Marketing Mix for Smiths Original Potato Chips - Example

Student: Tutor: Course: Date of submission: Table of Contents 1Introduction 3 2Target market 3 2.1Geographic characteristics: 4 2.2Psychographic characteristics: 4 2.3Demographic characteristics: 4 2.4Behavioural characteristics: 5 3Marketing mix 5 3.1Product 5 3.2Promotion 7 3.3Place 8 3.4Price 9 4Competitive advantage 10 5Success of the firm 10 1 Introduction This paper is intended to examine the marketing mix of Smiths Original Potato Chips in the Australian market in order to provide a detailed evaluation of the products effectiveness as a response to the product’s target market needs. Smiths Original Potato Chips has been a flagship product of The Smith’s Snack Food Company since 1931. The Smith’s Snack food Company had started operations in the UK before moving into the Australian market in 1931. Initially the chips were made and packed by hand before but automation came in slowly as the business operation increased. The company has changed hands several times and was acquired by PepsiCo. In 1998 the company is a major food company in Australia boasting of several brands such as Doritos, Cheetos, Sakata, Nobbys and more[The11]. The snack food industry in Australia is at its mature stage with large players controlling about 50% of the market[IBI13]. Smith’s Snack Food Company receives stiff competition from players such Frito Lays, and Snack foods Limited[Sma11]. Smiths Original Potato Chips has however held on strong to its brand visibility and salience in Australia to make it to the top products of Smith’s Snack Food Company in Australia[The138]. This paper will thus analyse the position of the product in relation to the 4Ps of marketing in order to highlight the company’s competitive advantage and success in relation to the marketing mix. 2 Target market Smiths Original Potato Chips is a snack food eaten by consumers simply for the good taste and the utility it delivers in terms of satisfying the taste buds with the unique taste of fried potato chips that consumers look for. The manufacturer indicates in the packaging that the product is 75% less saturated fat making it a healthy alternative to snacks cooked in 100% palmolein oil[The138]. This means that the product is intended for health conscious Australians who can be analysed in the following aspects; 2.1 Geographic characteristics: Smith Snack Food Company focuses its attention on serving the Australian population spread all over Australian states. This comprises its target market geographically. 2.2 Psychographic characteristics: Snacks can be categorised into high value and low value products with the former attracting a small percentage of the market which is willing to add some extra money for the benefits[Mic98]. Standard snacks just like Smiths Original Potato Chips are intended for the mass market that is sensitive to price changes and thus buy cheaply priced commodities. 2.3 Demographic characteristics: Age: Smiths Original Potato Chips can be taken by Australians from all the age groups from the age of 5 years and above. The group above 15 years is also more aware of health implications of the snack foods and as such will be looking for food cooked in less saturated fat for the purposes of health and also to maintain good body weight[Poo02]. Gender: Snack foods are not intended for any particular gender group; they are consumed by both men and women. This is also the case with Smiths Original Potato Chips[Poo02]. 2.4 Behavioural characteristics: Benefits expectations: Snack foods are intended to be sweet and offer a tantalizing taste worth repurchasing the product. This is what the consumers of Smiths Original Potato Chips look for in addition to eating the snacks when they are hungry. Most snacks are also consumed with soft drinks and as such the mildly salty taste or whatever flavour should complement the sweetness of most soft drinks[Mic98]. 3 Marketing mix 3.1 Product The product under examination in this paper is Smiths Original Potato Chips. The product is simply sliced potato chips fried using 75% less saturated fat. The product is then packaged conveniently and branded as Smiths Original Potato Chips[The138]. Image source: Smith’s Snackfood company website Smiths Original Potato Chips is a single product with different flavours such as Cheese and onion, Salt and vinegar, Sweet chilli, chicken and BBQ. They come in sachets of 80g, 100g and 175g. There is also the option of crinkle cuts chips or thinly cut chips[The138]. The different flavours and textures all satisfy the needs of the target market in terms of consumers preferring a crunchy taste and flavour they can enjoy. Different consumers too within the target market have different preferences and as such the different flavours all serve to satisfy the target market. Smiths Original Potato Chips is a shopping product since it’s intended for the mass market and receives less effect from economic downturns due to the fact that people look for cheap sweet foods to satisfy their taste buds even in tough economic times. The most important attribute of the product is the taste and crunchiness which is actually what the manufacturer tries to maintain through introduction of new flavours. Preparation method is also important as most consumers are shying away from foods high in unsaturated fat and artificial flavours (Goodyer, 2013). Smiths Original Potato Chips has taken care of this by using 75% less saturated fat and natural flavours. This is well indicated on the brightly coloured sachets which have different colours for different flavours while still having a conspicuous logo of the original smith chips. The package authenticates the product from competitors, differentiates between flavours and is attractive to the eyes perhaps to imply a tasty snack inside[The138]. The product has an effective brand that boasts of several flavours that have been introduced overtime. With a history of over 80 years, the brand can be said to be strong having retained its salience for such a long period. Smiths Original Potato Chips is at its maturity stage of its lifecycle due to the numerous competitors in the market necessitating for differentiations efforts in terms of preparation methods, packaging and promotion effort focusing on positioning the product as the good original snack from the manufacturer. 3.2 Promotion Just like any other consumer product, Smiths Original Potato Chips requires constant marketing to respond to competition and also to drives sales of new variations to the original product. One of the ways Smith Snack foods are doing this is through TV commercials such as a 30 second commercial featuring actor Stephen Curry enjoying cricket with friends enjoying Smiths crunchy chips with a tagline “You know you love ‘em”[Cir12]. The aim of this is to promote awareness and growth in sales of the commodity. The target market for the products is the ideal Australian family that is possible to reach through TV adverts and as such this communication channel is the most likely to be effective as compared to others. Smith Snack Food Company uses its website to promote its brands including Smiths Original Potato Chips and also provide detailed information regarding each brand as well as the organization to show its reputation over the years. Smiths Original Potato Chips advertising is very well integrated into the emerging social media platform with a dedicated page on facebook with more than 115,000 “likes”. The company uses this platform to popularize promotions such as 25x Smith's Chips Family Pack prizes to be won in the Smith’s Shout promotion. The company also uses the platform to highlight new flavours in a fun way through the facebook posts by the page administrator[Smi13]. This promotion effort is well suited for the product lifecycle stage of maturity since it seeks to grow the revenues of the company and highlight product innovations in the face of strong competition form other players in the industry. 3.3 Place A distribution strategy is a company’s way of getting a product to the final consumer. It is advised by many factors key among them cost, nature of the product and time. If a product takes long to reach the market it may work against it especially if the product has a short shelf life or the competition is stiff. A distribution channel might also prove costly to use thus limiting a company’s options[Mic98]. In light of this, Smith Snack Food Company can be said to have effectively taken into consideration the above mentioned factors as it distributes its products through retail stores and supermarkets such as Coles and Woolworths who have quite expansive reach of Smiths Original Potato Chip’s target market. This channel ensures that the company does not incur heavy costs of getting the product themselves to the consumer and also reduces the time it takes to get the product to the market as supermarkets and stores have already established networks and systems. Smith snack food company does not sell the product online as the volumes bought might not make business sense shipping it consumers furthermore the product is mostly bought through impulse buying where the consumer wants to get the desired gratification at the very time they purchase it. All the same buyers can get it from online websites maintained by supermarkets. Smiths Original Potato Chips can be bought from leading retailers in Australian major centres including Canberra such as Coles and Woolworths[Col134]. This distribution strategy is just but the best option for the company at the maturity lifecycle stage as it takes advantage of the distributors’ network to reach the target market and maintain market share and also compete for the available outlets with rivals in the market. 3.4 Price Smiths Original Potato Chips is cheap consumer product that is not intended to feature greatly in families’ budget. At Coles, Smiths Popped potato chips (sour cream and chives) (100g) goes for $3.80. The same is going for $3.5 at Woolworths. This is a slight price variation which can be linked to the cost models and pricing strategies of the retailer but not manufacturer’s price variation. At Coles, a 5 pack of 80g sachets of popped potato chips (sour cream and chives) is going for $4.28 per 100g. The same flavour is going for $3.80 per 100g for a 5 pack with sachets of 100g. This means that there is a discount of $0.48 for every 100g if one opts to buy 100g sachets instead of 80g sachets[Col134]. This is a marketing concept of ensuring more of a product is consumed in large quantities to reduce packaging cost and also increase profit by cost reduction and revenue growth. This is a very effective pricing tactic in the field of fast moving consumer goods. Smiths Snacks pricing strategy is basically a competitive pricing strategy where the price is usually slightly below competitors prices in various brands within a company’s portfolio to attract consumers and reduce the impact of competitors on the overall products portfolio. Kellogg’s potato chips (sour cream and chive) (100g) goes for $4.34 at Coles while the same flavour and amount for Smiths is going for $3.80. This puts Smiths at an advantageous position in terms of price based competition[Col134]. This pricing is reflective of the company’s efforts to maintain its market share in the maturity stage of the products lifecycle. The product is leading in the market but also experiencing completion. This two means the brand can peg on its salience to charge higher prices but should also remain aware of competitors’ prices to avoid losing market share to competitors. 4 Competitive advantage Smiths Original Potato Chips has been in the market long enough to understand what works for its consumers in Australian market and what doesn’t. This means that the company established relationship with the retailers is at an advantaged position since they trust the quality of the product and the market share thus ensuring shelf space in the market where every body wants to get their products out there in the market to reach the consumers. Smiths Original Potato Chips has different flavours all of which offer variety to consumers so that they can choose what satisfies their preference at a particular time[The138]. Smith Snack Foods Company is owned by PepsiCo which offers a strong financial and technical backing to ensure continued product innovation and technology adoption to reduce cost and transfer the benefit to the consumers in terms of quality products at low prices. It is important to note that large scale production is becoming the norm in the Australian market leaving out big players to face off in the market. 5 Success of the firm Smith’s marketing mix has been able to satisfy the needs and expectations of the target market in the sense that the company has used technology and long industry knowledge to produce quality chips from well selected Australian potatoes that are cooked in 75% less saturated fat. It means therefore they are tasty, crunchy, quality and healthy snacks for the market just as the market would prefer it. The packaging is in both small and big volumes that will ensure sustained sales considering most people just want to have a taste of snacks. The Smiths original logo assures the consumers of buying a product from a manufacturer that they have always trusted to deliver quality products. The pricing of the product is as competitive as it should be in a market filled with similar products where a brands salience is almost the only proprietary advantage that a firm enjoys. The pricing enables the product to compete effectively by offering consumers a quality but cheaper alternative from those available in the market. The distribution channel used ensures the company is able to reach a wide geographical spread in Australia thus delivering the product to the target market in time, at convenient place, in the right quality and at a relatively lower cost. This meets the expectations of the target market in relation to the mentioned factors. References The11: , (The Smith's Snackfood Company Limited , 2011), IBI13: , (IBIS World, 2013), Sma11: , (SmartCompany, 2011), The138: , (The Smith's Snackfood Company Limited, 2013), Mic98: , (Michman & Mazze, 1998), Poo02: , (Pooler, 2002), Cir12: , (Cirrus Media, 2012), Smi13: , (Smith's Chips/Facebook, 2013), Col134: , (Coles, 2013; Woolworths , 2013), Read More