Practise integrating product, price, promotion and place decisions, using calculations and case evidence to analyse trade-offs and evaluate a coherent marketing strategy.
'Promotion is the most important element of the marketing mix for the success of a parcel delivery business.'
Evaluate this view.
OR
Fizzy Drinks (FD)
FD is a private sector business that manufactures an international brand of carbonated drinks. Its slogan was 'A premium drink for premium customers'. The market for FD's drinks is very competitive, with 7 national and 12 international brands all competing in the same market. Recently FD lost the title of market leader to TR, one of its largest competitors. TR is a multinational public limited company.
Table 2.1 FD financial data 2023
Employee morale has dropped as a result of the negative feedback. Key employees have left to work for FD's competitors. The lack of experienced employees has led to a drop in the productivity of the production process.
Explain one intangible attribute of FD's products.
Festival Wear (FW)
FW is a partnership started by two friends, Maz and Jane. FW manufactures and sells high quality T-shirts at $ 40 each. The business can manufacture 35000 T-shirts per month using mass customisation. The T-shirts are only sold at music festivals and concerts and are customised to each event. FW has never advertised the T-shirts, relying on a sales team to attend a festival or concert and personally sell the T-shirts.
Current costs:
- variable: $ 10 per T-shirt
- fixed: $ 200000 per month.
Sales average 27000 T-shirts per month. Currently the sales team is paid a monthly salary, but Maz is proposing a new payment method in order to increase sales volume. This will mean a lower monthly salary but a commission of $ 2 per T-shirt will be paid. Maz estimates that sales volume would increase to 30000 per month.
Costs if the new payment method is introduced:
- variable: $ 12 per T-shirt
- fixed: $ 182000 per month.
Evaluate whether FW should expand its product portfolio to increase its sales volume.
ML Computers (MLC)
MLC is a successful private limited company that has been trading for 20 years in country K. The company makes a range of laptop computers. It is the market leader in a highly competitive market.
MLC is developing a new touchscreen computer that will use the latest technology. Initially secondary market research was carried out, followed by primary market research. The market research data suggested a high potential demand for the new touchscreen computer.
The Marketing Manager is planning the launch of the new touchscreen computer using price skimming.
All computers are made in MLC's two factories in country K. Operations are capital intensive. New machinery is needed to manufacture the new touchscreen computer. Maria, the Managing Director, decided to use leasing for the new machinery.
MLC has 350 employees. One of its objectives is to reduce labour turnover to 8% by 2026.
Labour turnover rates currently vary across the two factories. The labour turnover for Factory A is currently 14%. Table 2.1 shows employee data for Factory B.
Table 2.1 Employee data for Factory B
Maria is the majority shareholder with 55% of shares. She is concerned about the future growth of the company. Over the next three years she plans to launch five new computers using the latest technology. At a recent board meeting Maria proposed that the company changes the ownership of the business to a public limited company.
Analyse one advantage and one disadvantage to MLC of using price skimming to launch the new touchscreen computer.
Post Scent (PS)
PS is a private limited company operating in country H . It sells perfume for men and women using its own website. PS purchases the perfume in large quantities from various manufacturers and then sells it in smaller quantities to its customers. Most of the perfumes are sold in glass bottles.
PS has two main ways in which it sells perfume:
- A website where customers can purchase a range of perfumes. The perfumes are priced to be lower than high street competitors.
- A subscription service where customers pay a monthly fee for a mystery perfume to be delivered each month.
All of PS's products are delivered to customers' homes using the postal service. The packages can be left in a mailbox or in a safe place outside of the home. PS has an aim to improve the sustainability of its operations.
PS uses incremental budgeting. Table 1.1 shows the budgeted and actual cost and revenue data for 2023.
Table 1.1 Budgeted and actual cost and revenue data for 2023 (\$000)
The directors of PS have decided that the business needs a Marketing Manager. The role
The directors have shortlisted five suitable applicants and plan to invite them all to an assessment centre as part of the recruitment process.
Evaluate the role of effective packaging for PS .