Posted: April 7th, 2015

Marketing Management;

Marketing Management;

Read case and use following points to analysis case
Situation Analysis(PEST,Porter 5 force)
Objectives
STP
The Marketing Mix (4ps/7ps)
Ansoff Matrix( SWOT)
SOSTAC (Marketing Plan)

EXAMINATION INSTRUCTIONS:
This is a restricted open book exam.
A maximum of 6 sides of A4 paper of hand written notes and diagrams in English are allowed only. Students are allowed to use a calculator (but not if it is part of a mobile phone or other internet enabled device).
Read the case study and attempt all of the exam questions.
SUPPLEMENTARY PAPERS INCLUDED:
Full Colour Case study
In marking the papers, the examiner will take into account clarity of exposition and logic of arguments, effective arrangement and presentation and the use of concise and lucid English.
Candidates should ensure that all workings are clearly shown.
MOBILE PHONES MUST BE SWITCHED OFF AND PLACED BEYOND REACH.
THIS IS AN INDIVIDUAL PIECE OF WORK AND ANY FORM OF COLLABORATION OR OTHER FORM OF CHEATING IS REGARDED AS A SERIOUS OFFENCE UNDER THE UNIVERSITY’S ACADEMIC MISCONDUCT PROCEDURES AND COULD HAVE AN EFFECT ON ANY FINAL AWARD CLASSIFICATION.
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MKT7010 Marketing Management
Exam Case Study: ‘Local Source Group’
This is a restricted open book exam. Students are allowed to bring into the exam a maximum of 6 sides of A4 paper of hand written notes and diagrams in English only. Students are allowed to use a non scientific calculator (but not if it is part of a mobile phone or other internet enabled device).
Apples are one of the most esteemed fruits in the Northern Hemisphere, in part because they are so versatile. They are delicious eaten raw, baked, dried, or made into apple sauce. They make great pies, chutney and cider.
But the failure of supermarkets to exploit the distinctiveness of British apples is leading to a farming crisis, say campaigners. Last year was a bumper year for British apples both in size and quality, but apple growers warn that the industry is in the middle of a crisis that threatens to bring it to its knees.
The British apple market is dominated by cheap imports and the past three decades have seen a steady decline in the number of growers and orchards. The figures are stark: there were some 1,500 small to medium sized registered growers in 1987; today, there are just 500. Commercial apple trees are usually replaced every 10 or 15 years, but the current low profits mean farmers are unable to re-invest. In key areas of England such as Kent, Somerset, Devon, Hereford and Worcestershire, which for centuries have been defined by their orchards, many farmers face the grim choice of selling off their land, or turning to other kinds of farming.
“The UK produces very good quality apples, but if we continue losing farming at the rate we are, we’re going to lose apples that have local distinctiveness,” says one farmer.
The number of orchards has halved since the 1950s with only 50% of the remaining 35,000 orchards in good condition, the remaining have fallen into disuse. Orchards are mainly concentrated in the lowlands of England, such as Kent, Cambridgeshire, Somerset and the Three Counties (Herefordshire, Worcestershire and Gloucestershire). The local cool environment, seasonality of stock and length of time to develop a good orchard also have had an impact.
Some campaigners lay the blame for the crisis on Britain’s convenience stores and supermarkets, which sell 80% of the country’s apples. According to one survey, only 38% of the apples sold in Tesco and Sainsbury’s, the country’s biggest supermarket chains (with 25% and 15% market shares respectively) were British, while convenience stores (with 8% market share) scored lower, with 27%.
“The supermarkets are only paying lip service to supporting British growers,” claims a campaigner. “It’s plain from our survey that the majority of the apples on the shelves are imported. That doesn’t match up with the PR about supporting British growers.”
Figure 1: Apple Facts The cost of an apple is between 25p (Asda) and 35p (Sainsbury’s) but compared to other snack foods they pack far more nutritional value and benefits per gram. So the old adage of ‘an apple a day keeps the doctor away’ is probably true.
1. Delicious and crunchy apple fruit is notable for its impressive list of nutrients and anti-oxidants. Studies suggest that these are essential for normal growth, development and overall well-being.
2. Apples are low in calories; 100 g of fresh fruit slices provide only 50 calories. They, however, contain no saturated fats or cholesterol which is great for heart health
3. The fruit is rich in dietary fibre, which can lower cholesterol, free radicals and reduce the risk of cancer. The fibre makes the stomach feel fuller for longer reducing hunger and the likelihood of obesity
4. Apple fruit contains good quantities of vitamin-C that helps the body develop resistance against viruses and infections.
5. Apple fruit is a good source of Vitamin B which helps control blood pressure and heart rate.
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Both supermarket chains deny the charges and point to their aggressive promotion of British apples,
complete with Union Jack crates. But clearly there is a problem: Britain now imports more than 70% of
the apples it consumes, with some brought from as far away as Chile and China. Apple production
overseas has tended to prioritise bulk over quality and supermarket-led economies of scale have
encouraged the British apple industry to follow suit, rather than playing to its strengths, which are
diversity and flavour. More than 2,000 varieties of apple exist in Britain, but only some 30 are grown
commercially. “Buyers want lorry-loads of the same product, the same size, same price, week in,
week out, which, with our traditional English varieties, is very difficult to do, unless we have a longterm
commitment from them and a major replanting programme,” says the British Fruit Growers
Association.
“Farmers say this obsession with perfection obliges them to apply more chemical treatments, and
leaves them vulnerable to changes in buying fashions. You’re told they’re too red, or too green, or too
big or too small,” says David Knight, a Kent farmer who supplies Asda, Sainsbury and Tesco. “But it’s
not like a baked bean factory – things change every year”. Of course, the supermarkets say they are
working closely with British apple growers, but that their primary role is to meet customer demand. As
a Tesco spokesperson stated: “the only reason these specifications exist is because we know that is
what customers require. Customers want a shiny, firm apple which smells great, with no bruising,
spots or blemishes. It’s pointless to put into a store an apple that is too small, too big or too brown,
because it just won’t sell”. With a buyers’ market dominated by a few supermarket chains, producers
have no choice but to play along, or face losing their only customers.
But David Simmons, the director of an environmental and lobbying group ‘Local Source Group’,
says “every apple tells a story, and it’s a story about a place and its people”. Taking the apple as a
symbol of local distinctiveness, the group has compiled an encyclopaedic collection of local recipes,
traditions and customs related to orchards, as part of its campaign to re-awaken British people to their
links with the countryside. “The knowledge that surrounds apples and orchards is part of the culture of
a place. If we throw it away because of cheap imports, then we are eroding the sheer richness of our
British culture.” In 1990, ‘Local Source Group’ launched Apple Week, an annual celebration of apple
lore, which has led to the rediscovery of several apple varieties that has helped the establishment of
some 200 community orchards around the country, run by schools, local authorities and parish
councils.
Figure 2: Britain’s Vital
Statistics England Scotland Wales
Number of Schools 23117 1700 2569
Number of Local
Authorities 468 32 22
Number of Town and
Parish Councils 11000 353 732
Number of farmer’s
markets (all UK)
800
Land used for traditional
orchards (Sq Km) 390 2.9 8.4
Total geographical area
(Sq Km) 130,395 78,772 20,779
Population Size 51,446,000 5,194,000 2,999,300
Capital London Edinburgh Cardiff
Figure 3: Map Opposite: Orchard distribution in Britain
(England, Scotland and Wales only). Reproduced from Ordnance Survey © Crown copyright.
As well as providing a link with the past, these traditional orchards provide an important habitat for
wildlife. Trees in traditional orchards can grow 50 feet high, and surveys have found twice as much
bird life than in commercial orchards – including rarer species such as great spotted woodpecker, tree
sparrows and little owls. The countryside stewardship scheme, managed by the Government’s
Department for Environment, Food and Rural Affairs and by the Rural Development Service, has
contributed to the maintenance of some traditional orchards, but others are supported by a growth in
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“boutique” apple farming. “There is a resurgence of interest in traditional craft ciders” says a cider maker and owner of a Herefordshire orchard. “Small producers are sourcing apples from traditional orchards because these contain old-fashioned varieties of fruit. They aren’t available in large quantities, so they’re not attractive to the large scale commercial cider makers, but they are highly valued and make a distinctive tasting product. People are thrilled when they visit and I can show them the four trees that produced the cider they are drinking”. Craft ciders and rare apples are sold mostly in food and wine fairs or farmers’ markets, but the market is growing. Simmons from ‘Local Source Group’ says: “We can produce a very high quality product and maintain a very beautiful and wildlife-rich landscape that is making a small contribution to the local economy.”
The production of craft cider may be one way of maintaining traditional orchards, but it is not a practical solution for larger-scale British apple farmers. Some observers warn that the commercial trade will continue to decline and English apples will only survive as a niche luxury product. If consumers continue to choose cheaper imported fruit, they may see the end of the British orchard. “The apple you eat is the landscape you get,” Simmons says. “If you care about the land around you and the culture attached to it, then you’ll be prepared to pay a little bit more for it.”
The Economy and Health The recent recession has put pressure on families to afford the rising cost of fresh fruit although the nutritional benefits of this food group are widely acknowledged by parents, particularly women. All food groups have risen in price since 2007 (the start of the recession). Food prices overall (including non-alcoholic drinks) rose 11% in real terms between 2007 and 2013. In the year to June 2013, fruit and vegetable prices showed the greatest increases at 7.5% and 5.2% respectively. Food price rises has had a strong effect on food shopping for low income households which purchased 16% less fruit in 2012 than in 2007. In 2011 24% of men, 29% of women and 18% of children (aged 5 to 15 years) consumed the recommended ‘5 A DAY’ – the recommended number of fruit and vegetable portions suggested by the Government to maintain a healthy lifestyle. In 2011 6.6% of adults and 4.7% of children included no fruit or vegetables in their diet. Those aged 55 to 75 eat the most fruit and vegetables. Fruit and vegetable portion consumption was highest in the Southeast of England (4.3 portions), lower in the Northeast and Northwest of England and lowest in Wales (3.5 portions). Much of the regional variation may be explained by differences in income with twice as many adults (29%) from the non-manual group or high income households reported eating three or more fruit portions per day as those from the manual group or low income households (14%). Average weekly incomes range from £721 in England, £672 in Scotland and £603 in Wales. Children are particularly fussy about eating fruit and vegetables around mealtimes with their parents or other adults and are most likely to eat fruit with their friends as snacks between meals.
About ‘Local Source Group’ and Apple Week Apple Week was originally launched in 1990 in October by ‘Local Source Group’ a small environmental and lobbying group. The group owns no orchards and does not trade in apples or directly sell apple products and never will as this is not its purpose or vision. Instead, the group’s aspiration was to create a regular point in the calendar to celebrate British apples and local culture and the richness and diversity of landscape and ecology, raising awareness in the provenance and traceability of food. The number of events being organised, mostly by volunteers around the country grew from more than 60 in 1991 to over 600 in 1999, some attracting thousands of people. Apple Week has been one impetus behind the developing network of farmers’ markets and is helping people everywhere to discover they are not alone in valuing the links between food and the land, between natural resource use and the impact humans have on nature. However over the last decade, there has been a noticeable drop in interest. Simmons acknowledges there are problems: “Local Source Group’ employs less than 10 people with a very limited marketing budget and is largely funded via grants from Government (such as the National Lottery Fund), The Fruit Growers trade association, its own fund raising events and activities and through sponsorship by private companies. We need to
The UK’s top 10 favourite fresh fruit (and approx. prices):
1. Bananas (22p each)
2. Tomatoes (12p each)
3. Apples (26p each)
4. Grapes (£4.00 per kg)