BSBMKG501A Evaluate marketing opportunities Assessment #2 1. How has brand value been created by the Tilba Cheese Factory? (5 points) Within the context of evaluating marketing opportunities, brand value relates to the intangible aspects of a company that act as a major source of competitive advantage and benefit for both consumers and sellers. For example, a strong brand value allows for a faster purchase decision process for consumers as information can be gathered quickly, and alternatives will often not be considered with equal weighting. Healy confirms this stating that “Good brands create shortcuts in product choice” (p. 36). Brand value is created in conjunction with the components of the marketing mix. Each of the four components must promote a consistent message in order to achieve desired success. 1. Focal point ??? In creating a point of recognition through means such as a logo, or slogan, a company can convey the essence of what their brand stands for. For example The Tilba Cheese Factory labels all products in a way that promotes a boutique, high quality and speciality vibe that separates the company not only from main stream competitors such as Kraft and Coon, but also further promotes the boutique nature of the brand.
Healy states symbols can be used to allow for instant recognition of a brand, while also revealing its character. (Healy p. 129) 2. Co-Branding is a strategy that promotes two brands on one product. This method is useful for credibility and the establishment of new brands through associating an often prominent brand with a newer less established brand. In reference to the Tilba Cheese case, the credibility and brand value of the ABC factory was increased when aligned with the established Menora Gourmet Products distributor, thus allowing for the attention of larger buyers such as Woolworths. 3.
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Producing speciality goods is an effective tool that allows for a company to separate itself from competitors. The ABC cheese factory prides itself on producing products different to those of competitors. When their distributor requested that a vintage cheese be produced, Storey quoted “I don’t like doing anything the same as anybody else, we had to create this vintage cheese that was noticeably different and which quickly became a best seller, 2. Using Porter’s value chain and referring back to previous case answers, describe how value can be increased for both customers and the Tilba Cheese Factory.
Consider both primary and secondary activities. (10 points) Porter’s value chain is an internal process that identifies primary and secondary activities that can be altered in such a way, to further benefit customers and the business. Healy states that primary activities include: inbound logistics, operations; outbound logistics and marketing and sales. Secondary activities include: firm infrastructure, human resource management and technology developments. Below one primary and secondary activity will be discussed in relation to the Tilba Cheese case study. Primary: Marketing and Sales The ABC Cheese factory could add brand value through further promoting the boutique nature of the company. This could be done through the creation of a highly informative, interactive website that included pages such as “Watch your cheese being made” which could utilise video and photos to illustrate the start to finish production of the cheese. This type of promotion could allow the consumer to feel a sense of closeness to the company as the cheese is no longer just a finished product. Secondary: Technological development ???Along with the new website, an online ordering area could be made available.
This would allow for increased sales not only within local markets but also significantly increase international sales and awareness. Healy confirms this as a valid strategy “Value can be added by: providing an online ordering system and integrating these with warehouse and dispatch areas to shorten time for order placement to delivery. ” 3. How would you describe the competitive position of the Tilba Cheese Factory? (5 points) The competitive position of the Tilba Cheese Factory experienced a significant change following the alliance with Menora Gourmet Products.
Below Tilba’s competitive position will be discussed, first prior then secondly, post the alliance. Prior to the Menora alliance, Tilba’s competitive position was best categorised within Arthur Little’s six categories, as “tenable”: “The firm is performing at a sufficiently satisfactory level to warrant continuing in business, has a less-than-average opportunity to improve its position. ” (Healy p. 155) At this time the company only employed 4 people and was “little more than a curiosity” (Healy p. 203).
The main factors they kept Tilba open was the historical significance of the business and Peter’s belief in where the industry was headed seemed sufficient reason to remain in operation, “(Storey) came to understand that cheese was an upcoming product, attractive not only to tourists but also to a wider market nationally” (Healy p. 203). Despite this, there was little opportunity to advance the company due to the limit of only four cheese varieties, situating the company in a very small niche market. Post the Menora alliance, Tilba’s competitive position radically improved.
Tilba now had access to an established distribution network and Menora’s expertise. Tilba’s competitive position advanced to a ‘favourable’ level (in reference to Arthur Little’s 6 categories) which included “a more-than-average opportunity to improve its position. ” (Healy p. 155) Under Kotler’s positioning categories Tilba’s competitive situation can be further categorised as a ‘market challenger’, meaning a firm with a smaller share than the market leader yet the possibility of “the most quickly growing share” (Healy p. 158). Tilba reflects this in its strong growth rates of 30-50% annually since 1987 (Healy p. 03). Tilba also incorporates the attack strategies of a market challenger through specific substitute products manufactured to attack competitors’ share, for example Tilba’s Vintage cheese produced at the request of Menora. Kotler’s categories have characteristics that accurately fit Tilba, however the three categories do not account for businesses that aim for success yet do not strive to be market leader, this being the most appropriate description of Tilba, which cannot compete with such global scale multinational market leaders as Kraft. The ABC Cheese Factory is still a small business compared with the main players. ” (Healy p. 203). 4. Are the strategies pursued by the Tilba Cheese Factory logical given its competitive position and your answers to previous case questions? There are indications from the case study that suggest Tilba Cheese pursues a market challenger strategy. Healy states a business choosing to challenge “must choose strategies that gain market share”, one strong indicator of gaining market share is growth, which Tilba Cheese has experienced, “Since 1987 annual growth has been 30-50%” (Healy p. 03). These strategies pursued by Tilba Cheese show tendencies of good logic from the mentioned level of growth the company is receiving. Within the monopolistic cheese industry, 30-50% is a strong growth rate. Tilba Cheese uses the growth strategy of product development. This is seen in the case study where the introduction of new varieties of cheese are used, while the successfulness of this strategy is apparent when as the new products nearly out-performed previous best sellers: “we introduced Sun Dried Tomato, which keeps nudging Vintage now for number one honours. (Healy p. 204). Due to the monopolistic characteristics of the cheese industry, utilising unique product development to differentiate product lines from competitors is an extremely effective technique. Tilba Cheese also utilises a specialised distributor to strengthen market position and intensify distribution levels. In regard to Tilba Cheese’s distributor, Menora Gourmet Products, Peter Storey quotes “we’re stronger because of them”. (Healy p. 04) This strategy is logical as while the small size of the Tilba Company limits potential output levels incorporating a distributor means output can be significantly increased, allowing for a much stronger market position. 5. Describe the strategic alliance entered into by the Tilba Cheese Factory ??? What strategic directions did it (they) achieve? Tilba Cheese entered into a logistical strategic alliance with the distribution company, Menora Gourmet Products. This relationship is not solely based on distribution; Menora also provides expert industry advice in areas such as varieties, portion size and packaging.
On top of this Menora also offers “a sales and delivery team [and] contribute to promotions” (Healy p. 204). Throughout the duration of the alliance both companies have benefitted notably, with the first major success of winning Woolworths listing. . In the case study Peter Storey discusses the importance and vital assistance a distributor provides, “It’s difficult for a small business to survive and thrive without good strategic alliances. Advantages of strategic alliances include: 1. Financially businesses can benefit from alliances, in the case of Tilba Cheese.
While a financial mark-up is lost in using a distributor, the high levels of output attained through using Menora would far outweigh the mark up lost, while Menora benefits through the profits of their margin. “Financial benefits are achieved from alliances in the form of greater returns on equity (ROE) (Healy p. 173). 2. It is possible to increase output without increasing staff levels through strategic alliances. This can potentially allow access to previously unfeasible markets, while “economies of scale and scope can be achieved” (Healy p. 73) Tilba may not have been able to meet the output requirements of a large buyer, such as Woolworths without the assistance of Menora, which would have substantially lessened profits. 3. The technology and expertise of both companies in an alliance can be shared, allowing for a major competitive advantage. For example Menora provides advice on sizes such as reducing or increasing the 500gram portions. Healy confirms this, stating alliances provide “instant access to technologies and expertise that would take months or years, and many resources, to acquire independently of the alliance partner. (Healy p. 173) From these benefits it can be seen that strategic alliances can provide strong competitive advantages in various market structures and situations, and allow a company to grow at significantly faster rates than if attempted independently. 6. Given the size and resources of the Tilba Cheese Factory, explain what evaluation and control measures you feel are necessary and appropriate. Regardless of the relatively small size of Tilba Cheese, it is still crucial that set evaluation control measures are put in place in order to monitor activities within all operations.
Two important measures are profitability and efficiency control. Profitability control relates to the profit/loss of a company using a statement of financial performance to illustrate the company’s position. This statement is conducted at an entire business perspective as well as sub areas including “product, sales territory, market segments” (Healy p. 184). This evaluative measure is crucial as it provides indications for management toward which areas of the business are best performing or underperforming against budgeted levels.
Efficiency control is a vital measure within manufacturing companies, as inefficiencies in production can accumulate unnecessary high costs. The application of efficiency controls within areas such as marketing, distribution and sales teams also allow managers to determine which components of a business is best performing or underperforming. It is vital that accurate records are kept as a basis for comparison. Healy confirms this stating, “These measurements need to be made continuously and compared against historical data to see which areas of marketing activity are becoming more efficient. ” (Healy p. 84) In reference to Tilba Cheese, the company could use efficiency measures to determine if production levels are producing the same levels of waste as previous periods, if the data determines that more waste is being produced, further action can be taken to identify the specific problem. In conclusion, evaluative measures provide highly effective methods of identifying what components of a company are best performing and what areas will need to be looked into in order to increase performance. The main benefit of effectively set measures is problems can be identified early on to avoid business suffering. By Mark Patchett