Super Jams Critical Success Factors and Strategic Future Growth - Case Study Example

Marketing: Super Jam’s critical success factors and strategic future growth Introduction It has often been said that the organizational culture must be one of normative innovation rather than ordinary value-centric behavior. In other words critical success factors are diverse and complex but yet innovation related critical success factors at Super Jam have enabled it to ride the crest of the marketing success wave. But now the growth trajectory Superjam has slowed down. There is some truth in this argument though environmental constraints such as those related to the strategic competitive environment in particular and the strategic operational environment in general have an impact on innovation efforts of the organization (Wills, Samli & Jacobs, 1991). In the overall organizational context innovation and change are a strategic requirement to identify and develop new techniques of process and production. However in the larger context of the external competitive environment innovation in marketing is essential for continuous survival. Analysis 1. Environmental factors including SWOT Super Jam has been known for innovation in food quality & safety, packaging, food nutrition, Research & Development (R&D) and agricultural practices. This range of activities has a definite impact on company’s strategy, process and products. In the first place its emphasis on organic farming techniques has been well known though food quality & safety related issues at the national level are determined by the regulatory regime in place in each country. Thus Superjam’s procurement policy and supply chain management process interact to bring about a qualitative shift in its fruit processing activities (Amendt, 2001). The impact of this product-level innovation on the product quality and product placement has been one of the most important in its strategy of supplies procurement. In fact the product concept based on the “super image” has appealed to the young. At the process level too, the impact of innovation apart there are a number of critical success factors at Super Jam that have impacted on the outcomes. For instance it is quite obvious though the extent to which it has taken place isn’t determined. For example its fruit processing technology is relatively modern and the old processes of converting fresh fruits into marketable preserved jam have been replaced with some modern high tech processes (Fine, 2009). These new innovations not only retain the freshness of food but also ensure the constant natural nutrition retention without damaging the texture and the fiber. Super Jam now commands a sizeable market share in the domestic jam market. Its future plans as outlined by Fraser Doherty, the proprietor, include producing marmalades and peanut butter. The possibility of exporting jam to North America is so promising. Next Super Jam’s modern innovative marketing techniques have an impact on its strategic advantage vis-à-vis its rivals. Super Jam’s marketing strategy in particular has been influenced by these techniques. In the first instance the company seeks to identify the external competitive environment – opportunities versus threats - related issues and reposition itself in the market accordingly. Thus the recent shift in its marketing strategy to penetrate niches left behind by rivals is so important. Natural freshness in fruits is preferred by customers as much as jams are preferred with eccentric flavors (Belasco, 2001). Super Jam has just recognized these differences and customer preferences. Marketing strategy at Super Jam has acquired a new dimension with these new innovations. As much as its marketing strategy is focused on outdoing rivals at the earliest possible opportunity, its strategic market orientation efforts are focused on both product and customer (Loughborough University, 2007). Since many of its products are targeted at kids, the company has come out with new ideas on creating tastes and flavors supported by eye-catching graphics on packaging. This strategy has been successful to a greater extent though it has had some drawbacks as well. For instance the copying of its marketing philosophy by rivals with ease cannot be ruled out. Super Jam, as Doherty claims, is targeting the health conscious consumer rather than the generally-inclined customer. Despite this approach competition has forced the company to adopt a strategic reorientation of product development and pricing. As much as product diversification strategy of producing marmalades and peanut butter could save the company from being constricted in jam markets, there can also be better opportunities to identify new market segments both in the UK and elsewhere (Sharp & Dawes, 2001). 2. Marketing mix When the marketing mix – price, product, place, promotion and by extension people, process and physical evidence – is considered against the current level of market concentration ratios there are a lot of opportunities on the marketing front available to the average Jam seller in the EU. However the existing brand loyalties might curtail the degree of freedom enjoyed by each seller because super market chains stock a variety of products with identical labels from different sellers (Adamson Allen P. Adamson (Author) › Visit Amazons Allen P. Adamson Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central 1. & Sorrell, 2007). This development has a very significant impact on the organization’s marketing goals too. A conceptual framework for a uniquely propositioned marketing strategy depends on the viability and logicality of these outcomes. Assuming that a good marketing plan once put in place would take care of the 7 Ps above, there is very little else to accomplish in order to maintain a good cash flow and ensure positive and constant returns over the life cycle of each product - launch, growth, maturity and decline (Kotler Philip Kotler (Author) › Visit Amazons Philip Kotler Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central & Armstrong, 2009). Price of the product is essentially a reference to the larger context of the company’s pricing strategy and especially in the current competitive environment there is very little liberty if any available to the firm to adopt a pricing policy of its choice. In fact market skimming would seem to be the most ideal pricing strategy for many gourmet jam manufacturers like Super Jam. Product characteristics include those tangible and intangible benefits for the customer. A typical cross section of youth and kids would be inclined to buy Super Jam since its promotion strategy places emphasis on “super tastes” based on real fruits. In other words the seventh P “Physical evidence” of the product carries much weight as in sensory marketing (Rosa & Spanjol, 2005). Place again imposes some limitations on the firm’s ability to exploit broader marketing principles. Market segmentation strategy of Super Jam is exclusively intended for the creation of brand dependency and therefore there is a drawback associated with its geography. For example Tesco which stocks Super Jam products, has thousands of stores in almost every continent of the world but nevertheless it prefers to stock well known products in each region. Along with a proper promotion policy, an ideal people-oriented marketing strategy ought to be put in place. Customer-centric product promotion is nothing new in the industry though product promotion campaigns are less likely to be determined by any other factors than the strengths of the product (Musgrave, 2008). While the emphasis might be placed on the overall promotion strategy to attract as many potential customers as possible there won’t be any strategic advantage in the long term if the company concentrates too much on its strengths only. This is a strategic shortcoming in the continual development process. 3. Jam market size, growth and trends According to published statistics, in 2006 the total sales of spreads and table sauces in the UK were estimated at £822 million. Thus the figure represents an increase of 2.5% in comparison to 2005. Though the market for sweet spreads and sauces has been growing much more slowly in the UK during the first half of the current decade, there is the possibility that fresh real fruit products like gourmet jams would be in great demand from both kids and elderly on the ground that they are much less available in the market right now and people are becoming more and more health conscious (Icon Group International 2009). During the period from 2002 to 2006 the market for sweet spreads and table sauces in the UK just grew by 12.4%. The figure isn’t impressive though the market share of jams made out of real fresh fruits is likely to grow by more than 20% in the coming months. New product development (NPD) holds the key to success of jam manufacturers. For instance both marmalades and peanut butter are becoming very popular among people while canned fresh fruits and fruit cocktails are also becoming increasingly popular. Super Jam has a really remarkable appeal to the average customer. This, itself is a critical success factor related to the sales growth potential and cash flow dynamics of the company (Howell, 2009). Its plans to expand sales into the US market will obviously be a challenge to the big producers of jams in North America. 4. Competitor analysis. Competitors in the UK Jam market are all determined to provide a better product to the health conscious customer. A survey of the cross section of jam producers in the UK and imported products shows that they all target consumers who are wary of salts, carbohydrates and artificial sugars in their daily diets (Nestle, 2007). Salads and honey are becoming more popular among both the young and the old. Robertson’s for instance has almost decided to give up jams and produce a variety of gourmet sweet spreads like marmalades and honeyed spreads. HJ Heinz and Premier Foods PLC both have acquired other companies producing similar products so that the market for jams in the UK in particular and the EU in general has become very competitive. Competitors in the UK are focused on rationalizing their operations so that costs can be reduced and profit margins maximized (Fleisher Craig S. Fleisher (Author) › Visit Amazons Craig S. Fleisher Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central & Bensoussan, 2007). HJ Heinz and Premier Foods between them have more than 50% of the market share in sweet spreads and table sauces in the UK. Thus these two companies and other few big time producers take up most of the market share while small producers like Super Jam have to identify growth drivers in niche market segments and elsewhere through geographic concentration. 4. Customer analysis The consumer demographics in the market for sweet spreads in the UK shows that an increasing number of kids and youth are taking to eating jams made of fresh fruits with much less artificial sweeteners added. Purchasing behavior of British consumers of jams in particular and sweet spreads in general is determined by price elasticity of demand plus a variety of external factors (Donovan & Samler, 1994). These exogenous variables include the influence of recent research works and a growing body of opinion that diseases like obesity and diabetes are caused by artificial sweeteners and sugars in spreads. With the current economic downturn consumers have been very choosy about the prices they pay for foods. Especially consumers anywhere in the world have a tendency to buy natural products that promote healthy life styles. British consumers aren’t an exception to this rule. According to available statistics the average British consumer is more conscious about age related health problems such as Type-2 diabetes and poor metabolism. Similarly customer response can be evaluated by focusing on customers habits of making a purchase on a regular basis and making regular visits to the same store (Macdonald & Sharp, 2000). However the company must employ well trained staff to make these assessments. Conclusion Super Jam has come a long way within a very short period of time in marketing its variety of jams in the UK and now sells its own labeled products in big supermarkets like Tesco. The company’s progress into the current position of contemplating entry into the US market is remarkable. Its strengths lie in such factors as the ability to target health conscious consumers irrespective of their ages (Lindstrom Martin Lindstrom (Author) › Visit Amazons Martin Lindstrom Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central & Kotler, 2005). However the organization lacks some very important capabilities or critical success factors like its own resource base. Its supply chain management is typical of a very important critical success factor along with a continuous flow of cash. Future growth potential of the company depends on a number of factors such as the ever increasing competition in the domestic markets and rationalization of production processes by bigger rivals like HJ Heinz and premier Foods. The competitive edge that Super Jam has right now might slip away if it fails to adopt a more efficient program of product diversification and price-based competition. Consumers of sweet spreads like jams are more influenced by price, quality and ingredients. Thus the current advantage that Super Jam has depends on its ability to identify market drivers and accordingly change its strategy. However rivals aren’t likely to give up in their strategic reorientation efforts too. REFERENCES 1. Adamson, AP Allen P. Adamson (Author) › Visit Amazons Allen P. Adamson Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central & Sorrell, M 2007, Brand Simple: How the Best Brands Keep it Simple and Succeed, Palgrave Macmillan, New York. 2. Amendt, LJ 2001, Blue Ribbon Preserves: Secrets to Award-Winning Jams, Jellies, Marmalades and More, › Visit Amazons Linda J. Amendt PageFind all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central HP Trade, New York. 3. 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