Marketing Analysis River Link Ltd

Question 1

Question Young group Middle age group Elder group

Q1

Type of hot beverage Chocolate drinks Chocolate drinks Coffee Tea Tea Chocolate drinks

Q2

Reason

Indulgence Indulgence Lifting effect Habit refreshing effect, habit Relaxing effect

Q3

Shopping place Supermarket Supermarket Coffee shop Supermarket, local shop Supermarket,

Local shop Local shop

Q4

Influence choice Thick, rich flavour, smooth texture, not too sweet taste Innovations Aroma Personal taste, non caffeine variety Strong taste, knowing branded product Knowing branded product

Q5

You will buy new hot beverage "Silk" if would be

Chocolate drink

Data reduction of interviews is based on "tabular method" (Wilson, A.2006, p.125). Respondents are splinted in tree age groups: young, middle age and elder.

Table 1: Tabular method of data reduction

Young age group: This group prefers mainly chocolate drinks among hot beverages. Their reason is that it is taken as an indulgence. The shopping places are supermarkets. The influences of this choice are flavour and texture. The group is prepared to buy new food beverage called "Silk".

Middle age group: Males and females of this group consume chocolate drinks, tea and coffee. The reasons of choosing these hot beverages are habit to tea taste, indulgence from drinking chocolate drink, and coffee lifting effect. People of this age are used to shop for hot beverages in supermarkets, coffee shops, local shops. The influential features, for this group in chocolate drinks, are anything that is new in this area and flavour. The main criterion for coffee is aroma and for tea are personal taste and non-caffeine variety. The group concur that hot beverage called "silk" is suitable for chocolate based drink, but not tea nor coffee.

Elder age group: This group is tea-backer, as well they consume chocolate drinks. The causes of drinking such beverages are: strong taste, habit and tea refreshing impact, and chocolate drink relaxing effect. People of this age prefer shopping in local shops and supermarkets. Elder age group is stick to buy what they know, instead of trying new products. The group agreed that "Silk" is not a tea name, but chocolate drink one.

Message: the company has to corporate the goal to achieve customer satisfaction with the help of knowledge about consumer preferences and habits. The product has to include such items as good aroma, strong taste, smooth texture and the effect of the drink. Personal taste should be taken in the consideration with the help of wide variety of the production.

Distribution: Retailers are an integral part of Hot Beverage Market. Wide distribution scope and exact selection of distributor locations can provide convenient conditions for customers. Retail distributor is the mediator between manufacturers and customers. Big percentage of people of different groups used to buy hot beverages in supermarkets. Retailer sector includes such supermarkets as Sainsbury, Tesco, Asda, Co-op, etc. To make the buyers to consume our production, first we have to make retailers to want to work with it. Retailers value profit that is provided by well-supported national brands and competitive prices. The level of service has to be high: quick and reliable delivery, product support, promotional support. Also we have to spread our distribution power on local shops which are on the second shopping place after supermarkets.

Brand: People are ready to buy the products with a strong brand. It influences on the buyers behavior, so we need to build solid basement of our image. It will help the company to keep the product which it has now on the market and to start up a new one. The company has to undertake own label manufacture which will attract retailers to work with us.

Question 2

Audits

Macro audit

The PEEST analysis is used to report macroenvironment analysis (Jobber, D. 2007, p.78).

Table 10: PEEST analysis

Forces Events Effect

Political/

Legal * General Food Law controlling in UK  Responsibility for carrying out high standards in hot drinks production

Economic * Economic downturn

* Current weakness of sterling  Increases the prices in hot beverage industry

 Leads to vulnerability of UK hot drinks companies to foreign takeovers

Ecological/ physical * Health developments

* Environmental protection  Launch "light" or reduced sugar variants of beverages in the industry

 It leads to green packaging novelty

Social/

Cultural * The demand on hot beverages is increasing

* People tend to discover new drinks to indulgence themselves  The companies have beneficial affect on hot drinks production

 It stimulates the creation of new sectors in hot drink industry

Technological * Technological progress which gives high-end products  It drives the value growth

From Table 10 it is worthy to mention, that number of hot beverage costumers grows up and they are ready to consume the innovations in this industry.

Microenvironment

Market audit

The hot drinks market is growing. The several reasons are listed above in PEEST analysis. UK hot drink industry share market has the following picture:

Figure 2: UK hot drink market share

Table 11 indicates that in UK market tea gives up it leadership position to coffee but still leading a competition, while food beverages are on the last