Marketing and Consumer Behaviour ID: 38419273

Date: 2nd June 2013

Word Count: 1265

Marketing and Consumer Behaviour ID: 38419273

Executive Summary
The purpose of this report to help give employees of John McEwan Foods a better understanding of key marketing concepts and how they are applied to the John McEwan marketing strategy. Concepts such as market segmentation, targeting and positioning will be outlined followed by an explanation of the importance of branding and how the extended marketing mix is used to meet the needs of its customers. A wider understanding of these concepts throughout the organisation should sharpen its competitive edge and meet our customers requirements in a more unified manner.

Market Segmentation
Market segmentation is the activity of grouping potential consumers into segments that have common tastes, demands and preferences (Management Study Guide, 2013). Market segmentation allows marketing activity to be specific to the needs of a particular segment to allow for a better return on investment and a fuller perception of value of John McEwan products that would differ from the views from another segment (Investopedia, 2013).

Marketing and Consumer Behaviour ID: 38419273

Figure 1.1 Mark Segmentation for John McEwan

Marketing and Consumer Behaviour ID: 38419273

Targeting
These different market segments have been evaluated in order to arrive at the target market for John McEwan. Factors such as growth, size, structural factors, and long-run objectives are taken into account when evaluating market segments (Armstrong et al, 2012) to arrive at a target market. At John McEwan a main target market comprises high-brow entertainers 30-45 years of age with the primary need of conveniently procuring convenient gourmet food for the purpose entertaining friends/family. At John McEwan the preference is to carry out more concentrated strategies such as targeted online advertising and taking on stands at local food shows for example. The main reasons for these strategies are that John McEwan is an online business which can efficiently serve its niches (Armstrong et al, 2012), and that its mindful of its limited resources.

Positioning
Effective market positioning of the companys products is important as a means to influence consumer perception of competing brands and products. Its objective is to occupy a unique and advantageous position in the consumers mind (Business Dictionary, 2013). Two distinct competitive advantages for John McEwan are quality and convenience. Convenience is offered by way of: no need for quoting; no minimum orders; and no pre-order menus. High quality is achieved by way of John McEwan being owned by an existing food manufacturer. This allows a high level of quality control and at scale as high volumes of each John McEwan product already exist for a larger wholesale market. Value achieved through scale is then passed on to the customer by way of affordable pricing for a quality product.

Marketing and Consumer Behaviour ID: 38419273

Importance of Branding to Customers

A brand is a unique symbol, association, name or trademark which differentiates an organisations competing products or services. It signifies not only a physical trigger, but also an emotional hook to create a relationship between consumers and the product or service being offered (Blackston 2000). Branding helps customers by making it easier for them to make purchasing decisions by way of letting them identify products that benefit them in a certain way. Customers that that always buy the same brand will have confidence that they will get the same features and benefits each time they buy (Armstrong et al, 2012). The John McEwan brand is important to its customers because it represents a high level of quality and also plays on the emotion of the fun of home, entertaining and togetherness. The brand cares for the customers occasion and lifestyle just as much as they do and the customer feels that. When a customer purchases a John McEwan product, they have the confidence it is of high quality creating an excitement of sharing, in which in turn evokes a feeling of togetherness. An example of a much larger brand that effectively communicated change to its customers through its brand was Apple. As Apple went through a period of change it used the apple logo monochromatically changing from its rainbow stripes. In essence, the Apple brand effectively communicated its promise and instilled confidence with is customers as Steve Jobs initiated Apples new era (NY Times, 2009).

Importance of Branding to Organisations

Branding is important to organisations as a successful branding strategy will nurture brand equity and therefore competitive advantage. Such advantages include: a high level of consumer awareness; increased bargaining power; easier to introduce new products; and defence against price competition (Armstrong et al, 2012). Brand equity is the measure of the brands ability to capture consumer preference and loyalty (Armstrong et al, 2012). High brand equity is achieved by increasing consumer feelings about and connections with the brand (Armstrong et al, 2012). Brand equity is important because an increased level can give significant value to shareholders, which can actually be measured as a financial asset on a companys balance sheet. The John McEwan brand is very young at the time of writing so its brand equity is of little value. However, the brand is well positioned for equity to be developed over time with its unique offerings, value, emotive appeal and a robust marketing mix. Armstrong et al (2012, p238) states that Underlying brand equity is customer equity the value of the

Marketing and Consumer Behaviour ID: 38419273

customer relationships that the brand creates. The current robust branding strategy and marketing mix in place will develop customer equity over the medium to long term. A current example that can be seen in the market place is Cadbury launching a number of chocolate biscuit lines. Biscuits are a new category for Cadbury to play in, but are able to leverage their already significant brand equity to make a strong entry and attempt to take market share from Arnotts who currently controls around 60% market share of chocolate biscuits in Australia (Campbell Soup Company, 2013). Not only Cadburys brand equity strong enough to take market share, it potentially may also bring incremental customers to the category, thus benefiting the total category as a whole and those that play in it.

Marketing and Consumer Behaviour ID: 38419273

Recommendations for the Extended Marketing Mix

Marketing Mix

Recommendations
John McEwan should remain solely an online business and administered from the place of manufacture to keep costs down and pass this value on to its customers. Remaining online also helps to align with John McEwan's key benefit of convenience given buying online is a convenient way to shop. Content marketing though blogs, social media and video; stalls at annual food fairs; online PPC campaigns; SEO campaigns; seasonal price promotions; cross marketing with party supplies companies; and newsletter marketing. A cost-plus strategy to ensure we are not undercharging for our products. Our offering for ready meals is a 'bulk buy' and quite different from our competitors and will eventually tell us whether our prices are viable. A food loving social company culture is recommended as it transcends excitement to our customers' needs. A culture of excellent customer service is recommended also. The outsourced courier company must have a high level of customer service also. Delivery details (which consist of a suburb timetable) are clearly explained on the website and immediately after each order. All orders are handled by the ecommerce administrator who processes these twice a week and is accountable for order accuracy. All return processes are clearly explained on the website. All staff are to be aware of processes. It is recommended the John McEwan website has a homely rustic look with an air of fun and togetherness. The online business should remain at the place of manufacture so all employees can feel the process and smell the food being cooked to instil the sensual foodie culture. No customers are to visit the place of business, so there should not be any further design requirements to identify with the customer to keep costs down. Products are high value and are gourmet quality as they are direct from the manufacturer and sold in bulk lots (1kg). Well branded packaging should be used for customers to further identify with the brand when they see it arrive at home. All pictures of the products for the website are to be taken by a professional photographer to enhance appearance as much as possible. Heating instructions are to be given for convenience.

PLACE

PROMOTION

PRICE

PEOPLE

PROCESS

PHYSICAL ENVIRONMENT

PRODUCT

Figure 1.2 Marking Mix Recommendations for John McEwan

Marketing and Consumer Behaviour ID: 38419273

Reference List
Armstrong, G et al (2012) Principles of Marketing. 5th Edition. Australia, Pearson. Blackston, M. (2000) Observations: Building Brand Equity by Managing the Brand's Relationships. Journal of Advertising Research, Vol 40. Business Dictionary (2013) Market Positioning [Online] Available from: http://www.businessdictionary.com/definition/market-positioning.html. [Accessed 7th May 2013] Campbells Soup Company (2013) Asia Pacific [Online] Available from: http://www.campbellsoupcompany.com/atw_asia.asp. [Accessed 26th May]. Investopedia (2013) Market Segmentation. [Online] Available from: http://www.investopedia.com/terms/m/marketsegmentation.asp. [Accessed 5th May 2013] Management Study Guide (2013) Market Segmentation Meaning, Basis, Types of Segmentation. [Online] Available from: http://www.managementstudyguide.com/marketsegmentation.htm. [Accessed 5th May 2013] New York Times (2009) The importance of branding your new business. [Online] Available from: http://www.nytimes.com/allbusiness/AB4019474_primary.html. [Accessed 19th May 2013].

Marketing and Consumer Behaviour ID: 38419273

APPENDIX
John McEwan Background
John McEwan is a recently launched (2013) gourmet food brand. Its online store can be found at www.johnmcewan.com.au. John McEwan is owned by Glendal Foods which is a successful food manufacturer in Melbourne, Victoria. Glendal Foods is a family business which supplies the wholesale market such as Ikea, Costco, caterers and restaurants with finished food products. The John McEwan brand leverages the existing scale of Glendal Foods by way of taking its existing lines and re-packaging them in a take-home format. The customer base of John McEwan comprises young professionals, professional couples and working mothers. John McEwan has two offerings: ready meals and finger foods which provide a convenient gourmet option for home meals and occasions. Other products include accompaniments and sauces.