Marketing assignment on: Sales of ready meals

Case –Study

Using an appropriate framework of analysis, briefly summarize the effects of change in the marketing environment on sales of ready meals.It has been examined that market of ready meals is very aggressive and major competitors are Premier Foods, Sainsbury, Spencer & Marks, Tesco and Unilever Foods. This answer shall develop the various factors that persuaded the development of ready meal market by evaluating the alterations in the external environment (Political, Economic, legal and Technological). It can be said that any alterations in the environment of marketing have persuaded positively the development of ready meal market. This PEST analysis shall assist to evaluate the environment of ready meal market and search the factors which persuaded its growth. It is also examined that, Research Company called Mintel stated in 2007 that the marketplace for the ready meals in 5 greatest European countries enhanced by 5% among year 2006 and 2007 and arrived at €8.4 billion (Business Wire, 2011).  Moreover, it also estimated a further growth of 18% to attain the 10 billion mark by year 2011 (Mintel, 2011).  On the other side, Intel estimated that among year 2006& 2011, sales of UK ready meals would reach around 3.7 billion (Mintel, 2011). It can be said that, hunger for the ready meals would develop slowly in other countries of Europe, for instance Mintel estimated that by year 2011, around 9% of the Germans could eat the ready meals every week.

It is very clear that PESTLE analysis can be considered as a helpful technique for understanding the bigger image of the surrounding in which the organization is working. Kotler argues that the PESTEL analysis is considered as a helpful strategic technique for recognizing the market decline or growth, position of business and direction and potential for operations (Kotler &Amstrong, 2007). The advantages of the PESTEL analysis areThe technique is easy and simple to use and understand

• The technique helps in understanding the environment of the business better
• The technique motivates the growth of the strategic thinking
• The technique helps in reducing the consequence of the upcoming business threats

Political: It is very clear that every project is involved in external and internal politics. Internal politics comprises cohesive projects, personal interests and team jealousies prevail in all projects and should be managed and referred by stakeholders. On the other side, external politics consider to those which cannot be controlled by the stakeholders. These events comprise all kinds of political events such as trade restrictions, trade reforms, political stability and tariffs etc.

Economic: Economic factor comprises all events which impact the external and internal environment. The micro-economic events associate to the internal soundness and viability of project.

Sociological: Sociological factor comprises all events which impact the community and market socially.

Technological: Technological factor comprises all events which impact technology. Since technology becomes outdated throughout the few months after it came into the market, it is significant to refer this.

Legal: Legal factor comprises all legal features such as quotas, taxation, imports, exports and resources.

Environmental: Environmental factor comprises environmental and ecological aspects which would be either social or economic in nature. These comprise monsoons, temperature and calamities through ground conditions, rail and ground contamination. It can be said that, we have taken only four factors of PESTEL analysis such as Political, Economic, Social and technological to answer the effects of change in the marketing environment on sales of ready meals. PEST Analysis

Political factors: It has been examined that government is very worried about the safety and health of the community and advancing healthy eating and motivating people to remain healthier. In the market, which is in its stage of maturity, more attention shall require to be given to the competitive differentiation and recognizing the path in that users give value to the service or the product (Nag, Hambrick,  & Chen, 2007). Many users in U.K have become significantly worried about the health consequences of the food- stuff that they eat and manufacturers of ready meal are required to respond such type of concerns (Markides & Constantinos, 2005).  For example: they have reacted with the variety of addressed particular, few times transient, least calorie meals and health fads. For e.g. with concern to Omega 3 and trans –fatty acid supplements. Numerous users have become worried about the environment and few suppliers like Mark & Spencer have initiated agendas of sustainability in their prepared meals for e.g. by minimizing sourcing and packaging supplies from the sustainable sources/. It is observed that UK has greatest level of the obesity in region of Europe as per the health study. In, fact observatories had indicated that West Midland was the fattest region in European Union with nearly 29% of the adults grouped as obese.

Economic Factor: It can be said that consequence of an economic environment on the sales of the ready meals is more ambiguous. As individuals become richer, they may afford to purchase prepared foods as compared to spend time in preparing them. With the tempting variety of the ready meals accessible from oranges to beef, the U.K user with cash in her or his pocket shall be tempted to spend out on the ready meal as compared to stay at the home with the quick pizza and jacket potato. Though, increasing incomes have been related with increasing usage of the prepared meals and increased sales have been attributed to the weakening economic environment. When there was recession in year 2008, the manufacturer of Northern foods-a main supplier of the prepared meals to the Marks and Spencer recorded resilient sales. It is viewed that users were moved from costly restaurant meals to significantly cheap prepared meals. It is very clear that inflation is considered as increase in level of consumer and retail prices. If inflation rises in UK at the higher rate, then there would be a devaluation of UK currency. In year 2009, recession has assisted the inflation to fall quickly.

Social Factor: The values and structures of community have contributed towards the development of the ready meals market of UK and might describe why the growth rate is higher as compared to Germany or France (Kotler & Amstrong, 2007).   Ready meals specifically appealed to the single household and those nuclear families in which members tend to have their lunch and dinner at distinct times. Mintel stated that the custom of the family meals together stills stronger in various European countries as compared to UK that might assist to describe the higher reputation of the individual ready meal in U.K. It is examined that few social commentators have commented that young individuals have gone the capability to cook food creatively as cookery is minimized in significance in curriculum of the school (Nag, Hambrick, & Chen, 2007). ` Moreover, numerous UK users no longer experience the social stigma related to eating the prepared meal, something that could be anathema to various people in Country France which takes a greater pride in its global cuisine. Moreover, any kind of remaining stigma is minimized by number of the celebrity cooks who have endorsed prepared meals with their brand image. The attitude of the consumers is altering as they become more health-conscious. It has been examined that Ready Meals executed well in year 2011, revealing growth and development in both value and volume terms. It can be said that ready meal market in UK has grown rapidly because of the private label goods produced by the big 4 chains such as Asda, Tesco, Morrisons and Sainsbury. In terms of volume, ready meals market are estimated to view the growth rate of nearly 6% among year 2011 & 2016 whereas in terms of constant value sales are estimated to reduce by nearly 2%.

Technological Factor: It can be said that one of the basic variables of macro-environmental which have directly persuaded the operations of supply chain and the process of food retailers and grocery is technology. It has been examined that functioning of the supermarket is being impacted by the Internet usage with the help of online grocery retailing that is viewing constant growth (Moncrieff, 2006). Technology has performed a bigger function in the developing take –up of prepared meals. In fact, report has been published by the research body called Leatherhead Food International explained how these new procedures have permitted companies to form ready meals that preserve texture and taste, whereas still creating them simpler to use by the user. Moreover, great advancement in the distribution management, in specific the utilization of the information technology to monitor inventories has permitted chilled, fresh ready meals to be effectively, efficiently and quickly distributed without any need for added or freezing preservatives. In, fact mobile technology is also taken as the platform for the distribution throughout food retailing. For Example: New Wine Application formed by Cortexica Systems, for instance has been utilized by Tesco Company since year 2009 through which the users are directed towards Tesco Wine and enabling them to purchase the chosen wine directly from their phones because of the enhanced access to the broadband Internet in U.K.

Discuss the factors that might affect sales of ready meals in your country over the next five years.

Stakeholder Analysis

The segment of ready meal is responsible for the greatest share around 40% in the entire segment of frozen food. It is very clear that Europe is greatest user of the frozen foods whereas segment of ROW is estimated to have the greatest rate of the growth because of the prevalence of Argentina, Brazil and Australia as new markets of frozen food. Convenience is the major factor which drives the sales of frozen food globally (Kotler & Amstrong, 2007).  It can be said that users are looking towards for healthy and less time taken consuming meals. The emergence of the private label performs as the main challenge for global brands to establish and enter themselves in regional market. The objective here is to highlight the points that are actionable to its stakeholders. The market of global frozen food was predicted to around $ 218.41 billion in year 2010 and is estimated to develop to $261.50 billion in year 2015 at an anticipated CAGR of around 3.7% for the similar period (Moncrieff, 2006). In, fact frozen ready meals were responsible for the greatest share of the market in year 2010 because of their broad range of the product that comprises snacks, frozen pizza, desserts etc (Johnson, Scholes, & Whittington, 2008). It is evaluated that products of frozen potato are estimated to show the greatest CAGR from year 2010 to year 2015. It is examined that unorganized division including unbranded products could be the greatest challenging factor to organized division of the global market of frozen foods. In fact a great no. of companies support major shares in their concern local markets. Frozen Pizza can be considered as the fastest developing segment in frozen ready meal division with the predicted CAGR of around 4% with the U.K and is anticipated to maintain its power in the division from year 2010 to 2015. According to the stakeholder analysis, there are various stakeholders in the ready-meal market such as manufacturer of frozen foods, packaging manufacturers of frozen food, distributors and retailers of frozen foods, exporters and importers of frozen foods, consulting and research firms and industry associations and Government agencies.

Stakeholders Analysis: It is examined that first move in the Stakeholder analysis is to search who the stakeholders are (Johnson, Scholes, & Whittington, 2008).  The other step is to find out their influence, interest and power. The final move is to form the good understanding with the important stakeholders.

Stakeholders

• Manufacturers of Frozen Food
• Packaging manufacturers of Frozen Food
• Frozen foods  distributors and retailers
• Frozen foods exporters and importers
• Consulting firms
• Government agencies and industry associations

It has been observed that throughout 1990s, attitude of the consumers towards food has changed significantly in region of UK. One of the basic factors which have altered this shift comprises enhancement in the living standards and the requirement for the convenience. The most famous ready meal among the people of UK is frozen ready meal.   It can be said that main customers for the ready meal market are working women, working couple and students.It has been viewed that there are two types of competitors in ready meal market of UK such as Direct Competitors and Indirect Competitors. It is observed that direct competitors are those companies that create the similar goods as you. For e.g. if you create the frozen ready meal, then all other producers of frozen ready meal shall be the direct competitors. On the other side, indirect competitors are those companies which work in other market but focusing the similar consumers. For e.g. a producer of chilled ready meal shall be competing with producer of frozen ready meal for the similar meal occasions

To offer a constant quality of the product, ready meals have to contain special functionalities such as viscosity, dispersion capacity, optimizing texture, shelf life, freeze-thaw stability, natural taste and product stability.

The factors that might affect sales of ready meals in your country over the next five years

It has been observed that consumer buying behaviour is concentrated on the requirements of the individuals, organization and groups (Kotler & Amstrong, 2007). Consumer Buying Behaviour helps in finding out the factors which might affect the sales of ready meals in the country over the coming five years. There are 5 distinct levels according to the Maslow hierarchy of the needs such as physiological needs, social needs, security needs, esteem needs and self –actualization needs. The need of lowest level in an individual’s life is called the Physiological needs. This need indicates the requirement like food, water, and shelter of the individual etc. certainly anybody can’t survive without the basic requirements. But when individual satisfy the need of their basic stuffs in life, it could no longer motivate them. People could be motivated along with certain safety needs among them. It means the individual could be motivated regarding safety and consistency. Whenever people tend to be securing with their jobs or their basics already get sort out, they feel like being in groups or they then develop their affiliation need. It is the fact that every person in this world dream throughout their life. It could be considered to be the expectation of life. This aspect is highly subjective or it’s different from individual to another individual. This motivates people whenever they achieve their esteem need. It is known as the need of self actualization.

Changing lifestyles of the consumer are changing the market for the prepared meals in U.K and the Europe; users are working for longer hours and spending more time on commuting and have a developing desire to increase their restricted leisure time. As an outcome, the trend regarding the convenience has strengthened throughout the last 5 years as users buy more services and products to support and simplify their hectic schedules, attitudes and changing lifestyles (Johnson, Scholes, & Whittington, 2008). At last, it can be said that increasing concerns of the health show that users are becoming aware of the diet and are altering their meal time schedules accordingly. In, fact users in prevailing markets are accepting Western Lifestyles which creates huge demand for the convenience foods like canned, packaged produce and ready meals. The trend regards the Western lifestyles and convenience oriented is supported by the development of the outlets of fast food in prevailing markets. As users in the developing countries accept Western-related diets because they face the problems of health which are significantly applicable in region of the West.

It can be said that occasions of mealtime are altering as practices of the working change. Users are working for longer hours which show that more snacking and mealtime occasions are prevailing in the working environment. In Country UK, the no. of occasions of dinner take place at the work is estimated to have a rate of growth around 2.8% throughout the upcoming five years. On the other side, conventional lunch time is altering and that drives the afternoon lunch and snacking occasions (Business Wire, 2011). Therefore, afternoon snacking and desk dining are becoming significantly famous substitutes for the missed occasions of lunch. It is examined that users are eating more nutritious and substantial snacks among routine mealtimes to balance for missed or lighter meals. It can be said that travel is also the factor which affect the sales of ready meals over the coming five years because travel changes the demand for the ethnic flavors and tastes (Johnson, Scholes, & Whittington, 2008). Users now search cultural diversity interesting and stimulating as compared to threatening. Users who return from their holidays might have an appreciation for the ethnic cuisine. The market of chilled ready meal is the developing division of ready meal market but it is the private label which changes the market. Users might take products of private label are naturally designed because label recommends that meals are not place together by the techniques of mass production. The consumption of food is significantly fitting around the lifestyle and needs of the people as compared to the people adapting their lives around the structured mealtimes. The outcome is the missing of the regular mealtimes by the snacking occasions & users are significantly value the chance to use a filling and quick solution as compared to typical snack.

At last, it could be stated that changing lifestyles of the consumer and spending long hours at office would enhance the demand for ready meals in the coming five years.

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