TOPIC: Association of British Food Company
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- Introduction
- Analysis of strategic marketing environment, environmental drivers and their effects on the company
- Marketing strategy and appropriate analysis tools used
- Model-mix marketing strategy
- Customer analysis
- Competitor analysis
- BCG matrix marketing strategy
- Targeting and positioning
- How the company should develop its business from strategic marketing perspectives over the next three years and consider different strategic options available
- Conclusion
- References
- Introduction
The United Kingdom is known for its abundance in foods and drinks companies, and Association of British Foods Company is one of the best examples of foods and drinks companies in the country. According to Mann, Adebanjo and Kehoe (1998), this company was founded in 1935 by Garfield Weston and its major products include foods and ingredients. This company is the largest food-producing company in the U.K., and its headquarters are located in London. This company produces sugar and yeast and beverages among many other products.
- Strategic market environment
The Association of British Food Company, the strategic market environment involves the internal and external factors that affect the company’s ability to establish a good relationship with its customers. This company uses various analysis tools to analyze its market environment. To analyze its external market, it uses the PESTLE tool, which is used in analyzing the macro environment of the company. This PESTLE is an abbreviated word which stands for political, economic, social, technological, environmental and legal factors that have an impact on the macro environment of the company (Kolios and Read, 2013). Any change in the macro-environmental factors can bring significant impacts not only on the company. These changes in the macro-environment can have a great impact on the porter five forces that help shape the company’s strategy and competitive landscape. This analysis tool provides great detail about operating external challenges that affect the company. For instance, political factors have been given the first priority in the Association of British foods since this company runs its activities in various countries and the political environment of the other countries associated with the company is key. This company always considers the political stability of the country, level of corruption, beauracracy and interference in the food and beverage industry by the government among other factors in the political point of view before investing in any country and this has greatly helped the company in avoiding the problems that result from the external environment in from the political factor. The economic factor is another key consideration done by this company, where it identifies the type of economic system used by the country and how stable it is. It also considers the exchange rates and stability of the host country and more so views the infrastructure quality in the host country since its goods are mostly perishable. Interest rates and also inflation rates among many other factors in the economic sector are closely looked into to avoid influence and negative impact into its external environment. Social factors are also not left behind since this helps the company identify shared beliefs and attitudes that play a major role in understanding the customers in a particular market. The PESTLE tool analysis the demographics and skill levels of the population, culture, attitudes, education levels among others which may have an impact on the company’s external environment (Bees and Williams, 2017). Environmental factors are also considered in the PESTLE tool analysis since these factors can impact on the company’s profitability. For instance, this company evaluates weather, climate change, air and water pollution regulations in the food and beverage industry, recycling, among other factors. The company also considers legal factors in the host country where it identifies the presence of anti-trust laws in food and beverage industry, discrimination laws, health and safety laws, intellectual property laws among others and this helps the company take precaution measures before engaging in any market environment thus providing a conducive external environment for running its activities.
This company uses SWOT analysis tool in evaluating the conduciveness of its internal environment. This tool is used to identify the company’s present strengths and weaknesses as the internal strategic factors, and also its external strategic factors like opportunities and threats facing its immediate business environment (Helms and Nixon, 2010). Through this tool, the managers of this company developed a four type strategy that involves strengths-opportunities strategy, weakness opportunities strategy, strength-threat strategy and also weakness-threats strategies. Through the SWOT analysis tool, the company identifies the numerous strengths that enable it to thrive in the market place. This strength helps the company protect its market share and also helps it penetrate new markets. Most prevalent strengths of this company include a strong base for a reliable supplier of raw materials, and this has greatly helped the company overcome any supply chain challenges. It also has strong free cash flow, and this provides resources for the company, thus helps it expand new projects. A strong distribution network is another strength of this company where it is able to reach the majority of its potential market. This company has also been known to have super performance in new markets, and this helps the company build new revenue streams. This company also has its own weakness based on the analysis, where the company’s financial planning has not been done properly over the years, gaps in the product range sold by the company. It has also proved not to be so good at product demand forecasting, which has led to higher rates of missed opportunities, unlike its rivals. The company also has limited success, especially in outside core businesses where it faces challenges in moving to other product segments, among other weaknesses, and these reduce the company’s ability. SWOT analysis tool has also proved that this company has various opportunities which is an external strategic factor. For instance, the new technology has provided an opportunity for the company where it enables the company to maintain its loyal customers due to great service; lower inflation rates are yet another opportunity for the company since it brings more stability in the market and this enables the company to provide credit at lower interest rates for its customers thus it can easily retain its customers for long (Lamond, 2014). New trends in consumer behaviour is an opportunity for this company since this helps it open up new markets among many other opportunities. This company also experiences threats which is an external strategic factor, and this affects the internal environment of the company. Threats which affect this company include, the new environmental regulations which are recorded under the Paris agreement of 2016 might be a threat to the company (Rogelj et al., 2016). It also faces a threat of imitation of the counterfeit and low-quality product where some manufactures imitate their products and produce products which seem to resemble their own product at a lower quality, and this becomes a threat to the company. Intense competition has been a threat to this company since stable profitability has increased the number of players in the industry, thus increasing levels of competition, thus posing a threat to the company. These analysis tools have helped this company identify its strengths, weakness, opportunities and threats that may affect the company and act accordingly in order to ensure its strategic market environment is at its best thus help the company focus on the opportunities and reduce threats that the company can face. This company is known to have key environmental drivers that dictate the market environment for the company. These drivers include climate change which has been affecting the company’s production, greenhouse gas effective, pollution in both water and soil, biodiversity among other environmental factors have had significant impacts in the market environment of the company, and this affects the company’s progress. If these environmental drivers are not considered, their impacts will remain felt in the company the entire period.
- Marketing strategy of the company
- Model- mix marketing strategy
Association of British Food company uses the marketing model-mix to discuss its marketing strategy that involves product design, pricing, promotion, and distribution (Khan, 2014). Product design, name and features are one of the company’s marketing strategy that helped the company stand out in a competitive market. Pricing is another strategy in the model mix where the company evaluates the value of products for its targeted customers, and it achieves this by focusing on setting the list price, credit terms, discounts among others to its customers. This company may decide to use the pricing strategy in gaining entry into the market, and this will force it to lower the price of its products in relation to that of its competitors. Distribution strategy makes this company develop a distribution plan that decides if the distribution will be direct or indirect and whether it is interested in traditional brick and mortar or will focus on online distribution strategy (Yan, 2008). To make a proper choice of the distribution strategy to use, the company should consider the distribution strategy used by its competitors, analyze its customer’s preferences and also the product characteristics especially in the case of perishable goods use of middlemen to distribute the perishable goods will not be a good decision for the company. Promotion is a key element for this company where it blends above and below the line of promotional strategies in order to achieve its marketing objectives. To achieve this, the company first defines its unique selling propositions and understands the reason of its customers requiring the product and how different the product is from the available alternatives.
- Customer analysis marketing strategy
Customer analysis is another marketing strategy used by the Association of British Food. The company has achieved this by understanding the needs, expectations and attitude of its customers. To conduct customer analysis, this company firstly identifies its current and potential customers where the company divides the customers into various segments on the basis of their motivation, traits and also characteristics. The company makes sure that the customer analysis provides information about how the needs and expectations of different groups differ from each other, and the reasons behind it (Doole and Lowe, 2008). The company also analyzes how its products and services offered serves the needs of different groups, and this has helped the company identify the customer groups that have more profits and also growth potential and this information through the customer analysis helps the company develop customer profiles and personas. In developing these customer profiles by the company, the identity of market size must be done, which involves the current and potential customers, which can be easily divided into small segments. The company also ensures that the customer profile has differences which can easily be observed and also conduct a behavioural analysis of the customers in order to identify psychographic profiles. After all this, the company develops customer personas which consist of demographic information, preferred communication channels, possible influencers and challenges which the customers face due to unserved needs.
- Competitor analysis marketing strategy
Competitors analysis is a marketing strategy that has been used by this company where the company does this analysis in order to understand relative positioning and market share of the company’s both direct and indirect competitors. It achieves this, by first identifying the competitors, evaluates their strategies and then compares the strengths and weaknesses of the competitors’ products to its own. The company uses various strategies in getting the competitors’ information where it has used google search, going to trade shows, asking customers, among others (Gordon et al., 2008). This company has taken various steps in understanding the strategic positioning of its competitors. First, the company identifies the target market of the competitor, analyzes the competitors’ product, market share, its strengths and weaknesses. It also develops a summary of the competitors market and their strategies and then it compares its products with the competitors’ and this information has helped the Association of British food update its competitive analysis, and this helps the company make an informed and strategically wise decision. This has been the reason why the company is always ahead of its competitors.
- BCG matrix marketing strategy
The company also uses the BCG Matrix marketing strategy, where the company evaluates its product line continuously by assessing its growth potential and its share in the market. The company following the use of this strategy the company classifies its products into various categories (Rowe, 2008) For instance, products with high growth and market share are classified as stars, and this makes the company increase its investment in these products. Products with high market growth but low shares the company classifies them as question marks, and this helps the company analyze why the market shares are low despite a high rate of growth. The company also classifies products with low growth but high market share as cash cows that need to be milked in order to have good performance in the market with low growth and limited opportunities. It also classifies products with low growth and low market share as dogs, and this makes it easy for the company to divest since the company sees it difficult to make profits and get returns from such products. According to West, Ibrahim and Ford ( 2015), this company also uses other marketing strategies like brand equity, market analysis, competitive advantage and also segmentation marketing strategies that have greatly helped the company in its marketing process thus making the company ahead of its rivals.
- Targeting and Positioning marketing strategy
The company also applies the targeting and positioning market strategy, and this is made effective after segmenting its customers into different groups and placing them into groups with the same characteristics (Schlegelmilch, 2016). After segmentation, the company is able to choose wisely the target group whose needs and expectations meet the company’s resources and capabilities. This targeting strategy is done by evaluating the commercial attractiveness and growth potential in the identified segments. The company considers the size of the segment, estimated profits which will result from the segment and makes sure that the segments can easily be accessed. After segmentation, the company sets a clear positioning statement that creates a positive image of the offered product in the minds of the customer. To achieve the positioning strategy, the company identifies its strengths and weaknesses and compares it with that of its competitors in order to find gaps that the offering product can easily fulfil. It also evaluates the positioning strategy of its rivals, and this helps the company evaluate its own position in the market. This targeting and positioning market strategy has been of great help in the achievement of the company’s success.
- How the company should develop its business from strategic marketing perceptive over the next three years
The Association of British food company should have developed its business over the next three years by putting more emphasis on the following; The company should strengthen its distribution network especially in the control strategy since this will allow the company have higher control for its products in different markets. This will help the company control where its products are placed, thus enhancing accessibility and easy availability of its products. The company needs to develop stronger relationships with its consumers, and this will be facilitated by strengthening of distribution network since the company will be able to work closely with its end consumers where the company will be able to reach the consumers with same high quality of products across its different markets.
The company should develop unique marketing tactics like through forming partnership with its consumers. This will be achieved by coming up with new and strategic means of communicating with the consumers and engaging them with the brand (Pearson et al., 2011).To achieve this, the company will have to make consumer co-producers of the brand or by co-branding with other similar but dissimilar brands and companies in order to enjoy that consumers enjoy higher market visibility. The company should also adapt to different cultural aspects of different markets where the company can identify different consumer group characteristics in order to help it connect better with various target groups in different markets. It also needs to adapt to different cultural and regional characteristics since this will help the company present itself to target consumers, and this will facilitate the likeliness of consumers consuming the product. According to Davies, Titterington and Cochrane (1995), the company should also expand its market into new regions since the expansion will give the company exposure to new consumer groups and this will, in turn, increase the income streams and also increase overall consumption. It can also expand its market through diversifying its products where the company will add new products, and this will help the company penetrate even more in the market by exploring new consumer groups and identifying new target groups. The company should also strengthen the value network, and this can be achieved by adding quality and enhanced elements at different stages, and this will help the company maintain a competitive advantage. This will allow the company to maintain sustainable competitiveness over other players and will also help the company maintain a possible leadership position in both local and international markets and also industries.
- Conclusion
Association British Foods is one of the largest food and drinks producing company in the U.K. and success of this company greatly influenced by its strategic marketing environment and also a marketing strategy that the company uses in order to have a competitive advantage against its competitors. This company frequently uses various analysis tools like SWOT, PESTLE among others and this helps the company identify potential threats that the company may face thus helping the organization have strategic plans put into use to help reduce the impact the threats can cause. These analyses also encourage employees to adopt a strategic thinking mindset. Through the analysis, the company is able to create methods that will identify and exploit new opportunities in the market, and this also makes the company evaluate the impact their decision can cause before even implementing them. These analyses have helped this company’s progress remarkably increase. Marketing environment of this company has been a great influence leading to the success of the company where critical analysis of its both internal and external environment is properly analyzed, and this makes the company identify the impacts that its immediate and external environment can have in the progress of the company. Through the analyzes of its marketing environment, the company is able to identify key environmental drivers and potential effects they can have on the company. For this company to develop its strategic marketing strategy in the near future, it should strengthen its distribution network with the aim of controlling the market and through it improving its relationship with the customers. The company should also develop unique marketing tactics, and this will make different from its customers, thus improving its penetration into new markets. It should also expand its market into new regions in order to identify new customers and also diversify its products. The company should also strengthen its value network where it can add quality in various stages, and this will help it attain a competitive advantage.
- References
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Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now?. Journal of strategy and management.
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Rogelj, J., Den Elzen, M., Höhne, N., Fransen, T., Fekete, H., Winkler, H., Schaeffer, R., Sha, F., Riahi, K. and Meinshausen, M., 2016. Paris Agreement climate proposals need a boost to keep warming well below 2 C. Nature, 534(7609), pp.631-639.
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