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Beveraton PLC is a global manufacturer of soft drinks - Leaving Cert Business - Question 7 - 2019
Question 7
Beveraton PLC is a global manufacturer of soft drinks. It developed Intez, a new sugar free soft drink which will be launched in the market in September 2019. (A) (... show full transcript
Worked Solution & Example Answer:Beveraton PLC is a global manufacturer of soft drinks - Leaving Cert Business - Question 7 - 2019
Step 1
Explain the factors that should be considered before deciding on the price to charge consumers for a product.
Answer
When determining the price for Intez, several factors must be considered:
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Production Costs: This encompasses the total costs involved in producing the soft drink, including raw materials, labor, and overhead. The selling price should cover these costs to ensure profitability.
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Demand in the Marketplace: Understanding consumer demand is crucial. If demand is high, the company may set a higher price.
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Competition: Analyzing competitors' pricing strategies can help to position Intez effectively in the market. It is essential to consider how similar products are priced.
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Consumer Expectations: Insight into consumer perceptions regarding the pricing of sugar-free drinks can influence pricing strategies, as expectations may vary significantly across different market segments.
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Legal Restrictions: Compliance with any local laws and regulations regarding pricing is vital, as certain jurisdictions may impose restrictions on product pricing.
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Product Positioning: How Intez is positioned in the market (e.g., luxury vs. mass market) will guide pricing decisions. Appropriate positioning can justify higher prices.
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Stage of Product Life Cycle: Pricing strategies may differ based on whether Intez is in the introduction, growth, maturity, or decline phase of its life cycle, with introductory pricing potentially aiming to gain market share.
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Target Market: Understanding the characteristics and purchasing power of the target demographic can inform appropriate pricing strategies.
Step 2
Outline the pricing strategy best suited to the introductory stage of Intez and explain the reason for your choice.
Answer
The most suitable pricing strategy for the introductory stage of Intez is Penetration Pricing. This approach involves setting a lower price to attract a large customer base quickly by capturing market share. Given the competitive nature of the soft drink industry, penetration pricing can help Intez gain visibility and encourage trial among consumers, especially in the target 'lunch box' mass market. By offering a lower price initially, the brand can entice customers to switch from competitors and help build brand loyalty. As demand rises and the brand establishes itself, prices can be adjusted to more sustainable levels.
Step 3
Describe the role of Public Relations (PR) in a business.
Answer
Public Relations (PR) plays a vital role in shaping and maintaining a positive image for a business. It aims to:
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Create Good Publicity: PR efforts help craft a favorable image and can include press releases, events, and social media initiatives.
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Manage Reputation: Proactive PR can mitigate potential negative publicity and defend the business's reputation, especially during crises.
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Build Relationships: Engaging with various stakeholders, including customers, media, and communities, fosters trust and rapport, enhancing the business's image.
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Support Marketing Efforts: PR complements marketing by raising awareness of products and enhancing brand credibility.
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Long-Term Brand Value: Consistent PR efforts contribute to maintaining and enhancing the overall value of the brand over time.
Step 4
Discuss the methods Beveraton could consider to develop good PR, providing examples to support your answer.
Answer
To develop good PR, Beveraton could employ several effective methods:
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Sponsorship: By sponsoring events or local sports teams, Beveraton can gain visibility and create positive associations with the brand.
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Celebrity Endorsements: Utilizing influencers or celebrities to promote Intez can appeal to broader audiences and enhance brand recognition.
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Press Conferences and Launch Events: Organizing events around the launch of Intez can attract media attention and create buzz around the product.
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Social Media Engagement: Actively engaging with consumers on platforms like Instagram and Facebook can build a community around Intez, encouraging user-generated content.
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Content Marketing: Creating informative content related to sugar-free diets, health benefits, and lifestyle tips can establish Beveraton as an authority in the soft drink market, enhancing brand credibility.
By strategically implementing these PR methods, Beveraton can significantly bolster the image of Intez and foster customer loyalty.
Step 5
Outline the factors the marketing manager of Intez should consider when designing the packaging for the brand.
Answer
When designing the packaging for Intez, the marketing manager should consider the following factors:
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Promotion and Appeal: The packaging must attract customers visually, utilizing eye-catching designs and colors that resonate with the target demographic. Effective packaging can serve as a form of promotion in itself.
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Differentiation: The packaging should uniquely represent Intez, helping it to stand out from competitors' products on the shelf, thus capturing consumer interest.
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Functionality: Practical aspects, such as ease of use and convenience, should be prioritized. This includes how the packaging is designed for storage or transportation.
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Legal Requirements: Compliance with labeling laws is critical, including information on ingredients, allergens, and nutritional values on the packaging for consumer transparency.
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Size and Convenience: Offering different sizes can cater to various market segments, and the choice of packaging material impacts both sustainability and product preservation.
By addressing these factors, Intez can create effective, appealing packaging that aligns with brand objectives and consumer expectations.