GCSE BUSINESS STUDIESS COURSEWORK

Evaluate the present marketing mix for walker’s crisps and make recommendations for the development of the marketing mix in the future

Aims and objectives

Objective

My objective is to conduct research into the company Walkers, which specialize in crisps. This is to enable myself to discover how the firm can improve their product and broaden the range of customers that buy walkers therefore increasing there income.

Aims are as follows:

• I will gather as much as possible information about Walkers crisps.

• I will find out about the variety of Walkers crisps products.

• I will do a market research about Walkers crisps.

• According to the data, which I collect from the marker research, I will find out what percentage of people, prefer walkers brand to their competitors.

• I will do some more research in the Internet in order to find out what people don’t like about Walkers Crisps.

• I will examine the walker’s crisp logo and see how affective it is at catching the attention of customer.

• I will find some information about the growth and sales of the Walkers Crisps company.

• I will see how affective the promotion of other companies is in comparison to Walkers.

• I will find out how Walkers advertises their product in other ways such as, television, magazines, newspapers, Internet and posters.

• I will hand out a questionnaire to the general public. This is to find out their views about Walkers.

• After collecting data I will analyze and evaluate my findings and present them in an understandable manner.

• I will make recommendations on how walkers might improve their product and promotion.

Background of company

History

Mr Henry Walker came to Leicester in the 1880’s as a butcher, his company and factory was doing great, and from there they moved to cheap side in 1912, everything was going fine until the Second World War. Meat was then rationed, and the Walkers shopped ran out of meat to sell very early on in the morning. So Mr Walker turned to the potato crisp market, as they were becoming popular with the new rationing. Everyone wanted some of Walker’s new crisps. Today, Walkers is Britain's favorite crisp and the biggest crisp manufacturer, employing over 4,000 people in 15 locations.

Frito-Lay’s Walkers Crisps is the UK’s number one grocery brand and has used Lander as their brand design consultancy since 1994 across the entire brand portfolio. Walkers analyzed the evening snacking category and found that 42 percent of all snacks were being eaten after six p.m., yet crisps only accounted for 20 percent of snacks consumed. Research suggested that evening snacking was a continuing growth area and Walkers decided to make crisps part of their evening snacking portfolio. The only potato snacks currently available in this segment were Kettle Chips and Pringles.

The size of walkers

Today Walkers are owned by Frito-lay it is a private limited company which makes it a subsidiary of PepsiCo. 13.5million bags of crisps are sold every day in the UK and walkers snack foods are responsible for helping the 300,000 or so outlets in the UK who sell the walkers product to maintain the exceptional growth rates they have seen in this market over the last few years.

The market

With over a 40% share of this market, walkers have advice and help in improving the range stoked also the display and presentation of the products, the space and the location of the product in store is a valuable help to the verity of outlets they serve. On the web site it is estimated that 11million people will eat Walkers products every day

General business activities of Walkers crisps

A team of around 400employees have responsibility for growing sales in supermarkets, which accounts for around 50% of there total sale, as well as traditional retailers such as newsagents, independent grocers and petrol forecourts. Of equal importance are wholesalers and cash and carry outlets, who supply snack foods to independent retailers. Increasingly important are new outlets that are starting to recognize the profit opportunity that savory snacks can offer as well as traditional leisure sites. Among the many ways Walkers help retailers grow sales and enhance profit the advice range selection and display equipment. This maximizes the impact that it has upon the consumers in store and through point of sale materials supports brand promotions.

The legal structure

The legal structure is weather a business is a sole trader or a public limited company and the way in which a business conduct things legally. A lot of walker’s brands were formally branded under the name Smiths Crisps The name of this company comes from when walkers, Smiths and Tudor were three main brands of Nabisco’s UK snack division; it is also oligopoly. The UK retail trade is among the worlds most dynamic and sophisticated ensuring crisps and snacks continue to be the fastest growing products is the on going challenge for the sales force at walkers snack foods. Presently Walkers Crisps brand is being given a £20m facelift by owner PepsiCo which is a public company or an incorporated company, with three new flavors and a lower-fat, lower salt recipe. This shows that Walkers are trying to improve the healthiness of there product so that they can appeal to more of the population and try and improve there wellbeing whilst improveing the size of their company.

Target market

Marketing and competition

Walkers operates in the crisp and snacks market. Walkers sell snacks to all age groups genders religions, and all of society that eat crisps. There are quite a few competitors for Walker’s in the crisp market including: Golden Wonder, Nik-Naks, Seabrook, Kettle, Supermarket’s own brand, Doritos, Mcoys etc.

Market segmentation

There market is segmented in this is true for walkers as well they prove this in the different ways that they package there different sorts of crisps. This difference and similarities depends on a number of factors including:

• Grouped by Ethnicity
• Grouped by age
• Grouped by gender
• Grouped by income
• Grouped by area
• Grouped by occupation

The walkers company is split up in to 3 main ranges of crisps they are

• Core range
• Healthier snacking
• Sensations

Customer Targeting

Walkers Wotsits are a firm favourite with the kids. There bold designs and bright colours appeal to kids because it s what their drawn to almost. Walkers target children a lot because most of their market is based around children and them consuming the walker’s product.

Sensations, another brand within walkers is known as the posh crisp implying that this particular crisp is sophisticated and is mainly targeted at a more mature consumer maybe aged around 20+. The packaging it is presented in is a very simple yet classy look not a bold and out standing as wotsits but more plainly presented.

Market segmentation

There market is segmented in this is true for walkers as well they prove this in the different ways that they package there different sorts of crisps.

• Grouped by Ethnicity
• Grouped by age
• Grouped by gender
• Grouped by income
• Grouped by area
• Grouped by occupation

The walkers company is split up in to 3 main ranges of crisps they are

· Core range

· Healthier snacking

· Sensations

Crisps have a far more adult consumer profile than snacks

The bias towards adult consumers in Foodservice means that there is a 72% vs. 28% sales split between crisps and snacks and the core range should reflect this balance

This chart shows the number of male and females who consume walkers the data is taken from the primary research we did in class (crispy analyser).As you can see walkers targets both male and female in their target market. More males then females that we asked eat walker 14% more males eat them than females. I suggest to walkers that they mainly focus on the female market a bit more to make the percentage of females that consume walkers grater they could do this by having a celebrity to indorse their product that is well known to females.

Product

A product mix is the different products or services one company provides e.g. Walkers marketing mix is the regular walkers brand along with wotsits, sensations, Doritos and etc.

This chart shows the popularity of all the different flavours of walkers that people eat of the people we survey in the crispy analyser. You can see that by quite a large percentage that salt and vinegar is the most popular flavour out of all of them closely second is cheese and onion. I recommend that walkers eater focus on improving the promotion of the most unpopular flavours for example roast chicken at 3% or they could discontinue the unpopular flavours and focus on selling more of the most popular flavours by for example raising to price of them so that they can get more profit, but this could affect the popularity of them and people would buy less of those flavours.

From this graph it is evident that most people advice Walkers to promote BOGOF type of promoting strategy, when the costumer buys one of their products and gets another one for free. This type of promoting strategy has many advantages. Firstly, it attracts the costumers to buy their product. Secondly, it makes the costumers return after a while and buy some more of their products. And lastly, it creates a very good image for Walkers crisps, which makes it more competitive comparing to the other companies.

It’s very interesting, that the second most popular advice for Walkers crisps was to give out free DVDs. This method is quite, because, again, it attracts the costumers. However, this method also has a very big disadvantage, because the cost of this method might increase the costs of the Walkers Company it spends on promotion. From my own point of view, method of using coupons is more effective and I have a number of reasons for that.

First of all, it doesn’t cause high costs to the company. It attracts the costumers to collect a certain number of coupons in order to win the prize, which could be anything. It is a good method of promotion, because as people as it attracts people to collect more coupons, it attracts them to buy more of their products. This might cause an increase of the popularity of Walkers crisps as well as the increase of profits.

Giving people samples is also a good way of attracting the costumers, but it might be a very costly method of promotion for the company.

Use of scratching cars as a method of promoting Walkers products, could also be seen very attractive, as it gives people a chance to play the lottery and probably win something. For some people, even though they haven’t won anything yet, the fact that they can win something is already attractive. Further more, these people might also like the taste of Walkers crisps and become addictive to it, because they will want to buy more and more crisps with its scratching cards , which give them an opportunity to play and win something. With scratching cards, the process becomes cheaper, because not every card gives a costumer an opportunity to win something. However, if they company advertises and says, that the number of prizes they can get is limited, this might create even more interest from the side of costumers, as they will want to be one of those lucky people who can win something. This can also be a very good method of promotion, because most people will be interested in buying Walkers crisps rather than any others, which might make Walkers more competitive on the market. Methods of competition might be very suitable and effective for Walkers crisps as it shares more than a half of the amount of snacks market.

Although, Walkers has a number of very good promoting methods, which people know about, there are still some weaknesses. Due to its popularity, Walkers sometimes doesn’t advertise their products as much as the other brands do. On one hand tt is very logic to do so, because this decreases the costs of promotion but people still buy the crisps. On the other hand Walkers needs to remember that there’s still a number of people who come from the other countries or parts of England who don’t know much about Walkers crisps. This lack of advertisements might decrease the popularity of Walkers crisps in the other parts of England and throughout the world, which might have effect the profits of Walkers crisps in the future.

Because it’s not very comfortable to use pie chart to show the percentage of people who like Walkers, I decided to plot this diagram. The diagram below shows the percentage of people who like Walkers and other brand crisps.

The product life cycle is the development and launch of a company and over time how it has matured and grown, also it is the saturation of a company or the decline and withdrawal.

Walker’s product life cycle:

As you can see in this diagram walkers brand has many different products out all in different stages of the product life cycle. Quavers, Doritos, Wotsits and salt and shake all are in the maturity stage because there now at the height of there popularity, having been out for a bit of time and working there way up the lifecycle. Potato heads and cheese head are the newest things that have just been establish as a member of the walkers family so they are in the maturity stage of there life. Sensations have been out for a while but are still growing in popularity at the moment so there in the growth stage of there life. Monster munch, French fries and frazzles have been out for ages and so there popularity id slowly decreasing because they are getting pushed down by either other competitors or the newest product released by walkers. This table shows use basically that walkers has a large range of different product that it produces and new product are being brought out regularly with existing one that are still reasonably popular.

• Walkers are the No 1 brand in the UK*
• The UK eats 5.2 billion bags of Walkers crisps & snacks every year**, that's:
• 14 million bags a day and 87 bags per person
• Walkers is 4 times the size of Pringles
• Walkers spend £17 million in media support - more than all the other bagged snack manufacturers put together
• The salty snack category has grown by 14% since 2000, with Walkers contribution at +127%

As you can see walkers has 58% of the market share compared with the other brands on the market. KP follow close second behind walkers with a percentage of 22.2% share in the crisp industry. I recommend that walkers if walkers wanted to up there percentage even more they could lower there prices even more than they have already or they could bring out more product and flavours than any other brand.

Walkers packaging

The function of walkers packaging is to attract people to buy it and to also keep the crisps secure and as UN crushed as they can

Here is an example of a package that walker’s crisps are contained.

We carried out a analysis with walkers and also other well known brands e.g. Pringles and Seabrooke The results were that walkers packaging was effective in keeping the crisps in and kept the weather conditions out well such as rain but there were a lot of the crisps broken inside. Also the package effectively opens with not much effort required. Other brands that wee looked at were Seabrooke and Pringles theses product were better and worse in different way for example Pringles containers were very good at keeping each crisp in shape with only maybe the last one broken but its hard to get the bottom crisps out because it takes effort and also it s non weather resistant because its made out of cardboard so it would not be good for DoE for example. Seabrooke uses the shape style of packaging for there crisps but there are a lot less broken than walkers because of the ridged design and stiffness of the crisp and all the packaging designs are the same effectiveness I thought this maybe an indication to walkers that maybe there packaging is not the most effective way of maintaining the crisps.

I would recommend to walkers that they try to improve there packaging by making a packet which means there are a lot less of the content broken.

This is the kind of packaging that I would recommend walker manufacture so that it keeps the crisps in better condition and also there can be 2 different flavours in the packet at once. When the consumer opens the packet it can be closed and then opened again with would mean that consumers can eat them later. The down side to this design would be the heaviness and the inconvenience of the shape, and I would also suggest that the box not be made of metal it be made of another material which is less heavy and cheaper.

Price

The different method of pricing that can be used to put a price on a product is the following:

• Competitor pricing-which looks at the price there competitors are charging and hat would indicate the price that their business should charge Walkers could use this method of pricing.
• Cost-plus pricing- which is looking at the cost of the business compared to the price the business charges. If they didn’t get this right then it would lead to the eventual closing of that business. Walkers I think could use this method in some ways to approximate whether or not the business is charging to much but at the same time it could not use this method because walkers is so successful now that they wouldn’t really do anything to lead to a closing down of the business.
• Penetration pricing- When a company is new and it wants to attract business it lowers the price compared with older companies. Walkers dose not need to use this form of pricing because it has been in the crisp market for a long time compared with most companies e.g. Pringles.
• Skimming- If a business. Manufactures something that is superior it is aloud to raise the price on it because customers are prepared to pay more for it. Walkers would I don’t think use this method because there can’t really be a superior crisp, although if they bring out a particularly nice flavour of crisp that could mean the raising the price of it compared to other flavours.
• Differential pricing-This is when customers are charged different prices for the same product but each different business aims at a different customers e.g. charge different for adults and children. Walkers could use this method to aim for example sensations at older people and charge them for it than for example salt and vinegar which can be aimed more at children.
• Promotional pricing-The reduction in price on existing products to sell off old products and helps the business so they can get new stock in. This could be used by walkers when one of the flavours that has been made decreases in sales and so they bring out newer flavour and so by lowering the price of the old crisp flavour it will get rid of the old stock/ flavour.
• Psychological pricing- put at price of e.g. £9.99 so it seems less than £10 so the customer thinks there getting a way better deal. Walker could not use this for the selling of individual bags of crisps but they could use this method to sell giant multi-packs.

Walkers could use the method of Competitor pricing so that walkers stays on top of the market. Also it may use promotional pricing so that if roe example they bring out a new flavour they don’t want all the other products still out there, they want as many people as they can to buy the new flavour.

Walkers charges about 35p for one bag of walkers crisps. A competitor of there’s nick naks which charge around 30p but the content inside the nick naks packets is smaller than the amount in walkers.

Supply and demand for walkers looks a lot like this:

If the popularity of the product increased this would lead to the increase of promotion and an increase the number of potential customers. All this would lead to a shift in demand.

If suppliers cost went down for some reason or an entry of a new supplier came then this would lead to a shift in supply.

The higher the price (usually) the lower the quantity demanded and the higher the price is the higher the quantity supplied

In conclusion I think that walkers should keep the same pricing strategy until the products that they make start to have a dramatic decline in sales. I would recommend that walkers just keep the same pricing strategies until the popularity of the crisps go down.

Promotion

Promotion is used to get the companies product or service known to the public the different methods of promotion are:

• Sales promotion
• Public relations
• Sponsorship
• Advertising

Walkers use Advertising on TV and on billboards. They also do sponsorship the walker’s stadium for Lester city football Club Sales promotion is also used as another method that of promotion by giving free sample at supermarkets when they get new flavours out and also putting prizes in there packets e.g. pogs and money. Walkers dose not do public relations as a promotional method.

Advertising

• TV adverts- On the adverts that walkers produce they use lively music and brightly coloured images to keep the people watching it interested in what their selling. Also having an appearance of Gary linger in their adverts help to make budding footballers or fans of his watch more attentively. Humour is also used affectively in there adverts to keep the tone of the commercial upbeat and interesting.
• Magazine adverts- in these walkers used a range of brightly coloured pictures to attract the attention of the reader. Also Gary Linger a former footballer for Leister city is a well none celebrity icon and so using him in there adverts as a mascot will attract the readers attention even more and hopefully encourage people to buy their crisps. Also the information people need about the product is written on the packets e.g. less saturated fat!
• Promotional activities- Walkers uses promotional activities in supermarkets to attract the customer to buy their product, by making them think that they have found a bargain. They use BOGOF (buy 1 get 1 free) to do this. Also there are other deal the company does such as 20% extra free on some of their bags so that when the consumer sees the free part it makes them feel go about their purchase because there getting more for there money.

This is a chart that shows how many people new that Gary lingerers the celebrity endorser for walkers Even though there is a large number of people who knew that Gary was there spokes person (61%) but of the 39% that don’t they could be losing customer. I suggest that they could use a more well known person to promote their crisps for example David beckan that way more people will know about their crisp and be more inclined to buy them.

Strengths of Walker’s promotional material:

• The diversity of there adverts e.g. different stories told in there TV ads and magazines.
• The celebrity backing them up (Gary Linger) will lead to a lot more publicity than they could get on there own.

Weaknesses of Walker’s promotional material:

• Personally I think that walkers have no weaknesses in the way that they promote their crisps because it has worked affectively for as long as they have been in business.

I recommend to walkers that they continue with there methods of promotion and to maybe try and target a different group of people e.g. use a more famous celebrity to indorse there product this will make people want to watch and see the different adverts that walkers produce. But they should only do this if they can afford it with no threat of their profit going down.

Place

Walkers distribute there crisps in supermarkets using free sample and the purchasable packets also. They are also sold in smaller corner shops and magazine stands as single packets. This is good because it means that walker’s product is being sold in a number of different types of areas.

FMCG stands for Fast Moving Consumer Goods and the types of outlets their products are sold in are retail outlets such as businesses which sell food and clothing.

Walkers were available in all outlets this shows that walkers are well known and how a large amount of their products sold. Their competitors such as Pringles don’t sell their product in all outlets so this means a greater number of people buy walkers rather than Pringles which is a benefit for walkers.

People that I have asked using primary research the majority of them said they buy walkers mostly from super markets the second most places in which people buy walkers is from newsagents. This research has been done buy asking all age groups and distributed equally between male and female members of the community. (See appendix)

Strengths of walker’s distribution strategy

The fact that their product is sold in all different types of places and shops is a strength because it mean that more people will buy there product and will be more aware of it, even if they weren’t planning on buying any crisps, the fact that there in most store means that more people will see them and think um I would like to buy some crisps. And also the fact that walker’s crisp has remained so long as a popular crisp must mean there right in what there doing in the way it distributes its product. Another strength that walkers has is that there are so many competitor that are in the crisp business so that mean that sometimes a company may slip behind on what’s the newest thing out there, but walkers has I think manages to maintain a reputation as one of the best crisp company’s.

Weaknesses of walker’s distribution strategy

Walker’s doesn’t have very many weaknesses because the walker’s brand and distribution is very good with, I don’t think any faults.

Recommendations

I think that walkers has done a good job to hit every marketing place available but I think that one thing walkers could do is to higher people to hand out free samples of there newest crisp to the public in grocery store because even if the person was not intending to buy any if they tried them then they might have second thoughts and think “yum there good I think I might buy some more”. This way walker’s will gain more customers in grocery store.

Date: 2015-01-12; view: 4561