Introduction
Towards the end of 1994 the management team in Irish Biscuits Ltd identified the need to strengthen its marketing function. By July 1995 the marketing department had doubled in size and the marketing budget had increased to £2.5 million compared with a budget of approximately £1 million in other years.
The new team was charged with the task of updating the company’s corporate image and focusing on the development of new products.
Within an eighteen month period the new marketing team had presided over the creation of the number one selling biscuit brand in Ireland, Jacob’s Chocolate Kimberley, and had embarked on a diversification strategy with the launch of new snack food product, Jacob’s Chipsters. The success of Chocolate Kimberley allowed Irish Biscuits Ltd (IBL) to demonstrate their innovative skills to their parent company, Groupe Danone.
The diversification into snack food products illustrates the opportunities which are presented to the company as a consequence of access to the wide portfolio of’ products and brands from within the Danone Group organisation.
Irish Biscuits LTD
This case examines the impact of Groupe Danone parentage on IBL and the effect of’ two significant product launches in 1996 on the future direction of the company. It also explores the increasing pressure on the marketing team to make sense of a very complex market place as the traditional market boundaries between biscuits, cakes, confectionery and snack foods begin to blur with changing consumer and retailing trends.
The Research paper on Marketing Mix Product Consumers Company
Marketing Mix: The term marketing mix is used to describe the all the options available to the marketing manager in order to market a particular good or service. It is often referred to as the 4 P's (i. e Product, Place, Promotion, and Place) The Product Variable: This aspect of the marketing mix deals with researching consumers' product wants and designing a product with the desired ...
In 1966, when Ireland was on the verge of EC membership, W & R Jacob’s acquired the biscuit interests of Bolands, a large flour milling and biscuit manufacturing company, and Irish Biscuits Limited was formed. By 1971 the company was employing 3,000 people and controlled 82% of biscuit sales in Ireland. In the 1970s a very large modern factory on a 30 acre site in Tallaght was completed since described as one of the most sophisticated biscuit factories in Europe. As a result of this investment for much of the 1980s IBL was severely constrained in its development plans, by substantial interest repayments.
DANONE GROUP
Groupe Danone is the leading multiproduct food group in France, Italy and Spain, ranking third in Europe and among the top ten globally. The group is the world leader in dairy products and biscuits and number two globally in mineral water. Its corporate strategy involves investing in strong businesses rather than trying to reinforce weak ones and operations typically have very strong competitive positions and cost leadership. The biscuit division is the third largest division with in the Danone group accounting for 14.7% of sales and 11.41h, of profits in 1995.
Danone is also Europe’s leading biscuit manufacturer with annual production of 570,000 tones in 1994.
GROUPE DANONE BISCUITS
SALES & PROFITS 1993 – 1999
YearSales (FF) millionsSalesVolumemeOperatingProfit (FF) millionsOperatingMargin (%)
199312,949-2.0%8626.66
199412,837-1.0%8076.29
199511,750-1.3%8267.03
1996e12,007-1.5%8717.25
1997e12,367-1.5%9287.50
1998e12,739-1.5%9877.75
1999e13,121-1.5%1,0177.75
THE BISCUIT MARKET IN IRELAND :
Biscuits are one of the biggest markets in the Irish grocery trade, with a current market value of IR £125 million. Volumes at some 35,000 tones (13.8 kg per capita) have remained relatively static over the last five years. The market is divided between IBL (Jacob’s and Boland’s combined share) at 51%, United Biscuits (MeVities, Carrs, Crawfords and Pennywise) with over 201%, Burtons with 7%, Cadbury’s 5% and Fox’s with 3% (private label and economy biscuits account for the remainder of the market).
The Essay on Describe how marketing techniques are used to market products in two organisations
Describe how marketing techniques are used to market products in two organisations In this task I will describe how marketing techniques are used to market products in two different organisations in this case NHS and Nike. NHS The NHS was found by Aneurin Bevan on the 5th of July 1948 when he opened the Park hospital in Manchester; his ambition was to break a high standard of healthcare to ...
The biscuit market is usually divided into six sectors :
sweet/semi sweet (digestives, cookies, shortbread and cream filled), count lines (individually wrapped bars), chocolate biscuits, savoury (cream crackers and cheese biscuits), assortments (Christmas speciality) and snack biscuits (a relatively new sector which includes mini biscuits).
THE PRODUCT
IBL, has 78 different products under the Jacobs brand and 18 products under the Bolands brand in Ireland. It also produces a number of private label lines. Many of the Jacob’s brands are household names like Kimberley, Mikado and Coconut Creams, Chocolate Goldgrain, Club Milk and Fig Rolls. From 1983 to 1989 over 30 new products were launched by IBL including Snap Crackers, Choc Mallows, Busker, Club Polo, Club Crunchers and, for the Christmas market, Gallery and Elite. More recently, apart from local innovation of the Jacob’s Chocolate Kimberley product, new products have been selected from the Danone portfolio such as the LU biscuit range, Jacob’s Prince and Jacob’s Chipsters snacks.
There are many strong brands within the IBL portfolio which have achieved such status partly on account of their longevity and partly due to the successful advertising campaigns. For example…
– there are two sides to every Club Goldgrain
– if you’re gonna have a cuppa have a Club’. (Club Milk)
– someone you love, would love some, Mum’. (Kimberley, Mikado, Coconut Creams)
– how do you get the figs into the Fig Rolls? Only Jim Figgerty has the answer’.
THE DISTRIBUTION
RETAILER CONCENTRATION AND POWER :
Retail concentration has increased dramatically throughout Europe over the last 15 years as multiple retailers take an increasing share of tile convenience goods business. Dunnes Stores and Quinnsworth Group are the largest retail groups in Ireland collectively accounting for approximately 44% of total convenience goods sales. This presents manufacturers with two major challenges, firstly, access to key distribution channels is increasingly critical to a brand’s survival and secondly the threat of private label brands is likely to grow further. Multiple retailers within the biscuit market account for almost 47% of biscuit market sales (over 70%, of IBL, sales are through multiples) which suggests that the trend in retail concentration is particularly threatening in this market. The biscuit countline market is less vulnerable as a higher percentage of these products are sold through independent retail outlets.
The Essay on Ansoff's Product Market Grid
The Ansoff product-market matrix helps to understand and assess marketing or business development strategy. Any business, or part of a business can choose which strategy to employ, or which mix of strategic options to use. This is one simple way of looking at strategic development options: Each of these strategic options holds different opportunities and downsides for different organizations, so ...
THE PROMOTION
Innovating a sort of promotion?
Biscuit manufacturers argue that innovation from within the biscuit market has altered the role and perception of products in current dietary habits.
A recent review of Irish consumers’ attitudes to foodstuffs was undertaken by IBL. It identified four key factors which will have an effect on the future consumption of biscuits and related products.
Convenience: Patterns in food consumption are emerging which are less ordered than the rigid ‘3 meal a day’ structure of the past. This trend impacts on access to food, preparation of food, consumption of food and packaging. The biscuit market is well placed in the fulfilment of convenience as biscuits are easily available, easily stored, relatively mobile and can be consumed in a wide variety of occasions.
Cosmopolitanism: A growth in the style and fashion aspects of certain foods as well as increased consumption of international foods and increased exposure to international brands. To conform with this trend biscuit manufacturers must continuously innovate in product varieties, flavours and packaging.
Health: Nutrition and wholesomeness are increasingly important criteria in the purchase of foodstuffs. Braycott and McVities Go Ahead are important. signals of the health dimension in the biscuit market.
Indulgence: Higher standards of’ living and the importance placed on rewarding oneself hand children are growing phenomena. Within the biscuit market new personalised biscuits, individually wrapped, reflect this trend.
Various promotions :
KIMBERLEY BRAND
Heavyweight TV campaign (£500,000), Local radio promotions, PR including Late Night Show, Sampling, Dump displays.
The Term Paper on Tv And Advertising Product Market
The Television Industry and Advertising After a long day's work or a hard day at the office, people come home, sit in the Laz-e-Boy recliner, and flip on the television. Watching a favorite TV show has become many people's favorite way to relax or past the time. A wide variety of programming exists and most anyone will be able to watch something they can enjoy. The television industry is part of ...
THE PRICE
The prices vary according to the products but IDL tries to have a very good segmentation for all these products.
For example:
CHOCOLATE KIMBERLEY :
Retail Selling Price 89p for pack of six.
‘The packaging is luxurious reflecting the position of Chocolate Kimberley as the ultimate treat’.
Aine O’Halloran, Brand Manager, IBL.
THE SWOT
Strengths :
Range of products
Leader in the biscuits market
Member of the Groupe Danone
Strong brand
Experience of the market.
Weaknesses :
Low export penetration
Poor penetration confectionary and snack
Production orientated.
No market research
Opportunities:
Market development export
Groupe Danone Distribution
Growing snack food
Lifestyles changing
Product life cycle
Threats :
Strong retailers
New entrants
Substitute products.
THE WEB SITE
Irish Biscuits does not have a web site but the Groupe Danone does : Danone.fr.
This web site shows all the Danone products. Indeed, there are Evian (water), Lu (cake) and Danone (yoghurt).
In addition, the web site explains the marketing strategy of Groupe Danone.
Irish Biscuits is a part of Danone so it is interesting to understand how Lu works in France and in the world for Irish biscuits.
AN ADAPTED STRATEGY
Irish Biscuits has got a strategy adapted to the various markets. In fact, the Groupe Danone plays an important part concerning the strategy of Irish biscuits. But it is always the Irish Biscuits director who decides for the strategy.
The advantage of being a subsidiary of a multinational such as Danone is that it gives immediate access to distribution systems around the world (outside Europe the group also sells into US, Canada and the Middle East) as well as the opportunity to tender for production contracts for other Danone products.. This was reflected in the drop in shareholders’ funds from £34.3 million in 1994 to £32.6 million in 1995.
The Term Paper on Cost Leader Firm Strategy Market
Business-level strategy can be defined as the strategy that is chosen by a company to hold a competitive advantage within the market that it is involved with. Such a strategy has to be chosen by firms because of the intense competition that exists within a certain industry and thus managers, see the need to formulate business-level strategies that are geared towards creating and maintaining a ...
THE SOURCES
A study of the Danone Group and the Irish Group by Brenda Cullen and also Danone web site “Danone.fr” including research in the economic press (Capital, Challenges).
