A Marketing Plan for a Struggling Crisp Manufacturer in Scotland - Case Study Example

Develop a marketing plan for a struggling crisp manufacturer in Scotland Contents Contents 2 Introduction 3 Discussion 3 Research methods 3 Market research investigation 4 Analysis of the collected data 5 Micro and macro influences 6 Segmentation and selection of target markets 8 Marketing mix decisions 9 Conclusions and Recommendations 10 References 10 Appendices 13 Appendix 1: Proposed research methods 13 Appendix 2: Food and beverage sector growth imperatives in UK 14 Appendix 3: Impact of changing consumer behaviours on the UK food and beverages industry from now to 2020. 15 Appendix 4: Segmentation of the UK snacks industry 16 Appendix 5: The Snack Gap 17 Introduction Scott Snacks Limited (SSL) is a crisps manufacturing and marketing company established by Scott Mackie. Scott Mackie identified the gap in the crisp market of UK for “for one” packages of crisps. Though these crisps were initially a huge success in the UK market, but with the evolving consciousness of the consumers towards obesity and health effects caused by the high level of fats in the crisps and other snacks, the Muckle chips suffered much criticism from the health conscious consumers and food reviewers which led to a decline of the brand. The sales of the company declined steadily after 2006. This has created an urgent need for Scott Snacks Limited to introduce a new product in the market which will bring back the lost brand reputation of the crisps company. Therefore, the company appointed a market research company called Caledonia Marketing Consultancy to conduct an extensive market research including the market; competitor and consumer behaviour analysis to prepare a report that will help Scott’s Snacks Limited to decide the marketing strategies and marketing mix of its new product to be launched. Discussion Research methods The main objective of the research is to collect relevant market data for launching a new product under the SSL brand and develop a marketing plan for the new product of Muckle chips which would include an elaborate marketing mix decision. The research objectives include analysing the collected data for consumers, market trends, competitors and consumers with respect to the buying patterns and consumer behaviour trends in the UK market. The research methods used for the study involve the collection of qualitative and quantitative data from the secondary sources of information (Appendix 1). The secondary data collection is done by referring to published research papers, journals, government research reports and relevant websites. Forecasts and market value data are collected in order to analyse the future trends of the snacks market in the United Kingdom. The research methods involve collecting data for savoury snack foods as well as the total snacks categories to decide a proper segmentation, targeting and positioning (STP) of the new product in the market. The market research is done to analyse the buying patterns of the consumers in the United Kingdom snacks market and to understand the gaps in which a new product from SSL should be launched under the range of Muckle chips. Market research investigation The secondary data collected from verified sources highlight some major features of the snacks market in United Kingdom with respect to the total snacks market and the accelerating savoury snacks market. The collected data indicates that the snacks market of United Kingdom can be divided into three major segments which are the savoury snacks segment, potato crisps segment and the snack nuts sector. The savoury snacks segment is growing at a fast rate in the UK snacks market. The savoury snacks segment has emerged as the largest segment in the total snacks market of United Kingdom. The fastest growth of this segment can be attributed to the increasing demand for gourmet snacks products and the evolving perception of the customers for luxury snacks and healthier snacks being a part of their changing living standards. The potato crisps segment is the second largest segment on the snacks market which grows at an annual rate of around 7%. The growth of this segment can be attributed to the introduction of a variety of new flavours by the top players in the market and to the increasing demand of the consumers towards premium variants of potato crisps. The snack nuts sector is the segment which has experienced less growth in the last 3-4 years. The value of the snack nuts increased by around 4% in from 2012-2103 which has made the consumers less inclined to spend on these items. Most manufacturers have combined the snack nuts with other varieties of ingredients like crisps and dried fruits to decrease the retail value of the snack nuts in the market. The snacks market in United Kingdom including the savoury snacks, potato crisps and snack nuts is estimated to have a value of GBP 2466 million. Analysis of the collected data The snacks food products are identified as a popular segment in the food market of United Kingdom. The snacking occasion in the country has emerged as an important part of the busy lifestyles of the consumers in this market. The snacks items also have a major use as accompaniment with the main courses, especially with lunch. The sales of snacks products in United Kingdom are driven by the increasing demand of the consumers from premium snacks, gourmet snacks and healthy snacks (Appendix 3). The gourmet and premium snacks have gained popularity among the consumers as types of luxury that they can afford easily. The consumers are becoming more aware of the health benefits, quality and side effects of snacks food items. The increasing concern of the consumers towards health and obesity are factors which are influencing major changes in the snacks market of United Kingdom. The company’s manufacturing and selling snacks items are focusing on proving better nutrients and health benefits in their product offerings. The trend of healthier snacks can be capitalized upon by the snacks manufacturers by producing snacks which use reformulated recipes and introducing new snacks items that improve the heath credentials of the businesses (Appendix 2). Also, the market research indicates the growing demand for different sizes of packaging for different occasions like smaller packages for individual use and family size packages for use in parties, gatherings or other occasions. The increasing demands for smaller packets is also driven by the attitude of the consumers being shifted towards cutting down on snack food items as a part of adopting healthier life styles. The snacks market in United Kingdom is a major contributor to the manufacturing strength of the country. The export of crisps in United Kingdom has grown by 11.8 % from 2012-2103 with the major exporting markets being Ireland, Germany and France (SNACMA, 2014, p.2). The savoury snacks market is valued at GBP 2178 million in 2012. The total value of snacks food market increased by 8.4% in 2012 and is expected to grow at a continuous basis due to the increasing level of demand from the customers. The snacks food market in United Kingdom is expected to grow by almost 31% from 2013-2017 (Deloitte Touché Consulting. 2012, p.14). Thus, the research indicates that Muckle chips should introduce a new product in the savoury snacks segment as this segment is expected to have tremendous potential to grow in the future. The shifting focus of the consumers towards healthy and gourmet style snacks can be identified as an opportunity for Muckle chips to revive the brand and compete with the other players in the market by launching a low fat and nutrient filled crisp range (McDonald and Wilson, 2011, p.140). Muckle chips should launch popped potato crisps which would be cooked with the use of air pop technology rather than being fried. Micro and macro influences The macro environmental factors that are likely to affect the introduction of a new product in the snacks market of UK can be evaluated through the use of a PEST analysis. Political: The political factors may affect the snacks industry hugely. The role of the government is seen as a major influencer of the success of a new product in the market. The major political aspects affecting the popped potato crisps may be the health and safety guidelines followed in the country, the animal rights campaigns and the packaging and labelling of the crisps (Walker, Boyd, Larréché, 2001, p.55). The political setting of the country allows for the successful launch of a new product in the evolving snacks market. Economic: The economy of United Kingdom is reviving at a steady rate from the financial downturn of 2008. The snacks industry operates as a significant contributor to the revenue generation in the UK economy and in the export sector of UK. The economy of UK is likely to grow at a high rate driving the purchasing powers of the consumers in the market. The trend of exporting snacks in different parts of UK is also likely to gain more popularity. Therefore, this is considered to be the ideal time to launch a new crisp product range in the market. Social: The living standards of the consumers are improving with more focus given on gourmet style snacks and snacks with health benefits. The consumers are becoming more inclined towards crisps and snack nuts with health benefits. This has made the savoury snacks more successful in this market. The awareness related to health, wellness and obesity can be used as an opportunity by Muckle chips to introduce a healthy snack item in the market (Assael, 1999, pp.190-195). Technological: The UK market is characterised by well-informed customers segments that prefer to use the internet. Therefore, the company should use the internet to suitably market the product and create consumer awareness about the new product (Masterson and Pickton, 2010, p.44). Also, the company should employ proper manufacturing machineries and systems to ensure that the product they offer use the latest manufacturing technologies to make a healthy snack. SWOT Analysis Strengths: The major strengths are the easy sourcing of potatoes as the company has the core competency in sourcing the potatoes from the farm belonging to Scott’s father, knowledge of the UK market, the use of the new technology of air popped cooking rather than frying which will reduce the fat content by a huge 50%. Weakness: On of the major weaknesses for the business is the tarnished brand reputation due to use of high fat contents in Muckle chips which may affect the acceptability of the popped potato crisps by the customers in UK. The customers may be inclined to choose the popped potato crisps of other brands due to the better image maintenance done by the competing brands in the market. Opportunities: The main opportunities are the emerging concern of the customers towards healthy snacks and the inclination of the customers to consume snacks that would help them control obesity and have health benefits. The growing trend of snacking of low fat and differently prepared crisps is another major opportunity for the popped potato chips. Threats: The major threats are the high level of competition from other crisp manufacturers in the country like Walkers, the increasing power of distributors in the market, the availability of various types of healthy snacking options like nuts, fruit crisps, low fat confectionaries etc. The government and health activists pointing out the negative effects of crisp snacking is another threat for the new product. Segmentation and selection of target markets The snacks food market is identified to be varied and diverse. There may be a variety of reasons behind the selection of a crisp by the consumers. The segmentation of the market can be done into six major categories which are the party snackers, the indiscriminate snackers, weight watchers, nutritional snackers, economical snackers and the guilty snackers (Appendix 4). Muckle chips should consider the nutritional snackers and the weight watcher as the target segments for the popped potato crisps. The popped potato crisps would be ideal for the nutritional snacks eaters and the weight watchers because of the retained nutritional value and the air pop technology used in the manufacturing of these crisps. These target groups are likely to prefer the popped potato crisps due to their nutrient benefits (Appendix 5). (Source: Marinker, 2014, p.8) Marketing mix decisions Product: The product to be launched is popped potato crisps which will contain 50% less aft as compared to normal fried potato crisps. The introduction of the product will involve the generation of ideas for the product, feasibility test for the ideas and testing of the ideas with respect to appeal of the product (Haley, 1999, pp.30-35). The product would be differentiated from the existing range of crisps in the product portfolio of Muckle chips and from the existing range of high fat and unhealthy crisps in the market. The popped potato crisps would be ideal for light consumption, easily digestive and contain high nutritional value while being tasty at the same time. Place: The popped potato crisps would be launched in the popular markets of UK. The consumer behaviour in this market is shifting from general snacks to more healthy and nutritional snacks. Thus, the popped potato crisps as a healthy and low fat alternative to traditional crisps is likely to become popular among the consumers in the UK market. Price: The price of the popped potato crisps would be medium at around GBP 0.80 for a small packet and GBP1.20 for a large packet of crisps. These crisps will contain minimum Tran’s fat which would enable the company to price it in a medium range. The consumers are likely to get a value for money feeling from buying the popped potato crisps. Promotion: The promotional activities will involve both traditional and innovative ways of promotion. Free samples of popped potato crisps would be distributed in high footfall areas like malls, movie theatres and tube stations. Advertising would be done through the television, print media as well as through the internet. A catchy tagline emphasizing on the positive health benefits of popped potato crisps and their unique differentiation with the existing crisps would be used to attract the attention of the customers (Mullins, 2005, p.78) Conclusions and Recommendations SSL should focus on leveraging upon the increasing awareness of the customers towards the health benefits associated with the consumable products that they buy. The Muckle chips range has been criticised due to the high content of fat in the chips which has led to much loss of brand reputation of the company. The introductions of a naturally healthy popped potato crisp range would be helpful for SSL to gain back its profitable position and positive image in the market. The popped potato crisps range would be ideal for appealing to the nutritional snacks eaters who form a major part of the snacks market in UK. The forecasted high growth rate of the savoury snacks market in UK driven by the demand of the consumers towards healthy snacks products is an ideal opportunity for SSL to introduce the popped potato crisps in the market. References Assael, H. 1999. Consumer behaviour and Marketing Action. Boston: Kent publishing. Deloitte Touché Consulting. 2012. UK food and beverage 2020: A growing global appetite. [Pdf]. Available at http://www.deloitte.com/assets/Dcom-Switzerland/Local%20Assets/Documents/EN/Consumer%20Business/Food%20and%20Beverage/UK_CB_Food_and_Beverage_2020.pdf. [Accessed on 21 April 2014]. Haley, S. 1999. Benefit Segmentation: A decision Oriented Research Tool. Journal of Marketing. Vol. 14(1), pp. 30-35. Luther, W. L. 2001. The Marketing Plan: How to Prepare and Implement it. New York: AMACOM Division of American Management Association. Marinker, S. 2014. The Snack Gap: What could happen if snacking trends mirrored healthy eating trends? [Pdf]. Available at http://www.heartofmersey.org.uk/cms_useruploads/files/hom_1162898394_the_snack_gap_report.pdf. [Accessed on 21 April 2014]. Masterson, R. & Pickton, D. 2010. Marketing: An Introduction. London: sage publications. McDonald, M. & Wilson, H. 2011. Marketing Plans: How to Prepare Them, How to Use Them. New Jersey: John Wiley & Sons. Mullins, J. W. 2005. Marketing management: a strategic, decision-making approach. New York: McGraw Hill. SNACMA. 2014. Facts and Figures: Information for stakeholders about the UK crisp, savoury snack and snack nut market. [Pdf]. Available at http://www.snacma.org.uk/factsheets/Fact%20or%20Fiction%2010%20April%202014.pdf. [Accessed on 21 April 2014]. Walker, O. C., Boyd, H. W. & Larréché, J. C. 2001. Marketing Strategy: Planning and Implementation. Illinois: Irwin. Appendices Appendix 1: Proposed research methods Appendix 2: Food and beverage sector growth imperatives in UK (Source: Deloitte Touché Consulting, 2012, p.20) Appendix 3: Impact of changing consumer behaviours on the UK food and beverages industry from now to 2020. (Source: Deloitte Touché Consulting, 2012, p.15) Appendix 4: Segmentation of the UK snacks industry (Source: Marinker, 2014, p.9) Appendix 5: The Snack Gap (Source: Marinker, 2014, p.12) Read More