Marketing mix: Case study
A traditional family drinks firm has been developing slowly and built up a strong reputation, but control has now passed to the next generation, and they want to look at possible expansion for the firm. The new marketing director made the following statement:
'We have a strong family image, and our products are trusted, but we are considering changing our production strategy. We have normally just produced the flavoring and let others bottle it and take the risks of selling to the public. After considerable market research we have decided to launch our own brand of soft drinks. Initially, these will be a cola flavor, lemonade and ginger beer. If these are successful, then others are planned.'
1. Explain the marketing importance of 'a strong family image'.
2. Outline the market research the company is likely to have undertaken.
3. Analyze the advantages and disadvantages of the drinks firm introduce their brands with a penetration pricing policy.
4. Discuss potential changes in the marketing mix that this new strategy will involve and comment on their significance.
Answers
Answer:
1. The products of a strong family image are trusted.
2. They have decided to launch our own brand of soft drinks. Initially, these will be a cola flavor, lemonade and ginger beer.
3. Advantages
- High adoption and diffusion
- Marketplace dominance
- Economies of scale
- Increased goodwill
- High inventory turnover
Disadvantages
- Pricing expectation
- Low customer loyalty
- Damage brand image
- Price war
- Inefficient long-term strategy
4. Market Demand
Competition
Attraction of New Customers
Utilizing Excess Production Capacity
Expansion of Market in New Territory
Reducing Financial Risk
Improving Image and Goodwill
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Answer:
The products of a strong family image are trusted.
They have decided to launch our own brand of soft drinks. Initially, these will be a cola flavor, lemonade and ginger beer.
Advantages
1. High adoption and diffusion
2.Marketplace dominance
3.Economies of scale
4.Increased goodwill
5.High inventory turnover
Disadvantages
1. Pricing expectation
2. Low customer loyalty
3. Damage brand image
4. Price war
Inefficient long-term strategy
Market Demand
Competition
Attraction of New Customers
Utilizing Excess Production Capacity
Expansion of Market in New Territory
Reducing Financial Risk
Improving Image and Goodwill
Explanation:
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