Assignment - Case study
Scenario
Assume that you have been hired by Joseph Van Der Steen as a marketing consultant to make recommendations to the company on options for achieving business growth and increase revenue through the implementation of a marketing strategy.
Requirements
Your assignment must include the following:
1. A cover page (use the one attached to your study guide)
2. A table of contents page
3. Executive summary - a brief overview of the proposed plan which should include the report's main findings, conclusions and recommendations.
4. Situational analyses - give brief but relevant background information on the company's current market, products, competition and distribution. Identify the company's internal strengths and weaknesses as well as the main external threats and opportunities it faces.
5. Marketing objectives - Explain clearly what the plan is expected to achieve for the company. Identify at least four main marketing objectives that the company should pursue.
6. Target markets - Outline and justify the specific target markets that will offer the best opportunities for organisation growth.
7. Marketing mix - discuss each element of the marketing mix, product, price, promotion and place to achieve the company's objectives.
8. Budgets and controls - include sales, cost expenses and profit forecast.
9. List of references - at least four books/journals that you have consulted in the preparation of this assignment.
Case Study
Joseph Van der Steen had just inherited the family confectionery business in Brisbane. Selling in limited volume to a select group of customers, his grandfather had built a loyal following among people who would pay a premium price for beautiful and authentically old-fashioned, hand-dipped chocolates. All ingredients were natural: real butter and chocolate, fresh-ground vanilla and other flavors, authentic maple sugar and so on. All nutmeats were premium quality. Recipes and package designs had remained virtually unchanged since 1925, when the family had moved from Holland to Brisbane and had begun selling confectionery.
The confectionery production facilities were located in Brisbane. The building and equipment were sturdy, spotless and in excellent condition according to time-honored family traditions. The small staff was expert and loyal. Current production ran from 320 kg weekly in July to a high of 550 kg weekly in December. Capacity was estimated at 900 kg per week with one or two unskilled workers added for packing, stock control and cleaning duties.
The prices of Van der Steen confectionery had held steady over the past couple of years due to a decrease in the inflation rate. For several years before that, however, prices have had to be raised annually to compensate for sharp jumps in the costs of sugar, chocolate, packaging materials and other items. Even when prices were increased, demand remained relatively stable.
An income statement for financial year 2011 is shown below.
$
Sales 1 872 880
less cost of goods sold 1 264 219
Gross margin 608 661
less Operating expenses 256 458
net profit before taxes 352 203
The Company depends entirely on walk-in traffic at their retail store, located at the confectionery factory. A recent survey of 200 customers showed Joseph that 110 were regular repeat customers. Of the 200, 50 were business people buying several packages for business gifts.
The Van der Steen family had never advertised, depending entirely on word-of-mouth promotion and careful maintenance of customer goodwill. Some investments had been made in new packaging, but the basic package designs were almost unchanged since the turn of the century. They featured Dutch village scenes in pastel colors and Victorian faces. The company sold different combinations of a variety of confectionery primarily in 250g boxes.
While Joseph had only limited experience in the family business, he had graduated from university with a degree in Business Management. After a detailed evaluation and advice by his accountant, he decided to keep the business and build on the reputation and customer base established by earlier family members. He recently said that he would consider allocating a promotional budget of $110 000 for the first year, based on a sales objective of $2.3 million for the year. To reach that goal, the company would have to sell 900 kg weekly at the current retail price of $12.50 per 250 g box (approximately $50 per kg).
Joseph did a quick study of the competitive situation. There were a number of small sized, local producers of hand-made chocolates in Brisbane. Their prices ranged from $13 per kg to $65 per kg. In addition, the major department stores sold a variety of hand-made and fine chocolates. These chocolates were typically sold in 250 g boxes. David Jones' imported chocolate selection included Colefax Roden, Neu Haus, Cartner and Lindt. Retail prices for these imported chocolates started at $13.50 per 250g box. Popular locally produced chocolates at David Jones included Belle Fleur, Paddington and Dolci Doro. Prices in this category were generally below those of imported chocolates at around $11.50 per 250 g box.
Myer stores sold a range of confectionery by Thomton, priced from $11.95 to $41.50 per 100g as well as Swiss and Belgian chocolates at $11.50 per 250 g. There were numerous other brands of boxed chocolates, including the widely distributed Darrell Lea. Most were sold for under $9.00 per 250 g; only a few were priced at more than $18.00 per 250g. Very few were sold in the $9.00 to $18.00 per 250g price range. This type of confectionery was sold in many different sizes ranging from 50g 'samplers' to 1 kg boxes. The price per kg decreased as the package size increased.
Joseph had a number of decisions to make regarding his marketing strategy for the future. He wanted advice on how best to achieve his sales target of $2.3 million in the coming year and growing the business in the years ahead.
What to also include...
Question 4
• trends
• PEST analysis
• Marketshare
• Competition
• Distribution
• SWOT analysis
Question 5
• SMART objectives
• Contingency plan
Question 6
• Market segmentation - who should we be selling to?
• Whos buying already?
• The groups of customers
Question 7
• What are the 4 Ps : product, price, place, promotion ..... expand on the questions not just answer simply
Question 8
• Control mechanisms