Marketing on Tangerine Confectionery - Research Paper Example

Marketing Research on Tangerine Confectionery Executive Summary Tangerine confectionery is a medium sized British company engaged in the business of manufacturing sweets and confectionery products within the country. The weak economic scenario and the falling sales has made the company management come up with the idea of promoting company by way of new product development and entering new markets to increase sales and market share in the confectionery industry. The paper analyses the two key research questions on what kind of health confectionery products to be developed to cater to the confectionery market and ways to promote healthy sweets within the already saturated confectionery segment dominated by large players. The research also seeks answers to maintenance of high quality and its promotion for the new product developed. The research is a qualitative and a quantitative study. The key findings of the report are that the company should develop products that are low in sugar content and developed through organic ingredients. The best way to market these products and their high quality is by way of alliances and compliance with agencies that assure of quality standard maintenance. Contents Executive Summary 2 Background 4 Industry Analysis 4 Porter’s Five Forces 5 Problem Definition 6 Marketing Research Question, Objective and Components 7 Management Decision Problem 7 Marketing Research Question 7 Research Design 7 Rational for chosen research approach 8 Target Population 8 Sampling process 8 Questionnaire 9 Exploratory Research Questions 10 Findings 13 Recommendations 14 Limitations 14 Reference List 16 Background Tangerine Confectionery is a small British confectionery company that was established in 2006 and is headquartered in Blackpool, Lancashire. The company is the biggest British confectionery that has growth primarily by way of acquisitions and mergers of numerous small brands that have affiliated business. The company is the largest popcorn manufacturing and sugar confectionery private company that has a turnover of about £150,000,000 as of 2012 data (CompaniesintheUK, n.d.). It has a number of brands within its portfolio which include Lion, Mojo, Hobo’s and Taveners among the popular ones (Tangerine, 2014). Small and Medium enterprises or SMEs have been always considered to be one of the prime driving forces of the economy due to the multifaceted contributions they make in the field of employment, technological innovation, industry and also lend a competitive edge to firms operating within the industry. Hence technological innovation has the potential to spurt the growth of small and medium enterprises and also the aggregate industry levels in the economy (Susman, 2007). Industry Analysis Tangerine confectionery is largely local and established in UK alone. One of its largest and most discussed deals has been the acquisitions of Monkhill Confectionery from the house of Cadbury in 2008. It has been listed 23rd among the Profit Track 100 published by PricewaterhouseCoopers which makes it rank among the top 25 most profit making private UK companies in United Kingdom. It operates through 7 factories and about 4 factory shops employing about 1500 people (McDonough and Patel, 2012). The company sells largely through departmental stores like Tesco, Marks and Spencer, Waitrose, Morrison and Asda. It also sells via factory shops and numerous small and independent stores within the country. The key competitors for Tangerine confectionery include Nestle UK, Kraft Foods UK and Glisten Ltd (Hoovers, n.d.). When it comes to products, Tangerine confectionery expects its customers to love candies as the kids would do. They sell, fruit chews, liquorices, marshmallows, bon-bons, gum, hard candy, toffees and chocolate. The confectionery industry in UK is facing weak demand and an extremely sticky business situation due to the painful recession that descended on the British consumer. The recession brought about loss of employment and weak purchasing power due to reduced money in the hands of the UK consumer. Also, the growth in health concerns has also been largely responsible for reduction in consumption of sweets and confectionery items in the recent past. Such weak demand has also limited the ability of the manufacturer to pass on the high costs of production, due to inflation, to the ultimate consumer. This has resulted in reduced profits of the confectionery companies. Along with this, the fair trade and organic trade movements have caught up momentum and led to creation of niche segment of the health conscious consumers that has together contributed to further reduced demand for confectionery products for majority of the companies. This can also be seen as a rise in opportunities for creation and marketing of new and healthy confectionaries (IBISWorld, 2013). Porter’s Five Forces The Porters five forces helps to analyze the industrial framework and helps in developing a suitable business strategy that would be developed based on such analysis of its surrounding and business environment (Porter, 2013). Rivalry: High: There are a huge number of confectionaries both private and publicly owned in UK. The market is filled with small and large players which amount to over 450 in total. Since customers have numerous choices, hence rivalry to gain market share is immense and hence competition within the industry is also very high. Threat of New Entrants: Medium: the level of concentration within the confectionery industry and requirement of initial capital investment in the development of machinery, plant and equipment for the purpose of manufacturing confectionery products is extremely high. This means that new entrants have to have significant capital and strength in industry to gain a considerable market share and begin operations. The chocolate manufacturing industry is highly capital intensive while that of the confectionery industry is labour intensive which is why there is variation in the degree entry barriers and it is fixed to medium. Bargaining power of buyers: High: The industry is filled with numerous big and small players in the business. Apart from this the industry also has quite a few large players like Nestle and Kraft Foods. This makes brand switching and customer loyalty highly vulnerable and hence the bargaining power of buyers is very high. Bargaining power of suppliers: High: the suppliers have numerous buyers of their products. Sugar, chocolate and such items are majorly produced in-house but for products like cocoa that is sourced from other manufacturers, the bargaining power within the suppliers is very high. This is again because of the high number of confectionery businesses prevalent within UK. Threat of substitutes: High: In such a highly competitive market, the only way to compete is by way of innovation. Companies try to come up with something new or the other so as to gain a better and larger share of the market. Hence new product development in fun foods, savoury snacks and attractive food packaging can be high threats as product substitutes. Problem Definition The biggest problems faced by small and medium enterprises are the prevalence of large existing players that offer immense competition in the industry. The dominance and size of Nestle, Kraft Foods and Glisten Ltd reflect medium to high level of industry concentration. Customer loyalty is slightly stronger with big brand names because they assure quality products and reliability. The industry is faced by reduced sales figures and widespread decline in purchasing power and slowdown in the economy. In such a scenario, the company can take advantage of the high degree of brand switching and low levels of customer loyalty by introducing a new product that is demanded by the market. The product that should be ideal within this niche is development of organize and low fat or low sugar confectionery products that cater to the low serviced niche of the growing segment of health conscious consumers. The primary problem faced by the company is in creating the brand USP and assuring high quality of the product that is being developed to cater the health conscious consumer. The company plans to launch a new range of low fat, low sugar and organic confectionery products and sweets. Being a small sized privately owned company, Tangerine Confectionery is faced with some issues. The company is looking for ways to outshine large players in the established market and create brand recognition and promote its products in the highly concentrated market. The problem also relates to high quality maintenance of the product range such that the market position attained is maintained and expanded (Lucas, 2011). Marketing Research Question, Objective and Components Management Decision Problem The market research is based on development of a new and healthy variant of sweets that is of high quality and caters to the niche of health conscious consumer within United Kingdom. The company is engaged in the manufacture of candies, sugar products and confectionery that is high in sugar content. Tangerine confectionery is looking to manufacture and cater to a new niche in order to manage competition better and gain advantage of early movers within the confectionery industry. This would also make a greater and new market share available to the company which is largely under catered (Baines, Fill and Page, 2011). Marketing Research Question The research questions are 1. How should the company promote and position its new product category in the field of health conscious confectionery products? 2. How should the company adhere to and promote high quality of the products launched? Research Design The key idea behind conducting the following research is that the data analyzed was presented in the form of a qualitative analysis based on exploratory research of publicly available information. The paper was also analyzed based on the quantitative study of an interview method wherein 60 candidates were questioned over the marketing issues faced by the management of Tangerine confectionery. Rational for chosen research approach The qualitative and quantitative method adopted for research allows gathering a more comprehensive approach to the marketing research objective. Information that is available on the public platform is further supported and strengthened by the views presented in the quantitative study. The exploratory study, on the other hand, provides a more analytical outlook that is based on expert opinions presented within the available information (Creswell, 2003). Target Population The chosen population set was a group of 60 people which included a good mix of consumers, industrialists and analysts. The group interviewed comprised on 20 consumers in the confectionery industry, 20 analysts who were capable of presenting expert opinions about the food and beverages industry and 20 industrialists who were engaged in the business of foods and confectionery items. Members were contacted through phone calls and interview arrangements were made for industrialists and experts. Consumers were interviewed at various confectionery shops. Sampling process The qualitative study was conducted by reading through publicly available journal, news, books and study materials which presented a comprehensive view of the confectionery industry in United Kingdom and Tangerine Confectionery in particular. Views expressed within the paper have been expressed as an excerpt and expression of such information presented and evaluated over the readings (Celsi et al., 2011). The sampling for the quantitative study was conducted by way of charting out a balanced mix of expert and public views over the scope of the study. A balanced sample of expert and public opinions was necessary to get the industry viewpoint over the issue, expert and analyst opinion over the research problem and what the public thought at large over the research question under study. The sampling method chosen was random sampling for the decided sampling mix. This means that public, industrial experts and analysts were chosen randomly from the available data based on convenience of access and availability of persons for interview (Baker and Hart, 2007). Questionnaire Questionnaire Name   Age 0-15 16-24 25-49 50 and Above Category Consumer Analyst Industrial Expert   Gender Male Female       Which would be the most effective way of promoting healthy confectionery products Aggressive media advertising Promoting products at points of sale Advertising and affiliations with sport stars and celebrities Promoting at health clubs and gyms What should be the USP of the health conscious product range developed Low sugar content Low unsaturated fat content Organic ingredients usage Healthy packaging What should the company do to manage competition faced by large players Excessive advertising campaign Affiliation with key suppliers Developing an a new USP like organic liquorices Low priced quality products How should the company manage quality controls Binding contracts with suppliers Developing strict quality controls in manufacturing Affiliation with centrally approved quality standards Employing external quality assurance agency How do you want to see quality of the product On the packaging As affiliations with approved agencies Promotion via health clubs and celebrities Media advertisements What should be an ideal way of promoting product quality Affiliation with major health clubs and organizations Better quality standard maintenance alliances Media advertising of company quality maintenance procedure Exclusive quality details in packaging Exploratory Research Questions The questions that is to be answered by way of exploratory research or qualitative study include 1. What is the best way of promoting product quality for a newly launched product? 2. What is a good way to enter a market that is dominated by the presence of large players by a small and medium enterprise planning to launch a new product? Data Analysis The below analysis the interview presents the following views: The USP is the key seeling point of the new product range that shall be launched by Tangerine Confectionery. More than 50% of the res[pondents felt that health benefits should be brought in by way of reducing sugar content within confectionery products. This is essential because sugar is seen as a major source of fats and diseases incurable like diabetes. The second most popular choice for USP was development of organic inf\gredients based sweets. The organic food craze has cfause up much in the recent decade and should act as a good selling point. About 25% of the total respondents felt that new products catering to the health concious consumer segment should be selling its products at the departmental stores for increased visibility and ready trail and sales of the products. However, most of the respondents felt that the best way to promote new products would be by way of excessive media advertising and prmotion by way of print and media ads. In order to manage competition that is faced from established industry players, 30% of the respondents felt that new product developed should also be unique interms of kinds of product or the product variety that it caters to. An example in this case was creation of liquorices out of organi ingredients which is new to the confectionaruy industry. The second most popualr choice for managing competition was making huge spendings in produtc advertising and promotion to make the new products get more visibility. According to the 60 responses obtained, the best way to manage striuct quality in the product would be by way of adhering nad affiliating with government bodies and such institutions that provide quality control and assurance measures. Such affiliations alone would bring in high standards in product quiality maintennace. Another 28% of the responses viewed that binding contracts with suppliers over quality adherence also could help in checking and maintaining product quality. When respondents were quizzed over how they would like to see product quality so that it is most believable and reliabel, more than 40% of the people felkt that high level of affiliations with quality control boards and snuch agencies would provide them with the much needed assurance on product quality. Another 25% felt that media advertisement about quality maintenance would make them more aware over high quality fo products being manufactures with Tangerine Confectionery. The sample size was lastly asked to make suggestions over the best way to promote high quality maintenance of the product. This could also act as a unique selling point. About 35% of the employees felt that alinace with agencies that assured high quality maintenance through affiliations is the bsest way to assure quality products for onsumer by Tangerine Confectionery. The next best choice was media advertising that spke of high quality maintenance within the processes and production techniques. Findings The findings of the exploratory research suggest that Tangerine confectionery is in a market which is largely dominated by large players like Nestle and Kraft Foods. There is also a good level of customer loyalty and brand association with such brands. In such a scenario, the best way to launch a new product within them market would be to cater to the niche segment. Tangerine Foods plans to enter into the health confectionery items. This shall be a good starting point. The market is in huge demand for healthy sweets and high quality confectionery items. Banking on this very demand, the company should launch its new product that also offers a new niche of products that is not catered by the established players within the health confectionery segment (Pride and Ferrell, 2011). The company should explore and research into building products like organic liquorices and similar products. The strategy for marketing such products would be more effective if the product is unique. Marketing of this product shall be most effective if the new products are promoted more as a healthy fun food through excessive print and media advertising. Sales of products for Tangerine Confectionery are done via large retail chains. Sales and advertisement campaigns launched within these stores shall ensure a large customer reach and quick sales through instant availability of products. For maintenance of quality control, the most reliable and best viewed standard is affiliation with government approved and high quality standard maintenance agencies. Such affiliation brings in the much needed product reliability and contributes towards trust building among consumers. Adding to this, binging quality control standards with suppliers should also help in maintaining high standards of quality. Recommendations The management at Tangerine Confectionery is recommended to develop products that are low in sugar content and prepared out of organic ingredients as far as possible. Also, the product caters to a new niche that is not yet served by way of unique product development. It is suggested that the new product is marketed by way of excessive media advertisement and affiliation with major health boards and food control authorities so that the consumer is aware of high quality of the product. This shall also help in building consumer trust. Limitations The key limitation of the study was the limited amount of information available on the company primarily owing to the company size. Lack of publicly available financial data was also a major hindrance to support the report analysis. Since sampling was based on convenes, it was felt that a more strategically chosen sample would have presented a better expressed opinions and facilitated more reliable views within the paper. The ethical considerations also limit the scope of presenting more critical company information and data sourced through such interview which might otherwise strengthen or alter opinions presented within the paper (Marshall and Rossman, 2010). Reference List Baines, P., Fill, C. and Page, K., 2011. Marketing. Oxford: Oxford University Press. Baker, M., and Hart, S., 2007. The Marketing Book. London: Routledge. Celsi, W. W., Money, A. H., Samouel, P. and Page, M. J., 2011. Essentials of Business Research Methods. New York: M. E. Sharpe. CompaniesintheUK., n.d. Tangerine confectionery limited. [online] Available at: [Accessed 1 March 2014]. Creswell, J. W., 2003. Research Design: Qualitative, Quantitative, and Mixed Methods Approaches. Connecticut: Sage Publications. Hoovers., n.d. Tangerine Confectionery Limited Competition. [online] Available at: [Accessed 1 March 2014]. IBISWorld., 2013. Chocolate & Confectionery Production in the UK: Market Research Report. [online] Available at: [Accessed 1 March 2014]. Lucas, L., 2011. No humbug in the nostalgia sweet market. [online] Available at: [Accessed 1 March 2014]. Marshall, C. and Rossman, G. B., 2010. Designing Qualitative Research. Connecticut: Sage Publications. McDonough, G. and Patel, M., 2012. Tangerine Confectionery: the Case of CHP. [pdf] Tangerine Confectionery. Available at: [Accessed 1 March 2014]. Porter, M. E., 2013. On competition. Massachusetts: Harvard Business Press. Pride, W. M. and Ferrell, O. C., 2011. Marketing. Mason: Cengage Learning. Susman, G. I., 2007. Small and Medium-sized Enterprises and the Global Economy. Chetlenham: Edward Elgar Publishing Limited. Tangerine., 2014. Our Brands. [online] Available at: [Accessed 1 March 2014]. Read More