Substitute Products
U.S. producers of non-chocolate candy products sell through wholesalers, as well as direct to retailers. The buyers of the products make purchasing decisions based on expectations of consumer behavior. Buyers will select items that are perceived to be in demand, either based on historical sales data, or trends in consumer preferences. Thus, this section focuses on the trends that influence the purchasing decisions of the wholesale retailers and retailers. Alternatives available to consumers are plentiful for non-chocolate confections. Thus, the pressure on firms from substitute products is high. Competition for sales include chocolate candies, small dessert items, candy flavored yogurt, and snacks combining sweet with savory flavors. The availability of substitute products has a dampening effect on the ability of firms to increase prices (Porter, 2008). Therefore, the more competition in an industry, the harder it is to increase prices. Porter explains that not only does strong competition reduce profits in slow market conditions, but it also impedes a firm’s ability to increase profits when economic times are favorable. The following review of the role of substitutes in the non-chocolate candy segment explores the relative price to performance relationship, as well as the propensity of buyers to substitute.
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From the business to business perspective, the key for the manufacturer is to create demand for their products at the consumer end. When brand identity and demand are strong, wholesalers and retailers have little bargaining power. Movement of prices within the candy industry are typically tied to disposable income of consumers. Thus, as consumers have additional money, more money is available to spend on treats. For example, with the recent experience of lower gas prices in the first part of 2016, consumers can decide to re-deploy the extra cash on other goods and services. Which products will
They anticipate competition between supermarket chains will be fierce this year as food prices continue to stay low. The Canadian grocers have been grappling with declining food prices, especially for meat, and Loblaw’s said “The notion of a shift into a steady inflationary environment is going to be offset by what we see as a continued level of competitive intensity”
...ws that Americans and people worldwide have easier access to this irresistible pastry by the stores having the ability to leave the treats on the shelves longer. Another example of this market penetration is the online market for a Twinkie. as ‘U.S News & World Report’ spotted on ebay, “$5,000, top asking price for a single Twinkie. ‘This is your opportunity to own a piece of history, a delicious piece at that,’ the seller wrote.” This again shows that the interest/ market penetration, of the Twinkie has increased rapidly and suddenly. The comeback of this snack has brought this famous treat back into the lives of lovers and hungryAmericans nationwide.
So as Jamba Juice transformed so did its prices. Now one thing to keep in mind Jamba Juice specializes in smoothies and juices, and there are no other big firms that supply smoothies. So up until 2012, a small Jamba Juice smoothie costed $3.19, but when the company went “eco-friendly” from Styrofoam to Double Walled Paper cups prices rose .60 cents and stayed dormant at $3.79 for a good 3 years (Alexander, 2014). Although there is a change to the input in supply, the demand stays the same and eventually falls back to equilibrium. Then in prices rose again in July 2015 from $3.79 to $3.99 for a small Jamba Juice smoothie to compensate for the minimum wage increase that took place. Now you think, “Oh no big deal right?” Wrong. Consumers noticed, they noticed even more when prices rose again 3 months later in October that same year to $4.79 for a small smoothie. So in the span of 6 months Jamba Juice had raised their price $1.00 (Jamba Juice Company, n.d.). Although they noticed it did not really change the market for Jamba
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
Market research and information about the industry is very important to the organization because it will allow the organization to position itself well in terms of sourcing chocolate raw materials and in identifying the market for its products. For example, understanding that some chocolate product purchases are seasonal, e.g., at Christmas; around Mother’s Day; and, on Valentine’s Day, allows the organization to have more product on hand and to create displays, in store, that will increase purchases and attract more customers when existing customers tell their friends about the availability of high end products, at reasonable prices, in their store.
Woolworths a public company, had major variety on its Party Mix Lollies. Of the large variety, the Woolworths home brand party mix was recorded. It was made from 93% Australian product and contained no artificial colours or flavours. Consequently, it also had a very low health star rating of 1.5 out of 5 stars. This party mix lolly package was placed along the bottom shelf, as it was the cheapest. It was only $1 per packet and was 0.67/100g. On the other hand, BIG W a public company, had many popular Party Mix Lollies stacked on their shelves. The lollies had been intricately placed exactly at kid’s eye level and had very bright colours. They also advertised that they had no artificial colours or artificial flavours and were strongly advertised that they were made in Australia. They were moderately priced at $3/180g. Which would be prices at $1.67/100g. In addition, another Party Mix Lollies were heavily presented throughout the shelves. The Natural Confectionary Co Party Mix was very dominant on the lower shelves. However, this was not a very bright colour. It attracted the eye as it was very soothing colour compared to all the other confectionary displayed in the shelves. As well as this, it was the only Party Mix that was packaged in a tub instead of packaging material. It was also heavily displaying that is was made in Australia and had no artificial colours or flavours. It was priced at
In the market of premium ice cream Ben and Jerry's have a strong rival. Haagen Dazs is currently the main competitor in the concentrated market place for super premium ice cream. Substitutes, however, are available. There are other ice creams not in the super premium category. To an extent these are real competitors. However for the market Ben and Jerry's caters for, the 25-40’s with a high disposable income, their strategies should not have a great impact on Ben and Jerry's.
marketplace no matter what the product is when a company begins sacrificing at the customers expense people take notice quickly. This is when the buyer thinks they would be willing to give a little more in the price to be happy about their purchase. This is when Papa John steps in and reminds us all that they have been number one three years in a row in customer satisfaction. People take notice of the decisions that other people make. If they see an empty Papa Johns box in the trash of their next door neighbor they will take notice.
Despite there being a stable state established in the market of pampers, there have been variations in the way that the products of this company have been demanded from their manufacturing companies (Christopher, 2016). On having a closer look at the differences and swings in the way that demand is made in this organization, it was clearly found out that the differences in demands were greatly affected by the ordering practices of the product retailers. The way that wholesalers, and other product distributors acquired the product also resulted to some variations being experienced in the market (Simchi-Levi, Simchi-Levi, & Kaminsky,
Increasing demand for peanut butter and our product lines. For example, last year there was an increase in the demand of peanuts from China.
The “Top Challenge Trend” is likely that of “Faster Pace of Innovation” causing increased competition due to lower barrier of entry. (Carpenter, Bauer, & Erdogan, 2012) With the increase competitors from both major competitors like PepsiCo vs generic branding of sodas at cheaper rates. The market is flooded with new flavors and new competitors all the time.
Although there would be the con still that anyone could make cupcakes and enter the market easily. My target market would be around vegan and gluten free consumers. The other companies will always be around as everyone loves there sweets but as the economy develops more health issues and risk people will slowly start to turn to alternative eating lifestyles. Which can lead to a breakthrough of more vegan food base restaurants and shops in the near future. Its also a business that will stabilize it self as it will always be a want in this world. The only thing that may be strenuous on a business may be the revenue due to price adjustment as the economies household incomes fluctuate. When that should happen a new business model will be put in to effect to keep the business thriving and
Once the product is accepted the organisation would experience a high growth rate. For example, PAX Yogurt Company which originates on Mount St. Benedict, is a local company which developed seven different flavours of yogurt into the market, they are: almond, guava, passion fruit, pineapple, soursop, strawberry, natural (plain) and vanilla. The primary objective was to meet the customers’ needs with a good quality product at an affordable price in order to return high sales and profitability for the company. It is imperative at this stage, that particular attention should be placed on creating strategies for pricing, place or distribution and promotion so as to establish a market presence and create a suitable demand for the product. Pricing strategies include price skimming and price penetration. It is advisable at this stage to employ the price skimming strategy for example, pricing the product at the highest point possible. Prices can then be lowered when demand starts to
With further consumer behavior studies, McDonald’s marketers can understand the factors that control the customer 's sensitivity to changes in price. McDonald’s cost of food is the most important element of their business. If the price of the restaurants meals were to increase then the price sensitive customers would no longer gravitate to purchase McDonalds’ products. The restaurants inexpensive prices allow the company to beat out the competition. In the year 2013, a Big Mac would cost $3.60, whereas, a Baconator from Wendy’s would be $6.29 (Fast Food Menu Prices 2013). With the small price, there is a concern about how much quality and care goes into preparing McDonald’s food when compared to other restaurants; however, McDonalds’ remains beloved by the fast food
Frito-Lay controlled 40% of the USA-market assuring high volume production by increasing internal coordination with PepsiCo developing the Power of One strategy consisting in mixing snacks with beverages and sauces produced by Peps...