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Prices Snacks plc has been established as a company for a long time
therefore they have a great knowledge and understanding of the
competitive market. They make a range of confectionery items such as
chocolates, chocolate boxes and chocolate eggs.
The company started making milk chocolate bars and over the years
their products have developed and increased to meet customer demands
and to compete with rivals. The current products have been in the
market for twelve months and the sales are steady. Therefore as
marketing director I feel it time to start to develop a new product.
As marketing director of Prices snacks Ltd it is my job to identify
anticipate and satisfy customer's requirements with the new product
and the profit for the company.
The marketing department at Prices Snacks
Marketing is about creating customers. The manager's look at things
through the customer's perspective, so giving the customers what they
want at a profit is a high priority. The activities that are included
in the market section are:
Ø Market research to find out customer's needs. Also to find out from
questionnaires whether people like crisps, chocolate, sweets etc. Also
to find out the right type of chocolate that Prices Snacks customers
Ø Producing a product that meets customers needs and wants, Prices
Snacks must have a product that customers want and are prepared to pay
for other wise they will got to competitors like Cadburys or Nestlé.
Ø Price Prices Snacks need to calculate the price that meets the
customer's demand, so a profit is made for the company.
Ø Quantity Prices Snacks need to produce the right quantities to
supply customer demands, the use of questionnaires give Prices Snacks
an indication of the potential customers that buy there chocolate.
Ø Promoting the new product to the customer, Prices Snacks need to
make sure that the customers know about the new product. Billboards
and television advertisements and sales promotions e.g. Text to win
are used to attract customers. Point of Sales displays are attractive
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Ø Place distributing the product to the right place that is convenient
for the customer to buy it. Therefore prices need to make sure that
the product is being sold in the right market retail outlets. Petrol
stations, airports, Super markets and newsagents are the most common
places that chocolate are sold this is because many people when are
doing a weekly shop buy chocolate, and also at airports when people
are flying they like to relax and indulge with a chocolate. At
convenient stores chocolates at placed at the checkouts therefore it
is an impulse and people are attracted to buy it.
Price Snacks need to know what the consumer needs and wants to buy.
Price Snacks develop and launch a product and then embark on a heavy
promotion and advertising campaign to convince the consumer that they
want the product. This type of company is called a Product orientated
company. Prices Snacks is a market-orientated company, this means that
Prices Snacks find out what customers want and then they develop the
product to meet their need. To find out what consumers want market
research is carried out. Market research is the gathering, presenting
and analysing and interpreting the data about the people's demands for
Methods of market research
There are several ways of collecting data. Prices snacks have their
own marketing department, whilst others employ outside agencies to do
the research for them. The two main methods of research are:
¨ Desk research
Desk research is the gathering together of existing data that has
already been collected and published for other purposes. This is
called secondary research. Using desk research is relevantly cheap and
a quick way to gather information.
¨ Field research
Field research is the gathering of new data direct from consumers, by
carrying out relevant surveys and questionnaires. This is called
primary research. The main type of research that Prices Snacks use is
primary research but occasionally secondary research is required.
Segmenting and niche markets
Market segmentation is when a market is broken down into different
pieces, which are very similar. Prices snacks research into which age
group, what sex, and also where the customers mostly purchase the
products. Niche marketing is not involved in the distribution of
Price's snacks chocolate, but it is involved in some companies market
segmenting e.g. McDonalds cater for vegetarians, so they have to carry
out wider research. Trace of nuts is the only Niche market that we
Different pricing strategies help products sell faster. Price skimming
is when a company puts their product onto the market at a higher
price. They do this because the product is new so therefore people
will be prepared to pay the extra cost to try the new product because
of the high demand. Penetration pricing is where the product is
released into the market at a lower price to competitors; therefore
more bars are being sold but only a small profits being made. Once the
product is selling at a steady pace then the price will be increased
Cost plus pricing is a good way of setting the price of a new product.
To do this the following formula is used:
Number of chocolate bars sold + Number of bars being distributed + How
much it costs to produce the product then a bit onto is added to this
to make the product profitable.
Prices snacks use this method because it is easy to apply to the
products, so a profit is guaranteed. Price skimming is used for new
improved products that are not in the market, this is because there is
no competition, and therefore people will be prepared to pay that bit
more extra for a bit more luxury.
How and where the product will be distributed
Businesses have to decide where is the best place to sell their
products. Houses will be sold directly to customers and so will cars,
but chocolate is a lot more complicated to sell straight to customers
so Prices snacks have to sell to wholesalers and retailers. This type
of distribution is more cost effective and efficient. There are many
different ways of distributing the bulk products to the wholesalers
q By train,
q By ferry,
q By aeroplane.
Prices Snacks use road haulage to distribute products to all the
different shops this is because the products reach the destination
that they are going to a lot quicker than by any other transport. If
the products were being delivered by aeroplane then the flights are
only at certain times so the product reaches its destination at later
dates than intended. The just in time system (JIT) is used throughout
the company so all goods are delivered fresh, and can be sold at more
places liker smaller shops because they do not have the storage space
for bulk orders.
There are lots of different places that Prices snacks sell their
products. We make sure that our chocolate is available for everyone in
different place for example in vending machines when people at work or
at school need a quick snack. Petrol stations are another one of our
main stockists because people who travel a lot in their vehicles can
stop off at any point to get a chocolate this is very useful and
builds up their energy if their day is stressing. In corner shops and
in supermarkets are the main places that we sell our stock to because
these to are close to work places. Most chocolates are placed by the
cash till so if people don't intend to get a chocolate see them and
are more tempted to buy them.
People tend to travel a lot on different types of transport so we also
sell products in airports, train stations and on ferries. People
sometimes have phobias about travelling therefore chocolate is seen as
a stimulant and more purchases are made.
Advertising is the most common form of promotion. It is used to
persuade and inform as many customers as possible to buy a company's
product. Its purpose is to catch the attention of customers enough for
them to want to buy the product.
Prices snacks use a variety of different media to promote their new
products. The three main types of promotion are
Newspapers are a good way to advertise products because they are
published everyday and a lot of people buy newspapers there are also
free papers that come through the door. It is cheap to advertise in a
newspaper therefore not a lot of the profits will be lost to pay for
Magazines are also a good way of advertising because like newspapers a
lot of people read them. Also people tend to read magazines when
travelling and if the article catchers their attention when they go
into a shop they will be tempted to buy the product that they have
Televisions are the best way to advertise new products because more
people watch television, also a wider range of age groups see
commercials mainly children. Children tend to eat most chocolate and
will be encouraged to try the new product on offer. The problem with
advertising on television is that it costs a lot and is only used in
Any new product will have an expected life cycle. This is the amount
of time that the manufacturer expects the product to sell. The product
life cycle is made up of series of stages these are as followed:
Research and development
Prices snacks invest money into researching the market for the new
product, develop it and market test the product. At this stage the
product is making no money, it is costing the money company.
The product is launched on the market. A promotion campaign and a
large amount of advertising will take place at this stage. The product
is still making a loss.
The product starts to make a profit because it is becoming known in
the market. Advertisement is still used.
The product is still well established in the market. Advertising will
be used to remind the consumer about the product. This is when the
product reaches its peak and is at its highest profit level. Companies
will try to maintain this stage as long as possible. Then they may
introduce new models, or revitalise the advertising campaign to
promote further sales.
The product begins to lose its sales. Competitors are entering rivals
into the market. The product is out of date and sales begin to fall
and so do profits.
End of production line:
The product is taken out of production. The last stock is often sold
at a lower price for a quick sale. To make sure a product does not
reach the end of production line Prices snacks are always researching
into new ideas for new improved chocolate bars.