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ACTIVITY 3.

12
You are the chief executive of a company that makes and The head of marketing has produced the following
sells small kitchen appliances. The marketing strategy market research presentation. Do you agree with the
has focused on creating a “value brand” range offering conclusions and recommendations? Are there any
consumers low-cost appliances that can be made quickly others you would make? Explain your answers.
and cheaply. Sales have fallen in the last year but not as
much as for some other more expensive brands.

Sales trends: previous five years Market trends


u Essentials such as kettles and toasters have performed 35
well, with volume sales up 12% and 24%. 30

Households (millions)
u Less essential “novelty” appliances, such as deep-fat 25
fryers and health grills, have seen the biggest volume 20
declines over the last five years. 15
Sales in the current financial year 10
Actual Forecast
u Annual sales of small kitchen appliances are down by 2%. 5
u Reduced consumer confidence has caused consumers to 0
1 2 3 4 5 6 7 8 9 10 11 12 13
delay replacement of kitchen appliances and cut back. Years

Percentage of respondents who have bought


Actual Forecast
appliances in the last three years 300
Small kitchen appliances

70 250
market $million

200
60
150

50 100
% of total interviewed

50
40
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14
30 Years

20

10
Conclusions
0 u Postponement of replacement appliances during
tle

sk

the economic downturn will lead to a mini boom


te

ixe

de

pe
hi
t

as

en

op
Ke

W
To

Bl

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in consumer demand over the next five years.


u Changing fashions in kitchen design provide

an opportunity for more frequent replacement


Interview results purchases.
u The increase in the number of households will
u Consumers are becoming disillusioned with the short
lifespan of many appliances. boost future volume growth in the market.
u Many respondents are prepared to pay more for Recommendations
quality that lasts and products that do not harm the u Focus the product range on essential
environment. appliances only.
u More than 40% of respondents are likely to modernize u Target products and promotions on

their kitchens within the next five years. middle-income households.

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