The Competitive Edge Of Star Bucks Essay Example

Schultz’s goal is to:” Establish StarBucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow.” To achieve this vision StarBucks founder Howard Schultz has articulated six principles:

* Provide a great work environment and treat each other with respect and dignity.

* Embrace diversity as an essential component in the way we do business.

* Apply the highest standards of excellence to the purchasing, roasting and fresh delivery of our coffee.

* Develop enthusiastically satisfied customers all of the time.

* Contribute positively to our communities and our environment.

* Recognize that profitability is the essential to our future success.

In order to have an edge over its competitors Schultz has integrated a number of corporate objectives:

Securing the finest raw Materials

Starbucks begins its coffee quality right from the start i.e. bean procurement. Although in America other companies used low quality coffee beans,Starbucks strictly used best quality Arabica beans.Company’s vice president Dave Oleson himself keeps a check on the quality of the beans used.In 1992 Starbucks outbid European Buyers For exclusive Narino Supremo Bean Crop one of the worlds best coffee and became the elite supplier of the coffee beans in the world.

Vertical Integration

The company operates three roasting and distribution facilities out of them two are in Seattle area and one in East Manchester Township, Pennsylvania. In Seattle area the company leases about 92000 sq. feet in one building in Seattle, Washington and another plant and distribution facility of approx. 305000 sq. feet in Kent, Washington.

The Experience:

Star bucks provide seductive atmosphere in its stores which are distinctive and sleek, but yet very comfortable. Starbucks stores are mostly located in busy malls, street corners and even grocery stores. They are well lighted and jazz or opera music plays in the background. The company has employed about 100 people whose only job is to plan, design and build the unique interiors and displays in the stores.

The product packaging of Starbucks is also distinctive. The restaurants also offer coffee-by-the-pound, specialty mugs and home-espresso making machines. The company has also developed unique marketing strategies to establish its products in new markets such as free half pound coffee after one has bought ten half-pounds of coffee. Also the Starbucks employees spend a lot of time in describing the Starbucks global selection of best coffee and also help them to make decision on beans, grind and home brewing.

Building a unique Culture:

In the opinion of Schultz, happy employees are the key to competitiveness and growth. As he says “We can’t achieve our strategic objectives without a work force of people who are immersed in the same commitment as management.Our only sustainable advantage is the quality of our workforce.We’re building a national retail company by creating pride in- and stake in – the outcome of our labour.”

StarBucks promotes an empowered employee culture through employee training, employee benefits programs and an employee stock ownership plan.

Employee training:

Employees at Starbucks have to complete atleast 24 hours of training which includes stretches from everything of coffee history to a seven hour workshop. The workshop is one of the five classes that all employees must have to complete during their first six weeks and it focuses on the need to educate customers in coffee making techniques. During this training the store managers also teach the employees to make decisions that will add to customer satisfaction without requiring manager authorization.

Employee benefits:

All employees working with Starbucks whether part time or full time enjoy no. of benefits provided by the firm as benefits package.It includes medical, dental, vision and short term disability insurance as well as paid vacation, paid holidays, mental health/chemical dependency benefits.

Schultz is of the belief that without these benefits people don’t feel financially or spiritually tied to their jobs. He argues that stock options and the complete benefits package increase employee loyalty and encourage conscientious service to the customers.

Leveraging the Brand:

Multiple Channels of Distribution:

in addition its exclusive stores ,StarBucks has set up cafes and carts in hospitals,banks,office buildings,supermarkets and shopping centres.In 1992 Starbucks enetrerd into an agreement with NordStorm as exclusive supplier to its restaurants and espresso bar chain.A n year after,StarBucks sealed an agreement with StarBucks to implement a “caf�-in-a-bookshop” plan .Other distribution agreements included Associated Services, a office coffee suppliers; Sheraton Hotels and United Airlines.Star aims at capturing more of the US market with the help of these distribution agreements and new product partnerships.

Brand Extensions:

During the year 1995 Starbucks launched a range of packaged and prepared teas realizing the growing demand for tea houses and packaged tea.StarBucks initiated an agreement with PepsiCo. Inc. to bring out an bottled version of Starbucks’ Frappuccino (a cold and sweetened drink) in the year 1996.Starbucks also had an agreement with Washington-based Redhook Ale Brewery to make a product called Double Black Stout,a coffee-flavoured stout.In another partnership Dreyer’s Grand icecream Inc. agreed to distribute seven quart-products and two bar products of Starbucks coffee ice cream.Starbucks also entered into some other partnerships like collaboratin with Capitol Records Inc.,to produce two Starbucks jazz cds avialble only instore and Brueger’s Bagel Bakeries with the view to form new product associationswith coffee.

International Expansion:

Howard Schultz,the Starbucks founder, always followed a strict growth policy.Unlike many other coffeehouses or espresso bars, which are franchised,Starbucks owns all of its stores outright,excluding the license agreements at the Airports.Starbucks enters into an market and tries to completely dominate it before looking for further expansion.

In 1996,firm opened 307 stores and converted 19 Coffee Connection stores to Starbucks. Company aimed to open about 325 stores in the 1997 and to enter three new North American firms including Phoenix, Arizona and Miami,Florida.Schultz also aimed to own about 2000 store by the year 2000.But some analysts believe that the US coffee market may be reaching saturation.Keeping this in view, Starbucks has turned its attention to foreign markets for continuing its growth.Acc to Schultz Starbucks is looking at the Asia Pacific region for its international expansion.

Starbucks’ expansion into Asian Markets

In the year 1996,firm established an subsidiary named Starbucks Coffee International Inc. with the investment of $1.5 million. The subsidiarys’ aim was to penetrate into Asia-Pacific region.This subsidiary is responsible for developing new business internationally,financing and planning of international stores, manaing international operations and logistics, merchandising in international markets and finally for the training and developing of Starbucks Inetrnational managers.Since its establishment this subsidiary has opened and managed Starbucks coffeehouses in Hawaii, Japan and Singapore.Acc. to Kathie Lindemann, director of international operations atStarbucks, firm look for partners who share our values, culture and goals about community development and having plenty of experience.

Enetring the Japanese Market:

In Oct 1995,Starbucks entered into a joint venture with Tokyo-based Sazaby Inc.Starbucks focus to open about 12 new stores in Japan by the end of 1997.Starbucks Coffee International and Sazaby equally owned this joint venture of worth $2.33 million.Tokyo based Sazaby,operates upscale retain and restaurant chains throughout Japan.

With the help of Sazaby,Starbucks opened two stores in Tokyo in Sep 1996.The first outlet was opened in Tokyo’s posh Ginza shopping district and second store was located in Ochanomizu, a student clutered area with colleges,bookstores and fast-food restaurants.

Acc. To all Japan Coffee Association,Japanese consumed about 6.1 million coffee bags,each bag consists of 60 kilo of coffee beans,compared to the US and German consumption of 18.1and 10 million respectively.

Despite the absolute size of Japanese coffee market,analysts believe that Starbucks is likely to face stiff competiton and retaliation from well establishrd players in Japan, which include Doutor Coffee Company and the Pronto Corp.Doutor Coffee is Japan’s leading coffee-bar chain.It had about 466 shops in and around Tokyo.It is reported that nearly 10 million customers per month visit Doutor coffeehouses. Pronto Corp. is Japan’s second largest coffee-bar chain.In the year 1996,it had about 95 outlets most of them were in Tokyo.

Yuji Tsunoda, president of Starbucks Coffee Japan Ltd., mentions the company’s intentions to have 100 directly owned coffee bars in major Japanese cities in the next 5 years.

Doping In The DDR

Doping has always been a problem in competitions. Doping is taking performance enhancing drugs that will give them an unfair advantage over the other sporters. Steroids are especially popular when it comes to doping. Steroids increase the muscles of the athlete which allow him exceed the boundaries that he had before taking steroids. In 1978 Renate Neufeld, a 19 year old sprinter that had fled to west Germany, told the public about the doping in the DDR. This was one of sport’s greatest cover ups; for years the east-German athletes had been taking steroids without anyone finding out about it. The DDR had won 25 medals, of which all were won with the help of drugs. This was not only unfair, there was a moral issue; the athletes’ lives were being risked just for winning. The government was even helping the teams to get the drugs and keep it covered. This was probably due to the rivalry between the West and the East, the cold war. 1

In the DDR Sport and Fitness have always been, beside the school education, the most important things when the children were being brought up. The talented athletes were being trained until perfection. They were celebrated, not only for their outstanding performance, but rather as an example for the education and the skills of the socialistic state’s workers and farmers. The sporters came from all different social classes. Already in kindergarten age, the children get tested for any special talents. And if one was lucky enough to have a special talent, the state made sure one would get the best education that they had, which could be high schools, universities or even sport schools. In this way, many famous athletes were trained to bring phenomenal performances, in which the physical limitations were to great degree exceeded. Doping made this possible and was used in nearly all sports.

The sporters took drugs under medical supervision; using the newest scientific studies, to achieve a huge performance enhancement. The athletes were trained in special sport facilities, where they could live and finish school, this way they were able to keep the doping a secret. Only years later after the fall of the wall separating Berlin and the occurrence of doping’s long-term effects on the athletes, details were discovered of East-Germany’s doping. They had given many of their athletes anabolic steroids, especially the orally taken Turinabol. Turinabol is a steroid that is taken as a tablet. The east-German athletes had Turinabol available as much as they wanted, because it was being produced in their own medical research and production departments. The sporters did not always know that they were being doped; even t1en year old children got Turinabol hidden in their food. Even in East-Germany one needed a prescription to get Turinabol, which shows how deep some of the doctors were involved in this. They handed out prescriptions for Turinabol; knowing what it would be used for. 2

Anabolic-androgenic steroids, also know as AAS, is a drug that, when taken, acts as an artificial male sex hormone, testosterone. Testosterone is the male sex hormone that is produced in the testis of a man. Testosterone signals the body to develop the testis and the prostate as well as muscles, bone mass, hair growth and other male characteristics. Just like the natural testosterone made in our bodies, AAS builds up more muscles by increasing protein synthesis in the cells, meaning that more protein is produced by the cells. If one trains enough the extra protein will turn into muscles; making the athlete as strong as he/she has ever been. AAS can be taken in many different ways, for example, they can be taken orally as pills or as a fluid they can be injected.

They athletes took the drugs in cycles, where the sporters would take the drugs an a regular basis for periods of weeks or months. After that they would have a period where they wouldn’t take the drugs at all. They reason for using the cycle method was to beat the drug tests. The athletes had to be on cycles as long as possible, before stopping when a drug test was scheduled. The athletes of the DDR benefited from the Turinabol, because the body breaks it down and excretes it very quickly. This made it very easy for the athletes to hide the drugs from everybody. However, the longer the cycles of drugs were, the harder it was for the body to recover from the steroids, meaning that the longer the cycles were the worse it was for the athletes’ health.

Taking steroids has many affects on the body; the increase of muscle tissue is only one them. As it is mimics a sex hormone, it will influence the things that the sex hormones are in charge. If athletes were to take steroids they would have to face some serious irreversible damage to their bodies. The risks for the male athletes would be that their testis would start to shrink, a reduced sperm count, infertility, baldness, prostate cancer and they would also develop female characteristics, such as breasts. From female athletes there are the same risks just the other way around. The testosterone would start changing the women’s body, giving it more male characteristics. Some affects are growth of facial hair, male-patterned baldness, changes in the menstrual cycle, enlargement of the clitoris and a deepened voice. Steroids are especially dangerous when given to adolescents. 3 4

After the fall of the wall more and more details about doping in East-Germany were discovered. Beside the bodily changes that I just named, the top athletes also had miscarriages and disabled children as result to doping. According to some east-German athletes already children and teenagers with extraordinary talents were given doping, without them or their parents knowing about it. Especially in swimming doping was nothing special. The female swimmers all had strong male characteristics. The doped athletes were not only supposed to win all kind medals, but also experiment with different anabolics for the DDR’s medical department.

This way they were able to find out how specific anabolics work and what their affects were. One could say that the athletes were being used as guinea pigs. Using doping privately was impossible, because the only doping available was at the state’s own medical research centers, nothing could be imported from abroad. In terms of socialistic strategy, the state itself ordered the doping and controlled whether the athletes were taking them or not. There were documents found that were titled: “doping guidelines for the swimmers”, in which the East German government had decided what drugs and how much the sporters will be taking. 5

Renate Neufeld was 17 when she joined the sports club/ sports school KJS. She had to sign several documents, in which stood that she was not allowed to tell anyone anything about the club, that including her parents. The KJS was a very special sports club that had a school included in the club. This sports school trained the future Olympic stars. Whoever finished this school was sure to have athletic success and a place at one of the best universities. Renate Neufeld made it into this school as a young sprinter. She was forced to learn perfect Russian and they did thorough background checks, whether she had relatives in the West and whether her family was a strong follower of the socialistic party. She even had to go through tests to see whether she had a socialistic personality.

The club had a very strict policy; they took blood tests of Neufeld twice a week to see how she was doing. Everyone who couldn’t cope with the hard training had to leave; the school education became less important than the physical performance. One day she got a box of pills from her coach, he told her they were vitamin pills, but at the same time she was reminded of her professional discretion. She took 2-3 pills a week and quickly noticed that her thighs were becoming bigger and started to hurt. Her voice was starting to change and she started to grow and beard. When a friend noticed these changes she said: “so now you’re also taking them”. It was forbidden for Neufeld to go to doctor outside of her school campus and the school doctor reasoned her voice change with a cold and her pain with a normal muscle ache. Renate Neufeld was scared and stopped taking the pills she hid them and pretended to have taken them.

Her coach soon noticed and kept on asking her whether she had been taking the pills. When they found out she was refusing to take the pills, she was sent to the secret police and was accused of not wanting to show her best performance. She also had to go to the club’s own psychiatrist and was told there that if she wouldn’t improve she would be kicked out of the school and despite her school degree she would have to work as a cleaning lady in some factory.. After all of this she decided to flee to the west with her fianc�. She took the pills with her and showed them a doctor in West-Germany. They found that it was Turinabol. Her family stayed behind, in the DDR, and was harshly punished, her father was fired, and her sister was kicked out of her university. 6

In the end, one cannot blame the athletes for doping. It was not them who decided to play unfair; it was the Government of the DDR who forced their talented athletes to take drugs. The athletes were most of the time not even told that they were taking steroids and if they were told they had no other choice; they could either take the drugs or just leave the team and go do something else. The steroids ruined the sporters lives, the coaches were basically abusing their athletes; seriously risking their lives without even telling them. This was only possible because the whole government was involved. It was basically a dictatorship; they could have told the police, but not the coaches would have gone to jail but the athlete would have for not keeping quiet.

This was a general problem with DDR; the solcialistic government was controlling everybody and telling them what to do, even though it was life threatening. The DDR made their own steroid drug specifically for their athletes, which shows how much they wanted to win against the other nations. However, they did not care about the health of their own athletes and that is what I think is the worst part of the doping. Doping may make a sport useless because it makes it unfair, but destroying other people’s lives just to win a medal is in my opinion the worst thing one can do. And it gets even worse; knowing that a whole government is behind the doping. I think this ruins the sport, sport competitions are for fun; it is not war; where people sacrifice their lives just to win against another country

Works Cited:

* 1889, By. “Drugs in Sport- Wiki.” Wikipedia, the Free Encyclopedia. Web. 17 Oct. 2010. <>.

* Allden, By Peter. “BBC Sport- Sport’s Greatest Cover-up.” BBC News – Home. Web. 17 Oct. 2010. <>.

* “Anabolic Steroid- Wiki.” Wikipedia, the Free Encyclopedia. Web. 17 Oct. 2010. <>.

* “Doping in East Germany- Wiki.” Wikipedia, the Free Encyclopedia. Web. 17 Oct. 2010. <>.

* “Forced to Use Steroids- SI Vault.” Breaking News, Real-time Scores and Daily Analysis from Sports Illustrated – 14 Apr. 2003. Web. 17 Oct. 2010. <>.

* Lord, By Craig. “Drug Claim Could Be a Bitter Pill.” Ergogenics. Web. 17 Oct. 2010. <>.

* “Rediff- East German Kids Bred on Steroids.” – India, Breaking, Business, Stock, Sports, Cricket, Entertainment, Bollywood, Music and Video News. Web. 17 Oct. 2010. <>.

* “Spiegel- DDR: Schluck Pillen Oder Kehr Fabriken Aus.” SPIEGEL ONLINE – Nachrichten. Web. 17 Oct. 2010. <>.

* “Steroids.” Anabolic Steroids – Steroid .com. Web. 17 Oct. 2010. <>.

* “Steroids: The Ugly Truth.” Ray’s Health -. Web. 17 Oct. 2010. <>.

* “Turinabol- Wiki.” Wikipedia, the Free Encyclopedia. Web. 17 Oct. 2010. <>.

* “Use of Anabolic Steroids- Wiki.” Wikipedia, the Free Encyclopedia. Web. 17 Oct. 2010. <>.

* “Hormonal Doping in GDR.” Clinical Chemistry Online. Web. 17 Oct. 2010. <>.

Marketing Strategy For Launch Of Maxine By Mirrible


I will be working in the marketing department for the cosmetic company Mirribel public limited company. Mirribel have a range of market leading cosmetics products. The product that will be on the market is the new fragrance called Maxine. This new fragrance will be launched as Eau de Cologne and a Cologne Spray.


1 I have carried out market research on the new fragrance Maxine, by researching on the Internet; I also read the AVCE Business book. I have also carried out research by carrying interviews and questionnaires to the public this was my primary data. I have also looked at well known fragrances such as Tommy Hilfigure and Joop and Hugo Boss.


Interview with Public

1.1 Interview with John, john 24 and says he normally spends 30 pounds on Hugo Boss. He thinks that the prices have been expensive and he thinks big name company fragrances should try to keep prices lower so more people are able to buy the fragrance they like. This qualitative opinion may be useful, as it can sometime give more depth information on customer’s needs.

1.2 Uses the Internet to look up perfume fragrances such as Hugo Boss I find that the prices of Big Brands are charging are expensive. Also used the two different Business books for information.

Part 1.0

Overview of product marketing strategy

For Unit Three, we have to produce a marketing strategy for a new or an already existing product. My strategy will be based on the marketing principles, it will be important to understand customers needs that my why I will carry out market research.

I will use management process to help me make marketing decisions. This will require me gather and make data analysis to make the right decision for the new fragrance “Maxine.”

When carrying out research I will identify by asking questions that are relevant, and anticipate by taking account of customer’s requirements at present and the future. By meeting the needs of customers, I will satisfy customers by giving them the fragrance they want.

The marketing principle looks at the following:

* Knowing and understanding customer needs

* Knowing and understanding what competitors are up to

* Communicating effectively with customers

* Making sure that the whole organisation is marketing oriented

* Dealing effectively with any constraints which may affect marketing

The marketing mix is essential; it is made up of 7P’s that are very important for Mirribel when they sell their new product Maxine in the market. These 7P’s contribute toward selling the product. I will concentrate on the 4 main P’s that are product, price, and place and promotion.

* Product is the appearance the colour and packaging of Maxine.

* Price is weather the fragrance will be customer based, my research will help me to decide this or weather it will be competitor based priced.

* Place is the distribution of the new fragrance, weather it will be retailers or wholesalers, my research will help me to decide this.

* Promotion is how the fragrance will be advertised, such as through sales promotion or personal selling.


We therefore have to use primary research gathered, as well as research taken from others (primary and secondary sources) this will give ourselves a brief idea of the type of market, we will be working towards. Whether it involves demographic of age groups, and sex types.

Explanation of understanding of marking and market research affects choice of marketing strategy


The product Maxine will be available to men and women this fragrance, I will be aiming for this product to have market penetration, they may be done by high level sales this may also increase the market share. It is also dangerous for a business to offer just one product, Mirrible have five products already in the market. Within the market, since any larger rivals are likely to be more diversified and have a wider product portfolio. These larger businesses could, therefore, reduce their prices to such a low level that the small business cannot compete profitably. My marketing research has helped me to indicate that most buyers will spend �20-30 on perfume. By finding out the needs of people, should allow Mirribel to decide how to target the market and the best marketing mix for those consumers being targeted. Mirribel may decide to promote the product in a colourful supplement of cosmetics magazines. Mirrible have to make marketing decisions, which include wider and longer term marketing issues. These may include how Mirribel can gain competitive advantage for Maxine. For example if Maxine is using product differentiation in the market they operate in and where they wishes to be in future years. These marketing strategies can affect the entire business. The price range for Maxine will likely to be �25-30 my market research has helped to decide this. The price strategy will also be likely to be competition- orientated pricing at the going rate or penetration pricing set low so it can enter the market, and build high brand loyalty.


Nevertheless, during periods of economic growth and higher consumer spending, then niche markets can offer a very lucrative opportunity to many small businesses to offer a personalised, high value-added service/product. Maxine stands good chance of being successful because Mirrible also has strength of being well know with already five other products do well and some at the stage of cash cow bring high levels of revenue to the company. The market segmentation I will be aiming is young people between age 25-30 this information I have got from my primary research information. I will also be expecting women to spend more on fragrances than men this I also know from my primary research. I have found that there is a growing demand for perfume looking at the national trends in perfume.


I will also be partly concentrating on the 7 P’s of the marketing mix to help me outline the products marketing strategy. I will also use methods such as SWOT analysis to help me construct the strategy and PEST analysis. To help me find out what customer’s wants I will use my primary research such as my questionnaires.


The first objective for the marketing strategy is to have a good impact on the fragrance market and also increasing the market share, so this can raise the revenue of the business.

The other objective is to get the product well known to the public; getting the product published may do this. Here is the marketing strategy as follows.

* Mirrible have a few leading products in different markets that bring in high revenues to the business.

* Mirrible will advertise and make the product well know, before launchings the new product. They will also follow the strategy of leading companies.

* To increase the market share by having high level of sales.

* If successful to produce more goods to sell around the world.

* Penetration pricing. This is a pricing strategy for a new product, designed to undercut existing competitors and discourage potential new rivals from entering the market. The price of the product is set at a low level in order to build up a large market share and a high degree of brand loyalty. The price may be raised over time, as the product builds up a strong brand-loyalty Maxine will follow this.

Part 2.0

Research methods and data source

I have carried out my primary research by doing 50 questionnaires and giving them to the public round Enfield, Wood green and Tottenham. I also asked a few question about the new fragrance Maxine.


Primary research

This is research designed to gather primary data, that is, information which is obtained specifically for the study in question. It can be gathered in three main ways – observation, questionnaires.


Secondary research

This is the collection of secondary data, which has previously been collected by others and is not designed specifically for the study in question, but is nevertheless relevant. Secondary data is far cheaper and quicker to gather than primary data, but it can be out-of-date by the time that it is researched. The main sources of secondary data are reference books, government publications and company reports.

My Primary Research

Fig 1.0

The following graph above shows the amount of males and females, I gathered information from to

Conduct my finding.

Fig 1.1

It important to know where customers would prefer to buy their perfume because, this may give me a better idea where I should recommend selling the product.

The graph below show not many people like the name Maxine, so there may be consideration to weather the board may change the name of the new fragrance. Fig 1.2

Fig 1.4

The packaging is important because customers may prefer their perfume in either plastic or bottle. If the packaging looks well presented customers will buy the perfume.

Fig 1.5

The scent is one of the most important factors I will base it on the most popular choice.

Fig 1.6

Fig 1.7

This shows me how much disposable Income people are willing to pay on perfume; this is vital because this may help me decide how much I will set the price for the new Maxine perfume. �20-30 most people spend.

Fig 1.8


I have used primary and secondary information to help me find out what people would want from a perfume, and what prices the perfume should be. Also how to launch the perfume on the market and be successful.


I have noticed looking at my primary data that women spend more money than Men on perfume between-25 – 40 pounds do, and they also use it more often than men use perfume. The age group most people buy perfume is mostly between 20- 30 years old. The most popular perfumes where Hugo Boss, Joop, Calvin Cline, and Dolce Gabbana and Versace are popular designer perfumes.


Secondary information

I also visited many shops that sell perfume fragrances, such as Tesco, Boots, Superdrugs and Body Shop. I noticed that designer perfumes was expensive the cost of the perfume can also lead up to 60 pounds. If I compare the price in the UK retail compared to France you can see that France sell perfume cheaper, even up to 20% cheaper than UK retail.


In the last ten years perfume in the UK has increased so much it has been used for all occasions and is very popular in with men and women especially 20-30 year olds.


The UK has an industrial sector of such importance consisted of so many contradictions: as the quintessence of luxury, sensuality and refinement, the perfume industry is also the domain of powerful industrialists, of experts in marketing and publicity launches at the global level. In spite of the product’s somewhat frivolous connotation, the perfume industry has drifted through the recession virtually unaffected, its growth rate in France varying from 12.3% in 1991 to 4.2% in 1993 and 3.2% in 1994, without ever dropping into negative figures (in UK, nine out of every ten women and one out of two men use perfume). And despite several centuries of tradition, UK perfume manufacturers now use state of the art technologies.


Perfumes are perfected by inspired inventors (the famous “noses” skilled in the art of blending different essences) who know all about the latest findings in chemistry as well as the market prices of expensive natural raw materials. Perfumes are packaged with care, given evocative names and labelled by all the greatest fashion names. Nonetheless, they have never been as popular and are now sold on the shelves of large stores. At the same time, perfumes appeal not only to women but also more and more to men, young people and even children, a market in full expansion

Fig 1.9

This data is from the official national statistics UK site

It may be useful to know the economy earning, if people have a high disposable income they may be able to spend more on fragrances.

Retail sales increase

Fig 1.10

In the three months to December 2002 retail sales grew by 1.8 per cent compared with the previous three months, and by 5.5 per cent over the same three months a year ago.

Fig 1.11

The Bank of England has voted to keep interest rates unchanged at 4.0%, resisting calls from industry to cheapen borrowing.

The interest rates are down so people are able to borrow more money. The Bank has long faced pressures to cut rates to help manufacturing, the tortoise in the two speeds UK economy.


The importance of Boots the Chemist as an outlet for perfume in the UK, that some designers have launched perfumes exclusively with Boots-Yves Saint Laurent’s Baby Doll for young women, Laura Biagiotti’s Tempore and Time For Peace by Kenzo. Boots’ four best-selling women’s fragrances are Cerruti Femme, Chanel No 5, Cool Water Woman by Davidoff and Tommy Girl from Tommy Hilfiger (the company would not reveal the order of the top four best sellers). Fig 1.12

Economic trends in the consumption of cosmetic goods

This analysis is important for establishing how and where Mirribel, Maxine would fit into the perfume market, and whether or not it would be successful or how successful it would be.

This pie chart shows the economic trends in the consumption of cosmetic goods. This includes perfumes and cologne.

From the years 1990 to1994 the consumption was 9%. Through 1995 to 1996 the trends increased again to 10%. The trends rose again in 1997 to 11%. Then, from 1998 to 1999 the trends rose to 12%.

These results show that the trends in cosmetics are on the increase, and that they are being purchased more and more. The variety in colognes and perfumes are increasing, and these days there is a larger variety to suit many different people. As the cologne and perfume market grows, people have a more personal choice that is hat they desire.

The increase in the trends of the consumption of cosmetic goods id expected. This is because these days the demand for cosmetics has increased due to many different ethnicities. It is important for the cosmetic goods market to move with the times, in order to achieve success.

Even though there is an increase, it is not that much. Over a 10-year period, there was an increase of only 3%. This shows that the demand for the consumption of cosmetic goods is not increasing at a fast rate. These results show the people who do not demand cosmetic goods. I have also found that perfumes in the EU Countries are very popular.

How secondary research information is used in strategy


Maxine will be entering a competitive market with fragrances such as Hugo Boss, Tommy Hilfiger, and Calvin Klein which are all popular in the market. My secondary research will help to decide how to launch Maxine in a successful way. By researching on popular fragrance such Hugo Boss may help me decide what strategy would suit Maxine I was benefit by this. Hugo Boss advertises on the national television this may not be a suitable for Maxine because it is very expensive. They may do this in later stage advertising in cosmetic magazine and poster would be suitable and billboard. When launching a new product it important to know about the economy, that why I have used secondary research on earning in the UK economy. The disposable income is stable; it looks all right to launch the product.

Secondary research shows me (in UK, nine out of every ten women and one out of two men use perfume). So I may target Maxine at mostly women than men because women on average spend more money on cosmetic then men. The economy in the UK is at a peak retail sales has increased in fig 1.10 the interest rates are low so people are able to spend more deposable income. The economic trend shows cosmetic goods has increased in the last 9 years u can see on fig 1.12. Using my secondary information by looking if the economy is stable, has helped me to decide that the strategy to enter an existing market successfully.

Part 3.0

Audit and environmental analysis

The new fragrance that will be launched, in the external environment. It will have a big affect Maxine because, it will be entering the fragrance market where many companies, that can be a threat to the company, also it will have very competitive companies that will try to maximise profit and sales.


Marketing audit involves a systematic appraisal of all the factors, which are (external and internal) which are affect a company’s commercial performance over a defined period. The purpose is to reveal and analyse the strengths and weakness of the organisation’s marketing functions. When a company looks all the way around 360 degrees into products before they paying for it Mirribel company has to do marketing audit because Mirribel need to know it worth launching Maxine as it could cost them 30 million or more just to launch the product. Before they do invest sort of money on the perfume. When they decide that they want to look at inside the company. For example the company have to look if there is a demand for Maxine in the perfume market?


Mirribel have looked at the market. If there is a demand this can be proved when Mirribel are looking at secondary research, that has already been carried out from internet companies called and From these web sites Mirrible can use reports about the total market for toiletries, was �3,300 in 1999 it was 3,400 and has grown every year after this year.

The marketing audit can divide to four sections these are listed below:

1) The general business environment

2) The market environment for the particular product

3) The competitive environment i.e. the firm in relation to major competitors.

4) An internal Audit for the company and its marketing policies.


Macro Environment P.E.S.T Analysis: (SLEPT)

What is PEST Analysis?

It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization’s marketing environment is made up from:

1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.

2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc.

3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors.


The market environment refers to the forces that either directly or indirectly affect’s the business organisation, activities or indirectly affects an organisation activity but over which the activity has little or no control. PEST is one of the useful ways of analysing an organisation external environment is by grouping external forces neatly into four areas using a PEST analysis. External to an organisation that is in estate of flux and that are likely to have an influence on the organisation in the coming months and years. An affective PEST analysis will be based on detailed research using all the latest journals and publications. For example, it certain taxes are likely to be loured by? What will be the impact on the sales of each product?

SLEPT or PEST are the factors that affect the business. SLEPT is:

* Social- culture

* Legal

* Economic

* Political

* Technological


The social cultural of Maxine may be that more people may be interested in the fragrance such as women may demand more for the Maxine products than men do. Also people may believe that it’s better than rival designer companies fragrances, because of its scent and it value for money and high quality this may bring a big demand for it. When Mirribel sell their product in the markets social and cultural factors are has to be understood clearly by the company because this is a very important factor.

Because demographic changes, such as population growth movements and age distribution. Will be important, as well changes in culture changes values and social trends, such as family size and social behaviour. For example like in UK there is different cultures from different countries this can give an idea to mirribel to make different types of fragrances e.g. the Asian people mostly prefer the food that contains spice. So Mirribel can make a decision for different socials and cultures with their product to be brought by different social life and different cultures. Factor might include the followings:

* Consumer lifestyle

* Demographic issues

* Environmental issues

* Education

* Immigration/ emigration

* Religion


Legal Factors since Maxine entered the perfume Market the prices they have charged has been low and produced the good quality and value to consumer, so that they are not been cheated, also there are many companies selling fragrances and low and high prices that give consumers choose to chose from plus there are no monopolies that are only one supply of the goods, so consumer are able to chose from a variety of brands.


Economic factors are Maxine prices will produce high quality good at low prices. I don’t think that there will be a recession or depression in the economy. They may be recovery where consumer’s confidant are good and a big increase in demand for goods. The economic factor is the main important for Mirribel to sell the product in the market that if there is a high or low inflation rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the nature of the products and services required by consumers, as well as how difficult it becomes to supply them.

The economic factor is important for Mirribel weather they should sell the product in the market that is high or low inflation. Rates of economic growth, inflation, consumption patterns, income distribution and many other economic trends determine the nature of the products and services required by consumers, as well as how difficult it becomes to supply them.

Influence might include:

* Inflation

* Unemployment

* Energy price

* Price volatility


In my primary research shows, which I carried out in a street survey, I asked one question on how much money that is spent on fragrances a month. My results showed that most people spent �20-30. The result of how mush people spend will be important to Mirribel. I have also used secondary research using the National Statistics Office book; I found the family expenditure on perfume a year.

1. Interest rate:

The interest rate represents the price of borrowing money. If the rate of interest is low the price of borrowing, people will borrow more and spend more. The monetary policy committee will raise interest rates if spending is getting out of control. Higher interest rates will discourage spending and dampen down business activities. Mirribel is interested in interest rates because it affects people spending and if the interest rates where increased there would be less demand for perfume. If we look at the interest rates at the moment Mirribel found out it’s gone up by 6% in the last ten years.

2. Inflation

Inflation is economic problems that have repercussion for a large number of individual and the organisation. When unemployment is at high level, the population as a whole has less money, to spend and this affects many businesses. In a period of inflation, raising prices are likely to affect everyone in one way or another. To the government, inflation means a general increase in the level prices. Statisticians use the retail price index (RPI), which is on average of price changes and shown in a general change over a period of time.

3. Unemployment

One of the government’s most important jobs is to manage the economy. To understand how the government is able to do this we first need to know something about aggregate monetary demand (ADM) and aggregate monetary supply (AMS):

* ADM aggregate demand is the total level of demand in the whole economy.

* AMS aggregate supply is the total level of supply in the whole economy


Political issues that the fragrance will be made with no harmful and bad chemical that can have a pollution affect it will not contain any harmful gases that are not good for the environment it will be environmental friendly. The political factor is important because in a country political changes will affect the company. For example if the government changed, maybe other government would put the taxes down, that will make people spend more money on luxury products like perfume. This is very important for Mirribel because a new government may feel this is a good factor. This may encourage people to spend.

Influence might include:

* Changes in tax structure

* Privation

* Trade unions

* Changes in the availability of raw material

* Duties and levies

* Regulatory constraints, such as labelling, quality safety


Technological factors is that the technology will be improved and produce well to the highest quality in production. Promotion may be easy by the use of Internet, radio, and TV newspapers. The outcome of goods cost will be reduced by the new technology. Technology is important without technology Maxine will not be able to gain a high market share because of the high competitive market for perfumes. So Mirribel need to research the process and manufacturing parts of the perfume they going to market. The technological part gives more advantages to companies to promote and sell their products. For example Mirribel can sell the perfume via the internet this is what most companies do in our modern time. Also Internet is the most useful way of promoting and advertising as the internet break down barriers and it is also inexpensive. The technological factor might include the followings:

* New technological process

* New materials and substitutes for existing materials

* Better equipment

* New product develop

Forces external to the organisation are rarely stable and many of these forces alter quickly and dramatically.

The five main factors may be used to affect Mirrible demand and supply. For social culture if people have more disposable income and believe they are buying a good quality able to spend more on Maxine, so this may increase demand.


Swot Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues.

Once key issues have been identified, they feed into marketing objectives. It can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter’s Five-Force analysis. It is a very popular tool with marketing.

SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. For example, strength could be your specialist marketing expertise. A weakness could be the lack of a new product. Opportunities and threats are external factors. For example, an opportunity could be a developing market such as the Internet. A threat could be a new competitor in your home market. Carrying out a SWOT analysis requires research into an organisation’s current and future position.

A word of caution, SWOT analysis can be very subjective. Swot analysis will be used for the product Maxine I will be looking at the strengths, weaknesses, opportunities, and threat.



That Mirribel is well known public limited company with a rage of market leading cosmetics products. The company is well known in the UK. The company Mirribel has a good chance of being successful because they will be meeting the customer’s needs; this is done by using the primary and secondary date. The company is able to raise high levels of capital from shares and from the company pervious products that may be used to launch the new product Maxine. It important to companies brand name to be well established by the customers, so because Mirribel is well known so when it launches Maxine it product can be trusted by customers, because they know Mirribel provide high quality products. Off course the company has to finds way to make consumers respond with their product. They could use the following:

* The cosmetics (perfume) will be ideal gifts for special days

* Mirribel have got sale channel and our distribution are already in place, we can put these perfumes in the same Lorries, vans and they will distribute to the same place.

* Women with higher disposable income who fuel the demand for quality will spend their money on Mirribels perfumes, because they have been given quality with cosmetics. Women know they will be getting again with Mirribel products.

The strength will include:

* Good product

* Good relationship with customers

* Good management team



The product could perform poorly because is not competitive. The product Maxine could go straight to problem child this is when a product which has a low market share in a high growth industry, but this would only happen if it does not meet peoples taste. The product might have to be re launched because of poor sales, or Mirribel may have to spend more money in research to bring in a new better and more competitive perfume. This is the first time mirribel has launched a perfume so they don’t have as much experience in this than rival big brand names such as Hugo Boss. Mirribel market segment is important and Mirribel knows what their market is about, it is about dividing customers into different categories, and Mirribel knows what demographic are our customers in, that because Mirribel have been selling the cosmetics for a period of time. In this way Mirribel can make the price fit the type of people that are buying the Mirribel product.

The weaknesses include the following:

* Launching a new product when have very little knowledge

* Operates on a small scale

* Regular cash-flow problems

* Deals in a limited market

The name Maxine is not well know and does not sound as good as rival competitors so this may also be a weakness.



Maxine may reach the star stage when you have a high market share in a high growth market. They are very successful products which create a large amount of revenue for the business. They still require a large amount of money to be spent on their promotion, in order to keep ahead of the rival products in the marketplace. This may give Mirribel a good chance of launching its products world wide to be more successful, the will also grow world wide. Mirribel also has opportunity to sell the product existing customers new product because, if they brought makeup they will buy our perfume. This may be difficult product for Mirribel to sell it internationally because perfume is a more international product, so we may find it difficult to find a place in market and to sell their product.

The product could reach the cash cow stage after while this means that products have a very high market share in a stable market (i.e. market growth is low). These products are at the ‘Maturity’ and ‘Saturation’ stages of their product life-cycle and produce a very large amount of revenue for the business of Mirribel. Mirribel could start selling much more products and selling products in different markets. The company could also aim for profit maximise. There is also opportunity to our perfumes abroad because it is a lot easier to sell perfume then makeup in a foreign country.

Opportunity includes the following:

* New and rapidly growing markets

* Changing tastes of consumers

* Could diversify in to a number of product lines




Rival business may dominate the market by taking high level of market share leaving Mirribel with a very low share.

Rival business may also launch similar products taking Mirribel customers away. They may also try to copy mirribel ideas. They may also try to take over Mirribel by buying a very high level of shares, but Mirribel may be able to stop this happen by monitoring the shares brought. Mirribel may find it hard to keep the customers with their products as competition increases. So Mirribel has to find different ways to keep their customers. For example Mirribel can find different types of perfume for women to meet their taste so that they remain customers.

Treats as follows:

* Growing competition

* Recession leading to poor demand in the company

* Development of foreign competition

Other business may try to make Mirribel look poor compared to their business.

Fig 1.13

Part 4.0

Current perfume market and research findings

Perfume, like other cosmetic goods, has become largely popular among the middle and high-income earners. Their life-styles have markedly changed to a fashionable style of dressing, using perfume to enrich their characters in social activities. Perfume is essential for all genders and ages, so its market turnover now rises to BT 600-700 million, showing a relatively high growth rate of over 20% a year.


Perfume has been getting more popular in the last ten years and consumers tend to buy and use it more often now day the market also has a growing share of the sales of perfumes. The prices of perfumes and especially designer perfume have increased by a lot. Some people believe that if they spend more money they will have a better and long lasting scent than cheaper perfume.

In Europe perfume buying habits have gone through something of a revolution in the last 30 years. Perfume used to be a special occasion luxury that very few felt they could afford but now women who do not wear perfume are the minority. Famous designers and big fashion houses may have broken down many international barriers in the world of fashion but how does this affect perfume brand awareness across Europe.

Of the “big five” European countries France, Germany, Italy, Spain and Great Britain, 61.1 percent of all females aged 11 to 74 use a fragrance product at least once a week. Of the key 25-34 age group the biggest users were Spanish women, 82.9 percent of them use a fragrance at least once a week, compared with the lowest users in that age group, 53.2 percent of Italian women. The French were the next biggest users in that age group, followed by the Germans, then British women. The same survey asks the women how many times a week they use a fragrance product. In the 35 to 44 age group the average usage across the five European countries was 6.6 times a week, with France the most frequent users 7.3 times, then Spain 6.8 times, Germany 6.6, Italy 6.3, and Great Britain 5.6.1. This information tells me that perfume demand has increased in Europe and has been used more often.

Europe’s perfume buyers are still buying at department stores and duty- free shops at ports and airports, but these days, perfume has become such a fact of everyday life that we can pick up a bottle of our favourite scent at the supermarket while we are doing our week’s grocery shopping. Among the most popular fragrances in British supermarkets are Anais Anais, CK One, Ysatis, Opium and Paris, established big-name brands that do not take much selling and will not be left on the shelves.

Such is the importance of Boots the Chemist as an outlet for perfume in the UK, that some designers have launched perfumes exclusively with Boots-Yves Saint Laurent’s Baby Doll for young women, Laura Biagiotti’s Tempore and Time for Peace by Kenzo. Boots’ four best-selling women’s fragrances are Cerruti Femme, Chanel No 5, Cool Water Woman by Davidoff and Tommy Girl from Tommy Hilfiger (the company would not reveal the order of the top four best sellers).


Analysis of market

Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behaviour. The world is made up from billions of buyers with their own sets of needs and behaviour. Segmentation aims to match groups of purchasers with the same set of needs and buyer behaviour. Such a group is known as a ‘segment’.

The age segment I will be aiming for is 25- 30 years old this is because I found out when I gave my 50 questionnaires out that most people that buy perfume are around that age.

I will be mostly aiming for more women than men because women use perfume more often and spend more on it, this I find out through by research.

The perfume will be a cologne spray and will be in a glass bottle it will be environmental friendly.

Part 5.0

Recommendations of marketing mix

Marketing is making up of actual or potential buyer’s of a product and the sellers who offer goods to meet buyer’s needs. Marketing mix is a concept which is using by the companies to sell their product; this is connected to sell its product in the market. All business selling products round the world use marketing mix because they have to get established in the market to sell their product.


The marketing mix is made up of 7P’s, which are very important for Mirribel, when they sell their new product Maxine in the market. These 7P’s contributes toward selling the product. I will explain in the report. The 7p’s are the following:

* Price

* Promotion

* Place

* Product

* Process

* Physical evidence


The price level that Mirribel decides to sell its product(s) at will affect both the quantity of sales and the profit-margin received per unit. There are many considerations that Mirribel will need to take into account before it decides upon a selling price for a new product, such as:

– The objectives of the Mirribel – if the main objective of Mirribel is to maximise profit, then it is likely that the product will be priced at a high level.

– The degree of competition in the industry – the number of competitors in the industry will affect the price level that Mirribel decides upon for its product(s).

– The channels of distribution – the more intermediaries that are used in getting the product from the factory to the consumer, then the higher the selling price is likely to be.

– The business image – if the image of Mirribel is prestigious and up-market, then a higher price is likely to be charged for the product(s).

There are many methods and strategies that Mirribel can use in order to arrive at a selling price for its products:

Cost-plus pricing. This is where the cost of producing each unit is calculated, and then a percentage profit is added to this unit cost to arrive at the selling price.

Mark-up pricing. This is where the business adds a profit mark-up to the direct cost for each unit in order to arrive at the selling price. This profit mark-up will need to cover the fixed overheads and then contribute towards profit.

Predatory (or destroyer) pricing. This method of pricing involves a business setting its prices at such a low level that other (often smaller) competitors cannot compete profitably, and as a result they are forced out of the industry. This leaves the larger business in a dominant position, and it can then raise its prices to a much higher level in order to recoup any losses that they incurred when their prices were low.

Skimming pricing. This is a pricing strategy for a new product, designed to create an up-market, expensive image by setting the price at a very high level. It is a strategy often used for new, innovative or high-tech. products, or those which have high production costs which need recouping quickly.

Penetration pricing. This is a pricing strategy for a new product, designed to undercut existing competitors and discourage potential new rivals from entering the market. The price of the product is set at a low level in order to build up a large market share and a high degree of brand loyalty. The price may be raised over time, as the product builds up a strong brand-loyalty.

Prestige pricing. This strategy is used where the business has a prestigious, up-market image, and it wishes to reflect this through high prices for its products (e.g. Rolls Royce).

Demand-orientated pricing. This method of pricing involves setting the price of the product at a level based upon customers’ perceptions of the quality and value of the product.

Competition-orientated pricing. This method of pricing ignores both the costs of production and the level of customer demand. Instead it bases the price level on the prices charged by the competitors in the industry – either undercutting the competitors, charging a higher price, or charging the same price. ‘Going rate’ pricing is the term used to describe a business charging a similar price to competitors for a similar product.

I recommend that Maxine should use Penetration pricing, because This is a pricing strategy for a new product, designed to undercut existing competitors and discourage potential new rivals from entering the market. The price will likely to be �25 for Maxine. My primary research helps me decide on this price.

Fig 1.14



Promotion refers to the tactics that Mirribel uses to make consumers aware of their product(s) and to entice them to purchase the products, creating sales revenue for the business. Promotion can often be referred to as either:

‘Above the line’ – promotional activity refers to extensive promotional campaigns on national media, such as television and newspaper advertisements.


‘Below the line’ – promotional activities include more short-term tactics such as personal selling, sales promotions, packaging, branding and direct mail.

Most businesses will use a combination of ‘above-‘ and ‘below the line’ tactics in order to create the desired impact on consumers.


Advertising is the most expensive of all the promotional activities undertaken by businesses. It can be carried out on television, at the cinema, on the radio, on posters, in newspapers, in magazines, and on the internet. Advertising can allow the business to easily reach a vast audience, to have a great impact on consumers and to reinforce other types of promotion that it is carrying out (e.g. competitions). Advertisements can generally fall into two categories:

– Informative advertisements – informative advertisements attempt to purely let the consumer know the availability of the product, its function and purpose and to inform the consumers about the characteristics of the product (e.g. Government information films).

– Persuasive advertisements – persuasive advertisements attempt to get the consumers to purchase the product, by emphasising certain aspects of the marketing mix (e.g. the taste, style and moving images). Another category of advertising is ‘corporate advertising’, where the business advertises its name and image, rather than any of its product range.

There are several criteria that must be met in order for an advertisement to be considered ‘effective’:

– Firstly, it must reach the desired target audience (i.e. those consumers who are most likely to purchase the product – this can be discovered through market research).

– Secondly, the advertisements must be attractive and appealing to the target audience (this can be done through using certain images, pictures, words and personalities).

– Thirdly, the advertisements must create far more money through sales revenue than the business spends on the advertising campaign.

There are two bodies established by the government which monitor advertisements in the UK. The Advertising Standards Authority (A.S.A) monitors any advertisements in newspapers, magazines and posters, and ensures that they are ‘…true, decent, fair and legal’. Any complaints by consumers can lead to the advertisement being investigated and possibly banned from publication. The Independent Television Commission (I.T.C) monitors any advertisements on the radio, on television and at the cinema. Gain, it has the powers to investigate any complaints about certain advertisements and ban the business from advertising in the future.

Branding and packaging

Branding and packaging are another common way of differentiating the product from rival products in the market place. Businesses will try to stress the distinctiveness of their products and therefore create a certain image for their products in the eyes of the consumers.

A brand is simply a name for the product, often reflecting the character of the product, and businesses will try to build up brand loyalty (that is where consumers are happy with their purchase of a particular product, and will return to purchase it again in the future). A strong brand can enable it to be sold at a high price, resulting in a high profit-margin for the product. It can also provide a strong basis for the business to launch new products, using the reputation of its existing products to break into the market.

Packaging is also important because it is another way that the consumers can distinguish between different products (eg through the colours, size, shape and logos used on the packaging). Packaging also offers protection for the product during transportation and can contain competitions and prizes to further promote the sales of the product.

Loss Leaders

Supermarkets often sell a few of their own brands of products at a loss – these are called ‘loss leaders’. The purpose behind these loss-making products is that they attract many consumers into the stores, who will consequently purchase a selection of profit-making products as well as the loss leader.

Personal selling

Personal selling can take the form of door-to-door selling, trade fairs, and exhibitions. These allow an opportunity for the salesman to show how the products actually work, to see the consumers’ reactions to the product, and to allow the consumers to discuss the performance of the product with an employee from the business. This is otherwise known as direct marketing, since the business deals directly with the consumers, rather than through an intermediary such as a retail outlet.

Direct mail

Direct mail (sometimes referred to as ‘junk mail’) involves posting promotional literature directly to consumers’ homes, which are selected from a list of known customers (e.g. ‘Britannia Music Club’). It is more of a personalised way of promoting the business, but it often fails to produce a large enough sales revenue to justify its use. Telephone selling can be used as a slightly cheaper method of direct contact with potential consumers (e.g. double-glazing, insurance etc).

Sales promotions

Sales promotions are a short-term method of boosting sales volume and sales revenue, using such tactics as a price discount, free products, competitions, and discount coupons. They are often used to complement national advertising campaigns and can also include product endorsements by sports stars or television personalities, and may offer easy payment terms for the consumers. These have become a very popular way of boosting sales over recent years (e.g. Walkers Crisps ‘Cubix’ cards, McDonalds ‘Who Wants To Be A Millionaire’ scratchcards, etc).



This refers to:

– firstly to the stores and the retail outlets where consumers can purchase the products of the business,

The channels of distribution refer to the intermediaries that a business chooses to use to transport its product and make it available to consumers (e.g. wholesalers, distribution companies and retail outlets).

The retailer then sells each batch of products to the consumer, after adding on a profit margin. The more intermediaries that exist in the distribution of a product from a factory to the consumer, then the higher the final price of the product, since each intermediary will add on a profit margin in return for offering their services.

In order for the distribution channel for a product to be efficient, then the following criteria must be met:

– It must be able to make products available to consumers quickly and cheaply.

– Some products, such as perishable and fragile products (fruit, glass products) need to have minimum handling and travelling time, in order to minimise the risk of damage to the products.

– Large and dispersed markets will require many intermediaries – these must be chosen carefully to ensure the swift transportation and availability of the products to the consumers.

– Heavy and bulky goods will often need a direct channel of distribution from the factory to the retail outlets.

– The trend over recent years has been for businesses to eliminate many of the intermediaries in the distribution channel and for the product(s) to be sold directly from the factory to the retail outlets, or even directly to the consumers themselves. This reduces the final price of the product that the consumer has to pay, and it also speeds up the delivery and distribution process.

Retailing is a fast-changing sector of the economy and there have been many developments in this sector over the last decade, including the development of out-of-town shopping centres, the widespread use of Electronic Point Of Sale (E.P.O.S) systems, longer opening hours to fit in with busier lifestyles, and an increasing demand from consumers for many products to be sold in one outlet.

These developments are enabling the larger businesses to dominate markets and hold a significant percentage of the overall market share. These retail outlets can, therefore, exercise more power than ever before when buying stock from factories and warehouses – enabling them to dictate the prices that they will pay for their supplies. The factory providing them with their stock and supplies will have little alternative than providing the supplies at a low price, since they cannot afford to lose such a large and important client.


There are six basic ‘channel’ decisions:

1. Do we use direct or indirect channels? (e.g. ‘direct’ to a consumer, ‘indirect’ via a wholesaler)

2. Single or multiple channels

3. Cumulative length of the multiple channels

4. Types of intermediary (see later)

5. Number of intermediaries at each level (e.g. how many retailers in Southern Spain).

6. Which companies as intermediaries to avoid ‘intrachannel conflict’ (i.e. infighting between local distributors)


Selection Consideration – how do we decide upon a distributor?

* Market segment – the distributor must be familiar with your target consumer and segment.

* Changes during the product life cycle – different channels can be exploited at different points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were sold via a few specific stores.

* Producer – distributor fit – Is there a match between their polices, strategies, image, and yours? Look for ‘synergy’.

* Qualification assessment – establishes the experience and track record of your intermediary.

* How much training and support will your distributor require?


Types of Channel Intermediaries.

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. The main modes of distribution will be looked at in more detail.

1. Channel Intermediaries – Wholesalers

* They break down ‘bulk’ into smaller packages for resale by a retailer.

* They buy from producers and resell to retailers. They take ownership or ‘title’ to goods whereas agents do not (see below).

* They provide storage facilities. For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer.

* Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs.

* A wholesaler will often take on the some of the marketing responsibilities. Many produce their own brochures and use their own telesales operations.

2. Channel Intermediaries – Agents

* Agents are mainly used in international markets.

* An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods. This means that capital is not tied up in goods. However, a ‘stockist agent’ will hold consignment stock (i.e. will store the stock, but the title will remain with the producer. This approach is used where goods need to get into a market soon after the order is placed e.g. foodstuffs).

* Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved. They are difficult to motivate.

3. Channel Intermediaries – Retailers

* Retailers will have a much stronger personal relationship with the consumer.

* The retailer will hold several other brands and products. A consumer will expect to be exposed to many products.

* Retailers will often offer credit to the customer e.g. electrical wholesalers, or travel agents.

* Products and services are promoted and merchandised by the retailer.

* The retailer will give the final selling price to the product.

* Retailers often have a strong ‘brand’ themselves e.g. Ross and Wall-Mart in the USA, and Alisuper, Modelo, and Jumbo in Portugal.

4. Channel Intermediaries – Internet

* The Internet has a geographically disperse market.

* The main benefit of the Internet is that niche products reach a wider audience There are low barriers low barriers to entry as set up costs are low.

* Use e-commerce technology (for payment, shopping software, etc)

* There is a paradigm shift in commerce and consumption which benefits distribution via the Internet.


Places the product can be sold are poster magazines and exhibition would be suitable.

* Media

o Television

o Cinema

o Radio

* Posters

o Billboards

o Pillars

o Store Windows

* Written

o Magazines

o Newspapers

* Shows

o Exhibitions


Recommendation on marketing mix


I recommend the price that Mirribel should charge for Maxine should be demand orientated pricing. The reason why I suggest this is so it will affordable to most people. I can segment a larger audience, instead of just focusing on high earners. When deciding the price by comparing different companies prices. When Mirribel discuss the price of product that they going to sell. I used my primary research we gathered to give me idea what price would be suitable. In section 2 (appendix fig 1.7) the question was sort of price rage a mount spend on perfume was �20-30. So the price will be between these amounts of money.



The image of the product is important; if the product is eye catching to the eye then people may be interested in buying the product. My primary research shows what packaging people prefer in the (appendix fig 1.4) most people preferred bottle than plastic. It is likely that the product will be in a bottle. The scent is also import, in my primary research I found which scent is most popular in (appendix fig 1.5) most people said preferred flowery which was 17 out of 50 chosen.



When selling a product, it is best to sell it in a location that is popular where the product can be sold out. I carried out research in my group to find out the most popular place people will buy their perfume. When I asked people where they bought the perfume, the most popular place was high street shops. You can see my primary research on (appendix fig 1.1). So it would be suitable for Mirrible to sell their perfumes in popular retail high street shops such as Superdrugs and Boots. Mirrible can be competitive with other perfumes.



This is one the most important category Mirribel should look into, promotion should be used so public are aware of the product of perfume. It’s important to promote it in the right way of promotion. For example it would not be suitable to promote in an auto car magazine or financial times newspaper. The advertising should be in suitable I would recommend it be advertised in

Cosmetic magazines and posters. There are magazines that the Body shop and Boots provide this would be suitable for Mirribel.

Internet (E-commerce) can be suitable for advertising and can sell through via on Internet, it’s is a fast way to access a market. In our modern time many products are sold on line and are used for promotion e.g. Hugo Boss has their own web site. The Internet is becoming very popular and cost benefit to set up.


Explanation of how the audit, environmental analysis and market analysis have influence the development of your marketing strategy

The audit environmental analysis in section 3 has helped me to consider the internal and external factors, which affect Mirribel performance. I looked at the internal factors include SWOT analysis. This has influenced the development of my marketing strategy. When looking at the strengths, That Mirribel is well known public limited company with a rage of market leading cosmetics products. The company is well known in the UK. The company Mirribel has a good chance of being successful because they will be meeting the customer’s needs. Mirribel have strength of having a good product Maxine. The weakness could be dealing in a limited market.

The opportunity Maxine may reach the star stage when you have a high market share in a high growth market. They are very successful products, which create a large amount of revenue for the business. Mirribel has many opportunities to expand to operate in many countries round the world, so they can focus on the global market. The treats rival business may also launch similar products taking Mirribel customers away. They may also try to copy Mirribel ideas. By concentrating on the strengths and opportunities I can try and eliminate the treats by making Maxine different to competitors and making sure when I launch the product there is enough demand for it and their no weakness. This way I can meet consumers’ needs by meeting my objectives.

The SLEPT or PEST analysis has helped to identify the external influences that may affect the launch of Maxine. These include social such as people taste the changes in society, women may demand to product more then men, so I will target women mostly. Economic involves looking at the economy such as interest rates should be low so people can spend more because they can borrow more money. The national trade cycle is at peak when people are spending high level of money on goods. When unemployment is low this would be a good time to introduce Maxine to the market. The technology will be improved and produce well to the highest quality in production. The technology can help toward the development of meeting consumers’ needs by using different channels such as E-commerce radio, television.

The analysis of the market in section 4 current perfume market research findings has help to decide that Maxine will be able survive because their has been a growing demand for perfume over the years. So Maxine may able to grow like the perfume Chanel No 5. My research has shown there has been a high level of usage of perfume by men and women a week. Segmentation is essential by targeting consumers, I will be segmenting 25-30 year old, and I my research in task 1shows was the highest buyer of perfume in the questionnaire I carried out in shopping area. My research has helped me to decide that Maxine will be a cologne spray and will be in a glass bottle, it will be environment friendly. This has all influence the development of the marketing strategy.

The analysis marketing mix in section 5 has helped to influence the development of the marketing strategy and it how will take place. The prices for Maxine will likely to be penetration pricing so the cost is low and wider rage of social income people can afford the perfume. The cost of production will be produced, as new technology will be used. The product Maxine will be sold in popular shopping centres in retail shops, such as Super Drugs, Boots and cosmetic shops. Promotion and advertising will be on billboards, cosmetic magazine and posters. These stages all contribute and influence the development of the marketing strategy for Maxine.

Logical well-reasoned proposals for marketing mix, linked clearly to information generated by research and analysis of the market


The marketing mix provides a useful way of looking at the marketing of Maxine. Mirribel needs to create a successful mix.

* The right product

* Sold in the right place

* At the right price

* Using the most suitable form of promotion

The marketing mix is used to meet customer’s needs it is concerned with the four P’s product, price, place, and promotion. It is important for Mirribel to launch Maxine best suitable way. The product will have to look well designed and be appealing to customers. In my primary research I asked question on what sort of packaging do you prefer plastic or bottle. Most people prefer their perfume in a glass bottle. My secondary research shows most popular perfumes have their perfume in some sort of glass bottle e.g. Tommy Hilfiger. If the perfume is eye catching it likely to perform better than an ordinary perfume. When Maxine is launching Mirribel should take consideration on the appearance and cost of production. The perfume will be produced in large quantities. The cost per unit will be reduced because of the technology.


The price of perfume will be based on my research it will likely to be �25-30, when I asked people how they would pay they said �20-30. There are perfumes that are similar on the market for �60 like Vercace. My pricing strategies will be penetration pricing it will be lower compared to competitors. The reason why it will be penetration pricing so customers can afford high quality perfume value for money. If the price is around �25 customer I am able to meet customers’ needs.


The place will likely to be busy shopping centres; retail shop such as Boots, Super Drugs and cosmetic shop will be selling Maxine. My research shows that high street shopping centres are very popular. The retail shop also provides free testing perfumes to help customers decide which perfume they want.


Promotion for Maxine will be likely to be advertised in cosmetic magazines because they are a suitable place. Advertising may be used on billboards and posters because it is inexpensive and great selling point. Mirribel can also use models to give the perfume that cutting edge like competitors Hugo Boss used models to sell their perfume. The public relation can boost Mirribel sales it can meet it objectives.

Using popular marketing models to evaluate marketing strategy

Section C

Product life cycle


The purpose of the extension strategy is to delay the decline stage of the lifecycle and produce extra sales and revenue for the business. The stage that Maxine will be at will be stage 1 development and stage 2 introductions. After a period of time the stage should move on to stage 3 growth and stage 4 maturity.

Looking at the tree marketing models I think the life cycle would be the best to evaluate the strengths and weakness of the marketing strategy. The reason why I think I will be clearer to notice the stages of the life cycle.


Ansoff’s Matrix – Planning of Growth

This well known marketing tool was first published in the Harvard Business Review (1957) in an article called ‘Strategies for Diversification’. It is used by marketers who have objectives for growth.

Ansoff’s matrix offers strategic choices to achieve the objectives. There are five main categories for selection.

Fig 1.15

Ansoff’s Product/Market Matrix

Market Penetration

Here we market our existing products to our existing customers. This means increasing our revenue by, for example, promoting the product, repositioning the brand, and so on. However, the product is not altered and we do not seek any new customers.

Market Development

Here we market our existing product range in a new market. This means that the product remains the same, but it is marketed to a new audience. Exporting the product, or marketing it in a new region, is examples of market development.

Product Development

This is a new product to be marketed to our existing customers. Here we develop and innovate new product offerings to replace existing ones. Such products are then marketed to our existing customers. This often happens with the auto markets where existing models are updated or replaced and then marketed to existing customers.


This is where we market completely new products to new customers. There are two types of diversification, namely related and unrelated diversification. Related diversification means that we remain in a market or industry with which we are familiar. For example, a soup manufacturer diversifies into cake manufacture (i.e. the food industry). Unrelated diversification is where we have neither previous industry nor market experience. For example a soup manufacturer invests in the rail business.


This implies a positive and active defence of existing products in existing markets.

Ansoff’s matrix is one of the most well know frameworks for deciding upon strategies for growth.


Boston Matrix

This is a method of analysing the product portfolio of Mirrible business (that is, the number and range of different products which the business produces at a particular point in time). This model was developed by a group of management consultants called the Boston Consulting Group, and it divides the products that are produced by a business into 4 categories, according to their market share and the level of market growth. The 4 categories are :

Problem Child

(Sometimes referred to as Question Marks or Wild Cats). This is a product which has a low market share in a high growth industry. These products have often been launched quite recently and have not had the necessary time to establish themselves in the market. They will require a significant amount of money to be spent on their promotion in order to achieve a healthy market share. They are at the ‘Introduction’ stage of the product life-cycle.


These products have a high market share in a high growth market. They are very successful products which create a large amount of revenue for the business. They still require a large amount of money to be spent on their promotion, in order to keep ahead of the rival products in the marketplace. They are at the ‘Growth’ stage of the product life-cycle.

Cash Cows

These products have a very high market share in a stable market (i.e. market growth is low). These products are at the ‘Maturity’ and ‘Saturation’ stages of their product life-cycle and produce a very large amount of revenue for the business. This money is often used to promote the ‘Problem Child’ products and to develop new products.


These products have a very low market share in a low growth market. They produce very little revenue for the business and are at the ‘Decline’ stage of the product life-cycle. The business has to decide whether to try and extend the life-cycle and boost sales revenue, or whether to delete the product from the portfolio.

These different categories can be represented in a Boston Matrix, as illustrated below:

Fig 1.16

As you can see from the above diagram, this is examples of a business that has five products in its portfolio. The size of each circle is proportional to the amount of revenue which each product generates. Some important points to note form the diagram :

Product 1 is a ‘Dog’ and is clearly in decline – the business would be advised to delete this product from its portfolio.

Product 2 is a ‘Cash Cow’ and produces large amounts of revenue to fund new product development as well as to fund ‘Problem Child’ products (such as Product 3).

Product 4 is a ‘Star’ and is generating a high level of sales, but is probably likely to face strong competition in the near-future. It will, therefore, require much money to be spent on its advertising and promotion, in order to protect its sales from rival brands.

Product 5 is another ‘Dog’, but it clearly still produces a reasonable level of sales revenue. The business may decide to use an extension strategy to prolong the life-cycle of the product and to boost its sales level. Otherwise product 5 may well go into terminal decline like product 1.


Mirribel has five other cosmetic products that they sell

* Lipsticks this is at the stage of star

* Perfume oils this is at the stage of cash cow

* Perfume soap this is at the stage of cash cow

* Shampoo this is at the stage of star

* Deodorants this is at the stage of cash cow

The stage of Maxine as it, is just goanna be launched so it will be at problem child. Only products that have been launched will start off at problem child then move on to the star stage. Mirribel is a well known company, they have product that are doing well on the market that are at the stage of star and cash cow. Looking at how Mirribel has performed it is likely that Maxine will move straight to star stage in a short period. I would recommend Mirribel to improve performance so that profit increase and by meeting customers need successfully.

To help Mirribel to perform at a higher level I would suggest the Mirribel should offer a free gift such as Mirribel soap for a short period. Advertising on billboards and cosmetic magazines and poster will help to sell the product Maxine. I recommend for Mirribel is to maintain sales by keeping the price low so people are able to afford quality perfume. By advertising in more it can benefit the business as more people will be aware of Maxine. If more money is spend on product development this may make Maxine better than competitors’ perfumes.

I may use Ansoff matrix to identify a growth strategy such as market penetration will help to increase market share. This strategy may be useful to develop Maxine to a star stage to a cash cow stage over a longer period of time.

Evaluation of how useful and reliable the different marketing models used are to help with marketing decisions


When using the marketing model it think the main marketing model of the life cycle would be useful for me in making marketing decision, because this would clearly state the stage of Maxine by looking at the diagram. If the diagram started to look like it were going negative, it would indicate that important decision has to be made to the growth of the Maxine. By maintaining growth injecting of new life will have to be put in to Maxine. This may include changing or making modifications to the Maxine to keep it ahead of competition. Also alteration distribution patterns to provide a more suitable place for consumers to make purchase. Changing prices to reflect competitive activities. It may also consider carefully the style of promotion. The life cycle may be more useful if you had a product over long period. This may be the most reliable marketing model.


The Boston matrix helps to appreciate what the product has to go through various phases. The Boston matrix has the four types of product in an organisation’s portfolio this includes problem child this is when a product has just been launched the product might fail. The star stage is when the product is successful. The cash cow stage is when is when a product has reached a maturity of high market share. The dog stage is when a decline over a period of time. Mirribel are a successful business with five of their other product very well. If there were a chance that Maxine launch went totally wrong the Boston matrix would be the most useful marketing model to use, because if Maxine went wrong it would go straight to the problem child stage. Mirribel may require the money form the cash cow product to be put into new development for Maxine. Fortunately the development may be used to pay off by moving Maxine to the star stage.


The Ansoff matrix can be used for management and development of opportunity of a product. The five alternative strategies can be used for new and existing products. The strategies are consolidation; market penetration, product development and market development, and diversification. I don’t find the Ansoff matrix very useful if I was to use it for a marketing decision I may use it for product development and market penetration. This marketing model may be more useful if you wanted to enter a different market and have a high market share.

A rage of information that I collected independently to help me with the marketing strategy and that appropriate methods to checking validity the information


The research in section 2, I had carried out in a group of three people by carrying out questionnaire and asking question on perfume to 50 people. When analysing my results the looked realistic the question that I asked where suitable for my research. My research helps me make important decision for the marketing strategy. The reason why the validity of research is reliable, when I compared my research with the other two member of the group, I found the research was almost identical results in the successive questions. So a valid market research method provides data that can be used to test what is being sought. My planning of the data and collection process helped to ensure the data was reliable. The real benefit of my market research is the information is determined by how much it improved. Improved question can produce improved decisions. The good quality information will enable decisions to be made to satisfy the needs of target market, and also help Mirribel to achieve its goals.

Evidence that applied the marketing models and tools to evaluate the likely success of the marketing strategy


I found the product life cycle the most suitable marketing model to evaluate the likely success of the marketing strategy. It shows clearly the stages on the diagram. Using the product life cycle you can maintain the growth by making changes to your marketing strategy. Maxine is likely to go from the introduction and growth after a short period of time.

The Boston matrix can help by putting your product stage in the four possible boxes, problem child, star, cash cow, and dogs. By using the marketing strategy in meeting your objective like increase in sales, the Boston matrix may help to move on to the next step like moving on to a star stage for Maxine to a cash cow this would happen over a period of time.

If I wanted to look for another way to be successful in Mirribel business the Ansoff matrix is useful good ideas to use if you wanted to enter a new market by using diversification or develop the marketing strategy. This is useful in matching existing new product in new markets.

Overall coherent and well balanced marketing strategy that reflects on the use of marketing models and tools


The marketing strategy looks to work well I can see Maxine well perform at high level, because I have researched to find out customers needs, by giving customers what they want I can meet my objective by increasing sales and for Maxine to be able to move to the growth stage on the product life cycle. I would use the Boston matrix to guide the Maxine to the star stage to cash cow stage. The Ansoff matrix would be useful if I wanted to try out different marketing strategies for growth, such as market penetration so I can increase market share.

The marketing strategy looks to work well and fits well with the launch of Maxine. If the strategy was not working very well I would use the marketing models tool such the Ansoff matrix to help me make a decision by using product development to stimulate sales. The marketing model has helped to add value for Mirribel, by making important decisions help the strategy work.

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