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Marketing strategy of walkers crisps

2790 word (11 pages) essay in Marketing

5/12/16 Marketing Reference this

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Walkers is the UKs favorite crisps brand. Founded in 1948, butcher Henry Walker began making crisps in his Leicester Plant to keep his workers busy, as meat was scarce in post-war Britain. Today, Walkers is Britain’s largest crisp manufacturer, employing thousands of people in seven locations. Walkers have 16 ranges of crisps and snacks including Walkers Sensations, Doritos and Quavers. Still based in Leicester, Walkers joined the PepsiCo family in 1989 and makes around 10 million bags of crisps a day. Walkers is worth around £436 million, and Walkers snacks are enjoyed by over 10 million people in the UK every day.

In 2007, Walkers became the first company in the world to display a carbon reduction logo on a consumer product. The label covers the carbon used from seed to store and through to product disposal. Working with the Carbon Trust, Walkers reduced energy use per kilo by one third, and water use per kilo by 45%. Walkers have also committed to further year on year reductions to continue to qualify for the label. As part of their efforts to reduce our carbon emissions by reducing our road miles, they switched to using 100% British potatoes for Walkers crisps in July 2007.

Introduction to Task 1

This task is regarding marketing strategy options for walker, the requirements from task is to identify the type of growth for walkers which is most relevant to the company and provide justification for that. And then provide two marketing strategy options for walkers and explain how these options can be used to achieve the competitive advantages and long term growth.

What is a marketing strategy

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal. [1]

There are three steps in formulating a marketing strategy

Step 1: Identification of growth opportunities

Step 2: Consider developing Porter’s generic strategies

Step 3: Draw up marketing options

While assessing the growth opportunities some points which needs to be focused are “Planning a new business”, “Downsizing or terminating the old ones which are no longer profitable”, and the “ratio between the desired sales and projected sales”.

As per requirement of this task the discussion will be only limited to the step 1, which is the identification of growth opportunities for Walkers.

Type of growth for Walkers

As looking at the current business, market share and market opportunities it indicates that for walkers the growth type is “Intensive Growth”. Intensive Growth is related to the growth when an organization want to enhance their current business and try to identify opportunities to achieve further growth within the current business.

The above given diagram was produced by “Ansoff” which is a useful framework for companies management looking for the new opportunities to increase their sales and profits. As it show that it has four marketing strategies

Two marketing strategy options for Walkers

By looking into the current market position Walkers and the revenue they generate each year throughout the United Kingdom market, I will suggest Walkers the following two marketing strategies.

Market Penetration Strategy

Market Development Strategy

Market Penetration Strategy

The first strategy each and every company is looking for is to adopt for increasing their sales and revenue is the market penetration strategy. Market Penetration Strategy is the marketing efforts of the company to offer their existing products and services within the current market. The best way to do this is to attract competitors customers and looking for potential customers in the existing market for existing products.

As Walkers have the opportunity to use market penetration strategy for their different brands in UK, and also abroad. Before going for marketing penetration strategy proper analysis of competitors in market is required what are their strengths and in which areas they are lacking in providing good services to customers, what are the core competencies for Walkers against all those who are already in the market, and then develop a plan to address those areas which need to be, and try to capture more and more customers of other competitors and also become an attracting brand symbol for new customers in the market of crisps.

Market Development Strategy

Developing a new market for the existing company product is called market development strategy. In this activity efforts are put on to find new markets and make new customers to increase company revenue and profit. Walkers has the opportunity to develop markets oh geographical such as cities, counties, and demographical such as on basis of sex, age group and class etc.

Walkers have the opportunities to develop new markets for its product throughout the United Kingdom, and also in other potential areas globally. Through market penetration strategy they can give good packages to their customers in order to encourage current customers to buy more, the second and important factor in this strategy is that to attract competitor’s customer by providing them good packages to buy Walkers product and attract all those customers who are new to this market and increase the number of customers.

Justification for Marketing Strategies Choices

As Walkers Crisps is a UK brand with a 47% share of the British crisp market. And 12 different types of crisps products, which shows that almost half of the UK crisps market is captured by Walkers, and they have a very good and popular brand name, that’s why in this assignment the two marketing strategies “Market Penetration Strategy” and “Market Development Strategy” for the purpose of marketing are recommended to Walkers. They can launch their product in new markets to attract their competitor customers and all those who are new to the crisps market, because of having good will of Walkers and good market share in the country markets, Walkers will definitely get succeed in attracting new customers and their competitors customers.

The second proposed strategy for Walkers (Market Development Strategy) will enable Walkers to introduce their products into new markets with their current products. Although Walkers have about half of the market share captured in UK crisps market but definitely there will be some potential areas where they don’t have given the required focus in past, or address those markets where they have low sales as compared to their competitors, so this strategy will help walkers to properly analyze the new market areas and launch their products under the well known brand name of Walkers to achieve maximum benefits for the company.

Introduction to Task 2

For every product in market the PESTEL analysis is very important as it is a main part of the marketing strategy development, so the requirement from this task is to carry out PESTEL analysis for Walkers, and then provide enough information and asses how technological change and globalization for the company’s market planning in the next 3 years.

What is PESTEL Analysis

PESTLE stands for

P: Political

E: Economic

S: Sociological

T: Technological

L: Legal

E: Environmental. 

PESTLE analysis is in effect an audit of an organization’s environmental influences with the purpose of using this information to guide strategic decision-making. The assumption is that if the organization is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes.

Importance of PESTEL Analysis

To help make decisions and to plan for future events, organizations need to understand the wider ‘meso-economic’ and ‘macro-economic’ environments in which they operate. (The meso-economic environment is the one in which we operate and have limited influence or impact, the macro-environment includes all factors that influence an organization but are out of its direct control). An organization on its own cannot affect these factors, nor can these factors directly affect the profitability of an organization. But by understanding these environments, it is possible to take the advantage to maximize the opportunities and minimize the threats to the organization. Conducting a strategic analysis entails scanning these economic environments to detect and understand the broad, long term trends. 

A PESTLE analysis is a useful tool for understanding the ‘big picture’ of the environment in which an organization is operating. Specifically a PESTLE analysis is a useful tool for understanding risks associated with market (the need for a product or service) growth or decline, and as such the position, potential and direction for an individual business or organization. 

A PESTLE analysis is often used as a generic ‘orientation’ tool, finding out where an organization or product is in the context of what is happening outside that will at some point affect what is happening inside an organization. The six elements form a framework for reviewing a situation, and can also be used to review a strategy or position, direction of a company, a marketing proposition, or idea. 

Completing a PESTLE analysis can be a simple or complex process. It all depends how thorough you need to be. It is a good subject for workshop sessions, as undertaking this activity with only one perspective (that is, from just one person’s view) can be time consuming and miss many critical factors. We all see things differently and harnessing the knowledge of several people will ensure the process is robust and meaningful.

PESTEL Analysis for Walkers

Following is the PESTEL analysis of Walkers in UK, keeping in mind the market share, growth and opportunities available in UK crisps market.

Political: what is happening politically in the environment in which you operate, including areas such as tax policy, employment laws, environmental regulations, trade restrictions and reform, tariffs and political stability. As the political system in the UK is one of the most stable democratic systems, so Walker will be having no problems regarding the country political system. The taxations, employment laws and environmental regulations in UK have proper system to introduce so that’s not an immediate treat, but the Walkers have to look into current recession which is effecting almost all organizations in the world.

Economic: what is happening within the economy, for example; economic growth/ decline, interest rates, exchange rates and inflation rate, wage rates, minimum wage, working hours, unemployment (local and national), credit availability, cost of living, etc. the current economic conditions have effected most of the organizations throughout the world, so before launching any new marketing campaign it is necessary for Walkers to have proper analysis of the available resources for campaign and what will be the after effects of that.

Sociological: what is occurring socially in the markets in which you operate or expect to operate, cultural norms and expectations, health consciousness, population growth rate, age distribution, career attitudes, emphasis on safety, global warming. As Walkers is so much focused on these issues, they have invested millions pound to improve the health related issues in their products.

Technological: what is happening technology-wise which can impact what you do, technology is leaping every two years, how will this impact your products or services, things that were not possible five years ago are now mainstream, for example mobile phone technology, web 2.0, blogs, social networking websites. New technologies are continually being developed and the rate of change itself is increasing. There are also changes to barriers to entry in given markets, and changes to financial decisions like outsourcing and in sourcing. So Walkers need to keep updating on their technological side to ensure their parallel walk with the fast driven technological world.

Legal: what is happening with changes to legislation. This may impact employment, access to materials, quotas, resources, imports/ exports, taxation etc. As described earlier that to bring changes in legal system in country there is a fair and smooth process, so Walkers don’t need to be worried about it.

Environmental: what is happening with respect to ecological and environmental aspects. Many of these factors will be economic or social in nature. So Walkers need to develop environment friendly product and use such fuels in the manufacturing plants which produce min environmental pollution and don’t harm the health of the workers.

Impact of Technological Change

In modern world the technology evolve very quickly and each and every day there is some new innovation in the way organizations use the technology in order to enhance their operations and perform the daily activates in good and quick way. The business world has revolutionized almost beyond recognition in the past few decades. Technology and we mean the advances in communication and information technology has changed the face and the pace of business.

As communication and information travels faster and faster, the world seems smaller and smaller, and this has large implications for the way we conduct business. Storing important in files on a computer rather than in drawers, for instance, has made information easily accessible. Using e-mail allows businesses to communicate and send these files quickly to remote locations outside of an office.

The impacts of technological change for Walkers in next 3 years will the following

General changes to technology

Communicating

Consumers in control

Technology has bring a revolutionary changes to the way of marketing, after the evaluation of internet most of the business are now not limited to shop-based shopping, but the concept of virtual business is introduced. The fast communication among the business units and storage of large scale of data easily, and accessibility of data at finger tips are the main advantages of using technology.

Technology makes it easy for consumers to find information that they are looking for they are now in control of what they are getting from businesses. With the internet, it is simple for consumers to get online and find a great deal or the same product that you are selling, but one of higher quality for the same price. The internet has created a world of choices for the consumer to use, which means they can make demands on what type of product or service you are offering. What you need to do is to change your product or service and what you are delivering to ensure that your consumers are getting the best deal possible, but that they are also getting the best service and the best value when compared to other companies.

Impact of Globalization

Globalization has caused dramatic changes to business practices around the world. Companies such as IBM, Intel, Microsoft, and Philips have started to outsource specialists from various parts of the world, causing job shifts and changes in companies’ structures (Engardio, Bernstein, and Kripalani, 2003).

Globalization is an interesting phenomenon since it is obvious that the world has been going through this process of change towards increasing economic, financial, social, cultural, political, market, and environmental interdependence among nations. Virtually, everyone is affected by this process. Given these changes, globalization brings about a borderless world (Eden and Lenway, 2001; Ohmae, 1989a). Globalization drives people to change their ways of living.

So to complete in the globalized world Walkers management need to think out of the box and develop their marketing strategy in way which fulfills the needs of all the global stakeholders, and all products and information must be available globally. For that they may need to outsource their business operations may be to some firms in countries other than in where Walkers is in operation.

Conclusion and Recommendations

Walkers have very good market in UK, providing their customers good crispy products having twelve brands of snacks and crisps. They have captured forty three percent of UK market; have very good marketing strategy like having a former England football team captain as Walkers brand ambassador. But they have very potential growth opportunities which will need to be availed by having improved marketing strategy and addressing the hidden markets to penetrate in those areas, and also try to attract new customers into market, also the customers of their competitors. Also they need to keep updating on their system and technologies both for information sharing, marketing and product preparation to have improved quality of products and achieve the organizational goals and objectives.

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