I would be aiming my product at the skill workers because they need to eat low fat chocolate bars as they don’t have time to have proper lunch or dinner and it will save them time.
Task 7
Needs to be considered when writing a questionnaire
- What is the Questionnaire going to be about?
- Why are you doing the Questionnaire?
- What are your aims – is it to find out who your target market is?
- What are you trying to find out?
(Above are a few questions, which need to be, considered before starting off the actual Questionnaire, for us to know what and why we are doing the questionnaire).
- Decide what type of Questions you are going to use, closed or open questions.
- How are you going to analyse the data.
- Decide how many questions there are going to be
- How is the questionnaire going to be constructed?
- How long the questionnaire going to be?
(These questions will help us find out on how many people like what and why?)
- How are you going to persuade people to complete the questionnaire? How are the questionnaires going to be completed
(Above are few questions which will tell us, exactly how many people would like the product)
- What age group are you aiming the questions at?
- How many people are you going to ask?
- What sort of sample are you going to use? – Random or Quota
(These questions will help us find out on which product is the best and who like which type of product)
Task 8
Questionnaire
- Do you eat chocolate?
- Please indicate your gender?
- Please indicate your age range?
- 12-16
- 17-25
- 26-40
- 41-55
- 56 and over
- Do you ever eat low fat chocolate?
- What type of chocolate would you prefer?
- Normal chocolate
- Low fat chocolate
- How often would you eat chocolate?
- Everyday
- 4-6 times a week
- 1-3 times a week
- less frequently
- What kind of a flavour would you prefer?
- Mint
- Orange
- Coffee
- Coconut
- Vanilla
- Plain
- Any
- What would you like in your chocolate?
- Nuts
- Caramel
- Raisins
- Crispies
- Plain
- Other fruit
- Any
- Where do you normally buy your chocolate from?
- Supermarket
- High Street
- Corner Shop
- Anywhere
- How much would you pay for a chocolate?
- Under £1
- £1.01 - £2.00
- £2.01 - £4.00
- £4.01 - £6.00
- Over £6.00
- If you eat a low fat chocolate, for what reasons do you eat?
- Weight control
- Healthy eat up
- Like it
- Would you prefer bite size chocolate or large size one?
- Do you prefer low fat chocolate bars to the normal ones?
- Do you go to Gym?
Task 9
Analysing of Questionnaire
In this task I will be analysing my questionnaire, I will be representing my information in graphs and I will also be explaining. The questionnaire was filled in by 280 people so I had a sample of 280 people. If I consider the first question, which states whether the person eats chocolate or not, 260 people said they did whereas 20 of them said that they do not eat chocolate. Out of these 280 people, 114 were male and 146 were from the female gender. This shows that more women than men took part in the questionnaire. Though the result seems fairly unbalanced but I believe, this was not a problem as we intended our products more to the female sex than to the male ones.
If I now consider the age range of the 280 people that answered the questionnaire: _
21 people were up to the age 11;
100 of them were between 11-16 of age;
43 people had an age between 17-21;
35 people ranged from the age of 22-30;
36 of them were in the age range of 31-45;
9from 46-60 and there was 3 above the age of 60.
The graph of the age range looks like this: _
Based on the result and the graph, it indicates that the spread was uneven as more teenagers were asked as compared to adults. This is not extraordinary, nevertheless the people asked were of my own age and it is obviously easy to find these people to answer the questions. This may cause my result to be biased as it failed to represent the different age groups equally rather it was concentrated more on a particular age group of 15-18.
The next question asked the kind of chocolate, which people prefer. Out of which: _
126 people said that they prefer Milk chocolate;
40 said that they will have a Dark chocolate;
36 people said they will have white chocolate
Whereas 56 said that they would prefer any of them.
The graph for it looks like this: _
This proves that more people like the Milk chocolate and gives me with a clear option to use this as my basic flavour in the chocolate, which I will be planning for Elite Chocolates. The other types of chocolates such as Dark and White received similar number of preference but less than the Milk chocolate, which show that they were less popular among the people who took part in answering the questionnaire. There were also more people who preferred any of them this shows me if my flavour is milk chocolate more people will like it. The rest said that they will have any one of them so it does not affect the overall graph.
The next question asked how often people bought their chocolate. Of which: _
38 said that they buy it everyday;
39 they buy 5 or 6 times a week;
85 people said that they buy chocolate 3 or 4 times a week;
77 people said that they buy chocolate 1 or 2 times a week;
And 21 said that they buy less than this.
The graph of it was produced like this: _
The graph and the statistics indicate that most people buy chocolate 3 or 4 times a week which comes in between the extreme and the least.
Question 6 asked on what people expect to pay for a standard size of chocolate. The result was as follows: _
28 people said that they expect to pay for a bar of chocolate under 30p;
127 people said that they expect to pay for a bar between 31p to 40p for a standard size of chocolate;
83 people said that they expect to pay for a bar between 41p to 50p;
13 people said that they expect to pay 51p to 60p for a bar;
And 8 people said that they to pay more than this.
The graph therefore looks like this: _
It shows that more people expect to pay for a standard size of a chocolate bar around 31p to 40p. It gives me the insight to set my price between it; or either less than this as more people anticipate to buy a quality chocolate at a lower price.
The next question asked whether people would like to have any additional flavours in their chocolate. Of which 179 said ‘Yes’ whereas 81 said ‘No’.
Of the 179 people, who prefer to have additional flavours in their chocolate: _
32 said that they like the orange flavour;
72 said that they prefer mint flavour;
21 selected coffee as their favourite flavour;
13 went for cappuccino flavour;
49 people like coconut flavour;
And only 22 like some other flavour.
The graph based on the above-mentioned data looks like this: _
The graph shows that most people went for the mint and coconut and which helps the Elite chocolates to consider them as one of their flavour for the low fat chocolate bar.
Question 9 asked whether people would prefer any filling in their chocolate bar. 207 said that they would like filling whereas 53 said ‘No’.
Of 207 people: _
105 said that they will like caramel filling;
29 said that they will go for fruit filling;
80 of them said that they wish to have nut filling in their chocolate;
6 said that they will prefer Turkish delight;
And 10 people selected ‘Other
The graph of this, forms up like this: _
Therefore, I am able to obtain the result that the majority of the people who answered the questionnaire wish to have the caramel filling in their chocolate bar. The next most popular choice was nut filling, followed by fruit and then ‘Other’; whereas the Turkish delight filling came last in people’s preference.
Another question asked people whether they eat low fat chocolate. 131 of them said ‘Yes’ whereas 129 said ‘No’.
Then another question followed which asked about the people’s opinion of what they think regarding the taste of the low fat chocolate, whether it tastes the same as a normal chocolate. In this, 61 said ‘yes’ whereas 70 said ‘no’.
Of those people who said yes, while answering the question relating to whether they eat low fat bar, were asked why they eat low fat chocolate?
30 said that they liked the taste of the bar;
46 agreed that that eat low fat chocolate bar to reduce fat intake;
42 believe that they eat it to maintain and reduce their weight;
Whereas 3 eat it for ‘other’ reasons.
The graph of this looks like this: _
This helps us in analysing the major reason for which people eat low fat chocolate bar and based on the statistics and graph, I am able to obtain the result that the major reason is to reduce fat intake and reduce and maintaining weight. This also helps me in identifying the particular needs of the low fat consumers.
Question 14 was regarding the frequency of people eating low fat chocolate as compared to normal one. In which 29 went for more frequently option whereas 102 said that they eat low fat chocolate less frequently as compared to the normal chocolate.
The following question asked about the place from where people buy their low fat chocolate bar and received the following responses: _
14 said that they bought it from Health food shop;
8 said that they buy low fat bar from a chemist;
10 people buy their bar from gym or leisure centre;
40 said that they use to buy from local shop;
19 prefer to buy low fat chocolate from a high street shop;
Whereas 47 people said that they buy their chocolate from a supermarket.
The graph shows: _
The data and the graph clearly identifies that people ideally buy the low fat chocolate bar from a supermarket so it gives us with essential help for our target market and place of selling our product.
Question 16 asked people on what they expect to pay for a low fat chocolate bar.
14 people said that they expect to pay under 30p for a low fat bar;
48 said that they pay between 31p to 40p;
40 believe that they buy a low fat chocolate bar for price range in between 41p to 50p;
20 said that they expect to pay between 51p to 60p;
And 3 said that they expect to pay more than this.
Based on the statistics, I drew up a graph to further clarify the popular price range which the majority expect to pay. The graphs show that: _
The majority of people expect to pay in between 31p to 40p which was followed by the price range of 41p to 50p.
Another question stated whether they have bought any of the low fat product makes such as ‘Go Ahead’, ‘Be good to yourself’, ‘Healthy Eating’ or any other.
People responses were following: _
57 said that they have tried ‘Go Ahead’ make;
29 professed that they have eaten low fat products of ‘Be good to yourself’;
28 went for ‘Healthy Eating’;
And only 14 selected the ‘Other’ option.
The graph presents this data in the following shape: _
The graph clearly shows that the most popular make among people is ‘Go Ahead’ and therefore, gives the Elite chocolates to consider their taste, colour and packaging, in order to boost their own sales once the product is launched in the market.
One question asked people whether they prefer their low fat products to be chocolate coated. In which 94 people said ‘Yes’ while 37 selected ‘No’.
This result was nearly balanced and gives a general expression that it generally does not makes a big difference to chocolate coat a low fat product.
In the question, where it was asked regarding the type of pack they buy normally of a low fat product. Following feedback was received: _
39 said that they prefer to buy low fat chocolate bar as a single rather than a multi pack;
62 said that they buy multi-pack instead of single and are quite content with it;
30 said ‘Either’ as it does not much concerns them.
Graph, based on the data provided by the questionnaire, clarifies the response received: _
Therefore, it shows that most people like multi-pack so it lets me decide my packaging and it is followed by singe.
Question 20 of the questionnaire asked the people whether they try any low fat product version existing in market. In which, 49 went for ‘Yes’, while 82 said ‘No’.
This tells that the people are not entirely satisfied with low fat product, which might be due to several reasons such as taste, packaging and flavour.
The last question asked the opinion of the participants as to whether the fat values in a product should be shown for the portion size or per 100g so that it becomes easier to compare two products. Responses showed that 73 people went for portion whereas 58 prefer the fat values to be shown in 100g.
Task 10
Different types of retail outlets
The research that I have carried out shows that most supermarkets are selling McVities products. My research shows several things; it shows that in all type of supermarkets the price of multi pack is cheaper than price of a single bar. Also it shows that in most supermarkets McVities has one of the products that show that McVities is Elite chocolates biggest competitor. McVities products are cheaper compare to other company’s which shows that Elite chocolate need to think about pricing.
My research shows that Tesco is the most expensive when it comes to low fat chocolate bars as apple bakes is the most expensive in Tesco. The second expensive is Waitrose as the sell apple bakes the second expensive. The cheapest is Londis as they sell it the cheapest this shows that Elite chocolates competitors for price are Londis.
Task 11
Marketing Mix
Marketing Mix comprises of 4 Ps, which are notably known as Price, Product, Place, and Promotion. In marketing a new product, there should be a right combination of these 4 Ps: _
- The right product;
- At the right price;
- In the right place
- Using best methods to promote the product for the target market.
Different companies promote their products with different methods e.g. British Home Stores use mail shots as a form of promoting their product whereas Beverages companies like Coca-Cola spend heavy budget on advertisement through media. Both are using appropriate promotion methods for their products. This specific combination of the 4Ps chosen to suit a particular product is called the ‘marketing mix’.
CHOOSING THE MIX
In choosing the mix, a business should consider the 4 Ps.
PRODUCT
In taking care of the needs of people, a product should be made by the business for which the customers are willing to pay. A business should emphasize on the features of the product and what benefits would it give to the consumer.
PRICE
It doesn’t matter how good the product is in the beginning what matters for the customer is how much can they pay in terms of their income or lifestyles. The business should take in care of what the customers are prepared to pay and what the other competitors charge and then set a price, which will also thus enable to make a profit for the business.
PLACE
Choosing a place is important for the product so that it is fairly accessible. The business should make sure that the product is sold in the right type of retail outlet. For ace sop, it should be at the health or beauty outlet where people know that it would be available there. This decision is made by taking in mind the type of outlet, which the target customers may visit, and place the product there. Some manufacturers are now choosing mail orders and Internet to place their products for those who do not have time to go to shops and are rather content with buying at home.
PROMOTION
The business should make sure that the target customers know about the new product, its features and are encouraged to buy. To inform the customer, a business can use several modes of promotion e.g. Word of mouth, media advertisement etc. In the promotion, a business can offer several incentives for the customers in order to increase their sale e.g. ‘a free gift’ or ‘buy one get one free’ offer, depending on the company.
Competitor
Elite chocolate’s biggest competitor for the new product are McVities as above my research shows that nearly in every supermarket they have their products. Elite chocolate’s second biggest competitors will Cellos as they also have various products in the market and the price of their products compare to other products in the market are cheaper and reasonable.
Elite chocolate’s biggest retailer competitors are Londis as their pricing is the cheapest.
Target market
Elite chocolate’s target market will be 11-16 because in the questionnaire the highest number of people were at this age range and preferred eating healthy chocolates. Furthermore, the questionnaire shows that female are more interested in eating healthy chocolate that male. Elite chocolate’s target market will be mainly workers as they wouldn’t need to buy a proper meal and the chocolate will help them stay on diet.
Why people buy product
People buy products for several reasons some buy it as a need and some as a want. If some was to buy it as a need it would be to survive on it. Or if someone was to buy it as a want it may be for taste or flavour. Some people buy products like healthy chocolates because their health restricts them from eating other chocolates or it may be recommended by the doctor or health specialist.
Task 12
Analysis of existing product
As part of my research into the possible introduction of a new low fat chocolate; I decided to carry out a food tasting session, a form of primary or field research. We took 6 low fat products and asked people to taste the product and give it a score out of 10 for five things: _
- Taste
- Texture
- Flavour
- Packaging
- Overall
We also asked if they will/would buy the product. Having collected this information we collected the date in the form of tally charts and then draw graphs by hand and computer.
I am now going to analyze the information we have collected.
Taste
If I consider ‘Taste’ first of all, the ‘Apple Crumble’ was the least popular with 14 people scoring it less than 5 out of 25 and only one person scored 9. The most popular was ‘Go Ahead Caramel Crunch Bar’ with 22 people giving it a score of 8 or above. Therefore, I will consider using this taste for my product. The scores for the other three products were fairly equally spread, each receiving at least 1 score of 8 or above.
Texture
In ‘Texture’, the ‘Apple Crumble’ was again the least popular among the people with 14 people scoring less than 5. Go Ahead orange and sultana crispy slices Flavour was not very popular with getting score between 2 and 6. Therefore, I will not consider using wither if these textures for my product. The product, which was most popular, was ‘Chocolate caramel bars’ with 22 people giving it a score of 7 or higher. Henceforth, I will consider using this texture for my product. The scores for the other four products were fairly equally spread.
Flavour
In terms of ‘Flavour’, the ‘Apple Crumble’ Flavour’ were the victim of less popularity among most of the peoples, with scores getting less than 5. Therefore, I will not consider using either of these ‘Flavour’ for my product. The product, which was the most popular among the people in terms of Flavour, was ‘Go Ahead Forest Apple Bakes’ with 17 people giving it a score of 8 and/or 9. Therefore, I will consider using this flavour for my product. The scores for the other three products were fairly equally spread.
Packaging
Now I would look upon the ‘Packaging’ and in this ‘Apple Crumble’ was the least popular, 13 people scored it 5 or below. Therefore, I would not consider these ‘Packaging’ for my product. The product, which was most popular in terms of ‘Packaging’, was ‘Go Ahead Caramel Crunch Bar’ with 21 people giving it a score for 8 and 9. Therefore, I would consider using this ‘Packaging’ for my product. The scores for the other three products were fairly equally spread, each receiving at least 1 score of 7.
Overall
I will now look on the ‘Overall’ and in this ‘Apple Crumble’ was the least popular, 12 people scored it 5 or below. Therefore, I will not consider these as an ‘Overall’ for my product. The product, which was most popular ‘Overall’ was ‘Go Ahead Caramel Crunch Bar’ with 21 people giving it a score of 9 and/or 10. Therefore, I will consider using this as my product in terms of ‘Overall’. The scores for the other three were evenly spread, each receiving at least 1 score of 7.
Will You Buy?
The last part of my analyzing is to make note on ‘’Will You Buy?’’. For this, I will first consider ‘Apple Crumble’ and in this my result shows that 18 people said ‘No’ whereas the turnout was only 6 people who may buy this product. Therefore, I will not consider this for me product.
In ‘Go Ahead Apple Bakes’, 23 of the people stated that they might buy this one and only 7 people said that they would not buy this. Therefore, I might consider this for my product.
In ‘Chocolate and orange flavour crispy rice snack’, 17 people states that they will not buy this product and 8 said that they might consider buying it which gives me the result that I will not consider this for my product.
The ‘Chocolate Caramel Bars’ got vote of 16 person while 12 said that they will not buy this which also indicates me that it was one of the least favourable product therefore I would not consider it for my product.
Task 13
Strengths and weakness of my research
I carried out several researches in relation to my products target sale. These researches helped me in identifying key areas and to take appropriate steps in order to discover the appropriate market for my product, which will help me in maximizing my profit. The researches I concluded included research into existing products on the Market, research into three supermarkets and the low fat products they sell, questionnaire, tasting survey and research into the launch of a new product. I would explain the advantages as well as the disadvantages of the different researches in a table so that it will be easier in reviewing.
Task 14
Product Life Cycle
Any new product has an expected life cycle which determines the length of time, in which the manufacturer expects the product to sell. This cycle comprises of a series of stages.
Source:
STAGES OF A PRODUCT LIFE CYCLE
STAGE 1 – DEVELOPMENT
The first stage involves the researching, developing and market-testing of the product which is pre-requisites of any product to being introduced. At this stage, the product makes no money for the company; on the contrary, it costs money for the development to the company for which is uncertain that they will get any repay. At this stage I have been doing several types of research e.g. questionnaire, research of an existing product and tasting survey. I also took samples of other low fat products and then analysed them how well they cope with the competition.
STAGE 2 – INTRODUCTION
In this stage, the product is launched on the market. This stage is influenced by promotion strategies. The product still makes a loss for the company, as sales are low. In this stage I will introduce the chocolate into the market by promotion strategies. I have also looked at different types of advertising and promoting strategies. I also have looked at the marketing mix and planned how will my product look like, the price, how it would be promoted and where will it be sold.
STAGE 3 – GROWTH
The product becomes known in the market and sales should start to increase is it’s successful. Advertising is continued but less than at what it was at the start. The product should now start to make some profit. At this stage I will keep promoting my product to increase the sale and use different type of advertising media I would also use adverts to remind people about the product.
STAGE 4 – MATURITY
The product is now well-established in the market as it has grown through the stage of growth. Promotion will be used sparsely and only for the purpose to remind the consumer about the product. At this stage, the product reaches its highest sales & profit levels begin to increase. At this stage, option for extension strategy becomes available to prolong maturity. At this stage I would think about extension strategy to keep the sales high.
STAGE 5 – SATURATION
The market for the product becomes saturated and the profit and sales level are stable now. The only way to increase sales at this stage is to take them from competitors. This is helped by promotion strategies. Extension strategy is available at this stage as well to delay the product’s decline.
STAGE 6 – DECILNE
In this final stage, the product begins to lose its competitive edge due to people getting bored of it for various reasons which can be taste/packaging etc as well as new products now available from other companies. The product becomes out of date and sales begin to fall with profits as well. When the product is no longer wanted, it becomes obsolete. As soon as I see decline in the products sale I would start using the extension strategy it improve the sales of the product.
EXTENSION STRATEGIES
A successful extension strategy will delay a product’s decline. This theory is been adapted by the McVites’ Go Ahead Range in order to extend their products range which are still being popular and to maximize the profit, they gain. In the previous packaging of their products, they attributed green colour and had their packaging in a bigger size, now they revised their decision in order to extend its life cycle and to prevent, customers getting bored of the packaging, they changed it to different colour based on the tastes of that particular product like on ‘Go Ahead Caramel Crunch Bar’, they gave it a brown colour to its packaging etc. Even though, they changed their packaging, they took care of making them look same i.e. of the same company by applying some distinctive looks on the packaging. They also shortened up the size of the packaging to a standard chocolate size packaging. In addition to the changes in Packaging, they researched on which products were less popular and then removed them from their products’ range and while doing this they introduced some new products with different tastes to replace them and maintaining their profit stable. They introduced more varieties of the same product, for instance apple taste in ‘Go Ahead Apple Bakes’ and ‘Go Ahead Toffee Apple Flavour’ to make them more appealing. All these steps extended the life-cycle of their products in market for longer than previously expected and will help McVites gaining a substantial profit. With extension strategy, the graph of McVites will look modified to the original product life cycle graph.
My extension strategy is to use of form of flavour or tast and change the packaging so I can remind to let them know about the product.
At the moment Elite chocolates product is at the introduction.
Task 15
Conclusions on my Product, Price, Promotion and Place
Product
In deciding the shape of my product, I have come up to following designated attributes. My low-fat chocolate bar will be a standard bar size but I have decided to go in contradiction of the default shape which is quite rectangular. Instead, to give my product a new touch, I have purposed to modify its shape a bit to give it a luxury and delightful stroke by moulding the corners and lifting up the base. Though the shape will be similar to the standard bar found in the market but will have a much more elevated base. The advantage of this option is that I can have more fillings inside it. Another option to consider is a star shape for my bar, this shape will be quite unique and therefore help in increasing sales, as people will be more attracted towards it. Another advantage of this particular shape is that it would be easier to eat than the normal one due to frequent open spaces. The disadvantage of this specific shape will be that it might not be of the standard size.
Based on my research and its subsequent analyzing, I have come up to the following intended options regarding ‘flavour’ of my low fat chocolate bar. I will most probably use the Chocolate and orange flavour crispy snack because it was scored 7-10 by 19 people. Another option to contemplate is the Go Ahead Apple Bakes, because it was scored 7 or 9 by 23 people and nearly all the people wanted to buy it.
Concerning fillings or additional ingredients that I might add in my product, I have three different alternatives such as nut, caramel and fruit based on the questionnaires. Nut was the most popular so I might use that in my low fat chocolate bar.
On the basis of the questionnaires, Milk Chocolate was heavily selected by the people as to be their preferred coating for a low fat bar, so this will be my eventual coating for the purposed bar.
Price
After taking in consideration, all the factors related to pricing, and reviewing cost-plus pricing, penetration pricing, market-led pricing, destroyer pricing etc. Market-led pricing is visibly not the type of pricing, which I will choose for the Elite Chocolate bar as there is a high risk of failing in sales and resulting in the total decline of the product. I have decided that taking in observation, the size of the company and the fact that it does not have a strong financial backup, so I will be using penetration pricing as it is better than the destroyer pricing and will help in sustaining the product in the market and ensure its continued survival. Destroyer pricing will result in heavy losses for the company, which might make the company vulnerable towards closing down. Penetration price will obviously be less than the average chocolate bar price in order to attract target market and increase sales during the birth of the product. Also it will somehow encompass the cost plus pricing which includes all the costs of labour, raw material and production of the product.
Based on the market research and discovering out the average price of a chocolate bar, which is around 35p so my purposed price for the Elite Chocolate Bar is 20p as it seems a reasonable amount, taking in light the fact that it is a low fat bar which is not quite famous as compared to the normal one.
Promotion
In discussing the name of the product, I had to consider that the purposed name should be linked with the attributes of my product and clearly present its original image and purpose. The attributes which I have to take in notice were that its’ a low-fat product and is basically a chocolate so a lighter name that could predict the low-fat ingredients would be ideal for my chocolate.
Following are some of the names that I have come up with my conclusion for the low-fat chocolate bar: _ choc liner
- Crunchy Lite seems a good name as it represents a name if a chocolate which is light.
- Chocoliner is also a good name, which can be attributed with my low-fat bar. The name posses a light and speedy feeling.
-
Skimmy Choco Bar is my last purposed name for the chocolate. It relates to the low-fat ingredients in the chocolate and projects a healthy diet.
As I mentioned earlier, the shapes of the product which I might apply on the low-fat chocolate bar, so the packaging of the product will therefore be in similar size. Like if, I decide to use the moulded shape for my low fat bar than I will have to invariably have a rectangular shape packaging that is common in the normal ones. If I decide to use the star shape for my product, than the packaging will be different and can be in a circular shape for the ease of taking out the chocolate for the customer.
In order to draw target market towards my product, I will be using attractive colours and based on the research, which showed that in terms of packaging, the most popular low fat product in the market currently is the ‘Go Ahead Caramel Crunch bar’ with 17 people giving it a score of 8 and 9. The reason behind it is the application of a light colour such as Green, which gives a healthy and light feeling. Also the company, McVities, used a picture of the product and a logo as well to give the product a good presentation. My product will therefore have a light colour, it might not necessarily Green and I can use Light Blue, Orange etc, depending on the flavour. I will also have the shape of the product and the logo of Elite Chocolate bar on the packaging.
Promotion, which is one of the important elements of increasing sales and profit margin, I will use adverts in the form of flyers and banners in the shops where my product would be sold. As Elite Chocolates is not a big subsidy company so it would be difficult in the media advertisement on TVs and Radio. But Elite Chocolates can have their special offers such as ‘Buy One Get One Free’ depending on their sales. Also a good form of advertisement is the local magazines, which the majority of the people review.
Place
In debating the right place of the product according to ‘Marketing Mix’, I need to identify the type of market and the type of my product. After conducting a survey on different-size supermarkets to identify the range of quantity, prices and special offers in them. I divided them into three categories such as large supermarket like Tesco which has a huge range of products with prices being low and a high number of special offers, medium supermarket like Iceland where the range of products is limited than a large supermarket and prices therefore being a bit high and less number of offers and the third one being a small supermarket and includes local retailers, which had a very partial range of products and prices proportionally high than both of the large and medium size markets. This result compelled me to plot my target market as the large supermarket as the prices are low there but still it means that there will be a high number of competitors which can result in the decline of my product as it may find it difficult to compete as they will be produced on a small scale with less budget.
After taking in view all the factors of the different size markets, I have come up to the assumption which is based on the type of the product and as my chocolate bar is a low-fat one which is inter-related to medical products so preferably the best places to sell the product are ideally Gym, Health/Food Shop and/or a chemist where there will be less competitors and good accessibility to people as well.
Task 16
What to do if the product is successful or failure
If the product is a success, than ‘Elite Chocolates’ would have to carry out discussion regarding the future of the product. This may include the term targets for sales and profits as well as to introduce a variety of the same product. Other points, which the company might need to consider, are the life span of the product and would they like to increase it by applying extension strategy. The company may also need to increase the market segment of the product and introduce it to a wide range of target market, not just a particular niche market. They will have to determine the pricing of the product and what type of pricing method to apply once it’s a success and has started to make profits. This may include increasing the price but it may result in low demand by the target market or decrease the price so therefore, in order to increase the demand level and thus the annual sales of the low fat chocolate bar.
But if the product is a failure after its launch, which means that it is not making sales and generating profits, the company would need to follow other set of directions. A product being a failure is a great concern for the company as they have invested money in the research and development of that particular product. Therefore, they like the product to make sales for them and go in profits rather than making losses. If the product makes loses, it may be due to several reasons such as competition in the target market, wrong application of pricing method and/or the product lacks sufficient advertisement and packaging, which might make it less attractive in the eyes of the target market, which are required to buy the product. Elite chocolates in case of their product being a failure should therefore; either carries out another market research and identifies the correct target market because in most cases it happens that the company identifies a wrong target market for their product and their product becomes a failure. Elite chocolates apart from carrying out another market research can also spend time and money in enhancing the product image, which is quite important and it is the formula which is applied by successful companies like Kellogg’s and BMW. They can re-think about the pricing method they are applying and in case where it’s more than what their competitors are charging, so they think of changing the price and reduce it from the original one.
Abovementioned, are a few ways, which Elite Chocolates can follow determining to their product sales.
Task 17
Internal & External Constraints on Elite Chocolates
If Elite Chocolates decide to extend their business than they might have to suffer from internal and external constraints that may affect their original plans, this is normal and every business have to take in account these limits, which can be summed up as: -
Internal Constraints
- Local taxes imposed by the Government can put extra limitations on the company as their budget for producing products might decrease. This can be due to their profit and product scale like if Elite Chocolate will expand their products range and subsequently their sales enhance their profit than Government will believe that that company is able to pay substantial taxes.
- Value Added Tax can make certain category of products expensive such as chocolate as they are compartmentalize in luxury goods, this may increase the products price resulting in less popularity due to the price factor and less number of people will turn up to buy an expensive chocolate.
- Import & Export duties can also increase the internal burden on the company, as they won’t be able to sell products overseas. Import duties can reduce company’s ability to bring in cheap ingredients used in their products from other countries all resulting in the restriction of their capital.
- Increase in Interest Rates will soar the expenses for the company as they will have to pay for the size of the company, their sales region, the cost of the land on which they have established etc and if they will be taking any loan which nearly every company have to take to establish their company
- Expertise of labour means that more money will be lost in the form of higher wages to the labour as they have particular expertise in certain fields.
- Improved High-tech machinery means that they will be costly and expensive to buy and their maintenance will be higher as well with spare parts being costly.
All this will amount constraint on the company’s already compact budget and due to these factors it will produce internal complications for the company.
External Constraints
- Planning permission for extending the structure of the company and expanding it in terms of size can be affected by severe consequences if it is disallowed by the Government due to various social reasons. Company would have to take some other measures in order to fulfil their designs.
- Protestors can also cause an external pressure on the company, as they will affect the company’s future design and purposed plans. Protestors can put constraint through several reasons such as extending of the company’ s building, the increase in the amount of pollution resulting due to the company’s establishment etc.
- The extension of the building can result in buildings such as beauty spots suffer damage including the wild life.
- It will increase the amount of pollution of both forms such as Noise and Smell.
- The extension of the company will help in producing more waste products. Including gases, toxic substances, causing a severe effect on the environment.
- Safety hazards would be dented from the extension of the business and increase amount of traffic flow.
- Many small businesses will suffer from the company’s establishment and lot of people will lose their source of income.
All this will make the Government become aware of the company and they will try to influence the company’s decisions by enforcing restrictions and increasing taxes on it, thereby increasing the external restraints on the Elite Chocolates.
Therefore, the company would have to take measures before carrying out their plans in order to reduce the constraint and make maximum attainable profit both through productivity as well as environmental benefits, which can include job opportunities and better development of the local area.
Task 18
Laws Effecting Business
Marketing is all about selling goods but many measures must be taken to insure that the product is marketed in a decent way. To do this the company must have legal protection.
Trade description act 1968 description act makes sure that the product is not described falsely. E.g. the company is not aloud to say that a product is 100% wool if it is not.
This effects Elite chocolates as the chocolates size and description shown on a poster or advertisement need to correct.
The Sales Act of Goods 1979 Act makes sure that goods that have defects are not sold. They must only be sold if they are of merchandise quality and fit for the right purpose.
This effects Elite chocolates as this product need to for the right purpose; as it is a low fat chocolate bar.
The consumer Protection 1987 Act makes sure that unsafe products are not sold as they could injure someone or damage property.
This effects Elite chocolate as it shouldn’t be unsafe or to cause harm to healthy people.
The weights and measures 1951 Act makes sure that the company does not rip their customers of by selling a product quantity e.g. a crisp packet must weigh 25grams.
This effects the Elite chocolate, it should be bigger or smaller than the size shown of the packaging or shown on a poster.
The Food Safety Act 1990 gives environmental the power to close down businesses if not being prepared hygienically.
This effect Elite chocolate as it has to prepare the food hygienically and carry out a test before the product is sold in the market and sold to the consumer.
The British Codes of Advertising and Sales Promotion states that the advertisement must be legal, decent, honest and truthful.
This effect Elite Chocolate because the company has to advertise product honestly and truthful. The company has to have the right information when advertising.
The Consumer Credit Act states that the annual rate of interest being charged to customers buying goods on credit.
The Food and Drugs Act states that it is an offence to sell any food that is not fit for human consumption. This applies to the contents of food and medicines.
This effect Elite chocolate; it has to prepare the product that is fit for human consumption
Task 19
Different Methods of pricing products
Describe different pricing methods.
Whenever a product is about to be launched in the market, pricing methods are taken in consideration to attribute a good price to the product considering all the factors. To produce a product, the business applies marketing to obtain target customers’ needs and wants. With the help of this, the business is in control of the product, which they produce and sell in the market. However, it does not have a control on the product’s price. This is due to three different factors, which can be described as: _
- The actual cost of making the product, this includes the raw material and the labour cost;
- The price charged for similar goods in the market, this incorporates the competitors selling price;
- Economic conditions of the aimed market.
The continuous and consecutives loss in the market can limit the survival of the business as well as marking prices higher than the average in a market can also result in a decline. Therefore, the business needs to take in care all the factors in order to ensure a profit and sustainable quest for survival.
Cost-Plus Pricing
Cost-plus pricing means to take in account the costs and expenses required to make a certain product. It is based on the direct costs which includes labour and raw material and indirect costs such as over-heads that is the technology used in making the products, its expenses as well as the charges of the building where it is produced e.g. rent, heating, electricity etc. A percentage mark-up, which is the profit that the company plans to obtain from the product sales, is then added on to calculate the selling price. The profit margin is the difference between the selling price and the unit cost. It works out like this: _
Material + Labour + Share of overheads + Profit Selling Price
An Example of Jeans Cost-Plus Pricing: _
Material Cost + Labour Cost + Over-heads part cost + Profit Selling Price
£ 15 £10 £15 £20 £60
Mark up = 50%
= £20
The amount to be added in the selling price can be worked out by taking into account the market demand and price charged of a similar product by the competitors.
However, it still can be very complex to figure out the correct price by taking in account all the factors so large companies appoint management accountants to help with the pricing techniques.
Competition-Based Pricing
When a business decides to set its selling price at a similar level to that of its competitors even if it means a smaller profit margin then this is known as Competition-Based pricing.
When a new product is launched in a market, the business might decide to bring it at a lower price just to establish it in the market and ensure its good sales. This is called penetration pricing.
The opposite of penetration pricing is known as creaming or skimming which means that the business sets a higher price on the launch of the product and then gradually decreases it with the passage of time when the products starts to get common among the target consumers or in order to submerge it into a wider audience and get into the mass market. This type of pricing is aimed at high-fi technology products, which include computers, calculators, camcorders, walkmans, video and digital cameras. These types of products are aimed for niche market – to people who are quite enthusiastic and willing to pay a higher price.
Business can also use pricing methods to attract customers away from their competitors. For example, they will use certain offers such as ‘Buy One Get One Free’ to fascinate customers towards their products and eventually the customers will continue buying that product as they might forget their old brand of product.
Destroying Price
Destroying Price involves the selling of products at a very low price to eventually destroy the competition. In recent years, many newspaper companies have applied this technique and found it very useful. A classic example is of Times who tried to sell their copies at a price 10p when the rest of their competitors were selling at 50p. Though the draw-back of this is that sometimes the company is obtaining loss rather than profit and result in the per-capita decrease of the products production. Destroying Price is not applicable to all the companies and it can be only used by companies with enough back-up resources who can make up of that loss by producing a variety of other brands.
I personally believe that Elite Chocolates should select a suitable price for their product by considering all the factors such as the market at which they are aiming e.g. if there is a high demand of that particular product which they will be producing so the selling price should be marked rather high but it should not be so high as to lose the competition. Simultaneously, Elite Chocolates cannot afford to use the Destroying Price technique as it is based on a small budget scale and cannot fulfil the balance through its inappropriate resource backup. For me, the best method for Elite Chocolate is to apply the Penetration pricing firstly so that their product can establish strong roots in the market and then when the products starts to increase the sales, the company can therefore increase the selling price in order to obtain a suitable profit.
Task 20
Different methods of Promoting a product
Firms don’t only use advertising media to promote their products. They also use other methods which I’m going to describe it below.
Sales Promotion
- Buy One Get One Free (BOGOF). Firm use these types of offers to sell their product and to promote.
- Discounts. A good way to get people to notice the product is to stamp ‘10% off’ on the label.
Packaging
Packaging can help promote the product but having an eye catching product will differentiate and attract more customers. Packaging also need to be different from other products so the customers won’t other products in mistake.
Advertising
This play a big role in promoting a product. Advertising helps take the product to different age group and different audience at a different price. Some examples are TV, radio, billboards, poster and cinema.
Sponsorship
Sponsorship helps get attention of the viewers. Different firms sponsor different companies or sports teams a firm can sponsor more than one firm or a team for example Vodafone sponsors England Cricket and also Manchester United Football Cricket club.
Task 21
REPORT TO THE MANAGING DIRECTOR
To: Managing Director, Elite Chocolate
From: Ali Zaheer
Date: Monday 12, December
Terms of reference
I have been asked by managing director of Elite chocolates to investigate launching a new product on to the market in the form of a low fat chocolate bar. I will intend to do this using tasks which include primary and secondary research. I have done several researches which are listed and explained below.
Research undertaken
The first piece of primary research (this is the fundamental data that has been gathered for a specific purpose through direct investigation such as; observation and survey) that I undertook was to look at the live marketing campaign of the film Lord of the Rings. From the research it was possible to see that the creator of the film invested a lot of money on their marketing of the film with advertising used to promote the film and let people know about the film. From that research I also found out the different ways of advertising for example: on TV, billboards, posters etc.
Another primary research was that we surveyed 280 people on their chocolate purchasing habits. Our questionnaires aim was to find out fundamental facts such as: How many people buy chocolate bars regularly? How much are they willing to pay for special chocolates? What kind of fillings do they like? What types of chocolate they liked. This research enabled me to find what people like and what they think about chocolates. Using the research I also found out that most people prefer low fat chocolate.
We also asked our sample for personal information such as- age range, gender and whether or not they like buying chocolate. My research showed that 260 people from 280 eat chocolate. Nearly half of the people were 11-16 years old which could be our target age group. The most preferred pricing was 31p to 40p as it was preferred by 127 people. The pricing could be using for Elite chocolate because most people are willing to pay and it is affordable price according to the people.
In addition to this we also looked into how different retailers sold low fat chocolate bars. My research included a small, medium and a large size supermarket. My research showed that nearly all the supermarkets had Mc-Vities products which show that they have a big share in the market. In terms of pricing the cheapest low fat bar was also sold by Mc-Vities.
We also research our current competitors (existing products on the market) products, we found out the favourite flavours, type of packaging, size of bars and selling prices.
Furthermore, we carried out a taste survey to check how popular certain flavours, filling and textures were. The tasting survey was out of 25 people, in the survey they were tasting different low fat bars to see which one are the most or least popular. For the taste the most popular was the Go Ahead Caramel Crunch bar as most people scored it 8 and above. The most popular texture was Go Ahead Apple Bakes as most of the people scored it 6 to 9. 12 people scored it 7 or 8. The most famous flavour was Chocolate and orange flavour crispy snack because it was scored 7-10 by 19 people. Overall popular was Go Ahead Apple Bakes, it was scored 7 or 9 by 23 people and nearly all the people wanted to buy it.
From the tasting survey we had established that the least favourite flavour was Apple Crumbie and the most popular was apple bakes. We also looked briefly into a product launch from this we conclude an extensive strategy of promotion is needed to get the product established and selling. The most successful low fat bar was Mc-Vities Apple Bakes and the least successful low fat bar was Chocolate and Orange Flavour Crispy rice snack.
We have discovered from conducting the questionnaire that a lot of people do eat chocolate however in proportion few people eat low fat chocolate, women were more likely to eat low fat bars on a regular basis. The most popular flavours were apple bakes and caramel.
Also with the help of questionnaire we found out that consumers were most likely to pay only up to 50p per bar.
We discovered that supermarkets such as Tesco sold a larger variety of low fat products, but were most likely to only sell in multi-packs; small retailers such as newsagents were very unlikely to sell any low fat chocolates as most considered them to be aimed at a niche market.
I also found out that retailer such as chemist and health shops stocked low fat bars but only the widely promoted ones as the owners of the business believe that these types of products makes higher profit, these retailer makes higher profits because the demand for new products is high and retailers charge a high price furthermore, the retailer buy products in multi pack and sells it in single pack which makes more profit.
Recommendations
I have taken into account all my primary researches and I believer that the product should be launched into the market.
The new product Elite chocolate should use the 4p’s effectively which are product, price, promotion and place they are also called the marketing mix. It will have to sell its products in the right place; breaking into supermarket is very difficult, as large retailers are reluctant to new products. Elite chocolates best chances of success are selling in Gyms, Leisure centres, news agents and chemists and in heavily populated areas; the reason they are successful is because people want to improve health and prevent eating high in fat products and Elite Chocolate is low fat.
The chocolate bar must be priced reasonably, it must not be expensive. In my opinion the best pricing would be destroyer pricing; because the pricing in the market is very competitive and destroyer pricing it will eliminate competitor and leave the market wide open. Alternatively they could use the pricing from 31p to 41p as most people are able to pay the price. The company could also use penetrating pricing where Elite chocolate can break through other competitors and get share in the market.
The low fat chocolate bar needs to be low fat, taste good, the flavour should be similar to mint as most people preferred it and filling should be caramel or nut as this was the most popular and people liked it.
There should be an extensive promotion campaign; the best way would be offering free samples with women or men magazines this will inform more people about the product and give people the taste of the product. Soon it should be introduced in bigger supermarkets as it will attract more customers and new customers will be informed about the customers.
The low fat chocolate market is very competitive; with one mistake a company can lose a lot of money. In the market there are other successful products and other company’s has a big share of the market. Elite chocolate needs to be careful when making decisions.
Unless Elite Chocolates new product can not match these criteria it does not stand a chance of succeeding.
I believe it is in the company’s best interest to launch a new product as our research and planning shows that we can succeed. The research shows that there is a place for a better product and competitive price. Following the above recommendations will enable the product to be like and preferred by people and the company will succeed.
Resource Table
Name: Ali Zaheer Subject: Business Studies
