How to Grow Your Business With the Right Marketing Mix
The Marketing Mix
The marketing mix is a marketing tool that focuses attention on the various elements of marketing needed to carry out the marketing strategy. It consists of four factors that are product, price, promotion and place cemented together by effective market research. (Marcouse, I, 2003)
“The Lithuanian Sunset” will be providing food produce and movies, songs and press to its customers. The types of food that “The Lithuanian Sunset” will provide are as follows:
- Smoked meat
- Dairy products
- Frozen foods
“The Lithuanian Sunset” will stock all the listed products for a trial in order to see which products will sell well. Beverages, confectionary and smoked meat are expected to be the shop’s cash cows since the questionnaire results suggest that these products are most desired by the interviewed sample (see questionnaire, q.5). In effect, “The Lithuanian Sunset” may be able to cross subsidise other products and continually expand its product range. “The Lithuanian Sunset” will purchase its stock from The Lituanica Wholesalers who are located in Barking.
Unique Selling Point
“The Lithuanian Sunset” will be able to achieve a unique selling point by providing a variety of well known and quality Lithuanian products. In effect, this will allow “The Lithuanian Sunset” to charge slightly higher prices for its produce than “The Brother’s Food Store” since it will have a greater variety of produce. However, questionnaire findings should be also considered as most people do not have high incomes (see questionnaire, q.3). and so the products may be income elastic. As a result, the exchange and interest rate will affect the store’s performance since the exchange rate will affect the price of products imported from Lithuania and so will in effect determine the price “The Lithuanian Sunset” charges for its products. The interest rates will monitor the spending behaviour of Lithuanian customers since majority of them are earning a minimum wage and so are more likely to be saving the money in the bank and earning an interest rates rather than spending it on luxurious products.
Examples of product range
Canned Food Dairy Products Frozen ready-made foods Bread products
Fish products Meat products Alcoholic Drinks Confectionary
“The Lithuanian Sunset” will be located in the Stratford shopping centre next to the entry to Inn Shops (see questionnaire, q.10). The new Lithuanian store will be established in the old Iceland premises under a partnership between me and my close friend Eimantas Gudonis. “The Lithuanian Sunset” will be in a very close proximity to the “Brother’s Food Store” which will encourage the amount of competition involved between both stores (please see appendix 4 for a map). However, “The Lithuanian Sunset” is right at the entrance to Stratford Shopping Centre and so is more visible to the consumers, which suggests that “The Lithuanian Sunset” will not have to compete on prices as much but rather on the customer satisfaction. This will prove less costly to both “The Brother’s Food Store” and “The Lithuanian Sunset”, which will allow both shops to maximize their profit margins, which would in effect make the prospect of survival for “The Lithuanian Sunset” more feasible. Nevertheless, both shops may essentially be competing against each other for market share, which suggests that “The Lithuanian Sunset” should put a great effort in establishing a customer base in order to gain customer loyalty and so build its success for the long-term.
Many transport links such as the Stratford station, which is approximately 5 minutes away, and 3 bus depots surround the new premises of “The Lithuanian Sunset” could make a Lithuanian shop more feasible. There are buses 25, 238, 104, 276, 241, 262, 473 linking Stratford with other East London areas such as Canning Town, Leyton and Beckton that have a rather high proportion of Lithuanian inhabitants of London. Such a great variety of transport links will in turn make the new store more accessible to customers who may have a significant impact on the sales revenue of “The Lithuanian Sunset”. Also, many Lithuanians use the Stratford station when traveling so they are more likely to drop into “The Lithuanian Sunset” whilst they are on a journey.
Distribution and stock holding
“The Lithuanian Sunset” will not hold a large stock but rather use a just in time ordering system given that the new premises are surrounded by very accessible communication links. In turn, low stock holding will reduce opportunity costs since less space will be occupied by stock and so can be put to a better use that could ensure a greater contribution to the success of “The Lithuanian Sunset”. However, just in time stock system may prove rather risky to “The Lithuanian Sunset” since it is very dependent on transportation links and any disruptions in the transport infrastructure may prove damaging to the reputation of “The Lithuanian Sunset” and whilst the goods are being delivered to “The Lithuanian Sunset” the customers may not want to wait and shop at “The Brother’s Food Store” which will incur foregone opportunities for “The Lithuanian Sunset” and put it at a competitive disadvantage. All of this would in effect reduce the feasibility of another Lithuanian shop in the Stratford area.
The former Iceland premises are 70-sq/m and are fairly sufficient to facilitate all products. The shop also has good electrical wiring and old Iceland fridges to be used by “The Lithuanian Sunset”, which in turn will reduce its cash outflows and make the startup of “The Lithuanian Sunset” more feasible.
The layout of the new shop
The new business will aim to create a calm and friendly atmosphere in the new shop in order to create a sense of home for the Lithuanians and so “The Lithuanian Sunset” will benchmark against well-established businesses in Lithuania in order to make the customers feel as if they are shopping back at home. “The Lithuanian Sunset” will have a flat screen fixed on the wall in order to run a slideshow of advertisements, which will generate a certain cash flow, a music system playing Lithuanian music will be introduced in order to give more life to the shop as well as advertise music CDs. The new shop will be decorated in olive green paint so as to create a soothing and relaxing effect which apparently reduces stress and so is more likely to encourage customers to feel more relaxed. Below is the plan of the potential layout of the new shop.
Price will be an important aspect of the marketing mix since it will be one of the main determinants of the buying patterns of Lithuanians as shown by the questionnaire results earlier. In question 4 (see questionnaire results) 88% of the interviewees said that they would be willing to spend just under £10, which suggests that products that will be provided by “The Lithuanian Sunset” can be classed as income and price elastic, so the price of products will be an important aspect that will determine the capacity utilization of “The Lithuanian Sunset”. Since the “Brother’s Food Store” will be the main competitor of the “Lithuanian Sunset”, “The Lithuanian Sunset” can effectively benchmark against their competitor and provide slightly lower prices to the consumers (for all product prices please refer to appendix 2). “The Lithuanian Sunset” can initially adapt a penetration pricing strategy so as to attract more customers and work at nearly full capacity utilization. Eventually, “The Lithuanian Sunset” can raise its prices once it has established its customer base in order to increase its profit margins. However, entering the market with a low cost strategy may be ominous for “The Lithuanian Sunset” since it may establish itself as a low cost store, which may become an expectation for its customers and raising the prices of its products may become increasingly difficult because customers would have become more price sensitive. Moreover, “The Lithuanian Sunset” entering price competition against “The Brother’s Food Store” could eventually result in a price war, which would reduce the profit margins of both stores and in effect limit the feasibility of operation and expansion prospects of “The Lithuanian Sunset”.
|Product type||Our average price||Brother’s average price|