Marketing management help on: Research company Mintel and its report

The research company Mintel reported in 2007 that the market for ready meals in the five largest European countries increased by 5% between 2006 and 2007 alone to reach €8.4 billion. Moreover, it predicted a further 18% growth to reach the €10 billion mark by 2011. In the UK, the market was worth a total of €2 billion, with a much higher level of sales per head of population than in France or Germany. Intel predicted that between 2006 and 2011, UK ready meals sales would reach €3.7 billion, with about a quarter of all Brits likely to eat a ready meal at least once a week. It seemed that the appetite for ready meals would grow more slowly in other European countries, for example Mintel predicted that by 2011, only 9% of Germans would eat a ready meal each week.

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 report 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.PEST Analysis

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. 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.

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. 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. 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.

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 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.Political factors: It has been examined that government is very worried about the safety and health of the community and is advancing healthy eating and motivating people to decide 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. Many users 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. 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/.

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

Stakeholder AnalysisThe 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. 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. 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. It is evaluated that products of frozen potato are estimated to show the greatest CAGR from year 2010 to year 2015. The segment of frozen prepared meals is expected to view high growth in the market of U.S at around 4.1% CAGR. 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.S 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

The intended audiences will be:

• Frozen foods manufacturers
• Frozen foods packaging manufacturers
• Frozen foods retailers and distributors
• Frozen foods importers and exporters
• Research and consulting firms
• Government agencies and industry associations

Changing consumer lifestyles are driving the market for ready meals in Europe and the USA; consumers are working longer hours, spending more time commuting and have a growing desire to maximize their increasingly limited leisure time. As a result, the trend towards convenience has strengthened over the last five years as consumers purchase more products and services to ease and support their hectic, changing lifestyles and attitudes. These trends also mean that consumers are now fitting mealtimes around their lifestyles resulting in the fragmentation of the ‘traditional mealtime. Finally, rising health concerns mean that consumers are more aware of the influence of their diet on their health and are changing their mealtime occasions accordingly.

Meanwhile, consumers in emerging markets are adopting Western lifestyles, which tend to be fast-paced, generating enormous demand for convenience foods, such as ready meals, and canned and packaged produce. The trend towards convenience-oriented, Western-style lifestyles is exemplified by the growth of fast-food outlets in emerging markets. In April 2010, McDonald’s said that China was the company’s fastest-growing global market. The company said that the country’s US$300 billion-a-year “informal eating out” market was expanding at an annual rate of 10%, compared with 2–3% in the United States. McDonald’s had 1,000 outlets by April 2010 and planned to open 2,000 outlets in the following three to five years.

However, as consumers in developing countries adopt Western-style diets, they also encounter the health problems that are increasingly prevalent in the West. Scientists and health experts have documented alarming weight gains in recent years in China, the Middle East, Africa, Europe, and Latin America, especially in children and women. In the United States, the obesity rate has soared to about 35% for women and 20% for men. The common factors fueling the rise in obesity are: diets rich in sweeteners and saturated fats; work and leisure activities that involve less exercise; and increasing consumption of cheap, processed foods. Even “desperately poor countries such as Nigeria and Uganda are wrestling with the dilemma of obesity,” according to the Chicago Tribune. The newspaper added that the growth of another Western phenomenon in emerging economies, the supermarket, was contributing to the rise in obesity. Although these shops offer “better, cleaner food,” they also supply more snacks and soft drinks, instead of local fruits and vegetables.

Mealtime occasions are changing as working practices change. Consumers are working longer hours, which means that more and more mealtime and snacking occasions are occurring in the workplace. In Europe, the number of dinner occasions to take place at work is expected to have a growth rate of 2.8% over the next five years. However, meals that meet afternoon snacking and lunch requirements are strong growth areas for manufacturers.

The traditional lunch hour is changing and this is driving the afternoon snacking and lunch occasions. 55% of Americans do things other than eat during their lunch hour, according to the Steelcase Workplace Index Survey, a semi-annual survey that gauges workplace trends. Thus, desk dining and afternoon snacking are becoming increasingly popular substitutes for missed lunch occasions.

In today’s society, consumers’ eating patterns are changing and the norm is no longer to consume three square meals a day. 80% of US and 71% of European marketers agreed with the statement, “consumers will increasingly seek foods that can be either filling snacks OR light meals in the future”. Consumers’ perception of meals and snacks is becoming blurred as the number of eating occasions per day increases.

The growing interchangeability between meal and snack occasions is due to:

• Meal occasions are increasingly showing “snack-like” tendencies which means that consumers perceive them to be

“light” meals;

• Consumers are eating more substantial and nutritious snacks between regular mealtimes to compensate for lighter or

missed meals;

• Actual mealtime behaviors are increasingly showing snack-like tendencies.

The rise of ethnic foods. Travel is driving the demand for ethnic tastes and flavors. Consumers now find cultural diversity stimulating and interesting rather than threatening. Consumers returning from holiday often have a new appreciation for ethnic cuisine.

 Consumer perception. The chilled ready meals market is the fastest growing sector of the ready meals market but it is private label that drives the market. Consumers may perceive private label products to be naturally made because the label suggests the meal has not been put together by mass-production techniques.

• Mealtime behavior. Food consumption is increasingly fitting around people’s needs and lifestyle, rather than people fitting their lives around structured mealtimes. The result is a displacement of regular mealtimes by snacking occasions and consumers increasingly value the opportunity to consume a quick and filling meal solution rather than a typical snack.

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