Discuss how the new or existing product/services enables the business to meet the need of actual and potential customers - Heinz baked beans.

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AVCE Business

Marketing

Unit 3

E1

Discuss how the new or existing product/services enables the business to meet the need of actual and potential customers

Introduction

Within this report I will produce a marketing report about Heinz baked beans. I will attempt to answer all the criteria and compare with other brands of baked beans such as Heinz and Nettos own brand baked beans.

The company and their product

The company I will be doing this report on is Heinz. Heinz is the oldest manufacturer of Quality baked beans in the world. It is also the most famous Baked beans name.

The history of the Heinz company

The Heinz Company and brand name has a very long history that began in 1869 by a man named H.J. Heinz. H.J. Heinz and his family use to make horseradish, which is chopped up green radish in a jar. They made good quality products and became very popular. The Heinz company kept growing from a local town to a national name and then sold its products internationally. The Heinz shop use to bring a few thousand pounds in revenue but is now worth eight billion pounds.

Marketing Strategy

Product: Heinz baked beans

Price: 30 p a tin

Promotion: Billboards, public events, printed on leaflets of individual retailers.

Place: Mainly in Supermarket outlets

- The Heinz company isn't planning much when it comes to their Heinz baked beans because of it's success. Heinz takes adventurous campaigns on behalf of other Heinz other products such as their Ketchup and Mayonnaise. Among the many objectives of Heinz is to once again engage with the public especially with the younger generation and they want to remind the generation that grew up watching the BEANZ MEANZ HEINZ adverts that their product is still here.

- Heinz adopted a new cover for their Baked beans in order to recreate the image of the product.

Target Market

Heinz target market include the following:

- Senior Citizens

- Poor Students

- People who don't know how to cook

- Large families

Senior citizen purchase Heinz beans because they grew up eating it and eating tomato soup from cans. Poor Students also buy it because its cheap and because it fills their tummies. For professional or other people on the go, a baked bean is good because it doesn't take long. Large families are the biggest purchasers of Heinz baked beans because it a nutritional breakfast for children before they go to school.

The product

The Product I will be comparing is Heinz Baked beans which is not a luxury product but is a cash cow. Baked beans are eaten by a lot of people for breakfast. However it is very popular with University student as a quick meal on the go. Baked beans is a nutritional meal and is eaten by all kinds of people. The baked beans market is very competitive because there are many companies competing for the same market. Although Heinz doesn't have retail outlets it still has the most popular brand of baked beans.

The Four P'S

The 4Ps are the ideas to consider when marketing a product. They form the basis of the marketing mix. Getting this mix right is critical in order to successfully market a product. The 4Ps are

- Product

- Price

- Promotion

- Place

If market research is carried out effectively, a company can plan a promotion for the right product, at the right price, and to get it to their chosen market, in the right place.

Now look at the 4Ps in more detail.

Price

No matter how good the product is, it is unlikely to succeed unless the price is right. This does not just mean being cheaper than competitors. Most people associate a higher price with quality, so you would expect to pay more for a Rolls Royce than say a Toyota. Heinz baked beans has to be the right price or else now one will buy it.

Skimming pricing. This is a pricing strategy for a new product, designed to create an up-market, expensive image by setting the price at a very high level. It is a strategy often used for new, innovative or high-tech. products, or those which have high production costs which need recouping quickly.

Penetration pricing. This is a pricing strategy for a new product, designed to undercut existing competitors and discourage potential new rivals from entering the market. The price of the product is set at a low level in order to build up a large market share and a high degree of brand loyalty. The price may be raised over time, as the product builds up a strong brand-loyalty.

Prestige pricing. This strategy is used where the business has a prestigious, up-market image, and it wishes to reflect this through high prices for its products (e.g. Rolls Royce).

Demand-orientated pricing. This method of pricing involves setting the price of the product at a level based upon customers' perceptions of the quality and value of the product.

Competition-orientated pricing. This method of pricing ignores both the costs of production and the level of customer demand. Instead it bases the price level on the prices charged by the competitors in the industry - either undercutting the competitors, charging a higher price, or charging the same price. 'Going rate' pricing is the term used to describe a business charging a similar price to competitors for a similar product.

The marketing mix consists of the 4 Ps: Product, Price, Promotion, Place.

The product is the most important aspect of the marketing mix.

The Product

The product I am writing about will be Heinz Baked beans.

(Post picture of Heinz baked beans here)

Heinz Baked beans does not contain any animal products, and never has in the more than 125 years since it was introduced. "Natural flavoring" refers to herbs and spices that are derived solely from plant sources.

Promotion

Heinz uses promotion in the following ways:

- To make customers aware of new products.

- To remind customers about existing products.

- To persuade customers to switch from rival products.

- To improve the image of the business.

- The ultimate aim of these points is to sell more products.

The places Heinz will advertise from depend on three things, their target audience, the size of their market and the size of their advertising budget.

Forms of Advertising and their advantages and disadvantages

Type

Advantages

Disadvantages

Television

Can reach millions of people all over the world

Expensive

Radio

Cheaper than T.V, can be used to reach certain listeners

Sound only, smaller audiences

Newspapers/Magazines

A lot of information is known about the readers

Often not in colour, are static and silent

Posters/Billboard

High visual impact for a long time and will be seen by a lot of different people

Are only seen for a few seconds by drivers and are vulnerable to weather and graffiti

Cinemas

Very high visual and sound effect, captive audience

Are relatively expensive

Leaflets/Junk mail

Cheap to produce and distribute

Are easy to ignore

Internet Sites

High visual impact, interactive and can link directly to buying the product

There is a lot of competition so getting peoples attention may be difficult

Price

The prices that the products are to be sold at should be at a level which the customer will believe to be value for money and not just cheap.

Heinz could use one of the following pricing strategies to sell their products depending on the market

- Penetration Pricing- is where a firm charges a very low price when the product is new, and is used to increase the interest from customers.

- Skimming- is when firms charge a high price to make the product seem desirable to customers who have a larger income

- Destroyer Pricing- this is when firms charge prices which they know are unprofitable for their competitors, driving them out of the market. However this is illegal.

- Price Discrimination- this is charging different prices to different customers for the same product e.g. Students, OAP's.

- Competition Pricing- this is where firms charge very similar prices as other firms. Usually this happens where there is very little product differentiation e.g. Petrol.

Compare all rival products and research them and mention their business and Which products do customers prefer.

Within the baked beans market there are many different brand names the most popular is Heinz then come the supermarket brand names. All the products are similar they all contain tomato sauce with baked beans however the reason why Heinz is more popular is because its in every supermarket and is easily recognizable because of the brand name, logo and the container. The Heinz Company doesn't only produce baked beans but many other products such as microwave meals and ketchup, drinks etc.

What's the image of your products?

The image of my product is a quick and nutritious meal for breakfast or for students any time. Heinz uses the following methods to gain more consumers:

- free samples

- giving extra tins such increasing the size of the tin for a limited period of time

- can cut the price for a limited period of time

- Heinz can provide deals for large families and students

Samples are one way that Heinz tries to get more customers because sampling are an excellent way of including trail. Sampling allows consumers to experience a product directly and gain an appreciation for its benefits and characteristics. However the cost of the sampling program can be very expensive.

Marketing Mix

Price: 30 p each

Product: Heinz Baked Beans

Place: Through many different outlets

Promotion: Billboards / leaflets

Product:

- Is there a market? (Will people buy it?)

- The right design

- The right style

- The right packaging and customer support

Price

- How much will the people pay?

- Production and distribution costs

- How much profit in each sale?

- Pricing is influenced by competitors

- Low price is = more competitors

- Low price -compete in low cost segment of market

- All plastic design = low production cost

Place:

Product positioned in the market as a cash cow food product:

Heinz baked beans - a quality product

- Production costs - low

- Point of sale price - high

- Product has high mark - up / profit margin

Promotion:

- Telling people about the product & getting them to buy it

- Ultimate aim to establish a strong brand

- Customers will seek out the brand and pay more for it

What is a marketing plan?

Marketing strategy is a carefully evaluated plan for future marketing activity that balances company objectives, available resources and market opportunities. Each company may be pursuing different objective, thus they will develop different strategies. Pricing is one part of an overall marketing strategy. Price will affect the firm's competitive position and its share of the market. In some situation, minimizing price as a marketing strategy can achieve specific corporations objective. But a successful marketing strategy is not simply based on minimizing price, it need to consider the nature, possibilities and potential of the business and the environment in which it is operating. A successful marketing strategy should match the objective of corporation and finding a fit between firm's strengths and its competitive environment.

The findings and the strategy

The strategy of Heinz regarding my product (baked beans) is to sell it cheap making little or no profit but to get customers to purchase it so they can in return purchase other products. This makes Heinz baked beans a cash cow along with products such as bread and milk.

The Products Life Cycle

A business aiming to achieve its marketing objectives must be aware of the product life cycle. The product life cycle shows the different stages that a product passes through and the sale that can be expected at each stage. Most products pass through six-stage development, introduction, growth, maturity, saturation and decline

Development

This period called development is the first stage in which the product is being designed. During this period the suitable ideas must be investigated, developed and tested. If an is really believed to be great a prototype would be created. The vast majority of new products don't which are thought of do not go into production because of the concern that it wont sell.
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Product Introduction

This is the process when the product is new and it has been introduced into the market and the sale is often slow. Some companies have to expand and build new production plants and the company will have to meet promotion and distribution costs. Heinz baked beans had an introduction of promoting awareness that such a product existed they promoted in the early 60's with the slogan "Beanz, Meanz, Heinz. To develop the Heinz baked beans took just under one year. However it takes time for the consumer to gain confidence in the product. ...

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