How McCain Responds to Changes

How McCain responds to changes in the external environment QUESTION Q1. Describe the measures that McCain is taking to inform the public about the nature and Nutritional qualities of its chips. Food technology is one of the most dynamic technologies in the modern economy. Food technology involves researching and developing new techniques for making products as diverse as ice cream, probiotic yoghurt, frozen oven chips and muesli bars. Each of these products involves finding technical solutions to problems such as how to: • freeze while retaining flavour • maximise natural nutritional characteristics • turn a frozen product into an oven heated product. The solution was to use sunflower oil which reduced saturated fats by 70% across the whole product range. Food technologists know that by working with real potatoes they are dealing with a product with a very strong nutritional pedigree. For example, it is a little known fact that a potion of chips contains four times more vitamin C than a portion of grapes. As a product, potatoes are the second most important staple food in the world today (rice is the first), providing essential carbohydrates that help us to generate energy.

Q2. Why is it important for a business organization like McCain to engage in communication exercises about its product? Responsible businesses not only abide by the law, they seek to create standards above minimum requirements. McCain has to be aware of a number of legal factors. The government’s Food Standards Agency has recommended that firms put ‘traffic light’ labels on food to help people understand what they are buying and to help them make the right choices. • Red represents high levels of ingredients such as fats and salts. • Green represents low levels. Also featured on the labels are Guideline Daily Amounts (GDAs) which show how much fat, saturated fat, sugar and salt each product contains. This helps the consumer to achieve a consistently balanced diet. McCain has put ‘traffic light’ labels on its British products as a response to consumer concerns about healthy eating. All of McCain’s potato products are able to display the green label for saturated fat and none of its products show a red label. In the UK, advertising of products is supervised by a voluntary body within the advertising industry. It is

called the Advertising Standards Authority (ASA). McCain makes sure that all its advertising sticks rigidly within the requirements of the ASA. The ASA sets out that all adverts must be: • legal • decent • honest and • truthful. In addition McCain’s products comply with a range of laws, including: • The Food Safety Act, covering the way in which food is prepared and served. • The Trades Descriptions Act, which states that goods and services must be exactly as described. • The Weights and Measures Act – governing such aspects as giving the right weight on packs. For example, McCain’s oven chips come in packs of 454g, 907g, 1kg, 1.5kg, and 1.8kg. McCain takes these responsibilities very seriously. It is important to build a reputation for honesty and fair play.

CASE STUDY TITLE: The marketing mix in the food industry 1. Which four Ps make up the marketing mix? Answer: • Product • Price • Place • Promotion • Product - this has to look and taste good and be made from wholesome ingredients. • Price - the price has to be attractive to ensure enough sales to generate a profit. • Place - the place and position of the product in the market is important to compete for market share. • Promotion - this has to fit the company’s objectives for the product. 2. Explain the different product categories in the Boston Matrix. Why is this a useful tool for businesses? Answer: The Boston Matrix identifies four types in a company’s product

portfolio: • Stars. These products have a high market share in markets that are growing quickly. For example, the Playstation was a star when it was first introduced into the games market. • Question Marks. These products have a low market share in a growing market. Costs are more than returns as the company tries to increase market share. An example of a Question Mark could be a newly launched fashion item or a new car model. • Cash Cows. These products have high market share in established markets, for example, cornflakes in the breakfast cereals market. • Dogs. These products have low market share in a low growth market. A company may look to get rid of these products or invest in marketing to improve sales. For example, DVD recorders have replaced video recorders 3. Analyse how McCain Foods’ promotional strategies tie in with its message ‘It’s All Good’. Answer: Promotion A further demonstration of the ‘It’s All Good’ ethos is McCain Foods’ ethical stance on promotion. McCain makes a Commitment not to advertise to children under 12 years old. It also ensures that the retail labeling on its products carries clear information on levels of fat, saturated fat, salt and sugar to help shoppers choose healthier options. Its labeling is in line with the Food Standards Agency (FSA) traffic light scheme and the food industry’s Guideline Daily Amounts (GDA). McCain also takes part in different types of sponsorship, such as: • TV show Family Fortunes. This brings the McCain brand to a wide audience through a popular family programme. • McCain Athletics Networks which encourage young people to get involved in the sport through local clubs. This further supports the company’s approach to balancing calories in with calories out. 4. Consider other promotional strategies McCain could use and say whether they are above- or belowthe-line. Answer:

Above-the-line promotion is paid for and includes traditional advertising routes such as television, radio and the press. These are good for carrying marketing messages to a large audience. However,it is less easy to measure the impact of these channels, for example, whether a TV advert has increased sales. Special displays or positioning in stores or advertising on supermarket trolleys are also examples of McCain’s above-the-line promotional activity. Below-the-line promotion can take many forms and is usually more under the control of the business. Typical examples include events or direct mail. McCain uses a combination of below-theline activities including: • door-to-door leaflet drops or books of vouchers which give customers discounts over a period of time. These help to attract consumers and establish brand loyalty so the consumer buys the product again. • email newsletter for consumers. This creates a relationship with consumers, which is unusual for a B2B organisation. It not only allows McCain to communicate directly with and listen to consumers, it also enables the business to collect information, for example, about their lifestyles and product choices. This is used for feedback, research and promotions. ASSIGNMENT 3 Q3. What actions has McCain taken to alter its product? McCain is a privately owned company with a strong market focus. This means that it carries out research to find out what consumers want. It then uses this market information to create products that consumers want to buy. McCain’s business focuses on frozen potato products and frozen light meals. It provides consumers with a wide variety of cut and seasoned potato products through UK retailers, like supermarkets and restaurants. These include roast potatoes, potato wedges, hash browns, waffles and potato croquettes. McCain produces more specific potato shapes like Potato Smiles, Crispy Bites and Some things (shaped as numbers) which appeal to younger consumers. McCain also makes pizzas. Chips have come a long way since the potato was first brought to this country by Walter Raleigh in the 17th century. By the 1850s fish and chips were sold in the streets and alleys of London and in some of Britain’s industrial towns. If asked to name a typically English dish, most people will say ‘fish and chips’. Chips are produced in lots of different shapes and sizes, ranging from those deep-fried in fish and chip shops to today’s oven chips. Q4. What additional measures could McCain take to educate and inform customers and potential customers about the qualities of its products? The solution was to use sunflower oil which reduced saturated fats by 70% across the whole product

range. Food technologists know that by working with real potatoes they are dealing with a product with a very strong nutritional pedigree. For example, it is a little known fact that a potion of chips contains four times more vitamin C than a portion of grapes. As a product, potatoes are the second most important staple food in the world today (rice is the first), providing essential carbohydrates that help us to generate energy. Potatoes also have tremendous future potential. In 1995 the potato became the first vegetable to be grown in space. NASA worked with top scientists to develop super nutritious and versatile potatoes. These can be used to feed astronauts on long space voyages and NASA hopes one day that these will feed space colonies. McCain’s advertising supports the company’s message that chips are nutritionally acceptable provided they are made in the right way. The challenge now is to keep listening to customers and to the external environment in order to continue to give consumers the best value healthy chips and other food products. Of course the choice rests with the consumer. What do you think? Is McCain doing the right thing?

How Mccain Foods Success Through Marketing Mix Marketing Essay In today‘s highly competitive global market, no businesses should overlook marketing. There is so much in marketing that just getting attention of the prospective customers. Marketing covers a wide range of business strategies that include advertising, promotions, public relations, and sales. It is the process of ―introducing and promoting the product or service into the market and encourages sales from the buying public‖ (Exforsys Inc.). Marketing can break or make the success of the organization because production and distribution depends largely on it. All of the business industries rely on market to get the products and services across to the consumers. However, the level of competitiveness in marketing depends on the type of industries. The most competitive industries in terms of marketing are the beverage and food industry. One of the most undeniably successful companies in terms of marketing is McCain Foods Limited, which has gone global and continues to expand its reach. Many business analysts agree that McCain Foods‘ has a winning marketing strategy. McCain Foods‘ Marketing Mix is the strategy that ensured the company success within the food industry. This paper will examine and evaluate how McCain Foods Limited achieved success through its Marketing Mix. In order to provide more conclusive discussion on the subject, this paper will

also provide brief description of the company in order to provide background on how much the company has grown through it marketing mix marketing strategy and will also provide brief discussion on the fundamentals of marketing mix. Company Profile of McCain Foods McCain Foods Limited is world‘s largest and leading manufacturer of French fries, frozen potato products and other oven-ready frozen food products. It is quite apparent that McCain Foods is effective in marketing. On the company‘s official website, a good marketing statement welcomes visitors. It reads: McCain is dedicated to creating good food and a better life for our consumers, customers, employees, and the communities we work in, worldwide. Our goal is to consistently win with customers and consumers by making them smile. From a wide range of innovative food products that are better for you and fun to eat to sharing our expertise in sustainable agricultural practices with developing countries to reducing our environmental footprint, McCain is creating smiles around the world (McCain Foods Limited). The company was established in 1957 and is privately owned by four McCain brothers— Harrison, Wallace, Robert and Andrew, who all live in Florenceville, New Brunswick, Canada. According to Forbes, McCain Foods Limited is the second largest private company in Canada with over 20,000 employees and 55 production facilities in 12 countries across the world‘s six continents (Forbes). The company‘s operation is so massive that it processes one million pounds of potato products each hour and sells one-third of the world‘s frozen french fries products in over 110 countries. Basics of Marketing Mix ‗Marketing mix‘ is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market (Mind Tools Ltd). According to marketing resource editor Michelle Arevalo, marketing mix refers to the different tools a company uses to effectively promote its business in the marketplace. These are often separated into what is known as the four P's of marketing: product, price, placement and promotion. The four Ps of marketing which are product, price, placement and promotion, is one way – probably the best-known way, according to Mind Tools Ltd, of defining the marketing mix, and was first expressed in 1960 by E J McCarthy.

How did McCain Foods‘ Employed Marketing Mix The Times 100 Business Case Study on McCain Foods Limited‘s marketing mix provide good insight on the strength of McCain Foods in effectively employing marketing mix. Product

In terms of products and product development, the Times 100 points out that the company‘s philosophy supports the ‗calories in/calories out‘ principle, which states that to maintain a healthy weight, calories consumed should not exceed calories used. This can be clearly seen and recognized in McCain Foods‘ It‘s All Good‘ tagline which implies that McCain Foods‘ product does not taste good, but also fits with healthy diets. McCain Foods have a wide range of food products that includes healthier options such as Oven Chips. As for quality assurance, McCain manages its own potato seed development. Accordingly, ―after specially selecting the seeds, McCain works closely with around 300 farmers to ensure the potatoes are grown to a high standard and harvested at their peak. Only the best potatoes are chosen to make McCain chips and potato products.‖ (The Times 100, The Times Newspaper Limited) Price In terms of pricing, McCain Foods employs varied pricing strategies that are directed to adding value for money. This customer-center approached has been working quite effective. One of the strategies employed by the company is providing the consumers with extra perks. An example cited by the Times 100 is the: ‗extra-fill‘ packs can give the customer up to 30% extra free. Accordingly, McCain Foods also ―offer its products at a special promotional price using pricemarked packs to encourage people to try the product.‖ (The Times 100, The Times Newspaper Limited) Place Place, does not refer to the location of the manufacturing facilities, nor does it describe the place of headquarter operations. In marketing context, particularly in marketing mix, place refers to the channels companies used to position its product in the market. According to the business case study, McCain Foods does not sell directly to its consumers but faithfully strategizes itself as a true business-to-business organization. McCain Foods‘ products are placed to wholesalers and retailers such as supermarkets. The company considers these wholesalers and retailers are their point of sales. By being a B2B organization, McCain Foods does not use its own vehicles to distribute its products to the consumers. By going to wholesalers, McCain Foods‘ products are also being marketing to other businesses such as restaurants. Promotion In advertising, McCain Foods Limited employs good use of rhetoric in product promotion to persuade people to patronize their products. Ethos, the use of emotions, is well employed in MCCain Foods‘ It‘s All Good tagline. McCain is strongly committed in not advertising to children under 12 years old. In terms of the product labeling, the company ensures that ―the retail labeling on its products carries clear information on levels of fat, saturated fat, salt and sugar to

help shoppers choose healthier options. Its labeling is in line with the Food Standards Agency (FSA) traffic light scheme and the food industry‘s Guideline Daily Amounts‖ (The Times 100, The Times Newspaper Limited). As can be seen in the brief examination on McCain Foods‘ effective use of marketing mix, it can be clearly concluded that indeed the company‘s success is its reliance to the effective combination of all four parts of the Marketing Mix. McCain‘s strategic placement which offers savings, through major wholesalers and retailers as point-of-sales, benefits the company as whole. In terms of marketing, when pricing, promotion and products are customer-focused, it can be said, as McCain Foods have proven, customers will provide patronage.

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