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With this case study we have attempted to highlight the importance and benefits of Marketing for any company. Also, we have analyzed the different factors that affected the marketing decisions of Lofthouse of Fleetwood; the significance of market research for this company; the main marketing problems this company has been going through all these years since it became a global business and solutions to overcome these problems; and why this company is a product orientated business.
This case study is about a family owned company called Loffthhouse of Fleetwood ltd which was started in 1865 in a town of Fleetwood in Lancashire on the north west coast of England.
A young pharmacist named James Lofthouse developed a warming lozenge for sea travelers, from what was branded as FISHERMAN’S FRIEND and grew its humble beginning to a global business.
Amongst the many very effective treatments and remedies that James Lofthouse created was an extremely strong liquid containing menthol and eucalyptus, which helped relieve problems experienced by fishermen in the freezing condition.
First fisherman’s friend was packed into glass bottles (pic.1), but they did not travel well.
To make it easier to transport the liquid was made into small lozenges (pic.2). The first lozenges were packed into envelopes and distributed to local fishermen. which were much favoured by the local fishermen, who soon began referring to the miracle lozenges as their ‘Friends’ and would not leave shore without them. It was therefore these first consumers who gave the name FISHERMAN’S FRIEND
Visitors from industrial areas to the nearby costal resort soon discovered the effectiveness of the lozenges and news began to spread throughout the whole country and demand for James Lofthouse’s Original extra strong lozenges began to grow.
Fisherman’s friend is now available in over 100 countries around the world. The enormous popularity and success of Fisherman’s friend has led to the honour on three separate occasions of receiving the Queens Award to industry for export achievement along with many other awards for export success and today Fisherman’s friend is a brand recognized around the world by consumers who enjoy the benefits and taste of the different lozenges to them. .(ref 1)
5. Market Analysis:
5.1. Product Life cycle
Lofthouse of Fleetwood, with its chain of products called Fisherman’s friend, on a heritage of about 130 years is a very strong company. However according to the product life cycle theory, from 1980 to about 2000 had a decline that aggressively affected its sales worldwide, therefore its profits. In other words the product was dying in the market, only then they realized the urgent importance of a new strategy, which could lift up its sales before they reach the minimum profit. (brassington, 2005)
5.2. The Boston Matrix Theory
Fisherman’s Friend was a very strong and profitable company till the 1980, from there had a low market share and also a low market growth, so we can say that this product market share was relatively failing compared to the largest competitors in the same Industry.
The reason why Lofthouse of Fleetwood had a low-growth market was because of the large number of competitors globally consequently the only solution to overcome this problem could only be achieved by taking share away from those competitors.
This Dog position into the Boston Box, gives any company a weak market share and a limited market growth as a result the company is likely to be making a loss or s very low profit.(brassington, 2001).
5.3. Pest analysis:
5.4. SWOT analysis:
6.1. Summaries the STEP factors that might have affected Lofthouse of fleetwoods marketing decisions?
The STEP factors that may have effected the marketing decision of the company are Socio-cultural, Technological, Economical, and Political Factors.
Knowledge of PEST analysis is concerned with the environmental influence on a business. And also is a very useful way of summarizing the external environment in which a business operates.
6.1.1. The Socio-Cultural Factors
This is absolutely essential for a any business firms on the marketing decision making. This consists of demographic factors like age, gender, race, occupation, location and cultural factors like life styles, and attitudes.
Age Gender and Seasonal products
As we thought about the Lofthouse Fleetwood’s ltd, age factors is very important element in market decision making. Fisherman’s Friend is becoming generally well known ad a semi-medicated products and it is also huge reputation in this market. However, most of its retailers has classified it as a winter products. Because of during summer period, it doesn’t give much satisfaction to their retailer in terms of profits. On the other hand, in most overseas countries this product is purely marketed as a confectionery.
They sell this product over more than 100 countries and when they market it internationally, they should think on different taste of different people. For an example in southern European countries such like Greece, Italy and Spain where people tend to like for fruit flavors, therefore they have introduced fruit flavors lozenges. Another example to attract younger consumers was introducing mild flavours of the original Fisherman’s Friend that is not strong as the original one. (Brassington,2005)
6.1.2. The Technological Factors
In an increasingly competitive market, as the creation, launch and maintenance of new products are more expensive and difficult than ever and no organization can ever ignore the technological side and its environment trend.
As Fisherman’s Friend lozenge entered to the Norwegian market, where its very health conscious and wanted a sugar free version. To manufacture the sugar free lozenges, they had to use modern technology. The investment of the new technology proved to be well worthwhile as its proved successful not only in Norwegian but also in other markets as well.
Another example is when marketing into humid markets like South Asian and Far East lofthouse fleetwood’s had to use new packing to keep a lozenges prevent from soggy problems. (Brassington 2005)
6.1.3. The Political Factors
The economic environment covers both Macro and Micro economic conditions which affect the structure of the market.
That doesn’t means that the other step factors didn’t have much impact in the marketing decision its just that socio-cultural and technological factors had stood out as biggest obstacles.
Trading laws / Consumers Protection laws
Any company that wish to launch its product into overseas countries has to cognizance of trading laws and consumers protection laws, because every country has different policy. For example on 1999-2001 Fisherman friend was trying to launch into China. As we know about china which is a communist country, for that reason especially china has very strictly policy consumer and trading laws. There is no reliability on products as they purchase and there is no also refundable without consumers satisfaction. In contrast with UK and other western countries repayment policy. Taking count this point, Fisherman’s Friend had to perceive well in terms of political factors.
6.1.4 Economic Factors
Some of the economical factors that have affected Lofthouse of Fleetwood business internationally mainly are as follow. Firstly, the currency exchange rate is a big issue that Lofthouse of Fleetwood has to came across when exporting to oversees because of the commissions that the company had to pay to exchange sterling pounds for any other currency. Secondly, in order to introduce Fisherman’s friend product in a foreign country; taxation like tariffs has to be paid. Hence, we should be aware that every country has different wide range of rules, regulations and taxes that have an impact on their trade. Some countries apply high tariffs rates while some other do not in order to attract foreign investment. Lastly international trade agreements, as it were many global firms wants to engage in international trade agreement through on partnership with western countries firms. So that it can ensure valuable its industrials and also it could be more securable and guarantee for reliance their reputation. To go over the main points we should highlight that every country political system, regulatory bodies, international trade agreements will have great impact in global marketing. (DIBB, 2002)
6.2. Why market research is so important to this company?
Market is a link between the consumers/buyers and the product. Hence market research is very essential to all producers/companies regardless of what they produce or sell.
In this case, Lofthouse of Fleetwood has been in business over 130 years. Now Fisherman’s friend is sold in 115 countries. Therefore, different countries have different types of consumers and environments; likes and dislikes will differ from people to people according to their local conditions and culture. In order to find these different conditions, fulfill consumer needs and adapt the product to these differences, market research is important (Brassington & P., 2005).
Without market research Lofthouse of Fleetwood would never have known the differences between overseas markets. For instance, from market research Lofthouse of Fleetwood found that:
* Norwegian people are very health conscious, so they came up with sugar free products to suite them, and
* They came up with new technology to produce these sugar-free lozenges which compresses the dry powder into hard tablets.
* Fruit flavours are preferred in southern European countries such as Greece, Italy and Spain.
* Northern European countries prefer milder flavours which are less hot than the original strong fishermans’ friend.
* For humid markets, new packaging had to be adopted. They include a foil lining package to preserve the lozenges from going soggy.
This investment on market research proved to be very successful not only in overseas markets but locally too. For example, the lemon sugar-free Fisherman’s friend has been very popular not only overseas countries but also in UK.
6.3. Why should Lofthouse of Fleetwood want to reach the younger market?.
Fisherman’s friend is a brand trading on a heritage for almost one and a half centuries. In the UK market, its loyal customers are from the older age group and before long there will come a time when its most loyal customers aren’t around, therefore to survive in the market, they will need to have a new crop of customers.
6.3.1. What is it doing and what more could it do to reach to this audience?
Since this product started as a semi medicated product in UK, the perception among the younger generation are still that it is a product that ‘Granny buys’ and due to its strong flavour that it’ll ‘Blow your head off’!. Therefore, Fleetwood is focusing on new ideas to attract the younger market specially the age group between 18 and 34 to survive in the long run (Brassington & P., 2005, pp.63).
6.3.2. What is it doing to reach the younger audience?
ï¿½ It is trying different and innovative advertisings to attract the younger generation.
ï¿½ Distributing samples to young consumers, e.g. Including product samples in welcome packs on universities.
ï¿½ It has re-developed the product and created milder flavours from its original extra strong flavour.
ï¿½ Lofthouse of Fleetwood has produced a gum version of their original product.
6.3.3. What more could it do?
ï¿½ An attractive commercial involving popular sport models or a young idol or a musical artists. For example, imagine a new advertisement on magazine or TV appearing a celebrity like David Beckam. This will definitely get the attention of young people.
ï¿½ Make advertisements to target the younger generation interested in winter sports for instance. Like more of a sporty image to this product. This will attract snowboarders, surfers and young people involved in winter sports.
ï¿½ Run competitions which involve some new generation gadgets like iPod, mp3 players or game consoles to get the attention of Teens and young people.
ï¿½ Make the milder flavour packs more attractive and funkier. These milder flavours have been made to attract the young people but the failure was in the design of the package, therefore giving it a youthful image will target the right segment.
ï¿½ Make the sugar-free packs a little different, and slimmer. Because many young people are very health conscious these days and worried about sugar content in confectionary. By making the sugar free packs more colourful and slimmer will get the attention of these groups of consumers.
6.4. Lofthouse of Fleetwood contracts its marketing activities to an independent company, IMPEX, so that it can focus on manufacturing, does it makes Lofthouse of Fleetwood a production or product orientated company?
Lofthouse of Fleetwood liaises closely with the independent companies it works with.
For example, it has worked for 26 years with IMPEX, an independent sales and marketing company and had developed a relationship that consists on mutual respect and dependency.
Does this make Lofhouse of Fleetwood a production or product orientated company????
What is production Orientation?
Production orientation is the emphasis of making products that are affordable and available for the consumers, making sure that the prime task of management is accomplished, which is to ensure that the organisation is as efficient in production as well as in the distribution techniques.
With production orientation the main assumption is that the market is completely price sensitive. This philosophy is very legitimate as the approach in the short term where the demand outstrips supply. (Ref.2)
What is product orientation?
Product orientation assumes that the consumers are primarily interested in the product itself and buy in the basis of quality. Since consumers want the highest level of quality for any product that they buy, the organisation must work and continue to work to increase its quality levels.
At first sight this may look as a reasonable proposition but the problem with it is that the organisation makes the assumption that consumers want this product, while consumers/customers do not want a particular product, they want an answer to a problem they have come across and if the organisation product does not solve this problem, then the consumers will not purchase the product.
Therefore, the answer to the question if Lofthouse of Fleetwood a production orientated or product orientation company, is that |Lofthouse of Fleetwood is a product orientated company.
Lofhhouse of Fleetwood concentrates on producing different varieties of Fisherman’s Friend while the independent company concentrates on the sales and marketing of the product.
As a conclusion we can say that It’s worldwide success is due to it’s long standing ability to give: ‘RELIEF FROM EXTREME CONDITIONS’ (Fisherman’s friend.com) by developing products of supreme quality and giving customers the ability to choose from a large range of : products (gums, lozenges), flavours (Original Extra Strong , aniseed), and package handiness (tin, box, packet), in other words this company is aware of the importance of market research for strategic thinking, and leads to be more innovative towards making new products and using new technology.
They were also able to establish a loyalty frame in the older market trough all these years but they still could not reach the younger market. Even though they have tried product and packaging innovation, the younger consumers still see this product as a semi-medicated product, and as a sort of product ‘Granny buys’.
Nevertheless, Lofthouse Fleetwood Company is still spending a lot of money and effort on market research with the help of external companies to expand their market.
This case study also shows the importance of understanding what customers want and expect from products, making sure that the total marketing offering conforms with the customers expectations, and adapting to the different local conditions. (ref. 3)
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