Introduction to Marketing: Youngs Seafood - Essay Example

Introduction to Marketing: Young’s Seafood, Grimsby, UK Background Information Young’s Seafood is one of the major players in the seafood industry in the UK. The company has a market share of 40% of the total seafood market in the country. The recently witnessed financial crisis affected the company’s productivity, leading to a drop in sales. This marketing strategy is structured to help Young’s Seafood increase its sales to its initial and new market base (Young’s Seafood, 2010). Market Analysis In the UK, consumers spend more than £5.65 on seafood and fish products per year. Most of the seafood market is based in the urban and rural urban areas. For fresh seafood, the market is mostly concentrated among the older generation and up market population. However, the opposite is true for frozen seafood. Fish snacks seem to be popular among the younger generation. Consumption of seafood and fish products is currently lower than it has been the last few years. This may be attributed to the financial crisis. However, the situation is likely to go back to normal once the crisis is over (Seafish Organization, 2009). Major Competitors Icelandic UK: sales - $59.0 million. Deals with frozen-at-sea fish such as cod, haddock and redfish, which it processes into fillets and sells to wholesalers from local fish shops. The company also imports the same products to other countries in Europe, Asia and America. Brake Bros is a private fresh food supplier that serves the UK and France. The company had a sales revenue of $3,518.4 million for the year 2009. This was a 30.6% increase from the previous year. Brake Bros supplies mainly frozen fresh fish and seafood to wholesalers and restaurants. Princes Limited: the company had a sales turnover of $1,857 for the year ending December 2009. Princess Limited is a food service company that deals with the processing and sale of canned fish and seafood in the UK (IBISWorld Market Report, 2010). Other competitors include Orkla Group, an international conglomerate that is engaged in the production and distribution of food and other consumer products. In the UK this public company has a subsidiary that deals with the processing and distribution of canned and frozen seafood. The company’s sales for 2009 totaled to $9, 349.2 million. Aker ASA is a public company that is part of the larger Norway-based Aker Group. It specializes in whitefish fishing and seafood processing and sale in the UK. The recent sales figures of Aker show that the company made a total of $2.3 million in 2009. Maruha Corporation: this public company ois one of Japan’s top seafood producers. Its subsidiary in the UK is one of the major players in the country’s seafood industry. For the year 2009, Maruha’s sales grew by 36% to reach $8,507.8 million (IBISWorld Market Report, 2010). PESTLE Analysis Political factors: The taxation policy in the UK seafood industry has remained constant over the years, despite the financial troubles facing the country. It seems that the taxation policies will not change in the near future. Currently there is little political interference in the seafood industry, and it looks like the situation will remain the way it is. The industry does not receive much funding from the government since it is mostly a private sector (Dove, 2009). Economic factors: The United Kingdom just witnessed one of its worst economic recessions and the situation has not yet stabilized. This situation is affecting the seafood industry in many different ways. Since people are struggling with financial constraints, the level of consumer spending has gone down over the last 2 years. Government spending is focused in revamping the economy, with more attention being given to banks and other financial institutions. If the economy goes back to normal government spending is likely to be widespread across other industries, including the seafood industry. Most banks have tightened their lending policies, therefore it is harder to access loans than before the financial crunch. Currently interest rates, inflation and unemployment are at their highest levels (IBISWorld Market Report, 2010). However, as the economy stabilizes the situation is likely to get better. This is likely to have a positive impact on the seafood industries since more people will be financially stable to buy the products. Sociological factors: The UK seafood market is composed mostly of the working class population. This group of people is educated and they know what they need to stay healthy. Therefore, among other things, fish and fish products are some of the things they normally buy to maintain their health. Lots of UK citizens are conscious about their health and they will go for anything that they think will contribute to their overall wellbeing. Today, the media and the health sector are campaigning for the importance of certain Omega proteins which are extremely important for health and are found mostly in fish (Seafish Organization, 2009). Technological factors: Technology is changing and advancing almost on a daily basis. Some of the most current innovations in the seafood industry include new ways of storage and packaging. Marketing has also changed significantly as many people are turning to the internet to make their purchases (Euromonitor, 2006). Legislative factors: The law requires that there be a fair competitive environment for everyone in the seafood industry. The law also requires that all organizations involved in the seafood industry should have equal employment policies (Seafish Organization, 2009). Environmental factors: One of the environmental issues that the seafood industry has to grapple with is the issue of disappearance of certain types of fish. There is a lot of pressure from environmentalists for the seafood industry to regulate some of its products so as to sustain the population of the sea fish that are almost becoming extinct. There is no legislation as to what kind of seafood products should be regulated, but there are restrictions on the amount of certain fish that should be processed. Since the seafood industry is also involved in the production of canned seafood, there are various recycling systems being utilized by many of the companies involved in this business (Maddock and Young, 1995). SWOT Analysis Strengths: Young’s Seafood is one of the biggest market players in the seafood industry. It already has a large market share of 40%. The company also offers specialist services for different consumers. Young’s Seafood is also at the forefront in food technology and research. Another strength for the company is its able, committed and food savvy workforce (Dove, 2009). Weaknesses: One of the company’s major weaknesses is a lack of a major market presence in overseas markets. The company also has to deal with its high pricing rates as compared to other players in the industry (IBISWorld Market Report, 2010). Opportunities: One of the opportunities that the company can take advantage of is the increased health awareness among consumers. People now realize the importance of seafood as part of their diet and consumption of seafood is slowly increasing. The advancing technology might also offer better ways of storage and distribution and this can have a big impact on the company’s profitability (IBISWorld Market Report, 2010). Threats: The greatest threat that the company faces is the entrance of new players in the market. Apart from new upcoming seafood companies, there are other international conglomerates in the food sector which are continually entering the UK market. Another threat is price cuts from other seafood companies which could mean that more people will turn to those companies since they will be cheaper. There is also a threat from environmentalists who are pressurizing the fishing industry to reduce its production of certain types of fish and seafood (Dove, 2009). Porter 5 Forces Threat of new entrants/ competitors: the seafood industry in the UK is growing at a very fast rate and this trend is attracting more traders into the market (Euromonitor, 2006). This poses a threat to Young’s Seafood since its market share will be reduced. Bargaining power of suppliers: there are many suppliers of seafood and fish products in the UK and they all have their on unique ways of targeting their consumers (Seafish Organization, 2009). These companies have a bargaining power that many of them are using especially during these economically hard times to convince consumers to buy their products. Threat of substitute products: the entrance of new competitors also brings with it the threat of substitute products into the market (IBISWorld Market Report, 2010). This will divide the existing market since consumers will now have something to substitute the seafood and fish they have been getting from Young’s. Bargaining power of buyers: the changing economic environment has led to a higher bargaining power among buyers. Everyone is looking for the cheapest supplier of seafood and fish products (Euromonitor, 2006). This may force Young’s Seafood to reconsider its pricing strategy in order to attract as many consumers as possible. Competitive rivalry: competitive rivalry is rife in the UK seafood and fish industry. Although Young’s enjoys a 40% market share, it has to work very hard not to loose its customers to the local and international seafood companies in the country (Euromonitor, 2006). The entrant of new players in the industry and substitute products as well as the increased bargaining power of both suppliers and buyers has only increased this competitive rivalry. The marketing mix Product: Among the products that Young will be producing include chilled fish for various supermarkets. Other products include Fresh and chilled seafood, frozen seafood, Canned and other seafood. The products will be packaged in different sized cans and packages ranging from 100g to 1kg in weight. Each of the products will carry Young Seafood’s brand name. However, the products will also have their own unique sub-brand names. Price: the prices will be different for every product depending on its type and size. There will be some discounts offered on certain products, especially the large quantity ones. Special offers will be granted as part of the promotion strategy for Young’s Seafood products. The prices will be slightly higher in high-income areas and lower in low income areas. Payment terms will be through cash and checks. The credit payment option will also be provided where appropriate. Promotion: The advertising campaigns for Young’s will be more systematic than they are. The adverts will focus on the benefits of healthy eating and will be conducted on the broadcast and print media. There will also be various public relations events that will be carried out in order to let people know of Young’s Seafood products and how to get them. A budget of around $2,000 will be used for the promotion campaign. Place: The products are going to be marketed in all major urban centers in the UK, with an emphasis on the greater Grimsby area. Various sales representatives will be chosen to carry out sales activities around the country. Various dealers will also be considered for distribution purposes. Public, Private and Voluntary Sectors’ Marketing Approaches The marketing tools used in these three sectors are basically similar, but the strategies used are very different. For instance, the public and private sectors normally target the larger masses while the voluntary sectors normally target smaller masses. The marketing strategies for the private sector are normally very well coordinated as compared to public and voluntary sectors. The public sector also enjoys government funding for marketing while the private and voluntary sectors have to raise their own marketing capital (Dove, 2009). References Dove, C, 2009, Seafood News Supply & Trade, Sea Food Source, viewed 30 September 2010, Euromonitor, 2006, Fresh Food in the United Kingdom, viewed 29 September 2010, IBISWorld Industry Market Report, 2010, Seafood Processing in the UK, viewed 30 September 2010, Maddock, S and Young, J, 1995, “Catering for the fish consumer: a UK Perspective”, British Food Journal, Vol. 97, No.11, pp.21-25. Seafish Orgnization, 2009, Trade Summary, BTS and HM Revenue and Customs, viewed 29 September 2010, Young’s Seafood, 2010, Company Profile, viewed 30 September, Read More