Case Study Cadbury
Market Penetration Is the activity or fact of Increasing the market share of an existing product, or promoting a new product, through strategies such as bundling, advertising, lower prices, or volume discounts. For example, if Catbird lowers the price of a certain product, not changing the content of the product nor the market it was targeting. It) Product development is the creation of products with new or different characteristics that offer new benefits to the customer.
It may involve changes in an existing products or their presentation to satisfy the customers’ needs. For example, If Catbird created a new line of chocolates which were Just Like ones which were already In the market but doubling the size, changing the product but not the market it was targeting. Iii) Market development is the expansion of the total market for a product or company by entering new segments of the market. For example, when Catbird launched its Balloon gum in India in 2007 to take advantage of developing markets, It targeted a new market without changing Its product. V) Diversification is a strategy that involves adding product, services, location, customers and markets to your company’s portfolio. An example was when Catbird launched a range of Dairy Milk-branded pampering products in 2011.
2. L) The Nations matrix Is a model which Is used to show the degree of risk associated with four different strategies which Include market penetration, product development, market development and diversification. Market Penetration: For this Kraft would try to increase its sales by offering the same products and targeting the same markets.
So Kraft could use strategies such as lowering prices or use strategic advertising to show the customers the same product but in a new and innovative way. Kraft could start a major campaign for Maxwell Coffee House with coupons to existing customers.
Another strategy could be to Implement a short-term promotion such as selling three packets of biscuits for the price of two with an ending date. Product Development: For this Kraft would try to increase its sales by targeting the same market but offering a wider range of products. An aim is that it wants to be a great snack powerhouse.
It could achieve this by launching a new line of snacks which would be bought by people of all ages to have during school, work, leisure time..
. Kraft could also introduce new products created by their suppliers which could also be existing products with different flavors or scents. Another strategy would be to Improve or modify existing products such as by making small quality corrections or adapt the products so that they satisfy the customers’ needs. -Market Development: For this Kraft would try to increase their sales by keeping their existing products but targeting new markets.
It could do this by an expansion of the total market to open into a wider range of customers around the globe. An example would be if Kraft over took coronary Decease It NAS already eve retaken toner Tells wanly make conflate such as Doubleton, but it would expand its market as Catbird is sold in places in which there are no Kraft selling points.
-Diversification: New products could be introduced which would allow Karat’s products to increase consumer demand, sales and revenue. For example it could sell health and wellness products, organic or fair trade products for which they could charge an additional rice.
If it introduced completely new products such as furniture, it would as well be sold to a new market which would increase the number of consumers. It) In order to grow as a company, Kraft would have to look into depth for each of the four strategies in the Nations matrix and decide which one of them is the most suitable for its circumstances. For market Penetration Kraft would not have to change any of their actual products which would save them time having to think of new ideas for new products and designing, manufacturing and testing them. But coming up with a strategic advertising campaign would cost them money to carry out.
Reducing costs would also mean that the profit for each unit and so of their total sales would decrease, leading to a decrease in total revenue. In the case of product development, Kraft would not have to worry about having to offer products to a new market and so it is less risk-taking as it already knows their customers’ needs and wants. This could give them an opportunity to improve their existing products and so focus on raising their quality, which would be preferred by heir current customers, ensuring that they are loyal to the company.
But not expanding into new markets could not allow them to grow as a whole and increase their sales and revenue. Product development will also mean that the new procedures and tasks will have to be learned. Market Development would mean that Kraft would not have to create new products and so waste more time and energy from the employees.
It would also mean that they would buy more of the same products as they are Just targeting a wider range of customers, which would allow them to enjoy the benefit of economies of scale.
Although market development means that they will not know the needs of their new customers as well as those of their existing ones; this can be risk-taking. In the case of diversification, Kraft would benefit from their new customers who would cause an increase in consumer demand and so an increase in revenues. The fact that it is innovating and making new products means that they will also make them better each time and raise their quality. Like market development, it is risk- taking as it deals with unknown customers, which means that a market research will eave to be conducted which is expensive and time-consuming.
I think that Kraft, with an income of about $18 billion per year and 97,000 employees in over 70 countries is strong enough to choose the strategy of diversification. It is a nudge company Ana In my pollen ten Test way Tort It to grow Is to set enlarger targets which include continuing to develop its products and markets. Although it is risk- taking, the firm has a huge support due to its current products which are well-known around the world and which will allow it to expand and become an internationally leading company. Melanie Angina Valentine