Information for Marketing Decisions - Assignment Example

150401 Mr Rose has told you that he feels out of touch with how s think and behave. He has read that the research technique of focus groups might help him improve his marketing activities. Write to Mr Rose explaining the role that focus group might play as part of a user and attitude study of Wines and Spirits market. List the topics you would wish the participants of focus groups to discuss to help Mr Rose better understand his customers think and behave. Explain how you would recruit participants for such groups and discuss the criteria you would use for selecting participants. It would be hoped that the focus groups would discuss the topics that would be of the most use in understanding the potential customers for the wines sold by Waitrose. The focus groups are intended to improve the communication levels between the company and its customers.1 The focus groups could discuss the most relevant aspects of customer behavior: (i) The demographic factors that influence whether or not customers decide to buy wine. For instance are customers in different age groups or income groups is more or less likely to buy wine or a certain type of wine. (ii) To discuss whether customers always buy one type of wine, or if they are willing to try a variety of different wines. Successfully predicting changes in customer preferences could be highly profitable. (iii) To discuss what motivates people to select Waitrose’s wines. For instance do customers look for cost, quality, quantity, or good value to determine their wine purchases. Focus groups could also discuss whether special promotions or advertising affect customer preference. (iv) To discuss how Waitrose could use its marketing campaigns to gain new long-term customers for its wine selection and whether it is financially viable to do so. (v) To discuss whether marketing campaigns need to be adapted for different places, such as in Waitrose stores, on television adverts, or through internet websites. (vi) To discuss whether it might be worth considering if linking the sale of wine to other products such as meat, fish, and ready prepared meals would tempt more customers to buy wine from Waitrose even if they had intended to do so. (vii) To consider the promotion of Waitrose’s wine internally and externally through competitions and prize draws. Competitions and prize draws have frequently been used to promote particular stores and to attract new customers to buy specific products. For instance competitions could give away prizes such as trips to wine producing countries or a supply of expensive wines.2 To ensure that the focus groups came up with relevant and accurate research carefully chosen criteria would be needed to select the membership of each focus group. One simple method of obtaining potential members for the Waitrose wine focus groups would be to prepare questionnaires for recent Waitrose customers to complete. To avoid wasting time questionnaires would only be offered to Waitrose customers that had recently brought wines in store or through the company website. For accuracy and relevance the questionnaires could ask questions that allow us to determine whether those wine-purchasing customers regularly brought wine from the company, whether they were attracted by ongoing in store and online marketing promotions.3 Perhaps other Waitrose customers only brought wine for specific occasions like birthdays, anniversaries, or for one of meals. Alternatively customers could simply buy wine as an impulse purchase; impulse purchases that might be increased with well planned and well placed marketing promotions. Using the questionnaire method could have the advantage of finding the customers that liked the company’s wine selection the most, and could potentially suggest the most effective and perhaps even the most innovative means of increasing sales through marketing campaigns. Members for the focus groups could be recruited by placing notices, leaflets, and flyers in Waitrose stores, and upon the company website. Waitrose could offer incentives for some of its customers to join the focus groups for instance offering discounted wines or company vouchers, perhaps even offering cash pay outs if any specific ideas thought up by the focus groups helps increase both sales and profits. The focus groups could also be geared to specific age groups or geographic areas thus allowing the company to deliver marketing campaigns to more specific groups or areas. Sales and marketing of products can vary widely depended on local differences such as whether the stores are in better off or lower than average income areas.4 The recruitment criteria for the focus groups should concentrate on gaining members that are knowledgeable as well as enthusiastic about wine. That knowledge and enthusiasm should help the focus groups develop good ideas about increasing the company’s wine sales, preferably on a long-term basis. It would certainly be essential that every member of the focus groups is a marketing expert, the main essential is that every focus group member has the opportunity to give their honest opinion about what Waitrose does best and where it could improve.5 2.Mr Rose has noticed that a recent trend has been customers increasingly trading up and purchasing more expensive wines. He would like to appeal to these customers in particular with future marketing communications. Explain how a deeper understanding of market segmentation research would help Mr Rose. Suggest and justify suitable methods and bases for further segmentation research for wine buyers. Research has already shown that sales of wine are not reliant on any single group of consumers and potential customers, although some groups are more likely to buy wine than other groups are. Overall in recent years the consumption of wine in the United Kingdom has increased strongly. The increase in consumption of wine potentially makes the wine market highly lucrative for any company that can increase its share of the total sales over a long-term period. Of course increased opportunity has meant increased competition. Companies that have well researched and well –timed marketing campaigns should perform better than rival companies that carry out little or no marketing research at all. The wine market is not a single coherent market; there are many different types of wine to suit wide variations in customer tastes, different social occasions, as well as different budgets.6 Understanding the segmentation of the wine market is certainly research that could be easily justified as it could improve sales performance, and therefore potentially increase profits. It would be sensible to research the customers that buy traditional wines from countries like France, as opposed to those customers that are content to purchase and drink newer wines from countries such as South Africa and Australia. Waitrose has traditionally sold larger quantities of French wines, yet have increased sales of wines from other countries. The greater availability of differing types of wine from an increasing number of countries has without any doubt accelerated the segmentation of the wine industry in Britain. When it comes to the reason for those developments a change in the tastes of British wine consumers have changed due to the greater availability of new types of wine, some of which they will have tried on foreign holidays. Wines from Spain, Portugal, and Hungary became available in greater quantities after these countries joined the European Union. The freeing up of trade after the onset of the single European market that means it is now easier for to export, import, and sell wine (or any other product for that matter) throughout the European Union. Lower import costs mean that supermarkets such as Waitrose have a greater opportunity to sell a wider selection of wines. That could be regarded as yet another consequence of the process of globalisation.7 Methods for researching the segmentation of the wine market could be easily based upon measuring the sales of wine through the epos (electronic point of sales) system. The epos system has the virtue of already being used by Waitrose and most other British retailers. The epos system is convenient as it provides accurate data about the sales figures and revenue generated for all products that are sold with a barcode. That means that the company is able to compare the sales figures for all the different types of wines that Waitrose sells in its stores. Data from epos shows the effectiveness or otherwise of marketing campaigns and sales promotions. If the data from Waitrose’s sales demonstrate that the units of new wines sold outperform sales for older types of wine that could be used by Waitrose to justify the further segmentation of the wine market within Britain. Epos shows the national sales figures for all products, yet used in the right way it is an invaluable source of management information that can be used to make marketing campaigns more effective.8 Alternatively research concerning the segmentation of the wine market could be done on a smaller scale by running marketing campaigns in a limited number of stores. The point of the exercise would be to find out if new wine products will sell strongly or if their sales are poor and do not justify Waitrose stocking large quantities of those new wines. The company should carefully the stores used to ensure that they are not stores with above or below average sales of wine. The internet offers the prospect of confining marketing trials and pilot schemes to online customers only. For Waitrose there would be advantages in running pilot marketing campaigns. That is due to the company not having to order large and unrealistic volumes of new types of wine until after successful pilot marketing campaigns have been completed. The use of pilot marketing schemes makes practical sense, allows Waitrose to respond quickly to the further segmentation of the wine market in Britain. It has the potential bonus that customers believe that Waitrose are quick to respond to changes in what they want to buy and appear to offer excellent levels of customer service. Perhaps the simplest way to make the segmentation of the wine market in Britain work best for Waitrose is to ensure that its packaging is more distinctive than any other supermarkets that sell new types of wine.9 3.Mr Rose previously only carried out occasional Ad hoc pieces of market research. The Manager is aware that continuous forms of marketing research exist. Explain the different types of continuous marketing research, their use understanding changes in consumption of wines and spirits and how they could be used to improve the long-term profitability of Waitrose. Waitrose would be well advised to use continuous research methods into the marketing of wines and spirits in Britain as means to achieve long - term profits for itself. The company should make efficient use of existing management information with regard to the comparative sales performance of its different wine and spirit products as well as specialist marketing research methods already mentioned such as questionnaires and the ideas of focus groups. The use of questionnaires, focus groups, when combined with marketing trials potentially allow the company the opportunity to take advantage of the segmentation of the wine market in Britain. Research will increase the opportunity to focus on the new types of wines and spirits that are most likely to be popular with the company’s customers and could ultimately bring new customers into the stores or online to purchase the new products. Previously Waitrose as a company had failed to carry out continuous marketing research which arguably reduced its ability to make long - term profits. It was Waitrose’s frequently ad hoc approach to marketing which, meant that any success could be put down as much to luck as sound judgement. However businesses can not hope to rely on either good luck or ad hoc pieces of marketing research if they wish to increase their share of the wines and spirits market over a long – term basis. Increased sales alongside reducing costs are the best means of increasing long-term profitability. The extra costs involved in continuous marketing research campaigns will ultimately pay dividends in higher levels of long-term profits.10 It is straightforward therefore to argue in favour of continuous marketing research into the wines and spirits market as that means that Waitrose is adopting proactive measures to increase its wines and spirits sales rather than merely reacting to trends and developments within the wines and spirits market. A proactive approach should strengthen prospects for the company to achieve long - term profits as a whole. Questionnaires, focus groups, marketing trials thus increase the chance of the company successfully pursuing a proactive marketing strategy in relation to wines and spirits.11 Therefore Waitrose will find questionnaires and focus groups could prove particularly useful when it comes to providing continuous marketing research as they allow the company to receive feedback both from customers, and staff that want to improve sales and levels of customer service. Continuous marketing research is essential rather than a luxury if Waitrose wishes to build on its successes within the wines and spirits market in Britain, as it will reduce the risk of marketing new types of wines and spirits that fail to generate adequate sales and profits for the company.12 Bibliography Alsbury A and Jay R, (2002) Quick answers to marketing questions, Prentice Hall, London and New York Cartwright J, (2002) Mastering Marketing Management, Palgrave, Basingstoke Shaw C & Ivens J (2005) Building Great Customer experiences, Palgrave, Basingstoke Read More