Report Title: delimit a Pinta Date: 13/05/02 foot This root word is int annuled to give the readers an insight into the set theories and wherefore they be utilise by firms, in the report, issues such as circumstanceors influencing the m hotshottary value of draw from grangers perspectives and the battle mingled with the threshold draw auction pitch return and super food markets ar lavishlylighted. excessively the eccentric the take out brand is questi iodined and analysed. 1.0 TERMS OF REFRENCE This report is come to with factors that model outlay decisions; the report is based upon a depicted object field of study c everyed Pricing a Pinta, only if virtuoso is required to carry forbidden research and present certain information in the report. 2.0 subroutine In order to project the information needed to murder this report successfully, the methods that were adopted were: 2.1 profit research 2.2 merc put acrossise text playscripts 2.3 g rou nd offwork to marketing content studies book 3.0 FINDINGS 3.1 Internal and external; factors bear on the equipment possibility of take out for the farmers point of view. 3.1.1 Internal factors From the farmers perspectives, there ar much or little internal as rise up as external factors that regularise the hurt of draw, the internal ones include put uping food for approximation and shelter for the oxen utilize to bring the take out, during the summer breaker point cows consume grass, as yet, during the winter, farmers need to purchase food for their cattle as well as arrange a embody shelters for the animals. overly the cows health is important to the farmers, gibe to the Agricultural department, a farmer pays an average £44 a social class on vets embody per cow, overly hygiene factors must be considered by farmers adding to the variable addresss sustained by the farmers. It is too worthy mentioning that close to farmers employ workers wh ich depart in like manner affect the term! s of end product of milk. The farmer has to consider the breeding be and purchase the cows which is a major chunk of the farmers cost, every last(predicate) of the mentioned factors mickle to blue costs incurred by the farmer and consequently the farmer allow need to sell the milk at a high bell to do a profit, pull down if it is unimportant as the farmer needfully the profit to survive. To keep the bell of milk down the government offers subsidies to farmers, such subsidies potty likewise be considered as external factors, but since they look at an speedy electrical shock on the cost of production, it can in addition be counted as an internal factor. 3.1.2 External factors There ar various the external factors that influence the price of milk from the farmers perspectives including the unfeigned assume for milk; recent surveys show that the entreat for milk is declining or so as milk is widely sensed as a boring commodity. However, The Dairy Council h as been running a drift called the black-and-blue stuff, the aim of the campaign is to ascending the level of entreat for milk by highlighting its benefits, and the campaign was indorsed by some celebrities including Prince Na unwrapm Hamed, George Best and Chris Eubank. besides supermarket and dairies provide majuscule dialog and negotiate power when it comes to depraveing from farmers due to their economies of home plate, also the laws and regulations set by the government add to the production cost. However, the milk steel group, unites farmers for a pullive talk terms power, so when change the milk, the group ensures that the milk is interchange for the outgo realizable price providing the farmers make a decent return. Technological and health check changes also play a key external role, which has its influence on the price of milk, thank to amend breeding and better nutrition, average milk yields run by profitd steadily over the years. The dairy cow of today produces to a greater finish than twice the! amount of milk per year than her rootage did at the end of the Second World War and 1,200 litres much(prenominal) than a dairy cow 20 years past and now one dairy cow produces 10,409 pints of milk in a year, bounteous to supply22 families with their cursory milk. Such changes mean that the cost of milk a farmer sells to the dairy is relatively woeful as the supply per cow is amplification. 3.2 Pricing outline social functiond by supermarkets when sell milk When it comes to determine milk, supermarket use a competitive pricing strategy, one can easily see that nearly all supermarkets charge the same price for milk, if a supermarket breaks the trend, early(a)s react accordingly. match to the case study, milk is widely use by supermarkets as a damage loss leader; The press release leader is a pricing strategy which involves sell products/ serve at a price that exit hark back bitty or no profit and in some cases non even hover all bloked costs (marketing, over heads, direct costs, etc). This whitethorn sound shortsighted but it is a technique that is normally utilise to omit nodes to their argument via a bargain. These bargains impart describe customers to the business who may then purchase other products/ operate even if they dont deprave the product that was initially reduced. This is where the business will make up for the loss, as it will be selling other items that generate high profits. The loss leader strategy is normally used to encourage sales on those products that are in the reduction stages of their life cycle (becoming un-fashionable or out-dated, etc). In which case, supermarkets may indigence to cut the price of such products to sell-off fund that isnt moving well and thusly be satisfied with the later onmath of breaking even with the products (or with a small loss), but an ontogenesis in currency flow. According to the report, supermarkets often make a figure of well-nigh 2p gross profit margin per pint, which is not adequate to tip the cost of storage or! guardianship the milk chilled, however the milk is used to sell other products, by strategically placing the milk section at the end of the store, customers go through shelves which contain other product which could attract customers, those products are usually sold at a higher(prenominal) profit margin and therefore covering the losses that business leader have a bun in the oven been incurred by the milk. Also a great utility gained by supermarkets when selling the milk as a loss leader is the fact raises a reputation building for the supermarkets as a value-for-money business as mass will associate you with good quality for less money. Also supermarkets use an aggressive pricing strategy to monish new firms from entering the market as well as destroying competitors sales, and such action is quite catchly serving its end as the supermarkets market donation is increasing every year create a decline on the doorsill tar market share. 3.3 Threats to door bringing comp anies, move taken to debase the panics and a what the companies could do 3.3.1 Threats From the case study given, one can clearly see that the main threat confronting the doorstep sales pitch companies is the obvious decline of their share of the market, according to the case study, their market share has continually been declining and the slumping trend baron continue. The decline is caused by the supermarkets dominance of the market due to their bargaining power and economies of scale; the case study suggests that the average price diametricial amid doorsteps and supermarkets is 14p per pint. Modern day customers are know to be barging hunters and therefore they might prefer to buy from supermarkets to in order to save. the doorstep delivery companies employ around 20000 to make the deliveries, pick up the bottles and collect the money from individual households, on the other hand the supermarkets buy in bulk, deliver to branches and release customers to help themselve s. It is clear to see that the supermarkets are more ! cost effective, and that is the reason butt joint the different prices charged. Also the fact that supermarkets are more convenient as customers can buy milk when they wish opposed the fixed style of doorstep delivery, this is support by the educational activity mentioned by Mintel that claims that smaller households have more nomadic ingestion patterns, and thus buying from supermarkets is more convenient. Furthermore, the increase in milk life means that customers can buy a bottle that contains 6 pints of milk and it will remove less populate in the fridge than the equivalent frame of glass bottles would. 3.3.2 go to counteract To put an end to the constant decline in the market share, doorstep delivery companies along with draw marque launched a magazine called Home and Life, the magazines price was a £1 an issue and its first issue sold 350,000 copies. However the demand for the magazine has declined rapidly and the stem was in brief scrapped. Also one of the le ading doorstep companies (Dale rear communicate) entered an compact with jimmy Brothers and Kellogg to deliver bulky fmcg products to homes on the milk round and the conceit was failed miserably. The milk delivering companies also tried running promotions and arguing to create consumer loyalty.
Finally, according to Dale Farm usher website, the company seems to have used the if you cant beat them then join them approach as it began on the job(p) hand in hand with supermarkets, the company claims, Express is the UKs largest provider of fresh milk to the leading multiple retailers, delivering to around 1,200 individuals supermarkets daily. Such statement implies the link between th em, and it guarantees the Dale Farm Express sales as ! supermarkets have buyer power. 3.3.3 Suggestions for avail To get on demand the doorstep delivery companies could employ the use of pliant bottles instead of the traditional glass bottles, as they are more user friendly and they take less plaza in the fridge, also being more flexible with consumer necessitate could help, as that will be more convenient to customer with erratic milk consumption patterns. The companies could also invest in organic milk, as people are becoming more health conscious and the demand for organic products is constantly rising. The doorstep delivery companies could also sell other goods such as drinking chocolate bars and soft drinks at competitive or tinny prices, such a move will be of a convenient to consumers and it could build a relationship with the consumers. 3.4 The role of take out blade and what might happen if milk Marque did not exist The Milk Marque organisation exists to protects the farmers engagement and it acts as a trade union for farmers by ensuring the farmers guide the best possible deals from dairies. The Milk Marque also aimed to increase the price of the milk sold to dairies that resulted in an increase between 8 to 11% in milk prices. By working for farmers needs the Milk Marque helps standardise the supply quality, also by making farmers work to attainher for one cause, the Milk Marque allows them all to benefit instead of competing with one another(prenominal) causing losses to at least one party. It gives farmers negotiation power when negotiating prices with dairies or supermarkets. However, the Milk Marque owned a lot of the milk supply and had to be investigated by the Monopolies and Mergers complaint as evidence were exhibit that the organisation was involved in unfair trading. Shortly after being investigated, the Milk Marque announced a intend for structural reform. It proposed to split itself into troika successor organisations controlling tierce different regions; The Minister of a gribusiness Nick Brown, who said it was a positive mo! ve, welcomed the news in late 1999. If Milk Marque did not exist, it would be worse news for farmers as they will all be competing with one another for the sale of milk, it would also be hard to countenance decent price for their milk as they will not have negotiation power. Also it would be hard for supermarkets and dairies to get their milk supply from more than one source which is articled to increase prices, meaning the milk might not be sold as a loss leader. 4.0 CONCLUSION Although the price of milk is cheap to some extent, there are many factors which influence it, for example factors influencing farmers will naturally have an impact on the final price of milk, factors such as the farmers costs and government subsidies allowed to farmers contribute to the price the farmers ask for from dairies. Supermarkets and doorstep delivery companies both have different methods of pricing their milk, supermarket buy in bulk which allows them the benefits of discounts and therefore they can afford to sell the milk for cheaper prices. Doorstep deliveries, by in large quantities but have to hire people to deliver, collect bottles and collect money from households making their prices higher due to the service they provide. Experts predict that the market share for supermarkets is set to continue causing a decline in the doorstep deliveries market share, both styles suit different individuals, the doorstep delivery companies might have lost a great deal of market share, but as long and there is milk, there will eer going be people supporting the traditional idea of milkmen. 5.0 REFERENCE To complete this report several sources were used including: 5.1 Books ·         production line Studies for A level (Stephen Danks) ·         Marketing Textbook (Brassington an Pettitt) 5.2 Case studies book 5.3 Internet Sites ·         http://www.kingshay.co.uk/ work/dairymanager/images/fullcostvar.gif ·         http ://www.pbs.org/ktca/newtons/11/dairyfrm.html · !         http://test.corporateinformation.com/memberlogin.asp ·         http://www.shakey-jake.co.uk/aboutexpress/ae_factsandfigures.html ·         http://www.milk.co.uk If you want to get a full essay, order it on our website:
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