Current Marketing Mix for Payne's Poppets.

What is the Marketing Mix?

The marketing mix is the successful implementation of four aspects. A correct mix of these aspects will result in a product or service being marketed successfully. The four aspects of the marketing mix as mentioned before are

Product – something that the customers would want to buy
Place – where the business is selling this product, at a place, which the target market would frequent.
Price – the cost of the product should appeal to the customers whilst also generating profit
Promotion – attracts and raises awareness of people towards the product.

The marketing mix is important because having the correct marketing mix can make the difference whether or not a product is successful. The Marketing Mix is closely linked to Market Research, from which a suitable marketing mix can be drawn up.

In this section I will research and analyse the current marketing mix employed at Payne’s under the four headings: product, price, place and promotion. The information collected will be from the Payne’s website and through other such sources.

Product

From visiting the product range page on the Payne’s website at , I have found out that Payne’s have a selection of products, which they market which include “Just Mints”, “Just Brazil’s”, “Just Almonds”, “Just Hazelnuts”, “Lift” and also “Poppets”. This is because if one product fails, there’s always another one that they can rely on others for revenue. Also Payne’s are selling to a bigger market meaning a bigger proportion of the market will be willing to buy from them. Payne’s is a market-orientated firm; this is because they undertake market research and develop products that their research shows people would want to buy. One of the reasons Payne’s would do this is because market orientated firms are more assured of success since the products they are developing, have already been approved by the consumers who will be buying the product in the end. It is important to note however that Payne’s also displays characteristics similar to that of a firm, which employs Asset led marketing, this is where a company takes the best from both product and market orientation. It doesn't only make decisions based on consumer needs but also product strengths. It uses the product name and brand image as a strength to market both new and existing products, examples of this would be recent launch of the new chocolate-toffee-popcorn flavoured Poppets, which is completely different to the existing Poppet brand. Information for the new chocolate-toffee-popcorn Poppets product can be found in the press release issued by Paynes, on the Paynes website under the news section. Payne’s have what is known as a product mix – they have a range of products, which they sell. Payne’s use product branding, this helps build a trust between consumers and the product. The consumers will buy the product knowing that is of sound quality and value for money. The Poppets product is a brand name and is evidence of Payne’s using product branding. Payne’s also produce a high quality chocolate such as “Just Brazils” and “Just Nuts”, importing ingredients from Africa and Brazil; these are further examples of product branding. Poppets are a mass-market product; this is because they are sold at a low price that people of all socio-economic groups are able to afford. Payne’s Poppets have a unique selling point in that the packaging for Poppets come in a box unlike rival products such as Maltesers which come in small packets. This unique selling point gives them an advantage over their competitors. The unique selling point is something, which is rather important in the market Payne’s occupy; the confectionary market is saturated with confectionary products (as a quick browsing of confectionary shelves in newsagents and supermarkets will confirm). To distinguish their products from competitors, Payne’s will need to market their unique selling point as a reason why people should choose Payne’s products, having a range of products will not hurt either. Payne’s Poppets is a niche market product, it targets a small market segment, this is seen from the television channels it advertises on (Cartoon Network/Trouble) which are children’s television channels (i.e. they advertise Poppets to children). The effect of this is that the product is not marketed to other segments of the market that may prefer Poppets. Poppets come in seven flavours; these are mint, peanut, cookies, toffee, raisin, caramel and chocolate-toffee-popcorn. Payne’s Poppets employ batch production (the mentioning of the above flavours is proof of this, as Payne’s obviously will take advantage of the fact they can use batch production, to produce each flavour in batches equivalent to the demand). Batch production is when you produce one type of product for a while and then you change over and produce another product. An example of this is when a batch of toffee flavoured Poppets is produced, packaged, then the machinery is adjusted so batch of raisin flavoured Poppets can be produced. The main advantage of using batch production is that different customer needs can be met by making batches of different goods, which makes the process cost effective. The product life cycle of Payne’s Poppets is below:

This is a preview of the whole essay

I will describe the sales and activities that take place in each of the stages in the life cycle of Paynes Poppets. At the first stage, the development stage, there is no revenue as there is no product to sell. Paynes at this time will conduct market research, to find out whether or not their product will be successful. If the product is found to be enabling Paynes to make a profit then the product would be deemed successful and Paynes would be able to move onto the next stage. At the second stage, which is the product launch, Paynes would spend a lot of money through a campaign of intense marketing through radio, television, magazine and other forms of advertising. The revenue being generated at this time would not be equal or more then the amount being spent on advertising the profit. Thus Paynes would be losing money in the opening stage of the life cycle of Poppets. At the next stage which is known as the “Growth” stage, the advertising budget initially determined by Paynes can be reduced, the product will no doubt by that stage have become more popular and sales will be increasing. Reduced expenditure and more sales generating more revenue will mean that the amount of money Paynes will be spending will balance out with the money they will be receiving. The next stage after growth is “maturity”, at this point, Paynes will have established brand name loyalty with its consumers and consumers wishing to buy the Poppet product will buy the product, others will be aware of the product but may prefer not to buy it through dislike. At this stage any competitors that Paynes have will be determined to bring out a range of products similar to Paynes in order to compete (they will be aware that the product Paynes are selling is appealing to the mass market, they will benefit from the market research Paynes have initially conducted). This will prompt the next stage in the life cycle of Payne’s Poppets, which is the “Decline” stage. The decline stage cannot only be prompted by the arrival of similar products by competitors but also a lack of interest from the target market. It is as this stage that the manufacturer can decide whether or not they want to continue manufacturing the product, or to let it die and come up with a new product. Should Paynes decide they want to extend the life cycle of the product then they will take the life cycle of the Poppets to the next stage, which is referred to as the “Extension stage”. There are numerous ways to achieve an extension of a products life cycle, which include a re-launch of the product, release of new flavours and other incentives based on value and originality. Sometimes companies may decide to target a new segment of the market as an extension strategy. The strategies are undertaken in order to attract the consumers back to the product and increase sales. One final observation regarding Poppets specifically is that the Poppets product is one that is elastic. This statement is in reference to product elasticity. Product elasticity relates to how the demand of a product changes in relation to a change in price. A product that is elastic drops in demand as the price is increased. This shows that the confectionary market is extremely price sensitive - this topic will be analysed shortly under the heading “price” which will examine how Poppets currently apply the second of the four parts to the marketing mix.

Also listed below is the complete product range for Paynes:

Price

Business uses a variety of methods of pricing. Pricing is of utmost importance. When setting the rice for a product, a number of issues have to be considered, for example, the consumers, the profit, competitors and the costs of production. Pricing is very important, as all consumers will notice it first before they buy a product. A successful pricing strategy will be one that caters for the supply and demand of the product, with a healthy profit margin. Selling a product at a price, which is too high might make the product fail as will setting the price too low. Paynes price the Poppets product range according to the three sizes they are produced in. The table below shows the prices:

Payne’s employ one of the brands of competition based pricing. They do not employ the destructor pricing strategy, as they do not possess a significant market share to drive out other competitors (the pie chart describing market shares on the Cadbury website shows this – Paynes is occupying the segment of the market labelled “others”). Paynes instead employ the competition based pricing which charges at the same price as their competitors, this means that when people want to compare each product in terms of value for money, the find no discrepancy between the Poppets product and it’s rivals. It also makes sense not to charge ridiculously high prices (e.g. 50-60p for a regular size of Payne’s Poppets) when the cost of rival Minstrels is just 35p. This is very unlikely to increase sales for Paynes. At the same time is important that Paynes do not charge at too low a price. Selling a regular packet for say 10-15p would not cover the costs of research, manufacture and advertising. Another reason many companies do not sell products at an extremely low price when rival competitors are pricing at a higher price is that they do not want to create an illusion that their product is inferior in any way (i.e. of less quality). The Poppets product will be unable to attain market share and higher sales through pricing alone as a saturated market means there is little room to manoeuvre when it comes to setting prices. However is Poppets are to successfully market the product they will have to build on what they already have which is a product people wan to buy (shown by the fact they are market orientated and have already done market research for Poppets), in addition to this they also have a price which is pretty much already chosen for them. To get a cutting edge in the market they need to focus on the remaining parts of the marketing mix: promotion and place. A successful application of the remaining parts of the marketing mix, which pays attention to the advertising, packaging and the location where the product is sold, may be enough to gain Paynes an advantage over it’s competitors.

Below are the prices researched from supermarkets/newsagents etc on the price of Paynes Poppets and it’s competitors.

The table above shows that Poppets are being sold at a lower price that it’s competitors. However there is not a big difference between the prices and thus would not make too much of a difference when it comes to giving Poppets an edge in the market. It is essential that Payne’s Poppets be seen as a value for money product, with the price they have chosen for their product being dictated by the prices set by rival manufacturers, Paynes have little else to do in their application of this part of the marketing mix. Below are the prices Poppets charge for some of their products, this was researched from the Poppets website.

Place

The placement of the product is an important aspect of the marketing mix. An analogy of this to explain the importance of place in the marketing mix is that a retailer in a rural place would generate far less sales than a retailer who is in an urban area. Business must sell their products from a location where they are to generate the most sales. Selling in far of, distanced places that few people visit is not a recommendation that business are advised to undertake. Payne’s Poppets currently are not available in the most convenient places to buy the Poppet product (i.e. supermarkets). I was able to find out where and how confectionary is bought through market research carried out by the Cadbury Company. From their website I learnt that most confectionary sales are done on impulse. This would explain why Paynes sell the Poppets product through retailers. As the product is a convenience product, bought on impulse it is justified that Paynes sell through retailers, as this is how most consumers purchase confectionary. This means consumers do not have to make longer journeys to purchase the product. Many consumers would be unwilling to travel long distances for convenience products. Making the product as accessible to the customer as the products of its competitors, Paynes Poppets will be ensuring that they will not lose sales to its competitors. I decided that I would compare the availability of both Paynes Poppets and one of its rivals (I chose Maltesers) at numerous retail outlets. In total I visited ten outlets. This was during the course of the week, I accompanied various members of my family and friends and made note of the number of outlets that sold Poppets and the number that sold Maltesers. The results of my research are shown below.

I mentioned earlier regarding the fact that currently Paynes Poppets is not available in the places most convenient to purchase it (supermarkets), this statement was backed up by a poll I conducted of a randomly selected set of respondents (the gender of the respondents were proportionate). The poll was to see which retail outlet, consumers found most convenient. The results of the poll are below.

The table shows clearly that the supermarket is the most convenient retail outlet for most consumers. Paynes however is not available in supermarkets, whereas most of its competitors are (e.g. Minstrels and Maltesers). My research regarding the comparison of availability of Poppets and one if it’s rivals also backs up this specific piece of research, as many of the retail outlets I had visited during the course of the week were indeed supermarkets.

However to the defence of Poppets, the places that did sell Poppets, sold them in places that were extremely accessible, one shop displayed them close to the counter where the consumer may often have to wait in queue. Advertising at the point of sale was apparent.

The distribution method used by Payne’s Poppets is similar to the one below:

Producer -> Retailers -> Consumers

(For most distributions.)

Producer -> Warehouse -> Retailers -> Consumers

(For smaller retail outlets.)

Promotion

The aims of promotion are to increase the sales of a product, to create an image for the company and to keep customers informed about a product. There are many forms of promotion:

Sales Promotion – where the price and content of the product is considered, discounts are given, more of the product is given for the same price, free samples issued etc.
Public Relations - Bringing the name of the company into the attention of the public – usually can be achieved with little cost.
Sponsorship – Sponsoring, especially in sports is now becoming very common, especially as such events are gaining lots of interest from the public,
Advertising – through television, radio and other media – gaining public attention to product.

Payne’s advertise on both television and radio. The television channels they broadcast on include Sky One, Trouble and the Cartoon Network. Paynes are not marketing the Poppets product on terrestrial television. Research by television media companies show that most of the UK only watch terrestrial television channels and do not receive cable/digital programming although this trend is slowly changing. Therefore the viewers who are receiving the Poppets advertising is considerably lower than viewers who are receiving the adverts of its competitors. As mentioned before the channels that Paynes advertise Poppets on include Sky One, Trouble and the Cartoon Network. These channels are targeted at a younger target market, children aged 8-12. Paynes also advertise the Poppets product in teenage magazines; this was researched from the promotional package sent to us by Paynes, which showed the advertisements Poppets had produced. Paynes again are advertising to the 8-16 years of age market, because they are the target market that Paynes believe would want to buy Poppets. Most single mums or professors would not read teenage magazines, thus the reason for advertising in these magazines. Below is a table, which shows each method of advertising that Paynes employs and the advantages and disadvantages of each:

Television Advertising:

Radio Advertising:

Magazine Advertising:

A cause of concern here is that although Paynes have employed the same marketing techniques that its competitors are using they are not as effective. Paynes are not getting their advertisements out at peak times when the most viewers are watching in contrast to M ‘n’ M’s and Cadbury’s and in the case of the latter – Cadburys who also use a method of promotion mentioned above, sponsorship. Cadbury’s are currently the sponsor of Coronation Street, one of the most popular television soaps. Coronation Street regularly tops the rating as the most watched programme on television.

Payne’s also used point of sale advertising, i.e. where they advertise at the place where the product is being sold. This is done with advertising places on boxes containing the Poppet cartons. This information was gathered when I visited retail outlets conducting my research on the availability of Poppets for the “place” section of the current marketing mix application. As most people buy confectionary on impulse as shown in market research carried out by Cadburys, the point of sale advertising will have a huge effect on consumers when they choose confectionary. Poppets recently have sponsored projects to increase awareness of their brand. They have made themselves open for research to this year’s business studies coursework, students researching about Poppets will gain an in-depth knowledge of the company and it’s product range which may lead to an increase in sales all over Britain.