Hnc Marketing Graded Unit

Topics: Marketing, Competitor analysis, Potato chip Pages: 15 (5232 words) Published: May 2, 2011
Graded Unit

Development Stage

Category| Page|
| |
Introduction| 3|
Terms Of Reference| 5|
Micro and Macro Influences| 6|
Segmentation and Targeting| 8|
Market Plan ProductPricePlacePromotion| 10111112|
Conclusion| 13|
Recommendation| 14|
Bibliography| 15|
Appendix 1| 17|
Appendix 2| 20|

Scott Snacks Limited (SSL) is a private limited company that manufactures and markets “Muckle Chips”. The company is owned and managed by Scott Mackie. He fashioned this product when he recognised that there was a gap in the market for “for one” size bags of their crisps, and that his product could do well in this marketplace. SSL have a small factory in Scotland, outside Dundee, where the chips are produced. The premises are leased from the local council for five years, at little cost, since the council is keen to encourage a business to make use of the recently emptied factory. Scott’s company had a very successful introduction to the market, making a turnover of a million pounds in 2005. The company was also quick to establish their product in sports outlets. This distribution in 200 stores meant that Muckle Chips and the SSL brand name were very swift to begin growing, with sales rapidly increasing. However, in 2006, Scott Snacks Limited began to suffer. The sales of Muckle Chips begin to decline, due to a turn down in the snacks market, with fat-high foods taking most of the fall. The effect this was having on SSL as a company meant that Scott Mackie had to make some big changes in the way his company was run, and the way in which it marketed its product. As a whole, the snack market in the UK from 2004 to 2008 has seen a fall in sales in some areas, and a rise in others. The fruit, nuts, pretzels, popcorn and tortilla snacks all had an increase in year on year sales volumes. Despite this rise in this part of the market, the sales of crisps and chips fell dramatically, specifically between 2005 and 2006, when there was a drop of over 20,000 tonnes, from just below 160,000 to just below 140,000. Despite initial success, the company has not performed greatly of late. In 2005, SSL past the £1million mark for the first time. However this success was not built upon in 2006, when Muckle Chips saw a massive 25% collapse in sales levels, which was over twice the 12% drop the market as a whole felt. This disaster led to increased promotions on Muckle Chips to push sales, which further reduced unit profits. Added to this, the low cost renting rate on the factory premises ran out, further increasing unit costs. Muckle chips saw further decreases in sales levels, with 4% and 5% in 2007 and 2008 respectively. The market also saw the introduction of a “share size” bag of chips from one of SSL’s competitors, meaning that the company has just lost its unique selling point. The company was in a bad state at this point, and something needed to change.

Terms of Reference

The Aims of This Report
The aim of this report is to analyse the UK Snack market, to identify what current and future trends there are within the market, and to provide a recommendation that increases the sale performance within the company for our client to consider. Who Commissioned The Report?

The managing Director of Scott Snacks Ltd (SSL) has commissioned me to create a report, and to provide recommendations that meet his company’s needs. Constraints
I have not been given a great amount of time in which to produce my recommendations, which means I have had to be swift in making suggestions, which may not be as effective as they could have been, hade time not been an issue. Scott Mackie has a limited marketing budget, so I have been unable to collect any primary research. While the secondary research has been insightful, it is perhaps not as effective as primary research would have been. Manpower has not been a constraint, since we have employees who are more than capable of getting the job done...
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