I am Laura, the sales and marketing Director of Price’s Snacks. Price’s is a company that produces a range of savoury snacks, such as crisps, savoury chips and crackers. Price’s are a Public limited company. They set up in Winchester, when they just started with selling plain flavoured crisps. They have managed to extend the range of snacks available. Their current range of products has been on the market for almost twelve months and sales are going well. The Directors feel it is time to begin to develop a new product. It is my job to identify, anticipate and satisfy customer requirements with the new product.
In bringing out this new product the company aims to keep regular customers and hopes to attract more. By doing this the company will need to have them totally satisfied with the product. They could create a system for dealing with complaints, so that they can produce exactly what the customers want. The company will also hope to make a larger profit, which will mean looking at other competitors and seeing what they are producing. Choosing the right price for the product will be important and the right supplier. The company will also be expanding their range of products. The company will be competing with other competitors and hopefully we will be better known.
The function of the marketing department is to recognize and anticipate customer requirements with this new product. I will also need to bring ideas forward, which will please the customers and keep them happy.
The company will need to concentrate on getting the marketing mix just right. There are the four Ps of marketing; product, price, promotion and place. We must come up with a product that people will want to buy. It must suit some of the customers’ needs or wants. The price must be one that the customer thinks is good value for money, but not cheap. The best way to bring out this product will be with penetration pricing. The company will charge a fairly low price when we first bring out the new product. This will help to get the potential customers to become more interested. Once the product is well known the company can then increase the price. The product will need to be promoted so that possible customers are aware that it exists. The product must be available to sell in a place where the customer will find suitable. Price’s is based where customers can easily get to and are happy with.
Price’s has links between the marketing and production departments. The company’s production is market orientated, as we always want what’s best for our customers and so check what is on the market. This helps us to see what price customers would be willing to pay, and also help Price’s to produce a cheap, reliable product. The quality of the product is also important and the design and appearance is significant, so that it will appeal to customers. The main tasks are to see that production flows smoothly through efficient planning and control. It also ensures goods are made on time. The marketing department also focuses on consumer wants, while making a profit at the same time.
The products that Price’s already have are going through the stages of a life cycle. There are 5 main stages. These are the:
* Introduction/launch of the product
* And then Decline.
If the launch is successful, consumers will take to the product and sales begin to rise. Depending upon the originality of the new product, profitability should be strong. Enthusiastic promotion and sales power will take the product into all the required outlets and sales to the final consumer will be influenced by the ‘newness’ factor.
Once the new product has been out for a while the fast rising sales curve will begin to level off, as the excitement is lost and the competition reacts to the success. Sales will continue to rise but new customers will be harder to find. It is here also that the profits curve will reach its peak. The additional costs of promotion and sales force effort in keeping the sales curve may be large, especially in warding off the competitors’ attack. Their own new products will be attracting attention and perhaps even taking our customers away.
The life cycle is useful in determining the timing of new strategies or products, as it helps to see what stage the business is at. This is useful as it helps the company to know at what time they need to bring new products out. For example if some products a just beginning to grow there is no need to bring out something new. The best time to bring out a new product is when another is just reaching its maturity. This way new products will be brought out when old ones are just beginning to decline. The company will not lose a drastic amount of profit. By looking at the line on the product life cycle the company can work out what stage each of the products are at.
There is continually a chance of entering an international or European market. There are several possibilities with doing this. International trade would increase the size of Price’s market. This would increase the amount of customers and also the competitors. It would also make the company more efficient. Other possibilities would be that Price’s sales would increase, as they export their products, therefore making them more profit. Customers would have more choice and lower prices. There are also problems of going into international trade. If the products are over exposed, this could make the company vulnerable if the demand for things that it’s exporting falls. If the company were to go into international market they would need to think about the type of transport they would use to get the goods to the customers.
The best type of transport for Price’s Snacks to use would be air transport. Although it is the most expensive form of transport, it is ideally suited to fragile and perishable goods. The distribution is fast, which would keep the supply of goods going. Air transport is limited to the size it can carry and is not suitable for bulky products. This is ideal for Price’s as the goods are not very large or heavy.
Terms of Reference: I have been asked to develop a new product for Price’s Snacks. As I am the Sales and marketing director my job is to find out what the customers would like and to design a product that would be most profitable for the company. To do this I will need to do research. This is important as it helps to find out exactly what the customers want for their new product, so they will be pleased and buy the product. For example if a questionnaire was given to the customers to fill out the company would be able to see which is most popular.
Market research is used to look at a market segment in much greater detail. There are many purposes for this. It informs product development by studying market and social trends to establish customer’s needs. It will help to determine the market for a product looking at competitors. Also to inform development of a promotional campaign e.g. research, planning, preparation, implementation and evaluation. Improvements can be made, by looking at information on customer satisfaction. If the customers are not completely satisfied, our product can be altered.
The two main types of market research are:
* Field research also known as primary
* Desk research also known as secondary
Desk research involves making use of information that is already available, which someone else has collected. This could be found from sources such as; Government departments, newspaper reports, journals, etc.
Field research would involve us collecting new information through an organized research programme. Questionnaires for example would be a good way of finding out exactly what our customers want. They could be done on the spot or to return later. Alternatively we could print them in newspapers, magazines, handed out to passers by or sent through the post. Interviews are also a good way in asking customers what they want. This could be conducted in person or over the telephone. On the other hand samples could be given for testing by individuals or groups. This way I would be able to see their reaction.
I will use field and desk research to find out what sort of product the customers want. I will use questionnaires, and do surveys and talk to people. I will also look in textbooks and on the Internet to find information that already exists. By doing this I will be able to ask mixed groups of people. I will cover different ages, genders and socio grades.
Different factors influence the demand for goods at different times. In this the factors include the stage the product is in its life cycle. The product needs to be produced at the right time to meet demands. Marketing is based on the assumption that people of the same age, income, gender etc will choose to spend their money on similar things. For example women spend more money on cosmetics than men. By designing a product for a specific group, they are then the market segments. The whole population is split up into groups and each one is examined in detail to find out what kinds of goods and services consumers buy.
Where people live and their income can affect the way they spend their money. Age is significant-wants\needs of the elderly are different to teenagers. Gender is also important as men and women may spend their money differently. Market segments are also frequently defined by socio-economic groups. Once the characteristics and buying behaviour of these groups is known, the companies marketing effort can then be directed at the particular target groups which have been acknowledged as containing the most potential customers. This will help the company to achieve the highest sales for their products.
From the information I have gathered I think that all of the different methods I used were appropriate for deciding on a new product for Price’s Snacks. The questionnaire was a good way of finding out what products customers would like to see made. I was able to ask different ranges of people, such as age groups. I also widened my questionnaire after I found out what was the most popular snack. I was able to find out what flavour, shape, size etc. The survey I did was a good way of seeing what is already available and what types of snacks are advertised. The snacks that I found off of the Internet were also a good way of seeing available products and helped me to devise my questionnaire, because I knew what sort of things the customers would want. Overall I think the questionnaire was the best way of finding out what to base my new product around. I was able to ask all the questions and find out most of the answers that I needed.