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Maria Noone is the entrepreneur who owns Sensible Foods Ltd - Leaving Cert Business - Question A - 2014
Question A
Maria Noone is the entrepreneur who owns Sensible Foods Ltd. This new company intends to manufacture a range of low calorie confectionery products. Initially consume... show full transcript
Worked Solution & Example Answer:Maria Noone is the entrepreneur who owns Sensible Foods Ltd - Leaving Cert Business - Question A - 2014
Step 1
Evaluate the role of advertising and sales promotion as elements of the promotional mix at Sensible Foods Ltd.
Answer
Advertising Role
Advertising serves as a critical tool for Sensible Foods Ltd. by increasing brand awareness and reaching a broader audience. Given that this company is introducing a new range of low-calorie confectionery products, effective advertising strategies can help familiarize consumers with the product offerings.
- Awareness: Through national and local radio broadcasts, consumers who may not be privy to such products can be informed about their existence. This will create buzz and stimulate interest.
- Target Market: Advertising allows Sensible Foods to tailor its message to specific demographics, such as health-conscious individuals, thereby focusing on segments likely to purchase low-calorie products.
- Brand Identity: Consistent advertising contributes to building a strong brand identity, necessitating that any promotional materials reflect the ethos of Sensible Foods—health and indulgence.
Sales Promotion Role
Sales promotion complements advertising by providing immediate incentives for consumers to make purchases. Given the competitive nature of the confectionery market, it’s vital for Sensible Foods Ltd. to employ effective promotional activities.
- Special Offers: As mentioned, initial consumers will be tempted by special offers. This can include discounts or bundled products that entice customers to try the low-calorie products.
- Sampling: Promotional efforts could also include product sampling in Goodbuys stores and other locales to facilitate firsthand experience, which can lead to greater acceptance and trial.
- Encouraging Trial: Cleverly designed promotions can lead customers to try their products, especially when they are initially hesitant about the quality of low-calorie alternatives.
Conclusion
Both advertising and sales promotions are fundamental to Sensible Foods Ltd.'s strategy in launching its products effectively. They should work in tandem to create interest, inform potential consumers, and encourage them to make purchases.
Step 2
Describe two factors Sensible Foods Ltd should consider when choosing a suitable channel of distribution for its products.
Answer
- Market Coverage: Sensible Foods Ltd. must assess how broadly they wish to distribute their products. Opting for a supermarket chain like Goodbuys may allow for extensive market coverage, ensuring that a wide customer base can access their low-calorie confectionery. Conversely, selecting independent shops may limit their product’s reach but could support a niche market strategy.
- Costs of Distribution: The costs associated with different channels should be evaluated. Selling through large supermarkets might incur higher fees and logistics costs, while independent retailers might offer lower overheads but may also limit sales volume.
Step 3
Outline one positive and one negative implication for Sensible Foods Ltd of using a leading supermarket chain such as Goodbuys to sell its products.
Answer
- Positive Implication: Increased Visibility – Partnering with a reputable supermarket like Goodbuys can significantly enhance the visibility of Sensible Foods Ltd.'s products, making it easier for health-conscious consumers to discover them, which can lead to higher sales volumes.
- Negative Implication: Price Pressure – Working with a leading supermarket may subject Sensible Foods Ltd. to price pressures as these chains often negotiate for lower prices to maximize their profit margins. This could limit the company’s ability to set prices that ensure reasonable profit levels.