DrinkForFood

: to diversify or not to diversify : that is the question : a case study about a seasonal online retail start-up

Abstract

This case study is about DrinkForFood – a German start-up. The company sells personalized wines and candles to graduating high school students. A core part of the business is its social impact. For every sold product DrinkForFood donates one meal to a school in Senegal. The business acquires its target group via mobile instant messaging on WhatsApp and aims to build a close seller-buyer relationship based on trust. As DrinkForFood only has an online presence, this tactic should mitigate the consumer’s purchase uncertainty. The company faces the issue of complete seasonal dependence. School graduations in Germany are between May and July - the only period where DrinkForFood can generate revenues. This long off-season hinders the company to grow sustainably. Hence, the management considers diversifying the company’s operations by targeting new markets, customer groups, or extending the product range to decrease the seasonal dependence. However, the implementation of diversification strategies could disrupt DrinkForFood’s operations, dilute the brand image and endanger its profitability. The dissertation includes a Literature Review of relevant theories and topics related to the Case Study’s issues like trust, word-of-mouth, seasonality, and revenue diversification. It also offers a Teaching Note to help instructors for in-class discussions of the Case Study, analyzing the implications and challenges of diversification measures and the importance of relationship marketing activities, especially in the context of E-Commerce.

Date of Award	16 Oct 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Nuno Magalhães Guedes (Supervisor)