They are:
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Development: each new product idea has to be researched, designed and tested, this may take a few weeks to months. All of this requires funding, so it is important to calculate the extent of such costs when making the decision to develop a product. Costs include, market research, technical research, test market (trial run) and finally executive time to co-ordinate the research. Walkers Doritos has been through its development stage.
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Launch: once all development has been done, the launch is vital. Production of the initial new products is high. The product is then available for both trade and to the public, however, distribution costs are high as well as promotion costs to make more and more people aware of the new product that has entered the market and expensive sales team costs. This is a good time to obtain economies of scales as well as promote corporate brand images, ‘Walkers’ in this instance. Walkers Doritos has been thorough its launch stage, it was launched in 1945 and since then has had a brilliant number of increasing sales and many happy customers.
The reason why Walker Doritos have been placed on the Maturity point on the product life cycle is because it has been around for many years. In addition, sales have been put at a steady pace; they have not risen or fallen.
SWOT
Strengths
Walkers Doritos is a well known company that had been around for many years. The product already exists so further costs on advertising will not have to be made in order to get customers attention of the product.
Re-promoting will help attract new customers. Walkers Doritos will be promoting an offer to help get consumer attention and therefore increase sales.
Walkers Doritos is already at a stable position within the bagged snacks market, but by attracting new customers, sale will increase and help shorten the lead on other bagged snack higher up the market.
Due to its success over many years, money from sales is available to re-promote the product.
Weaknesses
Walkers Doritos have researched that there is a fall in sale in certain age groups. The most significant age group is between the ages 12 – 15, the possible reason may be that the product may be too original and not offering what consumers at this age want.
Competition within the market is fast, so for Walkers Doritos to maintain their position within the market, they will have to keep up to date and in order.
Costs from re-promoting the product may be high.
Opportunities
If re-promoting the product is successful, Doritos will increase sale and again shorten the lead on other competitors higher up within the market.
Attracting more customers from the different age groups would mean an increase in profit.
Threats
Competitors may take the same route as Doritos and re-promote their product and if they were more successful in achieving their goals then Doritos position within the market would be under threat.
Re-promoting the product may not work and lead to being a waste of money.
E2
From re-promoting the Walkers Doritos crisps, I wish to increase sales, this is one of the key factors, the other reason is to attract consumers, and to gain advantage over other competitors, in aspect of, ranking in the UK leading Snack Brands.
There are many ways to promote a product. The way in which I will be promoting the product is by ‘offering tokens on selected packets and if found then a gift will be rewarded’. The reason I had come to this reason was to tackle the age group problem between the ages 12 – 15 and by offering a prize if tokens were to be found then I believe this would get the attention of those ages.
The prize that I would have to offer would have to get the attention of young children to young teens. Therefore, I chose to promote a bike if the tokens are found. I belive this would increase sales as consumers would purchase the product in large numbers just to find the token.
There are many other ways of promotion such as
Price reduction:
Special offers:
Free offers:
Free samples:
Trade promotions:
E4
When promoting my product, there are laws, which I will have to take into consideration.
The Sale Of Goods Act 1979 and Supply of Goods Act 1994 regulates contracts for sale of goods. They imply the following term:
- The seller must have the legal right to sell the goods.
- The goods sold are ‘as described’
- The goods are of good quality and fit for the purpose.
The Trade Description Act says that the product must be what it says it is. In this case then Doritos will have to reward the prize when found.
The trade description act states that it is a criminal
- To apply a false trade description to any good, or to supply or offer to supply, any goods to which a false trade description is applied.
- To give a false indication as to price.
- To make a false statement knowingly or recklessly as to the provision of a service.
- To give a misleading induction that goods have been offered at a higher price, as in a shop sale, when this is not the case.
The Competition Act 1998 operates through the competition commission (which replaced the Monopolies and merges commission). This body can now investigate any firm in a dominant market position to see if they are acting ‘against; the public’, whereby a firm tries to run competitors out of business by long term, sometimes loss making, prices, to establish a monopoly.
Walkers Doritos is in a very dominant position and are very well respected so it is important that they stick to the rules. This is for the safety of themselves.