Interesting Marketing Positioning Tactics - Essay Example

CONSUMER BEHAVIOUR: Added-value foods BY YOU YOUR ACADEMIC ORGANISATION HERE HERE HERE Consumer behaviour: Added-value foods Executive Summary Northern Ireland Fast Food Company is considering the launch of their boil-in-bag products into the consumer market, a switch from the catering product markets for restaurants and corporate catering services. It is first important to understand more about the market environment and trends in consumer behaviour which will drive sales success as well as gaining knowledge about distribution, promotion, and the market structure. This market has both advantages and disadvantages for this launch attempt. It should be noted that in certain areas of this added-value food market there are gaps in areas of research in relation to the specific market size which can be expected and in certain psychographic aspects of the consumer character profile. These will be identified throughout the report. Task 1 - Market and its structure Specific market size cannot accurately be predicted, due to an apparent trend in the United Kingdom for a more socially-acceptable movement toward thrift in the frozen foods sector. This seems to be moving different markets together, thus creating large opportunity for a more mass market focused brand campaign. Before determining an appropriate market size, it would be necessary to understand which specific region of the country could best be supplied logistically. Competitors consist of many multi-national companies with very wide product lines, therefore this is also an indication of high profit potential if Northern Ireland pursues a less domestic approach to sales by expanding beyond the UK. In London alone, with such a large emphasis on thrift mixing markets, the four million adult consumers in this region could serve as a test market for introduction into the consumer market and represent enormous profit opportunity. One notable trend in this market environment is how the different competitors continue to use interesting marketing positioning tactics, through promotion, to create different perceptions with the customers. From an observational research perspective, the quality of the products as well as the food texture does not seem to be a marketing objective in this region. Rather, creating the personal connection between how the product would be viable in the family environment and the consumers’ visual taste sensations in advertisements remains the large focus of marketing in this frozen foods community. Because this will be more of a mass market-focused campaign for the quality dinner foods provided by Northern Ireland Fast Food Company, it will be necessary to fully determine which city and region will be the first point of test for distribution and sales so as to conduct consumer research regarding consumption trends prior to entering this new market. If a more geographically-dispersed distribution system can be set up, regional consumer behaviour patterns can be identified through consumer research and similar data. This information about specific markets, until defined, makes this a mass market business philosophy for this market where positioning is a primary goal to achieve high sales results. The market structure in this new consumer market is one which is built on ease and convenience. In terms of the pattern of distribution, it is a producer-to-retailer-to-consumer logistics chain. Unlike the existing market which the company is in, this market will work directly with many different suppliers, based on the specific region where Northern Ireland will enter, to ensure adequate inventory levels at retail supermarkets. Fuel costs are a considerable concern in this supply network and this is, according to Casatelli (2008), creating a domino effect and is forcing many retailers and suppliers to spread these costs back to the consumer. A trend in the general value-added foods customer is one where eating is becoming more commonplace due to the current state of the economy (Casatelli). This is creating new distribution opportunities for other competitors already in this market to reach more consumers or simply to meet with the new demand for these gourmet-type frozen products. “For frozen food to be developed successfully into a mass consumer good, it (is) necessary to create new markets upstream and downstream of production, and develop a supporting infrastructure” (Cerasale and Stone, 2004, p.109). In a mass market like this new consumer and retailer market, the cornerstone is the distribution system and how it will be established. The supporting infrastructure, in some areas of the United Kingdom, already exists through long-standing suppliers in the frozen foods industry and the logistical chain for supermarkets. Northern Ireland needs to examine their capability in manufacturing for a mass market, geographically-dispersed demographic and assess whether the skills and resources exist to make this a competitive reality for the company. This market is saturated by heavy amounts of competitors, providing many different types of food products under many reputable and known food brands. These positioning strategies mentioned earlier create different visual and other promotional elements which focus on the consumer lifestyle or their taste for luxury dining options. This is not to say that Northern Ireland will experience an inability to satisfy the consumer through marketing and promotion, however the high amount of competitors create complicated problems with branding strategies and competitive promotional advertising. However, Northern Ireland food products are designed with a more discriminating consumer in mind which could be of benefit to the company for future positioning strategies with a focus on ingredients as a key wealth market selling benefit. There is also growth in this market environment for a new type of shopping experience: The supermarket. Large competitors, such as Tesco, are building supermarkets in many different areas of the country, building more market potential in the process to reach consumers and distribute frozen foods products. The older, more community-focused markets (the mom and pop markets) do not seem to be as viable a market opportunity because they are being phased out by a more strategic distribution network with large chains. For Northern Ireland this is a large opportunity in supply, working with retail partners to create promotion, and maybe even reducing costs in the process as the distribution system gets more streamlined and efficient through existing retail logistics. Promotion of these competing food products is essentially competing market strategies to solve consumers’ latent needs. Latent needs are some of the most primary driving forces behind humans’ physiological needs and products which fit these needs are frozen foods, instant coffee, and panty hose (Schultz, Tannenbaum and Allison, 1996). In-store promotional materials vary from manufacturer to retailer based on current sales volumes being experienced in these companies and the levels of consumer demand. Pricing is one of the most important aspects of this highly competitive market, due to a social trend in the United Kingdom toward the many social benefits of being a thrifty consumer. Jones (2009) says that consumers now think being a frugal consumer is cool and being frivolous not at all acceptable. Baker (2009) mentions that frozen foods companies are beginning to focus on value because consumers are so concerned about wasteful living and rising food costs. Competing frozen foods products are priced significantly different and vary based on quality of ingredients, brand strength in the market, or size of the foods product (serving portions). If value is the brand new driving force behind consumer intention to purchase, this can be a promotional tool to draw consumer interest in not only Northern Ireland’s new foods but to satisfy their concerns about economic interests and rising prices for food. Task 2 - The consumer and motivation When looking at how consumers are motivated to purchase products, frozen foods aisles at retail companies experience “robust traffic” and frozen foods are “integral to the shopping list” (Robinson, 2008, 14). This supports the mass market philosophy which Northern Ireland should consider as the frozen foods aisles at most major competing supermarkets is a wide demographic of economic, social and lifestyle backgrounds. The idea that frozen foods are integral to the shopping list shows that there is a high consumer demand for the products and it fills a very basic consumer need. What is this need? Convenience, quality and an affordable price based on concerns about the current condition of the economy and their individual financial portfolios. So, what motivated consumer purchases? Sometimes, it is not just the products, it is the retail environment in which they shop and their perceptions of the retail organisation display. Nearly half of all consumers in a recent survey targeted at 840 random buyers felt that some retailers were not keeping their frozen food products at the right temperature (Robinson). This motivated strong opinions about the current store they were shopping in when assessing the retail environment. This would be something to consider for Northern Ireland in terms of motivating purchase by examining the various retailers and how they display their products and whether this will give negative or positive marketing visibility for the company. Consumers in this market are clearly driven by pricing and the added value products seem well-designed to satisfy consumer needs for convenience. It would be of benefit to assess retailers for their ability to place in-store promotion for Northern Ireland and make it look reputable for marketing opportunities. Another 2008 consumer survey found that vegetables is the most popular food category in the frozen foods marketplace (Robinson, 2008). This is the result of a new social trend for healthier eating whilst still taking advantage of time saved and convenience. Because consumers are motivated by the retail environment in making a purchase and have strong opinions about the display philosophy of retailers, creating supply agreements where Northern Ireland products are placed next to vegetables could be another marketing visibility element which could give competitive advantage and also get consumers to take a good look at these new valued added products. In terms of the novel eating experience, added-value foods distributed by Northern Ireland will still consist of quail, amaretto sauce, and duck in sour cherry sauce (among others), giving rise to the new line of gourmet frozen foods. The product’s design and ingredients are the selling point and can provide consumers with a completely different set of frozen food options. There does not seem to be any guilt sensations created in these markets when reflecting on the lack of self-preparation. Eating out as a family is no longer considered to be a staple family activity and is being viewed more as a luxury (Casatelli). Because there is already such a large competitive environment, consumers have many different food options to choose from and it is socially acceptable. With families having multi-career parents and the modern role of the child, frozen and convenient foods have been listed as integral to the shopping list for multiple demographics. If guilt sensation exist, it is likely a niche market mentality which would not pose any large risk to Northern Ireland and could be dealt with using marketing tactics if such a market personality or behaviour caused sales problems. "The frozen food category has come a long way through innovation, to the point that it can take a great deal of guilt out of peoples eating decisions” (prnewswire.com, 2009). This is innovation in product design and marketing from competing companies. Guilt as an emotional response in consumers is not an important issue for Northern Ireland. Culturally, the role of the woman as housekeeper has been complicated but this traditional belief is being phased out of many UK households. This is another area where research data gaps exist. Frozen foods are integral to the consumer shopping list and their use is so commonplace that youths are exposed to these frozen foods brand and some markets become familiar with many brands and have strong opinions about their tastes and convenience. As Northern Ireland’s case study identifies, in terms of food preparation, “this was seen increasingly as a chore and people were often prepared to pay to avoid it” (Case Study, 2009, 1). Due to the more value-minded consumer in today’s frozen foods market, the price they will actually pay is another consideration. The sale and consumption of frozen foods as convenience meals is no longer the mother role and has universal implications for retailers and producers. Task 3 – Endorsements and psychographics As positioning strategies of all varieties are ever-present in this retail marketplace, the use of endorsements would seem to be a natural outcome of attempts to differentiate products from competing frozen food consumer options. The consumer concerns about product temperatures and the retailer environment shows a growing trend toward food safety in the consumer and household buyer. Rahman (1999) offer concerns in this market, which Northern Ireland leadership is probably familiar with, such as microbial pathogens in food preparation and storage. These concerns are being reflected in the frozen foods consumer. Northern Ireland can consider the impact of using reputable celebrities as a means to promote food safety, linking consumer concerns with notable celebrities. It is widely-known that many consumers, in many different demographic categories, are driven to purchase products based on celebrity influence. How these ideas or concepts are delivered, via different media mediums, is also linked to whether consumers will accept a celebrity message or reject it in favour of a competitive positioning strategy. Creating a lifestyle connection is the primary goal of frozen foods companies which offer similar meal options to Northern Ireland. Currently, there is a trend in this market toward retro offerings, such as using packaging or other promotional to reconnect consumers with the 50’s, 60’s or 70’s. Barrett (2009) describes Birds Eye and the relaunch of a Arctic Roll product from the 1970s and Walkers redesigning packaging to make their foods products appear vintage and retro. The use of well-known celebrities from previous successful television eras, thus adding a new vintage touch to Northern Ireland’s products, can create the lifestyle connections while this trend is still socially acceptable and profitable. Whether a celebrity endorsement would legitimize labour saving is completely speculative. This is a mass market campaign with multiple demographics as the buying audience. Frozen foods are a national social trend in broad demographic groups and consumers are not feeling any guilt toward lack of self-preparation. It would seem likely to say that if no emotional consumer needs require fulfillment, then celebrity endorsements would not necessarily be required to ensure higher sales successes. This does not seem to be a market where many negative consumer perceptions toward themselves is present and the use of a celebrity spokesperson to legitimize emotions would seem of second-rate importance to pricing concerns and expressing quality and value through promotion in this competitive market. Home cooking is not important in this market which has already been established. It is a socially-acceptable cultural trend toward convenience which is noticeable in wide amounts of households. The social acceptability of added value foods is quite high. It would be difficult to tell whether frozen foods would be used as a tool to impress and then obscured to, proverbially, hide the crime. With the consumer path toward embracing frugality, exchanging information between colleagues and peers about the great tastes or perceived values of frozen foods brands might be a common event. This is another area where gaps in research exist, due to the more recent trend toward frugality which could change the reliability of studies showing how consumers obscure their cooking activities on the social level. The innovator, based on consumer segmentation theories, is “successful, has abundant resources, receptive to new ideas, and tend to purchase more upscale products” (SRI Business Intelligence, 2009). This is the ideal consumer market for Northern Ireland, however the mass market focus is more opportunistic than to satisfy the innovator market alone. However, as the innovator represents the market with the most sophisticated tastes and their resource capabilities, this market should be targeted for most promotional communications. It is estimated that the innovator market will make up approximately 60 percent of future sales of Northern Ireland products when entering this marketplace. Task 4 – Research discussion In a test market, revenue analysis is one of the easiest methods to assess sales success. This quantitative focus measures sales within a specific region and can give Northern Ireland as assessment of where certain promotional campaigns are most successful or least successful. This could offer opportunities to redevelop a more efficient supply chain or any number of business improvements to maximize marketing successes. Similar to the revenue analysis is an assessment of each retail environment to calculate purchase frequency in each area of retail distribution is another quantitative focus for Northern Ireland. Placement tests for consumers would offer a great deal of benefit to Northern Ireland as they can be designed for quantitative data to be achieved or a more behavioural, quantitative focus. Offering test consumers, in their own, familiar environment, different product options and then constructing the research design methodology to measure ranked perceptions of taste, quality and price versus value would satisfy the research needed to understand what drives consumer sentiment in this market. Using Northern Ireland’s more interesting food combinations, compared to less-affluent competitor offerings in a similar structured study could provide any number of potential opportunities to the company in providing a product which will remain competitive. The pre and post questionnaire is also a qualitative research focus which can measure how consumer attitudes have changed after sampling Northern Ireland products and after. This could give unique insight into how the consumer views existing branded products and their willingness to defect from their favourite brands to Northern Ireland on a ratings scale, giving this a more quantitative focus as well. These questionnaires could ask any number of structured questions and give unique psychographic insight into consumer behaviour patterns in this market. Sample groups would have to be sufficient to show a diverse group of consumer beliefs or structured in smaller focus groups. For a placement scenario in-house, at least 200 UK households would need to participate in order to gain any useful and reliable information about what could be expected in a mass market promotional campaign. The innovator, and their abundant resources, will make up a large portion of the company’s total sales profit and research could be even more tightly confined to this group, in a sample of 400-600 consumers. Depending on the scope of the study and the specific research objective, there are many tools available to conduct quality research on different demographic groups and segments. The non-innovator group, estimated at 40 percent of the potential retail customers for Northern Ireland, could also be targeted for qualitative study. A group of 300-400 consumers fitting the non-innovator group could offer opinion regarding the budget restrictions in UK consumer households, their concerns of pricing issues, and also their intention to buy products based on exposure to known frozen foods brand promotions. Even though Northern Ireland is not yet sure of whether creating a new brand is an objective when entering this market, these studies can provide hard data and interpretative data into the current mindset of a broad mix of consumers. Focus groups would be necessary due to the lack of research on the new, frugal consumer even those who are sharing these social values with other colleagues fitting the innovator consumer profile. Observation in these focus groups can witness how the consumers react with one another about different brand opinions and how these are swayed by colleague sentiment or rejection of the brands. The speed at which these changes occur in a social environment would also be important in this study design to Northern Ireland because rapid brand sentiment could mean spontaneous loss of sales if consumers find lack of social value with the product. Existing consumer sentiment in this frozen foods market, for this type of innovative offering being considered by Northern Ireland, is the area of research which is limited when keeping in mind the frugal consumer in tough economic climates. Task 5 – Reflection of producer The recommended mass marketing approach is justified by how this market illustrates rapid trend changes from frugality and the innovator’s inherent acceptance of new brand concepts and product offerings. There is a certain variability to this market caused by consumer sentiment and economic resources. However, despite these consumer characteristics, an innovative product offering such as Northern Ireland’s product varieties, is unparalleled on this retail consumer market and can be positioned to promote this aspect and satisfy the largest, desired market segment in the process. Trend-prone consumers will likely tire of certain product offerings, therefore Northern Ireland must be ready to improve the product mix by devoting more resources to development teams to be prepared for new market offerings. If noticeable changes to frugality exist and frozen foods meals can be priced higher to meet with rising demand, this trend can assist in creating a higher pricing model and offset some of the costs associated with research and development in new food products. Because the innovator consumer segment appreciates innovation, it is a matter of understanding what drives their consumption behaviour, whether the retail environment or the promotional strategy itself that supports it. The life cycle of each Northern Ireland product will be dependent on the specific social trend toward frozen foods products in each region or market. Therefore, the company must always remain focused on being able to provide new food options, or use promotion to steer consumer attention from lack of product line to reinforce another associated aspect of Northern Ireland which can be linked to social or emotional sentiment. The aspects of labour saving and novelty product range is dependent on Northern Ireland and their chosen promotional positioning strategies as a competitive tool. The current product mix, with sour cherry sauce and quail for examples, represents innovation and novelty as well as the labour-saving elements required of many demographics likely to be the market segments for Northern Ireland. Promoting these benefits, in a method which connects with consumer attitudes, is positioning which will require a competitive analysis (in-depth) to examine multiple areas of marketing and benchmark which activities are found to be most successful in the innovator and non-innovator categories. This is a fundamental aspect of competitive marketing in these markets for frozen foods meals and makes marketing much more of a strategic function in this foods category. Use of in-store demonstrations will improve the marketing visibility of Northern Ireland and if it can be coordinated with different retailers, it has a projected positive success opportunity. Setting up brand awareness in consumer markets is a first strategy for launching a new product and is usually done through promotion. In-store demonstrations, after securing a retailer agreement for sales, will allow customers to sample Northern Ireland food options along with an incentive promotion (percent off strategy) to appeal to the consumer who might not be familiar with the Northern Ireland name. In-store demonstrations might be more successful than attempting to create a competitive brand in this saturated market simply by exposing high-end and low-end consumers to more affluent food options. Pricing is a large strategic tool for Northern Ireland also with the frugal-minded consumer and the highly competitive environment. Though the company’s product quality and ingredients are innovative and represent a new foods opportunity for innovators and non-innovators alike, making sure pricing is in-line with consumer expectations in difficult selling economies looks to be a high focus for Northern Ireland. A recent survey targeting a high sample group of consumers discovered that 42 percent of consumers had simply abandoned their favourite brands in favor of lower cost alternatives (Green and Klein, 2008). Northern Ireland needs to look at their current costs of manufacture (taking into consideration supply, operations, payroll, etc.) and determine whether the business can actually create pricing which is in-line with both segments’ socio-economic concerns. This defect-for-value consumer will demand pricing that they feel is worth the quality being offered by Northern Ireland food options. A wide distribution strategy would give Northern Ireland more flexibility in reaching more markets across the United Kingdom and could create brand awareness for long-term expansion outside of the country. The explosive growth of the supermarket sales floor across the country has created new supply chain opportunities and new supplier networks which could be of benefit to Northern Ireland in diversifying its product line in the face of changing consumer demands. A selective distribution strategy would act as an opportunity to test out various markets in different regions to measure whether their attitudes toward pricing, the food variety, and even aspects such as packaging. A selective distribution strategy would be a short-run cost savings but would also limit Northern Ireland for a mass market promotional strategy. There is a strong reliance on the need for advertising and promotion in this highly competitive market and a more wide distribution strategy can offer faster profit potential if the promotional messages chosen are relevant and rely on solid research data about different demographics. Creating a unique brand for Northern Ireland value added foods products would be costly in the face of high competition and these companies’ strong brands. Creating a unique consumer label, however, would seem to rely on complicated branding strategies to build multiple levels of consciousness in the innovator and non-innovator consumer groups. In order to compete, a branding strategy should be theorised by Northern Ireland and developed if a wide distribution strategy is selected. A selective distribution strategy would not rely on the short-term costs of branding in a competitive environment. Strategically, the best long-term decision for the company is a wide distribution strategy with a well-developed branding strategy which begins right at market entry in mass market focus. Positioning the product at the right place, such as creating a retail agreement for placement near vegetables, is one strategy for visibility. Ensuring that retailers have precise display equipment which looks quality for the Northern Ireland image is also necessary for aligning any strategic agreements with retail organisations. Conclusion The consumer market for frozen foods category which are innovative has opportunity for success in many areas. Competitive activities and behaviours create new supply opportunities and logistical solutions whilst also creating the need for competitive promotion which better understands consumer needs. The frugal consumer has been overtaken by the more frivolous buyer and this is a consideration for Northern Ireland, requiring new research focus to discover how this new trend will impact the purchase of more novel frozen foods products. Stimulating and motivating purchases involves taking advantage of the current trends toward value and using marketing communications to create a positive perception of Northern Ireland products. Knowing that consumers of mass markets value lower prices but still want innovation and convenience presents a struggle for Northern Ireland to meet multiple business objectives. However, this is a lucrative market for frozen foods companies which can satisfy consumer emotion and perceptions on brand value. Bibliography Anderson, Robert A. (2000). Quick Access Consumer Guide to Conditions, Herbs and Supplements. Integrative Medicine Communications. Baker, Rose. (2009). Brand Sector Report: Love in a cold climate. In-Store, London. January, 29. Barrett, Lucy. 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