Food Tech Chapter 16 Marketing Questions

  1. What are the 4 P’s of marketing?
  • Product
  • Place
  • Promotion
  • Price
  1. What factors may cause a product to fail?

Factors that may cause a product to fail are: inadequate marketing plan, slow product development team, the promotional campaign does not target the right market or is not ready for the product launch, distribution of the product to appropriate retail outlets is not finalised, the price of the product is too high for the target market. It will fail if not all the areas of the marketing mix are used. This is critical to the success of the product. It will fail if there is not enough funds to develop or manufacture the product, if the target market dislike it etc.

  1. What does the marketing plan have to do with the objectives of the company?

A marketing plan translates the company’s objectives into marketing terms, i.e. how to maximise sales, maintain or increase customer satisfaction and improve consumer choice and quality of life. The marketing plan identifies the target market, predicts demand for the product and organises the activities of the marketing mix. The marketing plan provides a common goal for all people involved in the marketing mix. The marketing plan helps managers to clarify what they want to achieve and makes staff more aware of what they have to do within a certain timeframe.

  1. What does it mean when a company has a product orientation approach rather than a sales orientation approach?

A product orientation approach has an aim to make a better product than that of the competitors. Thus the company spends more time & money on the product planning activity in the marketing mix. Whereas a sales orientation approach has the aim to encourage more people to buy the product. The company spends more time, effort & money on the price structure, promotion & placement/distribution activities in the marketing mix.

  1. Explain the product life cycle.

The product life cycle is a graph of product sales over time. Marketers watch the graph to monitor how the product is performing in the marketplace. This graph helps to determine the strategies needed to give the product the longest & most financially rewarding life possible. Stages in the product life cycle are: introduction, growth, maturity and decline.

  1. What are dinks, tweenies, dewks, puppies and woofs? How might a single product such as a canned soup differ depending upon these market segments?
  • ‘Dinks’- dual-income families with no kids
  • ‘Tweenies’- pre-teen, teenage market
  • ‘Dewks’- dual-income famililes with kids
  • ‘Puppies’- poor urban professionals, e.g. uni graduates
  • ‘Woofs’- well-off older folks

A simple product such as a canned soup will differ amongst these market segments based on: the target market, age, gender, socioeconomic level, family size and education. The ‘Woofs’ are better able to pay a higher price for the product than ‘Dewks’ can. Canned soup would be appropriate for ‘Dinks’ as they have busy lives and might not have time to cook a proper meal. It is an afforable product for ‘Dewks’ and ‘Puppies’ and might be a nice’ & quick meal change once in a while for the ‘Woofs’ who can afford more expensive meals.

  1. What factors determine a products’ price?

The product price depends on what the target market is prepared to pay. Factors that can assist in deciding a product’s price are:

  • Lower the price is, the higher the demand will be
  • Gaining market share is important. To encourage more people to buy the product, the price must be lower than the competitors price.
  • A company’s policies may restrict prices. A company with a prestige image will not want to discount the product because this could hurt the brand’s association with luxury and their reputation or image that they project to consumers; devaluing the product, image & brand.
  • Anticipated reactions of competitors are important. Will not raise prices, unless competitors do so to.
  1. Define the following terms: penetration pricing, competitive pricing and list price.
  • Penetration pricing –means the product price is below that of its competitors for long enough to obtain a foothold in the market.
  • Competitive pricing (status-quo pricing) –is where the price is set to match that of the competitor; the price is the same for all similar products e.g. milk.
  • List price – is the suggested selling price based on the break-even point.
  1. Promotion activities include?
  • Advertising
  • Personal selling
  • Publicity/public relations
  • Sales promotion (sales & demonstrations)
  1. Why is advertising the most common form of promotion? List 3 types of advertising

Advertising is the most common form or promotion as it tells us who we are or should be, it influences us and suggests that happiness can be obtained from buyinga certain product or looking a certain way. Advertising tells us that a product can fulfil our every desire & provide instant solutions to life’s problems. It affects our lives.

3 types of advertising are:

  • Magazines/newspapers
  • Television
  • Radio
  1. What is “product positioning” and why is it important?

Product positioning refers to the image of a particular product in the mind of a consumer. E.g. people associate orange juice as the primary drink at breakfast. It could also be advertised as a refreshing drink at any time of the day; it is important as the consumer could be made to see the product in a different way.

  1. Give an example of a sales promotion

Sales promotions could be: contests, free samples, coupons, cash-back offers etc; anything that entices or influences a consumer to purchase a good or a service.

  1. What is personal selling?

Personal selling is a major promotional tool which is mainly invisible to the average consumer. It involves one person selling directly to a customer and is not very popular with food products.

  1. Explain the terms of publicity and public relations listing examples.
  • Publicity is the unpaid use of media to get the public to recognise your product; broadening their knowledge and recognition of a product. E.g. when a company’s wine wins a prize at an annual wine show, when a celebrity wears the company logo when playing sport, attending a function or who is seen eating/drinking the product. The company pays the celebrity for wearing the company logo, but not for any publicity the celebrity generates.
  • Public relations are a communication tool to build or maintain a favourable image (relationship) with the public. E.g. sponsorship of sporting team/event, school activities and charity drives/fundraisers, to help build a positive company image.
  1. What does “place” refer to in the marketing mix?

Place in the marketing mix refers to where the product will be sold geographically and to the kinds of outlets in which it will be sold.

  1. What is the difference between intensive, selective and exclusive distribution? Give examples of two products for each.
  • Intensive distribution – is when products are available at every possible outlet. E.g. chocolate bars, soft drinks (especially coke)
  • Selective distribution – when there is a wide but not intensive distribution. E.g. some types of cheese are available at Deli’s rather than Woolies or Coles
  • Exclusive distribution – when a limited supply of a product is sold in only a few retail outlets usually because the product is expensive. E.g. handmade chocolates – has an elite image in the consumer’s mind.
  1. What “tricks”might supermarkets use to entice consumers to buy particular products?
  • Impulse bars at the front of supermarkets near check out, selling luxury items such as chocolate bars, magazines to entice you to buy them as they are at your convenience and they display a vast range to choose from. They are enticing as you wait in line to be served and pick up the magazine to read whilst waiting, then you are served and have not finished yet – so you are enticed to buy it.
  • Impulse buying – building wide aisles and placing demand items (bread, eggs, milk, butter etc) at the back and throughout store so the person has to walk past many other items which can be tempting, to get to the product they wanted. Through passing all these items, one is tempted to purchase other items they did not intend on buying.
  • Smell of fresh bakery items and fresh cuts of meat and in-store cooking demonstrations – satisfy your hunger and entices you/persuades you after trying the product (provided that you liked it) to buy it.
  • Putting items on sale, specials.
  • Having add-ons, side by side foods that complement each other. E.g. corn chips next to a dip, entices you to buy both,
  1. List and explain the different types of retail outlets
  • Regular supermarkets – offer a wide range of brand names for most products & are the first to offer new products, one-stop shop. Manufacturers pay a lot of money for shelf space – important. Usually convenient parking close to store with ramps, some are placed in malls/shopping centres to draw in more customers. E.g. Coles, Woolworths, Franklins
  • Discount supermarkets – offer slightly lower prices on basic items than in regular supermarkets & there is a no-frills approach to store displays & fittings. The selection of name brand products is limited & new products take longer to appear on shelves. Prices do vary as they do in regular supermarkets. The price charged depends on the amount of competition and the demographics of the market in a certain location. The more competition = lower price. E.g. Aldi
  • Bulk-buying barns–sell products that are almost out-of-date & that have recently fallen from popularity. Customers buy products in bulk, by the case. The retailer makes a profit because it sells such a large quantity. The consumer can save money but must have adequate storage space at home.
  • Small-independent food stores & corner stores– products cost more than they do in a regular supermarket as these retail outlets offer convenience so customers pay more. Small store owners buy their food through wholesalers because their orders are too small for large producers to fill directly. The more people who handle the product, the more it costs the consumer. E.g. IGA
  • Vending machines – great way of promoting products. They are expensive to maintain, are easily vandalised and need to be restocked often.
  1. Explain the process of distribution

Distribution involves moving the product from the manufacturer to the point of sale. The longer the chain = the less efficient it is.

Distribution includes the following activities:

  • Warehousing –correct storage of goods = consumer perceives product in the best & safest possible condition.
  • Materials handling – forklifts, conveyor belts & other materials that move the cartons of product from the storage area to pallets ready for shipping
  • Inventory control –essential as it ensures the quality of the product & quick filling of orders. Holding too much stock is expensive – because it takes up space & the chances of theft, fire and water damage increase, as the product is held longer
  • Order processing – handling & filling of orders, processing of accounts & collection of credit payments. Makes sure the customer receives what they order, when they want it
  • Transportation – type used – air, water, rail or road, depends on the type of product, urgency of the delivery, the distances to be covered & the nature of the product.
  1. What is “direct marketing”?

Direct marketing is the shortest sales path between producer and/or supplier and consumer; the consumer orders directly from the supplier. It is an alternative to retail shopping. Examples are: flyers & pamphlets in the mail, home shopping network on cable TV, telemarketing.