Research and Development,
McDonalds
McDonalds recently has come upon some hard times, coping with changing trends within their industry and newer and fresher ideas coming from rivals. McDonalds in recent since the enlargement of such rivals like Subway McDonalds has invested heavily in its research and development department to find out what exactly what was going wrong with their customer sales figures between the years 2000-2002.
Their most recent research plan was to understand why their profits dropped from 1’977 million dollars in 2000 to 893 million dollars in 2002, this they found was due to the consumers worries had greatly increased with health fears of increasing obesity becoming more common for those eating more and more fast-food, so customers now opted for more healthier options like subway which offered more of a variety for health conscious customers.
Through this research into what was currently going on McDonalds changed its image vastly by evaluating the current menu and making changes to it from using organic products to revising the whole menu entirely by offering salads and vegetarian burgers.
Evidence of their new strategy to tackle with new consumers and rivals and the adjustments they made to the way McDonalds is run and its menu was shown in the annual reports.
McDonald's has thanked the continuing success of its recently introduced salad range for its best quarterly sales growth figures in seven years.
The fast-food giant saw its global sales increase by 10% to $4.7bn (£2.5bn) in the second quarter of 2004, compared to the same period of 2003.
Profits were up even higher, jumping by 25% to $590.7m, above expectations.
The figures indicate that McDonald's turnaround from its recent downturn is staying on track.
(Taken from the BBC website, )
Also McDonalds has vastly changed its image through research of what they’re current customer range is. By finding this out they worked out how to advertise McDonalds to that certain audience and draw them in. one of the ways they done this was by playing on modern days society of looking up to celebrities, they done this by incorporating Justin Timberlake into their advertising scheme and by sponsoring his worldwide tour, this allowed them to increase there customer range by endorsing a worldwide star. Also they’ve introduced a scheme where customers can download songs after purchasing a meal from McDonalds in the US.
In addition to the introduction of new, healthier products, McDonald's has also worked hard to improve its level of service, and introduced new initiatives in the US, such as customers being able to download songs after they purchase a Big Mac.
(Taken from the BBC website, )
As shown by McDonalds, through effective research and implementation of that research McDonalds has once again started to see profit increases since the beginning of 2000 when they started to show steady decreases in profits.
2000 2001 2002 2003
Research and Development,
Cadbury Schweppes
The Fuse bar
Cadbury Schweppes has always had the problem of finding new ways to develop its products and produce new ones into a developed market. Cadbury Schweppes found that in order to release a new product within an already intense developing market they had to invent new and innovative strategies to tackle the problem of releasing a new product.
One of Cadburys latest business adventures was the new release of their new chocolate bar called “Fuse”.
The things that Cadbury Schweppes realised it had to in order to ensure that this new product the fuse bar was released successfully were, extensive research of the background into the confectionery market, an evaluation into the Cadbury Schweppes company itself, researching the snack market, market research, product development, extensive consumer testing to ensure customers get what they want, designing process, more consumer testing, product launch strategy, launching of the product, analysing post launch results and the overall conclusion of successfulness of the product. All of this is put into great detail to ensure that the results required are produced from all this, at the same time a lot of investment is put into all this so the company as big as Cadbury Schweppes is definitely expecting some positive results from all this.
Research of the background into the confectionery market
This is important as it helps the company with understanding what has been going on within the market as lets them spot any trends within in it thus helping them predict how that market is going to move on within the next few years. Although this can be the case markets can develop more quickly than expected where companies may come up with new innovative ideas, which can change the market drastically. To tackle these problems Cadbury Schweppes has constantly been doing research into the market to ensure that they’re competitiveness within the market stays strong against competitors
Evaluation of the Cadbury Schweppes Company
To ensure that the Cadbury Schweppes Company is working to its highest quality, regular evaluations to the company are made, from studying the company’s growth to its overall placing within its industry e.g. confectionary market. At the moment they found that the company is no. 3 in the global drinks market with over 92 countries in which its brands span across, and also they are the worlds fourth largest chocolate supplier with over 25 large plants across countries all over the world and making sales of their products in over 165 countries.
Research into the snack market
As Cadbury Schweppes found through this research they found out that the snack market was a huge business finding figures like:
The confectionery business was worth 4.9 billion pounds
The biscuit business 1.7 billion pounds
Snacks 1.2 billion pounds
Crisps 1.1 billion pounds
Ice cream 0.8 billion pounds
Snacking they found was key to ages between 16-34 years, this key age group they found represented 37% of the snack industry.
Market research
Through market research they tried to establish a link between consumers to their products. Through this research this allows the company to make more informed decisions on what they’re going to do. Also through market research its shows how previous brands have been successful in their product launch strategy.
Product development
Cadbury Schweppes set out 2 objectives for the development and the launch of the new Fuse:
- To grow the market for confectionery
- To increase Cadbury Schweppes’ share of the snacking sector
The Fuse bar concept was developed after market research by Cadbury Schweppes identified that the growth of snacking and a definite gap in the market for a more chocolaty snack for consumers. After this was identified a development team was brought in to identify the recipe which consumers wanted most. Not all products during the development stage from Cadbury Schweppes were used for the later stages of further development.
Early consumer testing
Early consumer testing was important in the case of Cadbury Schweppes as they found out that about 85% of most products with early testing help with the launch of the final product. Forms of early consumer testing which Cadbury Schweppes used for the Fuse bar were, giving out free samples to the public, taste tests and personal preference tests.
Pack design and brand name
As Cadbury Schweppes found a key element of any new product launch is the development of a strong packaging design and brand name.
The design brief for the Fuse bar had two clear requirements:
- To communicate the dynamic and slightly wacky “personality” of the new product and create a point-of-purchase i.e. in store
- to bring the brand name to life by communicating the fusion of Cadbury Schweppes’ chocolate with snacking ingredients
Pack Design
Packing allowed Cadbury Schweppes to convey the positive attributes of the product they are trying to sell. Cadbury Schweppes sought to position their new Fuse bar as unique, exciting and as a delicious chocolate snack, which would stand out from its competitor’s products. To achieve this Cadbury Schweppes used bright and fiery colours for the product name and contrasting them against the easily recognisable “Cadbury purple”.
Brand name
Like packaging brand names play a critical role in the success of a product, by helping create the products own “personality”. The new product (the Fuse bar) was aimed to appeal to 16-34 year olds. The name Fuse Cadbury Schweppes felt gave the chosen affect to communicate the fusion of snacking ingredients.
Further consumer testing
Testing is important throughout the entire product development process. It helps provide valuable information that can be use to fine-tune the product and minimise many risks included in a new product launch.
In this further testing the company found out that the Fuse scored higher for texture, “interesting eat” and combination of ingredients, than its competitors and achieved the highest rating ever for a new Cadbury product- 82% of consumers which they tested rate the Fuse bar as excellent or very good and 83% said they would regularly buy it.
The launch strategy
The launch strategy Cadbury Schweppes found thee most important aspect of the launch of their new product. To ensure the launch was successful Cadbury Schweppes had to go through a number of processes from ensuring that retailers will stock and sell their product to ensuring that they had a key customer range. If the product failed at this stage it would cost the company millions from investing into previous stages.
Usually the way Cadbury Schweppes launched it products in the UK was by launching the product in one region of the country to raise awareness and give them a general idea of how the product would sell elsewhere in the UK.
There were also key requirements to the co-ordination of the launch:
- Secrecy had to be paramount
- Marketers who had identified the gap in the market had to work closely with individuals from research and development as well as other external agencies
- Manufacturing operations, in conjunction with marketing and finance, had to evaluate a new factory investment for brand approval
Cadbury Schweppes officially launched the Fuse bar on the 24th of September 1996, aptly christened “Fuseday” by Cadbury Schweppes. This launch involved a tight management of the stock distributed, with over 40 million bars being moved from Cadbury deports straight into shops ready for sale within only a matter of days.
Post-launch results
After a new product is launched it is important to analyse whether the product has met its launch objectives. During 1996 the chocolate market grew by 9% and 19% of this growth was contributed to the launch of Cadbury Schweppes’ Fuse bar. One way of analysing the effectiveness of the whole product launch is to ask market researchers to identify advertisements using prompts in a recall test. Cadbury Schweppes found out that during just one week of the Fuse bar being released it sold a record 40 million bars and within 8 weeks the Fuse bar became the UK’s most favourite snack bar. The release of the Fuse bar also contributed greatly to the growth of the company in 1996.
Overall through thorough uses of these processes Cadbury Schweppes has created and developed a successful and popular brand through its new product the Fuse bar. The main three reasons why Cadbury Schweppes’ product launch was so successful because;
- They used accurate sources of consumer research to identify a big marketing opportunity
- Product research and development combined extensive consumer testing lead to the successfulness of the overall product
- Massive trade and consumer hype generated by a national launch of the Fuse bar
