Discuss how the new or existing product/services enables the business to meet the need of actual and potential customers - Heinz baked beans.
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.
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. ...
This is a preview of the whole essay
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. During the introduction stage the price of the product is usually high however for Heinz baked beans it was low and continues to be low.
Growth
Once the product is established and consumers are ware of it the sale of the product begins to rise quickly. The product and company gain profit. If its something new in the market their will be a rapid growth in sales and competitors may launch their own version.
Maturity
During the maturity period the growth in sales will decline. By this time a successful product would have gained a stable market share at this point. Sales would have peaked and competitors will have entered your market with their version and are taking advantage of the profits.
Saturation
As more firms and competitor enter the market place it will become saturated. Some businesses will be forced out of the market because there are too many firms competing in the market. During the stages of maturity and saturation some businesses use extension strategies to extend the life of their products.
What is a customer?
Customers are not part of the business but they are central to survival of the company. Customers are the ones that buy the product and services companies provide. Customers are individuals and they purchase what appeals to them. It is very important to understand the needs of most customers. Customers dictate the pattern of business activity. Companies that make good, which are unpopular and disliked often, struggle and fail into bankruptcy.
What are the needs and wants of the customers?
The needs of most customers include the following: To get their monies worth, to receive a good product. To be treated with respect and kindness and to receive bargains.
Marketing Strategy
Marketing analysis and strategy
It is very important that a business understands the needs of the customers because it helps the business to determine how to price, promote and place a product. For example information gained from marketing research by a company may indicate that the most likely buyers of a new product will be female or male. Finding out about the needs of this group should allow the companies to decide to promote the product in colour supplement of quality newspapers to use high quality paper in the product and to charge a relatively high price. Marketing strategies will vary in different circumstances. Sometimes marketing decisions will be based on the hunches of decisions makers. This may be the case in smaller businesses where one person or a few people make decisions.
The Factors influencing a business's marketing strategy
The objective of the business: The marketing strategy that a business uses must reflect the objectives of the business as a whole. Marketing strategies must therefore be consistent with the wider corporate objectives of the organization. For example a business that is aiming to reduce the number of countries into which it operates should not develop international marketing strategies which go against this wider, corporate strategy. However, marketing strategies are not always secondary to corporate objective. In some business, marketing information and strategies often have strong influence upon corporate objectives and strategy. A growing market amongst ethical customers, for example, may persuade the business to ethical principles.
The Strategies of competitors businesses
All businesses take into account their competitors strategies. For example, if a competitor promote all of its company products on the internet successfully other business may follow.
The structure of the market
The level of competition will influence marketing strategies and the degree of change within different markets. In less competitive markets with relatively little change, for example businesses may find that their strategies require only minor adjustments from one period to another. In more competitive and dynamic market businesses may find that their strategies require far reaching changes on an annual basis for example, a manufacturer of active wear clothing aimed at 16-24 years old may need to constantly monitor changes in tastes.
The size of the Business
Larger businesses are likely to be strongly influenced by one or more of the above factors when making decisions about their marketing strategies. Smaller and medium sized businesses however often find strategic decision making more challenging. This is because the owners and managers of such businesses are often so immersed in the operational side of their work that they take a few opportunities to adopt a strategic outlook. Intuition and responses to daily pressures may influence as a result marketing strategy.
Marketing Strategy for the Product
Attract and please customers
In order to please new customers Heinz can conduct the following:
Give discounts, buy 1get1 free and lower prices. In order to attract customer they can conduct a mass promotion of the company and products to develop customer awareness. They can use many methods of advertisement such as billboards, newspapers and TV etc
Stake out a Market position
Market positioning is concerned with the perceptions which consumers have about products. To simplify the choice from a vast array of products. To simplify the choice from a vast array of products, consumers categorize products according to a range of Factors. Such factors tend to include the quality, status and value for money of products. It is the categories into which consumers place products that defines their position. Businesses know that consumers will position their products in relations to those of competitors. This is often in the form of peaking order or product ladder.
What is marketing?
Marketing is a range of activities that makes sure consumers get what they want in the right amounts, at the right time, and at the right price. It can also let a consumer know what goods or services are available on the market to decide which one they might want to buy.
Achieve organizational objectives
Own brand baked beans doesn't play a major role in the achievement of the organizational objectives but plays a minor role in attracting new customers
Who purchases the product?
The majority of the people that buy baked beans are either students or large families however it's a products which many different types of people purchase.
E2
Appropriately identify collect and use primary and secondary data relevant to the marketing strategy
For this criteria I have carrried out primary and secondary research to establish customer needs of Heinz's customers and what they want. I have carried out questionnaires, interview and surveys as my primary research and preferences, buying patterns, sales trends, product substitution and information on the market as my secondary research.
Why people like it
The reason why people like Heinz baked beans is its quick to make, cheap, tasty, appetizing and nutritious. Students like it because it's cheap, tasty and appetizing. Mums like it because it nutritious and quick to make. At the price of 30 p anyone can afford it.
Primary research
Methods of primary research include the following:
- Questionnaire
- Personal interviews
- Telephone interviews
- Postal surveys
- Observations
- email surveys
- Focus groups
- Consumer panels
Questionnaires
A market research questionnaire contains a series of questions designed to gain information and opinions about a certain product or service. They are used to estimate levels of demand, market size, intention to purchase, etc. They are also a useful means of adding structure to an interview or focus group. A questionnaire may look easy to construct, but a lot of thought goes into the type of questions used and the way they are phrased.
Personal interviews
This involves an interviewer obtaining information from one person face to face. The interviewer rather than the interviewee fill out the responses to questions on a questionnaire, which contains mainly open questions. The main advantage of interviews is that they allow the chance for interviewers to give detailed responses to questions that concern them.
Telephone interviews
This method allows the interview to be held over the phone. It has the advantage of being cheaper than personal interviewing and allows a wide area to be covered. However it is often distrusted by the public and it is only possible to ask short questions. There are a lot of different companies which do telephone interviews.
Postal surveys
This involves the use of questionnaires sent to consumer through the post. It is a relatively cheap way of conducting field research however it depends on the number people.
Observations
Observation is when the company watches the customers. Most retailers do observation research. Observers look out for the amount of time consumers spends making decisions and how often they spot a display.
Email surveys
Email surveys are a new way of doing surveys and most companies us them. Email surveys are cheap, fast and don't cost anything for the customer. Email surveys are also very cheap for the Business itself.
Focus groups
A focus group is a group of customers brought together on one or number of occasions. The group of customers should represent the different people who regularly shop at the store. They are asked to discuss questions prepared by market researchers.
Consumer panels
Consumer panels are groups of customers who are consulted on their reaction to products over a period of time. TV companies mainly use consumer panels.
Interviews
interview of women aged 20-35
John is a Heinz employee who works in the marketing departments telecommunications department he phones Susan to ask her about her Heinz products.
John: Hello! This is John calling on behalf of the Heinz company, Would you please answer a few questions.
Susan: "Sure"!
John: "What type of Products do you purchase that are under the Heinz label"?
Susan: "Well, I purchase the Heinz ketchup, the Heinz salad cream and Heinz baked beans".
John: "Have they satisfied your expectations"?
Susan: "Yes they have".
John: "would you like to see improvements to the products".
Susan: "I would like to suggest making the salad cream not so concentrated and more light".
John: "Thank you for your suggestions"
Susan: "Your welcome"
John: "Could we interest you in free coupons"
Susan: "thank you very much".
John: "You've been very helpful, thank you and have a good day".
Interview of Male 20-34
Emma is an employee of Heinz marketing department and works in the telecommunication sector. She phones Rick which has been a loyal Heinz customer to ask him about his products.
Emma: "Hello! Whom my I be speaking to"?
Rick: "Hello! This is Rick".
Emma: "Hello sir do you mind if I ask you a few questions regarding your Heinz products".
Rick: "No! I don't mind".
Emma: "Are you satisfied with the products you have purchased"?
Rick: "Yes, I am satisfied with all my products".
Emma: "Can you name me some of the products you have purchased".
Rick: "I purchased, Heinz ketchup and Baked beans".
Emma: "How often do you purchase baked beans or ketchup".
Rick: "I buy it every major shopping trip".
Emma: "how often is that, sir".
Rick: "Every, two weeks".
Emma: "May I ask if you have a large family".
Rick: "Yes, I have four kids".
Emma: "Okay thank you very much, Sir"! "Can we interest you in free coupons".
Rick: "Thank you very much".
Emma: "Have a nice day".
Rick: "Bye"
Observations regarding placement of product
Within every large supermarket Heinz baked beans is sold on the canned foods isle. The vast majority of the people purchase Heinz baked beans or the cheaper owned brand supermarket name. However Heinz baked beans is sold in every major supermarket and it leads this is because of the advertisements which were broadcast in the 60-70-80's and that generation still remembers those adds and is more familiar. The packaging also plays a part because its more attractive then the rest. The majority of the people which were purchasing Heinz baked beans in loads were large families, students, single professionals and the elderly in small amount because they cant carry a lot.
What are social sector purchases the most baked beans
The two largest groups which purchase my product (Heinz baked beans) are large families and students living away from home.
2- large families
-students
4- singles
3- elderly
Within my questionnaire I found the following information
Graph
Summery
Within my Questionnaire I received the above feedback. I found the response typical and was not surprised.
Secondary data
Newspaper articles
CHICAGO (Reuters) - Ketchup maker H.J. Heinz Co. (HNZ.N: Quote, Profile, Research) on Tuesday said quarterly earnings rose, as it rolled out a host of new products and eliminated some unprofitable ones as it reinvigorated sluggish areas such as frozen foods.
The Pittsburgh-based company said it earned $202.2 million, or 57 cents a share, in its fiscal third quarter ended Jan. 28, compared with $151.6 million, or 43 cents, in the year-ago period.
Prior year results include earnings from discontinued operations that were spun off in December 2002 to canned foods processor Del Monte Foods Co. (DLM.N: Quote, Profile, Research) . Earnings from continuing operations in last year's quarter were 54 cents a share, excluding some special items.
Analysts had expected Heinz to earn 57 cents a share in the most recent quarter, according to Reuters Research, a unit of Reuters Group Plc.
Last week, Heinz narrowed its outlook for 2004 earnings to a range of $2.19 to $2.21 a share from an earlier range of $2.15 to $2.25 a share. The company said it is on track to achieve those results.
Quarterly revenue fell to $2.10 billion from $2.11 billion.
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The Pittsburgh-based company said it earned $202.2 million, or 57 cents a share, in its fiscal third quarter ended Jan. 28, compared with $151.6 million, or 43 cents, in the year-ago period.
Prior year results include earnings from discontinued operations that were spun off in December 2002 to canned foods processor Del Monte Foods Co. Earnings from continuing operations in last year's quarter were 54 cents a share, excluding some special items.
Analysts had expected Heinz to earn 57 cents a share in the most recent quarter, according to Reuters Research, a unit of Reuters Group Plc.
Last week, Heinz narrowed its outlook for 2004 earnings to a range of $2.19 to $2.21 a share from an earlier range of $2.15 to $2.25 a share. The company said it is on track to achieve those results.
Quarterly revenue fell to $2.10 billion from $2.11 billion.
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H. J. Heinz Company Announces a Presentation to the Annual Consumer Analyst Group of New York -- CAGNY -- Conference
PITTSBURGH--(BUSINESS WIRE)--Feb. 12, 2004--H. J. Heinz Company (NYSE:HNZ) announces its presentation to the annual Consumer Analyst Group of New York (CAGNY) Conference in Scottsdale, Arizona (listen only) to discuss the company's performance and growth strategies on Wednesday, February 18, 2004 at 10:45 AM Mountain Time (12:45 PM Eastern Time). This presentation will be available via a live webcast on Heinz's corporate web site at www.heinz.com.
Presenting will be: William R. Johnson, Chairman, President and Chief Executive Officer and Art Winkleblack, Executive Vice President and Chief Financial Officer.
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Ariba-Heinz pact may bode well for merger
By Michael Yeomans
TRIBUNE-REVIEW
Friday, March 5, 2004
Judging by the experience of H.J. Heinz Co., it appears the pending merger of FreeMarkets Inc. and Ariba Inc. is just as complementary as french fries and ketchup.
Sunnyvale, Calif.-based Ariba, which said last month it will merge with Pittsburgh-based FreeMarkets, said Thursday it has signed an agreement with Heinz to provide software for analyzing and managing Heinz's spending on supplies.
Terms of the deal were not disclosed.
FreeMarkets has conducted online reverse auctions for Heinz for more than three years, which Heinz uses to acquire supplies, such as food ingredients, in bulk. It also uses desktop software supplied by FreeMarkets to buy supplies on its own.
E3
Create a realistic rationale for the development of a coherent marketing mix for the product or service
Four P's
Price
The Basic price of Heinz own brand baked beans is 30 p. You only receive a discount if you purchase it in bulk as a set of 16.
The pricing Policy is simple for Heinz Baked beans which is a cash cow for the company along with milk and bread the price is very low and it doesn't change.
There is no price Variations for the own brand baked beans because Heinz makes little profit but depends on customers to purchase other things.
There is also no price discrimination because everyone purchases the product at the same price.
Companies such as restaurants are given the opportunity to purchase it in bulks hotels are also given the right ones such as bed and breakfast.
Payment terms are usually done through cash or swipe cards and if the customer has a nectar card their will be a discount and points but it depends on how much they purchase.
Promotion
Advertising is usually done for other products besides Heinz baked beans however when customers are shopping they usually purchase it. Heinz conducts advertising on the TV and billboards. Heinz advertises on a daily basis on many channels because of its desire to beat its rivals.
Heinz does not do personal selling door to door however it allows customers to order what they want of the internet or telephone and have it delivered.
When conducting sales promotions Heinz does a media bombardment especially major holidays such as Christmas, Easter and other holidays.
Heinz has a good customer service so it perceives it has a good public relations because its perceived as the community supermarket. Heinz likes to deal one to one with customers' complaints.
In the case of sponsorships Heinz only sponsors activities which contribute to its good image.
Heinz promotion mix is usually only TV adverts but it is know using the internet and billboards more often.
Place
- Heinz has distribution depot all around the UK and it has factories which produce the materials and trucks which take them to their destination.
Heinz market converge is not very brood because it only to supermarkets.
Heinz excellent at logistics and taking their products to their shops this is because they carefully plan the logistics and the distribution department.
Heinz sell their products through out the whole of the UK
Effective customer service
In order to provide effective customer service Heinz encourages all its staff to be kind and helpful to all its customers
Marketing Strategy
Marketing is making it as easy as possible to get the potential customer to buy a product. In marketing there is a term called the four Ps, which represent:
- Product
- Price
- Promotion
- Place
The four Ps form the basis of the marketing mix. Getting this mix right is critical in order to successfully market a product.
Product
The business must come up with a product that people will want to buy. The design of the product must be fit for its purpose. The product name must be a good name too. There must be a good product range to give your customers options.
Price
The price of the product must be a good one because, 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.
Promotion
The product must be promoted because potential customers need to be aware the product exists. The main aims of promotion are to persuade, inform and make people more aware of a brand, as well as improving sales figures. Advertising is the most widely used form of promotion, and can be through the media of TV, radio, journals, cinema or outdoors (billboards, posters). The specific sections of society (market segments) being targeted will affect the types of media chosen, as will the cost. For example, if you were a toy manufacturer, you might want an advertising spot during children's TV or if you ran a local restaurant, you might choose a local paper or radio.
Place
The product must be available for sale in a place that the customer will find convenient. Distribution channels are the key to this area also. A firm has to find the most cost-effective way to get the product to the consumer. For example, direct marketing through catalogues, via a TV shopping channel and through the Internet have become popular, because the consumer can shop from home.
The product lifeline
Development Launch Growth Maturity Decline
( Sales
( Profit
Stages 1 2 3 4 5
Swat analysis purpose
The purpose of SWOT analysis is to conduct a general and quick examination of a business's current positions so that it can identify preferred and likely directions in the future. SWOT analysis involves looking at the internal strengths and weakness of a business and external opportunities and threat.
Heinz SWOT analysis
Strengths:
- Heinz is effective at getting the customer to quickly recognize their label. Heinz is well known that is why it has a majority in the Baked beans field.
- Heinz is well known for being an old and reliable name in food. Heinz is also known for producing good, quality food that is reasonably priced.
- In the market niche of Baked beans Heinz is the number one brand and makes the most profit however their rival Cambells doesn't make as much money as Heinz because Cambells isn't global.
- Heinz has one of the oldest reputation canned foods industries. Which is trusted by the majority of people around the world making it the number one brand.
- Customers who like your product will return and purchase it again. That is exactly what Heinz customers do for their Baked beans.
- Heinz products are so successful that other companies try to follow in their footsteps and imitate them.
Weakness:
- Heinz is very old and is out of touch with the younger generation and needs to advertise their range of food products like they done for other generations.
- Heinz also has to expand its range of food and create more food products instead of the Baked beans, ketchup and salad cream.
Opportunity:
Heinz has a large strong hold in their market niche however they should expand from North America, Europe and South America. To Asian markets and African markets to gain more money though selling Heinz goods in countries such as China, India and south east Asia who make up the majority of the Human population. This move would surly beat all of Heinz rivals such as KRAFT foods and CAMPELLS.
Threat:
If Heinz fails to take advantage of this opportunity and their rivals do, it could be a heavy blow for Heinz. Costs at Heinz are spiraling and rise up every year I think Heinz should cut back what it doesn't need and save any money it could.
PEST analysis
Political
- Regional
The fear that many old pensioners do not earn enough to survive might be to Heinz advantage because it's increased the number of pensioner that work for them because of its image as the community supermarket. The pensioners work in easy jobs but do receive money.
- National
National politics may influence Heinz because the national government has given a expansion contract to Morrisons to purchase Safeway stores so Heinz can enlarge their market.
Economic
- Consumer activity such as - confidence, spending pattern, willingness to spend.
- Economic Variables - inflation, unemployment, trade, growth
- Government policy- fiscal, monetary, supply side, exchange rate;
- Fixed and Variable costs of the business
- The effect of changes in product and labour markets.
Social
A Company has many benefits if its aware of the changing social environment around it, such as the changing dishes because of immigrants there are new foods such as curry, donar, kebab etc. Supermarket if they adapt fast enough can reap huge profits from it.
Technological
Heinz has to follow the emerging technological advances such as faster scanning or selling food over the Internet in order to be more competitive with their rival supermarkets.
Boston Matrix
Market Growth
High Low
Star
Highly profitable
Good market share
High growth rate
Growth stage of the PLC
Rapid growth requires relatively heavy investment.
Cash Cow
Produce a lot of cash
High market share
Low growth rate
Maturity stage of PLC
Need less investment to hold market share
Cash 'milked' to finance investment in other products.
Problem Child
Low market share in a high growth market.
Cash required to maintain or increase their market share to become stars; otherwise they should be phased out.
Dog
Low market share
Low growth rate
No longer profitable
Decline stage of the PLC
Need to be withdrawn.
Heinz baked beans is a cash cow because customer purchase it in bulk supplies and it generates little profit but generates a lot of customers which then purchase other things from the shop
Ansoff Matrix
Existing
New
Existing
Market
penetration
Product
Development
New
Marketing
Development
Diversification
E4
Identify and explain the external influences effecting the development of the marketing strategy
The government
There is a huge government influence on Heinz within all major countries it operates. Within every country there are similar and different laws, Heinz has to abide by all the laws in every country if it wants to safeguard their interest. Developing countries treat Heinz favorably because they want to increase business development. However Developed countries treat most business the same because business development isn't as necessary as the developing world.
A legal framework
Every business has to follow the legal framework or else the companies will be punished. External influences such as the legal framework also make up the planning of the strategy and methods.
The economic climate
The economic climate can have a tremendous impact on business activity. For example a recession and a falling demand for goods and services could lead to hardships for many companies and this could lead to a dismissal of a lot of staff and the closure of companies.
World events
World events can also effect business. Within the past year the wars in the gulf and Afghanistan has contributed to the world hate of America and this has affected Heinz. The boycott of American goods such as Mc Donald's and Coca cola have effected Heinz because Heinz is also an American products. Leaflets which are distributed by anti-American demonstrators clearly label Heinz as an American product however Heinz isn't involved in any political activity. The affects of the boycott are minimal and don't pose a real threat to Heinz.
Competition
Heinz faces many rivals in the canned food and packaged foods market such as Kraft food and Cambells foods. Heinz also set their activities according to what their rivals might do. The rivals activities often have an influence on Heinz's operations. Heinz keeps close eyes on their rivals operations because what they do can effect their own company.
Consumer tastes
Consumer taste is another phenomena. What people considered being "cool" in 1960 would be considered today as very "UN-cool" The taste and habits of people change very quickly. This is why most company considers consumer taste to be important. Within the past couple of years people are becoming more health wise and are drinking more bottled water and eating more low in fat foods. In order to remain popular Heinz has introduced low fat foods and is cutting back on using salt in ketchup.
Social factors
Companies also have to think of the social factors. Within the past decade the role of women have changed and women are now leading in many fields. Many women are also working and families are depending more on take-outs and ready meals. Heinz has a huge market in the UK because a lot of women don't know how to cook thus depending on ready-made meals.
Environmental factors
Before environmental factors were not considered important however now companies take it seriously because of government intervention. Companies use environmentalism to look good to the public. Some companies use environmentally friendly methods in their manufacturing plants to reduce costs. The Environment is now on the political agendas of most western nations and even some developing nations.
Legislation and regulation
Legislation and regulation may influence business activity this may be in the form of government law or European Union regulation. Legislation and regulations are very important because if you don't comply with them the business can lose money and be brought to court.
Changes in population
The changes in population can affect the demand for products and the supply of workers. In the UK there is an ever increasing number of elderly people and the number of people having children is not that great. This is why the UK needs foreign labor .
The objectives of the Heinz
The business objectives of Heinz include the following:
- To stay within the legal framework and provide lawful trading which includes the implementation of the Health and safety acts. Heinz understands the responsibility and reasonable care required by law to supply safe and quality working conditions, to meet the full exceptions of it's employees.
- To provide quality food products at a reasonable price
- To be friendly to the environment by sustaining the level of air pollution and other waste.
- To enlarge there market shares and gain a big advantage over their rivals.
- To expand and sell more Heinz products to place in the developing world like China and India which have nearly half's the world population.
The Supplier also plays an important role within the internal effects of other Marketing strategy.
Stake holders are the group of people or individual who are affected directly or indirectly by the performance of the organisation. The stake holders include employees or shareholders or external stake holders such as suppliers or customers. The employees who work with in the organisation also help in decision making as the step of introducing a new product can affect on their pay rates and working conditions.
Organizational resources: The production process, finance and human resources influences my strategy as they have a direct link with the product as I had to see how would be the production process for my new product. Finance influences as the new product development would require finance for developing and launching it. The human resource department influences my strategy as it has to look after the extra employees which I will be needing for the distribution of the product.
Organizational Culture and structure: Marketing decisions are taken within the context of the internal 'culture' of an organisation. This culture consists of the underlying values, attitudes and assumptions which an organisation adopts. It influences the way in which an organisation considers new ideas and options, how it reacts to events around it and how it structures itself.
Suppliers are the people who provide the organisation with the necessary resources which are needed for to meet its customer's requirements. These include equipment, materials, premises and finance.
Competitors
organisations usually have to compete with other organisations for customers. The success of the organisation depends on their ability to satisfy customer needs better than their competitors.
C1
Identify and explain the links between your analysis of external influences and development of your marketing strategy
External influences of Heinz Development of Marketing strategy
The government
The Heinz company must obey the law and is not above it. Government regulation and laws passed apply to Heinz. Heinz doesn't get involved in politics and funds no political party. Heinz's Marketing strategy has to be developed in favor of the law and cannot be set opposing the law.
The legal framework
Heinz employs company lawyers to guide them in developing a marketing strategy which abides by the legal frameworks. Heinz attempt to abide by the law and has a clean history without negligence.
The Economic climate
The economic climate is the center of Heinz's marketing strategy because it has tremendous impact on business activity. For example a recession and a falling demand for goods and services could lead to hardships the company. However growth would lead to expansion of markets and an increase in the creation of new products.
World events
Dramatic world events would alter the marketing strategy in many ways to adapt to the new effect.
Competition
The competition factor is a main part of the marketing strategy because Heinz and other companies want to out perform their rivals, the ways they will outperform their rivals are put into the marketing strategy. Among the marketing strategy of Heinz includes enlarging the countries where Heinz products are sold and increasing products sold in countries such as China because this would give Heinz an advantage over their rivals.
Changes in population
It is a fact that most elderly people enjoy different foods to what teenagers eat. Within Europe there is a large percentage of elderly people and Heinz takes this into effect when writing the marketing strategy. Heinz sells more Baked beans, and morning foods. Heinz sell all their products however in countries were there is a larger percentage of elderly people Heinz will sell products which the elderly enjoy.
Consumer tastes
Heinz marketing strategy takes notice of the changing consumer tastes. Heinz is a very old company it has been in business since 1869. Heinz has gone through many changes and has still prevailed as the number one canned foods brand. Heinz changes and alters their labels to fit into the theme. It altered their baked beans label and is easily distinguishable from others. Heinz marketing strategy includes the Consumer tastes. Heinz alters the packaging to deal with new themes and get the interest of the Customers
Social factors
Social factors aren't dealt with in the marketing strategy. Heinz may include women on commercials or minority communities. Heinz may also employ women and ethnic minority in their workforce however, social factors aren't part of the marketing strategy.
Environmental factors
The environmental factors are taken seriously within Heinz because it gives the company a good image. The Marketing strategy allows Heinz to produce all products with a picture showing to recycle and keep the environment clean. Heinz also uses environmentally friendly filters in the production plants.
Legislation and regulation
All Legislation and regulation influence the marketing strategy of Heinz In Europe government law or European Union regulation are carefully adhered to. Legislation and regulations are very important because if you don't comply with them Heinz can lose money and be brought to court.
C2
Make well reasoned proposals for your marketing mix clearly linking your proposals to information generated by your analysis
Well reasoned Proposals
Post articles:
Heinz and the health issues
Most doctors and other organizations such as the heart foundation and others believe the Heinz products have too much salt and other additives which harm the personal health of the customers. It is believed Heinz baked beans is bad for the health and really bad for diabetics.
(add more about health issues regarding Heinz baked beans and other proposals and include articles from the internet.
Product Development
I propose that Heinz create new products. Some of Heinz products are popular however Heinz must create more then three popular products. Heinz should take every one of their products and attempt to make them popular and easily recognizable.
Market Development
Heinz should search existing markets for new products in order to broaden their product range. This would create more choice for the customer.
Diversification
Heinz should also diversify their product in order to gain a bigger hold on the market. This is most risky if the competition is well established, but if the product type or market is new, it can have related ventures.
Marketing mix.
Marketing is a range of activities that makes sure consumers get what they want in the right amounts, at the right time, and at the right price. It can also let a consumer know what goods or services are available on the market to decide which one they might want to buy.
General proposals
I believe that Heinz Company is achieving many of their aims because they lead the market. However I believe Heinz should in return reward their employees with pay rises. Heinz should also attempt to attract the young customers.
Quality Proposal
The quality of Heinz's products is very good however Heinz should respect the wishes of the people when they want something changed. Heinz is a very old company and still uses the same ingredients as it did back then. Heinz hesitates to change products and this will dent their reputations as a respected food producer. Heinz should welcome changes especially for their Salad cream products.
Image proposal
Heinz has a very good image in the eyes of the public as a good company which produces quality products at a reasonable price. Heinz ketchup is the most popular brand. Heinz is a closed company and doesn't advertise regularly, I propose that Heinz advertises more in order to engage with the younger generation.
Price proposal
The price of Heinz's products are relatively cheap I believe Heinz should increase the price a little because it has a major part of the market.
Promotional proposals
The generation of the 60's and 70's grew up on the BEANZ MEANZ HEINZ adverts however my generation isn't as well informed about the Heinz brand name or their products. Heinz should produce the same promotional adverts which are fit for the 21'st century.
Information generated by my analysis my proposals
The government
Heinz shouldn't be involved in politics, this includes not funding any political part or even being associated with a politics. Heinz should be seen as neutral and shouldn't be involved in the political process.
The legal framework
Heinz should be aware of the legal frameworks of all individual nations in which they operate. The legal framework should be adhered to and not tampered with. Heinz should keep a good image and not participate in any illegal activity
The Economic climate
Heinz should set their Marketing strategy on the forecast of the economic climate. Heinz should spend more when the economic climate is good and should save more when its not looking good.
World events
Heinz should keep a close eye on world events and should alter the companies image or products in order to adapt to the new reality.
Competition
Heinz should part take in new strategies In order to out perform their rivals. Heinz should take new endeavors such as expanding their market into developing nations such as China and India. They should also launch promotional campaigns selling the idea that Heinz is better then rivals.
Changes in population
Heinz should understand that in some countries there are more young people then elderly. They should sell the products in which are in need by the people. If one country has a higher population of young infants Heinz should sell more baby food and vise versa.
Social factors
Heinz is a very old company and to survive without altering your products image is an achievement however social factors are important and I believe Heinz should recreate their image in order to appeal to the younger generations who see their products as boring. Heinz should also adapt into the new social cultures within individual countries and give the impression that it's a popular brand name.
Environmental factors
Heinz environmental proposals include labeling on products not to discard their waste and pollute. Heinz also uses filters in production plants. I also propose that Heinz should donate to environmental organizations such as green peace in order to gain a good image with the public.
C3
Independently identify and collect a range of information relevant to marketing strategy and apply appropriate methods for checking its validity
A collection of a range of information about Heinz relevant with the marketing strategy
Heinz: a premier global food company
Heinz is the most global U.S.-based food company, with a world-class portfolio of powerful brands holding number-one and number-two market positions in more than 50 countries. The Heinz brand is a $2.5 billion global icon and Heinz's top-15 power brands account for two-thirds of annual sales.
Today, Heinz brands are cultural icons to consumers everywhere, symbolizing quality, convenience and great taste. To learn more about the core categories, click on the links below:
Ketchup, Condiments and Sauces
Meals and Snacks
Ketchup, Condiments and Sauces
If it isn't Heinz(r), it isn't ketchup.
Throughout the world, Heinz(r) is synonymous with ketchup. It sits atop restaurant tables from Melbourne to Miami and Montreal to Mumbai. Each year, Heinz sells 650 million bottles of ketchup.
And, for those on the go, Heinz makes 11 billion packets of ketchup and dressings each year...that's at least two packets for every person on earth.
Heinz is a leader in ketchup, condiments and sauces, selling nearly $2.5 billion worldwide in 140 counties.
Ketchup is experiencing explosive growth and unprecedented excitement. It's caught the attention of teens the world over, with imaginative new colors - from Blastin' Green(r) and Funky Purple(r) to new "mystery" shades...even Wicked Orange(r) and Green Sauces(r) in Europe...And, the surprises continue with new "bottoms-up" easy-squeeze bottles and organic varieties.
Heinz markets an ever-expanding range of condiments - There's the British favorite, Salad Cream; Spain's popular Orlando(r) range; Costa Rico's Banquette(r) line; UFC(r) "banana" ketchup in the Philippines; and Indonesia's ABC(r) soy sauce, the second largest selling brand in the world.
Heinz's line up of "meal enhancers" are number-one and it offers an expansive range of tomato sauces for restaurants, trattorias and café...chances are, your favorite pizza is topped by Heinz.
In the U.S., consumers enjoy Jack Daniel's(r) and Yoshida's(r) grilling sauces...and what else buy Heinz 57(r) Sauce...Plus, the expanding range of Classico(r) (acquired 2002) pasta sauces, America's number-one premium brand.
Meals and Snacks
Frozen Foods
Frozen foods represent more than $2 billion in sales and offer convenience and unsurpassed taste.
Ore-Ida(r) (acquired 1965) is the world's best-known branded potato processor, with a U.S. share at nearly topping 50 percent. Families enjoy its wholesome goodness and the excitement of new Funky Fries(r).
Bagel Bites(r) (acquired 1991) and Hot Bites(r) are among the most popular after-school snacks and the company's newest brands offer the taste of Mexico with Delimex(r) Tacquitos.
For hearty appetites, there are Boston Market(r) HomeStyle frozen meals and side dishes. And, Smart Ones(r) varieties combine great taste with great nutrition.
In Britain, some of the favorite frozen foods are Weight Watchers(r) from Heinz; Jane Asher(r) desserts; and the new Linda McCartney(r) meat-free entrees.
Creative one-minute cooking shows showcase Heinz(r) and Wattie's(r) frozen foods in Australia and New Zealand.
Soups, Beans and Pasta
In many nations, Heinz means soups, beans and pasta - a vigorous category in which Heinz serves up an enormous portion.
In the U.K., the company's advertising is so memorable that most Britons think Heinz is an English firm.
Thanks to breakthrough advertising and innovations, Heinz is a leader in the growing soup category in Europe and is tops in the U.K.
Worldwide, Heinz beans and pastas offer nutrition and fun for not only youngsters but parents, too. As far as Venezuela, South Africa and New Zealand, Heinz power brands lead the way.
Recent acquisitions in Europe added Honig(r) dry soup, the best name brand in the Netherlands...along with HAK(r) vegetables...and KDR(r) spreads and sprinkles, a traditional Dutch topping for breakfast toast.
Infant Feeding
Parents everywhere trust Heinz. And, in Italy, the Plasmon(r) environmental oasis program remains the hallmark of purity and safety.
This year, moms and dads worldwide will spend nearly $1 billion on infant foods, biscuits, cereals and juices from Heinz. Heinz nutritionists keep pace with the latest trends, offering innovative new tastes and organic varieties.
Most babies in Italy, Canada, Venezuela, and Australia enjoy Heinz brands. And, in the U.K. and India, Heinz is know for its Farley's(r) and Farex(r) brands. Chinese parents are quickly becoming loyal to the trusted Heinz name.
At any given moment, on any given continent, the people of Heinz are at work...creating new products, perfecting fresh ideas, and developing nutritious and innovative foods for today's families. Heinz is a trusted name for consumers, a valued partner in the community, and a great investment with tremendous growth potential.
(The above information was taken from www.Heinz.com)
Checking its validity
Heinz a premier global foods company
Heinz's is an American company and it generates the most turnover. Heinz has a brand holdings of being number 1 or number 2 in 50 countries. The Heinz brand generates $2.5 billion and is a global company. Heinz products are a cultural icons to consumers everywhere, symbolizing quality, convenience and great taste. The above report is a valid article and it shows that Heinz is an American company and it generates the most income in its market. However the statement of ' Heinz being number one or number two in fifty countries' seems accurate but Un provable.
Ketchup, Condiments and Sauces
Heinz produces the number one Ketchup in the world because it is the most purchased. This known by many people without doing research. Heinz also produces sauces which sell a lot as well however in Italy they are in the top five for Sauces because of that countries history of special sauces.
Meals and Snacks Frozen Foods
Heinz produces ready quick meals and other frozen foods that are popular here in the UK. I think the article is valid because in the UK many people don't cook and depend on ready made meals.