "sliced pork in gravy with red cabbage" and the product was to be packed in a carton containing the standard vacuum-sealed bag with sliced pork plus another bag with the red cabbage. Cost allocation problems arose in this connection, leading to long discussions between the marketing and finance departments of the Danish…...

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