Marketing Managemnt Soln

7/29/2019 Marketing Managemnt Soln

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CASE 1

The use of the marketing mix product launch

INTRODUCTION:

NIVEA is an established name in high quality skin and beauty care products. In the

UK, Beiersdorfs continuing goal is to have its products as close as possible to its

consumer regardless of where they live. Beiersdorfs continuing programmed of market

research showed a gap in the market.

This case study shows how carefully balanced marketing mix provides the platform for

launching and re-launching a brand onto the market.

SITUATION:

The market can be developed by creating a good product/range and introducing it to the

market (product-oriented approach) or by finding a gap in the market and developing a

product to fill it (market-oriented approach). Having identified a gap in the market,

Beiersdorfs launched NIVEA VISAGE as the marketing mix or four Ps. The company

re-launched the NIVEA VISAGE Young range in June 2007 further optimizing its

position in the market. Optimized means the product had a new formula, new design,

new packaging and a new name.

SOLUTION:

NIVEAN VISAGE young is a skincare range in the UK market designed to ehnhance the

skin and beauty of the teenage consumer rather than being medicated to treat skin

problems. As such, it has created a clear position in the market this shows that NIVEWunderstands its consumer and has produced this differentiated product range in order to

meet their needs.

To bring the range to market, the business has put together a marketing mix. This mix

balances the four elements of product, price, place and promotion.


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The mix uses traditional methods of place, such as distribution through the high street,

alongside more modern methods of promotion, such as through social networking sites.

It makes sure that the message of NIVEA VISAGE Young reaches the right people in

the right way.

ISSUES TO BE ADDRESS:

* Details of business being consumer led.

* Key parts of marketing mix.

* Balance of marketing mix

* Strong points of NIVEA VISAGE Young products.

Question 1: Describe what is meant by a business being consumer led?

Answer:

Beiersdorfs continuing goal is to have its products as close as possible to its consumer,

regardless of where they live. Its aims are to understand its consumers in its many

different markets and delight them with innovative products for their skin and beauty

care needs. This strengthens the trust and appeal of Beiersdorf brands. The business

prides itself on being consumer-led and this focus has helped it to grow NIVEA into one

of the largest skin care brands in the world.

Most marketers want to give consumers more brand control, but are hindered by

internal processes and lack of management buy-in. To get over these hurdles, firms

should start consumer-led marketing small, using it in turnkey marketing and

promotional projects. But the usual general rules already apply in these early stages:Listen, don't filter, and offer feedback to engaged consumers.

Customers are becoming more demanding and more astute. Globalization has given

them access to a wider variety of suppliers and products, either direct (e.g. using the


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Internet) or via importers. Globalization and automated mass production has also led to

over-supply. There is a relentless downward pressure on costs and relentless upward

pressure for increase quality and functionality. Suppliers are caught between a "rock

and a hard place". Commerce is, or in many cases has, switched from supplier led

pricing to consumer led pricing.

Consumer led pricing puts the final arbitrator of the maximum selling price into the

hands of the buyer. Of course, the seller has the option not to accept any price, but for

those business with one or just a few product or service lines within a competitive

market sector, there are usually short-term pressures to meet the customers' demands.

To coin a well used phrase: The Customer is King at least until the number of suppliers

have fallen and the remaining companies have a near monopoly position. At that point

the government or the European Commission will intervene to regulate the industry on

behalf of the consumer (e.g. automobiles) or the consumer will switch to substitute

products (e.g. from rail to road transport), or the industry will restrain itself (e.g.

Microsoft acquires Apple to ensure it survives in order to provide a notional level of

competition).

Question 2: What are the key parts of marketing mix? Explain how each works with

others

Answer:

The marketing mix is probably the most famous marketing term. Its elements are the

basic, tactical components of a marketing plan. Also known as the Four P's, themarketing mix elements are price, place, product, and promotion. Read on for more

details on the marketing mix. The concept is simple. Think about another common mix -

a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the

final cake by altering the amounts of mix elements contained in it. So for a sweet cake


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add more sugar!

It is the same with the marketing mix. The offer you make to you customer can be

altered by varying the mix elements. So for a high profile brand, increase the focus on

promotion and desensitize the weight given to price. Another way to think about the

marketing mix is to use the image of an artist's palette. The marketer mixes the prime

colours (mix elements) in different quantities to deliver a particular final colour. Every

hand painted picture is original in some way, as is every marketing mix. If you'd like to

see the marketing mix applied to a real business - then take a look at our Ryanair

marketing mix.

Some commentators will increase the marketing mix to the Five P's, to include people.

Others will increase the mix to Seven P's, to include physical evidence (such as

uniforms, facilities, or livery) and process (i.e. the whole customer experience e.g. a visit

the Disney World). The term was coined by Neil H. Borden in his article The Concept of

the Marketing Mix in 1965.

Price:

There are many ways to price a product. Let's have a look at some of them and try to

understand the best policy/strategy in various situations.

Place:

Another element of Neil H.Borden's Marketing Mix is Place. Place is also known as

channel, distribution, or intermediary. It is the mechanism through which goods and/or

services are moved from the manufacturer/ service provider to the user or consumer.

Product:

For many a product is simply the tangible, physical entity that they may be buying or

selling. You buy a new car and that's the product - simple! Or maybe not. When you buy


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a car, is the product more complex than you first thought? The Three Levels of a

Product

The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a

seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts

down roots as it becomes an adult (maturity); after a long period as an adult the plant

begins to shrink and die out (decline).

The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle

(PLC). However, CLC focuses upon the creation of and delivery of lifetime value to the

customer i.e. looks at the products or services that customers NEED throughout their

lives.

Promotion:

Another one of the 4P's is promotion. This includes all of the tools available to the

marketer for 'marketing communication'. As with Neil H.Borden's marketing mix,

marketing communications has its own 'promotions mix.' Think of it like a cake mix, the

basic ingredients are always the same. However if you vary the amounts of one of the

ingredients, the final outcome is different.

The variety of integrated decisions made by a marketing manager to ensure successful

marketing. These decisions are made in four key areas known as the 4 Ps of

marketing"product, price, place, and promotional"and cover issues such as the type

of product to be marketed, brand name, pricing, advertising, publicity, geographic

coverage, retailing, and distribution.

Using the 4Ps Marketing Mix Model

The marketing mix model can be used to help you decide how to take a new offer to

market. It can also be used to test your existing marketing strategy. Whether you are


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considering a new or existing offer, follow the steps below help you define and improve

your marketing mix.

1. Start by identifying the product or service that you want to analyze.

2. Now go through and answers the 4Ps questions - as defined in detail above.

3. Try asking "why" and "what if" questions too, to challenge your offer. For example,

ask why your target audience needs a particular feature. What if you drop your price by

5%? What if you offer more colors? Why sell through wholesalers rather than direct

channels? What if you improve PR rather than rely on TV advertising?

4. Once you have a well-defined marketing mix, try "testing" the overall offer from the

customer's perspective, by asking customer focused questions:

a. Does it meet their needs? (product)

b. Will they find it where they shop? (place)

c. Will they consider it's priced favorably? (price)

d. And will the marketing communications reach them? (promotion)

5. Keep on asking questions and making changes to your mix until you are satisfied

that you have optimized your marketing mix, given the information and facts and figures

you have available.

6. Review you marketing mix regularly, as some elements will need to change as the

product or service, and its market, grow, mature and adapt in an ever-changing

competitive environment.

Key points:

The marketing mix helps you define the marketing elements for successfully positioningyour market offer.

One of the best known models is the Four Ps, which helps you define your marketing

options in terms of product, place, price and promotion. Use the model when you are

planning a new venture, or evaluating an existing offer, to optimize the impact with your


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target market.

Another Example for MARKETING MIX with respect to SWIFT

Product: Initial launch version with basic features in Lxi/Vxi/Zxi formats

Price: At 4.84 lacs (on road Mumbai) much lower than other competitors in the B +

segment.

Promotion: High decibel campaign kicked-off during the Footbal Worldcup 2006.The

campaign emphasized the curvy sports car hatchback design targeting sport lover youth

segment.

Place: Selective distribution initially based on order-booking only in select cities and

ponly through company dealerships. Dealers carry no inventory. Long delivery cycle

time.

Question 3: Explain why the balance of the marketing mix is as important as any single

element.

Answer:

Whereas costs set the lower limit of prices, the market and demand set the upper limit.

Both consumer and industrial buyers balance the price of a product or service against

the benefits of owning it. Thus, before setting prices, the marketer must understand therelationship between price and demand for its product. In this section, we explain how

the pricedemand relationship varies for different types of markets and how buyer

perceptions of price affect the pricing decision. We then discuss methods for measuring

the pricedemand relationship.


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Pricing in Different Types of Markets

The seller's pricing freedom varies with different types of markets. Economists

recognize four types of markets, each presenting a different pricing challenge.

Under pure competition, the market consists of many buyers and sellers trading in a

uniform commodity such as wheat, copper. No single buyer or seller has much effect on

the going market price. A seller cannot charge more than the going price because

buyers can obtain as much as they need at the going price. Nor would sellers charge

less than the market price because they can sell all they want at this price. If price and

profits rise, new sellers can easily enter the market. In a purely competitive market,

marketing research, product development, pricing, advertising, and sales promotion

play little or no role. Thus, sellers in these markets do not spend much time on

marketing strategy.

Under monopolistic competition, the market consists of many buyers and sellers who

trade over a range of prices rather than a single market price. A range of prices occurs

because sellers can differentiate their offers to buyers. Either the physical product can

be varied in quality, features, or style, or the accompanying services can be varied.

Buyers see differences in sellers' products and will pay different prices for them. Sellers

try to develop differentiated offers for different customer segments and, in addition to

price, freely use branding, advertising, and personal selling to set their offers apart.

Because there are many competitors in such markets, each firm is less affected bycompetitors' marketing strategies than in oligopolistic markets.

* Consumer Perceptions of Price and Value

In the end, the consumer will decide whether a product's price is right. Pricing decisions,


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like other marketing mix decisions, must be buyer oriented. When consumers buy a

product, they exchange something of value (the price) to get something of value (the

benefits of having or using the product). Effective, buyer-oriented pricing involves

understanding how much value consumers

place on the benefits they receive from the product and setting a price that fits this

value. A company often finds it hard to measure the values customers will attach to its

product. For example, calculating the cost of ingredients in a meal at a fancy restaurant

is relatively easy. But assigning a value to other satisfactions such as taste,

environment, relaxation, conversation, and status is very hard. These values will vary

both for different consumers and different situations. Still, consumers will use these

values to evaluate a product's price. If customers perceive that the price is greater than

the product's value, they will not buy the product. If consumers perceive that the price is

below the product's value,

they will buy it, but the seller loses profit opportunities.

Question 4: Analyze the marketing mix for NIVEA VISAGE Young. What are its

strongest points? Explain why you think is so.

Answer:

NIVEA is an established name in high quality skin and beauty care products. It is part

of a range of brandsproduced and sold by Beiersdorf. Beiersdorf, founded in 1882, has

grown to be a global company specialising in skin and beauty care.

In the UK, Beiersdorfs continuing goal is to have its products as close as possible to

its consumers, regardless of where they live. Its aims are to understand its consumers

in its many different markets and delight them with innovative products for their skin and

beauty care needs. This strengthens the trust and appeal of Beiersdorf brands. The

business prides itself on being consumer-led and this focus has helped it to grow NIVEA


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into one of the largest skin care brands in the world.

NIVEA found that Marketing mix Model really work with this product. And to bring the

range to market, the business has put together a marketing mix. This mix balances the

four elements of product, price, place and promotion. The mix uses traditional methods

of place, such as distribution through the high street, alongside more modern methods

of promotion, such as through social networking sites. It makes sure that the message

of NIVEA VISAGE Young reaches the right people in the right way.

The marketing mix is the combination of marketing activities that an organisation

engages in so as to best meet the needs of its targeted

market. Traditionally the marketing mix consisted of just 4 Ps.

For example, a motor vehicle manufacturer like Audi:

* Produces products that are of the highest quality and fit for the needs of different

groups of consumers,

* Offers a range of cars at value for money prices, depending on the market

segmented they are targeted at,

* Sells the cars through appropriate outlets such as dealerships and showrooms in

prime locations, i.e. in the right places, and

* Supports the marketing of the products through appropriate promotional and

advertising activity.

As my point of view the strongest points of NIVEA VISAGE are as following:

1. Perfect target segment: they research and identified that younger consumers

wanted more specialized aimed at their own age group that offered a beautifying


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benefit, rather than a solution to skin problem. Its actually for teenage market.

2. Strong Brand Identity: a strong and consistent brand identity differentiates the

product and helps consumers to understand and trust the product. This aims to keep

consumer buying the product long-term

3. Sales Promotion: To run particular product very aggressively you must have a good

sales promotion offer for distributor and retailers. Sales promotion done for example

competitions or sampling, encourage consumer to buy products in the short-term.

These are the main strong point while analyze of NIVEA VISAGE Young product.

CASE 2

SWOT analysis in action at Skoda

INTRODUCTION:

In 1895 in Czechoslovakia, two keen cyclists,

Vaclav Laurin and Vaclav Klement, designed and produced their own bicycle. Their

business became koda in 1925. koda went on to manufacture cycles, cars, farm

ploughs and airplanes in Eastern Europe. koda overcame hard times over the next 65

years. These included war, economic depression and political change. By 1990 the

Czech management of koda was looking for a strong foreign partner. Volkswagen AG

(VAG) was chosen because of its reputation for strength, quality and reliability. It is the

largest car manufacturer in Europe providing an average of more than five million cars a

year giving it a 12% share of the world car market. Volkswagen AG comprises the

Volkswagen, Audi, koda, SEAT, Volkswagen Commercial Vehicles, Lamborghini,

Bentley and Bugatti brands. Each brand has its own specific character and

is independent in the market. koda UK sells koda cars through its network of


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independent franchised dealers.

SITUATION:

To improve its performance in the competitive car market, koda UKs management

needed to assess its brand positioning. Brand positioning means establishing a

distinctive image for the brand compared to competing brands. Only then could it grow

from being a small player. To aid its decision-making, koda UK obtained market

research data from internal and external strategic audits. This enabled it to take

advantage of new opportunities and respond to threat.

SOLUTION:

The SWOT model helps managers to look internally as well as externally. The

information derived from the analysis gives direction to the strategy.

It highlights the key internal weaknesses in a business, it focuses on strengths and it

alerts managers to opportunities and threats. koda was able to identify where it had

strengths to compete. The structured review of internal and external factors helped

transform koda UKs strategic direction. The case study shows how koda UKtransformed its brand image in the eyes of potential customers and build its competitive

edge over rivals. By developing a marketing strategy playing on clearly identified

strengths of customer happiness, koda was able to overcome weaknesses. It turned

its previously defensive position of the brand to a positive customer-focused experience.

The various awards koda has won demonstrate how its communications are reaching

customers. Improved sales show that koda UKs new strategy has delivered benefits.


* Key weakness that skoda was able to identfty


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* Strength skoda use to trun its brand weakness into opportunity.

* Addressed external threats

* Important benefits of using a SWOT analysis.

Question 1: What was the key weakness that Skoda was able to identify?

Answer:

Following are the main key weakness that Skoda was able to identify

1. Negative Brand Position: Skoda UKs management needed to assess its brand

positioning. Brand positioning means establishing a distinctive image for the brand

compared to competing brands. Only then could it grow from being a small player.

2. Poor Perception: This weakness was partly due to out-dated perceptions of the

brand.

These related to kodas eastern European origins. In the past the cars had an image

of poor vehicle quality, design, assembly and materials. Crucially, this poor perception

also affected koda owners. For many people, carownership is all about image. If you

are a koda driver, what do other people think?

From 1999 onwards, under Volkswagen AG ownership, koda changed this negative

image. koda cars were no longer seen as low-budget or low quality. However, a brand

health check in 2006 showed that koda still had a weak and neutral image in the mid -

market range it occupies, compared to other players in this area, for example, Ford,

Peugeot and Renault. This meant that whilst the brand no longer had a poor image, it

did not have a strong appeal either.

3. Direction: This understanding showed koda in which direction it needed to go. It

needed to stop being defensive in promotional campaigns. The company had sought to


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correct old perceptions and demonstrate what koda cars were not. It realised it was

now time to say what the brand does stand for.

4. Happy & Contented: Skoda owners were known to be happy and contented with

their cars. The car buying public and the car industry as whole needed convincing that

Skoda cars were great to own and drive.

These were the main weakness area that Skoda able to identitfy.

Question 2: What strength did Skoda use to turn its brand weakness into an

opportunity?

Answer:

To identify its strengths, Skoda carried out research, and that activity is called as Self

Awarness. koda

attributes these results to the business concentrating on owner experience rather than

on sales. It has considered the human touch from design through to sale. As per my

formula:

Concentrate on owners Experience Sales

koda knows that 98% of its drivers would recommend koda to a friend. This is a

clearly identifiable and quantifiable strength. koda uses this to guide its

future strategic development and marketing of its brand image.

Strategic management guides a business so that it can compete and grow in its market.

koda adopted a strategy focused on building cars that their owners would enjoy. This

is different from simply maximising sales of a product. As a result, kodas biggest

strength was the satisfaction of its customers. This means the brand is associated with


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a quality product and happy customers.

Skoda UK has responded with a new marketing strategy based on the confident slogan.

the manufacturer of happy drivers. The campaigns promotional activites support the

new brand position. The key message for the campaign focus on the happy customer

experience and appeal at an emotional rather than practical level.

Survey: In Top Gears 2007 customer satisfaction survey, 56,000 viewers gave their

opinions on 152 models and voted koda the number 1 car maker.

Question 3: How has Skoda strategically addressed external threats?

Answer:

Skoda strategies worked on two main basic points, which are as follows:

1. Market Segmentation

2. Environmentally & Friendly products

Market Segmentation:

Threats

come from outside of a business. These involve for example, a competitor launching

cheaper products. A careful analysis of the nature, source and likelihood of these

threats is a key part of the SWOT process. The UK car market includes 50 different car

makers selling 200 models. Within these there are over 2,000 model derivatives. koda

UK needed to ensure that its messages were powerful enough for customers to hear

within such a crowded and competitive environment. If not, potential buyers would

overlook koda. This posed the threat of a further loss ofmarket share.

koda needed a strong product range to compete in the UK and g lobally.


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In the UK the koda brand is represented by seven different cars. Each one is designed

to appeal to different market segments. For example:

* the koda Fabia is sold as a basic but quality city car

* the koda Superb offers a more luxurious, up-market appeal

* the koda Octavia Estate provides a family with a fun drive but also a great big boot

Pricing reflects the competitive nature of kodas market. Each model range is priced to

appeal to different groups within the mainstream car market. The combination of a clear

range with competitive pricing has overcome the threat of the crowded market.

Environmentally & Friendly products:

The following example illustrates how koda responded to another of its threats,

namely, the need to respond to EU legal and environmental regulations. koda

responded by designing products that are environmentally friendly at every stage of

their life

cycle. For example:-

* recycling as much as possible. koda parts are marked for quick and easy

identification when the car is taken apart.

* using the latest, most environmentally-friendly manufacturing technologies and

facilities available. For instance, painting areas to protect against corrosion use lead-

free, water based colours.

* designing processes to cut fuel consumption and emissions in petrol and diesel

engines. These use lighter parts making vehicles as aerodynamic as possible to use

less energy.

* using technology to design cars with lower noise levels and improved sound quality.


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Question 4: What in your view are the important benefits of using SWOT analysis?

Answer:

A SWOT analysis may sound like a form of mission planning for James Bond. A SWOT

simply stands for: Strengths, Weaknesses, Opportunities, and Threats. Each area forms

a box on a grid and you fill in each section to help formulate a marketing strategy.

SWOT is a strategic planning tool used to evaluate the strengths, weaknesses,

opportunities, and threats to a project. It involves specifying the objective of the project

and identifying the internal and external factors that are favourable and unfavourable to

achieving that objective. The strengths and weaknesses usually arise from within an

organisation, and the opportunities and threats from external sources.

The SWOT analysis is an important part of the project planning process:

Strengths: attributes of the organisation that help achieve the project objective.

Weaknesses: attributes

of the organisation that stop achievement of the project objective.

Opportunities: external conditions that help achieve the project objective.

Threats: external conditions that could damage the project.

The following grid can be used to record each factor:

State Project Objective: | |


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Strengths (internal factors) | Weaknesses (internal factors) |

Track record (similar successes) | Gaps in knowledge and expertise |

Resource availability | Timescale and deadlines |

Skill levels | Budget and funding |

Processes and systems | Competing projects |

Reputation | Processes and systems |

Opportunities (external factors) | Threats (external factors) |

Technology and infrastructure development | Political influences |

Changing consumer behavior | Environmental factors |

Emerging and developing markets | Competitor activity |

New innovations (R&D) | Economy |

Market demand | Seasonal effects |

Advantages of SWOT

* Simple and only costs time to do.

* Generates new ideas to help take advantage of an organisation's strengths and

defends against threats.

* Awareness of political and environmental threats allows an organisation to have

response plans prepared.

Disadvantages of SWOT

* May tend to persuade organisations to compile lists rather than think about what is

actually important in achieving objectives.

* Presents lists uncritically and without clear prioritisation so that, for example, weakopportunities may appear to balance strong threats.

* Usually a simple list

and not critically presented.


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CASE 3

Marketing Strategy for growth

INTRODUCTION:

James Kemsey (JK) Wilkinson opened his first Wilkinson Store in Charnwood Street,

Leicester in 1930. After the Second World War, the 1950s saw a ruse in the focus of its

sales. In the 1960s customers wanted more conveience shopping. Wilkinson started

selling groceries and supermarket goods and created the Wilko brand. In the 1980s

Wilkinson extended its range of low-cost products to include quality clothing, toys,

toiletries and perfumes. In 1995 it opened a central distribution centre opened in Wales.

In 205 Wilkinson launched its Internet shopping service. Offering over 800,00 product

lines for sale online. Wilkinson currently has over 300 stores, which carry an average of

25,000 products lines. 40% of these are Wilko own-brand products. The companys

target is to see this elelment grow and to have over 500 stores by 2012.

SITUATION:

Wilkinsons growth places it in the top 30 retailers in the UK. Recently it has faced

increasing challenges from competitors, such as the supermarket sector. Wilkinson

needed to combat this and identify new areas for growth. Over two years it conducted

extensive market research. This has helped it create a marketing strategy designed to

continue growing by targeting a new market segment the student population. This

case study focuses on how Wilkinson created and implemented this strategy, using the

finding of its market research to drive the strategy forward.

SOLUTION:

To pursue a growth strategy, Wilkinson

used market research to identify new target customers. This enabled it to prepare

marketing strategies to fit the audience.


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Primary and secondary research was used to find out customer views regarding its

brand. Data indicated the student market segment was a significant area to focus on to

achieve market development. A marketing campaign using data from a follow-up survey

was put in place. The campaign showed significant increase in students level of

awareness about Wilkinson and its products. It encouraged them either to shop more

or to try Wilkinson for the first time. Market research gathered will help to formulate

future plans for new stores.


* Difference between primary and secondary research.

* Marketing strategy to help for Wilkinson Growth.

* Benefit of marketing campaign.

* Effectiveness of marketing campaign in helping Wilkinson

Question 1: What is the difference between primary and secondary research? Identify

one example of primary and secondary research carried out by Wilkinson.

Answer:

In the research process the researcher needs relative information about its topic of

research. For this purpose the researcher conducts unstructured interview, structure

interview and library research to define the problem more specifically and evolve a

theory, delineating possible variable that might be influence on the problem. Certaintypes of information such as background details of the company can be gained from

available published records like the web side of the company its archives and

other sources. Other types of written information such as company policies, procedures

and rules can be obtained from organization records and documents. Data gathering


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such existing sources are called secondary.

In other words we can say that the secondary data is data which is already publish or

collected by any other person or organization. We also say that the secondary data its

process & refine data. The secondary data is easily available on net, books, in different

articles etc. in other type of data such as the perception and attitudes of employees are

best obtained by talking to them, by observing event, people, and objectives or by

administrating questionnaire to individuals. Such data gathers for research from the

actual site of occurrence of events it's called primary data. In other words the primary

data is fresh hand data its mean primary data the researcher generated by its self by

conducting the interview, questioner, sampling our group discussion.

Primary research = you do the actual research wherein you gather all the data. Primary

research originates with your company. Generally, the results are proprietary and

belong to you.

For example, you conduct a survey of 1000 respondents.

Secondary research = you use existing research, such as data from census bureau,

statistical government office, white papers, press releases, news stories, etc.

Primary data is a data which is created for the first time and there is no previous source

available. Secondary data is a readily available data like data from trade directories,

statistics from websites etc. In Dissertation Literature review is done through secondary

data which includes the contents such as theories, models, compilation, research

findings by some other scholar etc.

Both Primary & Secondary methods have advantages & disadvantages. The

advantages are that its recent, relevant and designed specifically for the companys


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intended strategy. The main disadvantages are that it is more expensive than

secondary research and can be biased if not planned well. Secondary research is

relatively cheap, can be undertaken quickly and so enables decision-making sooner.

However, secondary research can go out-of date and may not be entirely relevant to the

business, needs.

Example of Primary & secondary research on Wilkinson, Wilkinson undertook primary

market research using questionnaires from student across the UK and secondary

research using government and university admissions data. The statistics revealed that

there were three million potential student customers.

They had a combined annual of around 9 billion per year. This rese arch confirmed

that the choice of focusing on the student market as means of growth was valid.

Wilkinson undertook further research to identify how to reach students and persuade

them to start shopping at Wilkinson stores.

Question 2: Explain why Wilkinson needed a marketing strategy to help them to grow.

Answer

Wilkinson carried out market research and used the results to develop a new marketing

strategy. This aimed to communicate the added-value of products to customers and

encourage them to buy. Ansoffs matrix is a useful tool to develop these plans. This is a

way of showing the various choices faced by a business.

* Businesses can use a market-driven approach - developing existing products in

existing markets or existing products in new markets.

* Alternatively, a business can use a product-driven approach - developing new

products in existing markets or new products in new markets.


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Wilkinsons market research showed that existing products into new markets (called

market development) was the best route to take. To grow, a business needs to give

consumers what they want, at a price they are satisfied with, when they want it and

make a profit for the company. Wilkinson commissioned market research which

identified key potential for growth in the student sector. It had to develop a strategy for

growth that not only covered the specific requirements of this target group, but also

linked closely with the companys overall aims and objectives.

The key elements that need to be in place for business planning are:

1. aims - describe the overall goals of a business

2. objectives - are steps which managers decide need to be taken in order to achieve

the overall aims

3. strategy - is a plan which outlines all the medium and long-term steps that need to

be taken in order to achieve a given target

4. tactics - are what the business does in the short-term - these respond to

opportunities and threats identified when preparing the original strategy

Strategies may be to combat competition,

to improve the position of the company in the market or to grow the business. The type

of strategy required will depend upon several factors but the main influences include:

* number and power of competitors

* company strengths

* size of business

* financial position

* government influences

Question 3: Evaluate the benefits of marketing campaign to Wilkinson.

Answer:


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Wilkinson wanted to know what would inspire students to shop at Wilkinson more and

what factors would help to attract non-customers. The research provided significant

primary information to analyze the effects of the campaign.

Evaluation

Wilkinson used questionnaires collected from the first year undergraduates to gather

qualitative data. In addition, Wilkinson obtained quantitative data from various other

sources, including:

* Redemption rates how many people used the discount vouchers when buying

* sales analysis how much extra business did the stores handle

* footfall in stores analysis how many extra people went into stores

This information helped Wilkinson to develop its plans for future marketing campaigns. It

identified motivation factors for the student audience which would help to encourage

future purchase. Key factors included products being cheaper than competitors and

easy access to stores. The layout of the store was another major problem affecting

repeat visits.

23% of students questioned gave distance from university as a reason for not regularly

visiting the store.

These findings have been taken on board by Wilkinson in its future planning of store

locations and layouts.

Outcomes

Researching students opinions after the campaign showed that:


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* awareness of Wilkinson brand had significantly risen from 77% to 95% of those

interviewed. This brought it in line with Morrison supermarkets, a key competitor.

* 17% of students who received a goody bag at freshers fairs used the 15% discount

voucher. A further 58% intended to use the voucher. The campaign had either got

students to enter the Wilkinson stores or increase their intention to visit the store.

* Of particular importance to Wilkinson was that the campaign had made the company

more appealing to 67% of students interviewed. This fulfilled one of the main objectives

of the campaign and was reinforced by figures from existing students. Prior to the

campaign 13% shopped at Wilkinson at least once a month. After the campaign this had

risen to 33%.

The results of interviews with fresher students two months after the campaign shows

which of the various marketing tactics Wilkinson used with the students had the greatest

impact on their awareness.

Question 4: Analyze how effective the marketing campaign was in helping Wilkinson

respond to competitive pressures.

Answer:

To maintain growth, Wilkinson needed to find a new market for its products. It identified

students as a likely market through market research. It then set up a campaign to raise

students awareness of Wilkinson products and value. The campaign achieved many of

the businesses aims, including growth.

Wilkinson marketing strategy began with its corporate aim to grow and increase stores

across the UK. It was facing increased competition from supermarkets and needed to

identify an area to focus on. To pursue a growth strategy, Wilkinson used market

research to identify new target customers. This enabled it to prepare marketing


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strategies to fit the audience.

Primary and secondary research was used to find out customer views regarding its

brand. Data indicated the student market segment was a significant area to focus on to

achieve market development.

A marketing campaign using data from a follow-up survey was put in place. It

encouraged them either to shop more or to try Wilkinson for the first time. The campaign

helped to achieve many of the business aims, creating increased brand awareness and

repeat visits. It also helped to inform the companys future strategies for growth.

The campaign showed significant increase in students levels of awareness about

Wilkinson and its products.

Market research gathered will help to formulate future plans for new stores. These will

be in line with Wilkinson commitment to providing communities with affordable products

across the country.

CASE 4

Extending the product Life Cycle

INTRODUCTION:

Businesses need to set themselves clear aims and objectives if they are going to

succeed. The Kellogg Company is the worlds leading producer of breakfast cereals and

convenience foods, such as cereal bars, and aims to maintain that position. Productlines include ready-to-eat cereals (i.e. not hot

cereals like porridge) and nutritious snacks, such as cereal bars. Kelloggs brands are

household names around the world and include Rice Krispies, Special K and Nutri-

Grain, whilst some of its brand characters, like Snap, Crackle and Pop, are amongst the


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most well-known in the world.

In 2006, Kellogg's had total worldwide sales of almost $11 billion (5.5 billion).

In 2007, it was Britains biggest selling grocery brand, with sales of more than 550

million.

Kellogg's has achieved this position, not only through great brands and great

brand value, but through a strong commitment to corporate social responsibility. This

means that all of Kelloggs business aims are set within a particular context or set of

ideals. Central to this is Kelloggs passion for the business, the brands and the food,

demonstrated through the promotion of healthy living.

SITUATION:

This case study is about Nutri-Grain. It shows how Kellogg's recognized there was a

problem with the brand and used business tools to reach a solution. The overall aim

was to re-launch the brand and return it to growth in its market. The company divides its

market into six key segments. Kellogg's Corn Flakes has been on breakfast tables for

over 100 years and represents the Tasty Start cereals that people eat to start their day.

Other segments include Simply Wholesome products that are good for you, such as

Kashi Muesli, ShapeManagement products, such as Special K and Inner Health

lines, such as All-Bran. Children will be most familiar with the Kid Preferred brands,

such as Frosties, whilst Mum Approved brands likeRaisin Wheats are recognized by

parents as being good for their children.

Each brand has to hold its own in a competitive market. Brand managers monitor thesuccess of brands in terms of market share, growth and performance against the

competition.

SOLUTION:


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Kellogg's was able to see that although Nutri-Grain fitted its strategic profile a healthy,

convenient cereal product it was underperforming in the market. This information was

used, along with the aims and objectives of the business, to develop a strategy for

continuing success. Finally, when Kellogg's checked the growth of the re-launched

product against its own objectives, it had met all its aims to:

* re-position the brand through the use of the marketing mix

* return the brand to growth

* improve the frequency of purchase

* introduce new customers to the brand

Nutri-Grain remains a growing brand and product within the Kellogg's product family.


* Details of product life cycle stages.

* Suggest appropriate aims & objectives for type of business

* Which way product development could diversified.

Question 1: Using current product familiar to you, draw and label a product life cycle

diagram, showing which stage each product is at.

Answer:

Each product has its own life cycle. It will be born, it will develop, it will grow old and,

eventually, it will die. Some products, likeKelloggs Corn Flakes, have retainedtheir market position for a long time. Others

may have their success undermined by falling market share or by competitors.

The five typical stages of the life cycle are shown on a graph. However, perhaps the

most important stage of a product life cycle happens before this graph starts, namely


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the research and development (R&D) stage. Here the company designs a product to

meet a need in the market. The costs of market research - to identify a gap in the

market and of product development to ensure that the product meets the needs of that

gap - are called sunk orstart-up costs.

The product life cycle shows how sales of a product change over time.

Nutri-Grain was originally designed to meet the needs of busy people who had missed

breakfast. It aimed to provide a healthy cereal breakfast in a portable and convenient

format.

1. Launch - Many products do well when they are first brought out and Nutri-Grain was

no exception. From launch (the first stage on the diagram) in 1997 it was immediately

successful, gaining almost 50% share of the growing cereal bar market in just two

years.

The need for immediate profit is not a pressure. The product is promoted to create

awareness. If the product has no or few competitors, a skimming price strategy is

employed. Limited numbers of product are available in few channels of distribution.

2. Growth - Nutri-Grains sales steadily increased as the product was promoted and

became well known. It maintained growth in sales until 2002 through expanding the

original product with new developments of flavor and format. This is good for the

business, as

it does not have to spend money on new machines or equipment for production.

The market position of Nutri-Grain also subtly changed from a missed breakfast

product to an all-day healthy snack.

Competitors are attracted into the market with very similar offerings. Products become

more profitable and companies form alliances, joint ventures and take each other over.

Advertising spend is high and focuses upon building brand. Market share tends to

stabilize


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Diagram of Product Life Cycle

3. Maturity - Successful products attract other competitor businesses to start

selling similar products. This indicates the third stage of the life cycle - maturity. This is

the time of maximum profitability, when profits can be used to continue to build

the brand. However, competitor brands from both Kellogg's itself (e.g. All

Bran bars) and other manufacturers (e.g. Alpen bars) offered the same benefits and this

slowed down sales and chipped away at Nutri-Grains market position. Kellogg's

continued to support the development of the brand but some products (such

as Minis andTwists), struggled in a crowded market. Although Elevenses continued to

succeed, this was not enough to offset the overall sales decline.

Not all products follow these stages precisely and time periods for each stage will vary

widely. Growth, for example, may take place over a few months or, as in the case

of Nutri-Grain, over several years.

Those products that survive the earlier stages tend to spend longest in this phase.

Sales grow at a decreasing rate and then stabilize. Producers

attempt to differentiate products and brands are key to this. Price wars and intense

competition occur. At this point the market reaches saturation. Producers begin to leave

the market due to poor margins. Promotions become more widespread and use a

greater variety of media.

4. Saturation- This is the fourth stage of the life cycle and the point when the market is

full. Most people have the product and there are other, better or cheaper competitor

products. This is calledmarket saturation and is when sales start to fall. By mid-2004

Nutri-Grain found its sales declining whilst the market continued to grow at a rate of

15%.


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5. Decline - Clearly, at this point, Kellogg's had to make a key business decision. Sales

were falling, the product was in decline and losing its position. Should Kellogg's let the

product die, i.e. withdraw it from the market, or should it try to extend its life?

At this point there is a downturn in the market. For example more innovative products

are introduced or consumer tastes have changed. There is intense price-cutting and

many more products are withdrawn from the market. Profits can be improved by

reducing marketing spend and cost cutting.

Question 2: Suggest appropriate aims and objectives for small, medium and large

business.

Answer:

When a company recognizes that a product has gone into decline or is not performing

as well as it should, it has to decide what to do. The decision needs to be made within

the context of the overall aims of the business. Kelloggs aims included the development

of great brands, great brand value and the promotion of healthy living.

Strategically, Kellogg's had a strong position in the market for both healthy foods and

convenience foods. Nutri-Grain fitted well with its main aims and objectives and

therefore was a product and a brand worth rescuing.

Kellogg's decided to try to extend the life of the product rather than withdraw it from the

market. This meant developing an extension strategy for the product. Ansoffs matrix is

a tool that helps analyze which strategy is appropriate. It shows both market-

orientated and product-orientated possibilities

Kellogg's had to decide whether the problem with Nutri-Grain was the market, the

product or both. The market had grown by over 15% and competitors market share had

increased whilst Nutri-Grain sales in 2003 had declined. The market in terms

of customer tastes had also changed more people missed breakfast and therefore


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there was an increased need for such a snack product.

Question 4: Consider the decision taken by Kellogg to opt for product development.

Suggest a way in which it could have diversified instead. Justify your answer.

Answer:

Having recognised the problems, Kellogg's then developed solutions to re-brand and re-

launch the product in 2005. Fundamental to the re-launch was the renewal of the brand

image. Kellogg's looked at the core features that made the brand different and

modelled the new brand image on these. Nutri-Grain is unique as it is the only product

of this kind that is baked. This provided two benefits:

* the healthy grains were soft rather than gritty

* the eating experience is closer to the more indulgent foods that people could be

eating (cakes and biscuits, for example)

The unique selling point, hence the focus of the brand, needed to be the soft bake.

Researchers also found that a key part of the market was a group termed realistic

snackers. These are people who want to snack on healthy foods, but still crave a great

tasting snack. The re-launched Nutri-Grain product needed to help this key group fulfil

both of these desires. Kellogg's decided to re-focus investment on the core products

of Soft Bake Bars and Elevenses as these had maintained their growth (accounting for

61% of Soft Bake Bar sales). Three existing Soft Bake Bar products were improved;

three new ranges introduced and poorly performing ranges (such as Minis) were

withdrawn.New packaging was introduced to unify the brand image. An improved pricing structure

for stores and supermarkets was developed. Kellogg's was able to see that

although Nutri-Grain fitted its strategic profile a healthy, convenient cereal product it

was underperforming in the market. This information was used, along with the aims and


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objectives of the business, to develop a strategy for continuing success. Finally, when

Kellogg's checked the growth of the re-launched product against its own objectives, it

had met all its aims to:

* re-position the brand through the use of the marketing mix

* return the brand to growth

* improve the frequency of purchase

* introduce new customers to the brand

Marketing Managemnt Soln

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