Dexter’s Ltd is a private limited company, which manufactures soft drinks consisting of still and sparkling water, then retails them nationally. Dexter’s competes with the big brands already on the market, for example Robinsons, Ribena, Schweppes etc. Dexter’s wants to have its own brand name for all the drinks it retails.
Dexter’s has a managing director and five other directors who make up the business shareholders. The organisation is divided into five main functions, a director is in charge of each function but this will be explained further in task two.
In the future, Dexter’s plan to gain a larger market share of each individual drink they sell, they also want to increase the amount of different drinks they sell. They plan to do this by launching a new line of fizzy drinks (non Alco pop’s!). Before they do this though it is important to find out if there is a market for fizzy drinks and if there is, whom are they competing against? Dexter’s haven’t researched far into the idea yet but they know they want to introduce four more flavours of fizzy drink. However they don’t yet know what these flavours will be or whether they will be packaged in plastic bottles or cans.
The problems that Dexter’s have come across are that they are competing against a large number of companies already selling fizzy drinks. Some of these are large organisations who can afford to spend ï¿½millions on advertising and promoting their drinks as they are already very successful. Dexter’s have to research what their target customers want, in order to sell their drinks. They will have to fin out what price they are willing to pay, whether they would buy cans or plastic bottles, what size the cans/bottles should be and the flavour they would prefer. They have to try and make their drinks sound and look more attractive so the target customers will pick them over the competitor companies brands.
Dexter’s needs to create an awareness to the target customers so they will know about the product before and during the launch of it. They need to make Dexter’s product sound better than any other brands so that the target customers will choose it over others. To do this Dexter’s need to be producing s new product that the customers want so they have to do market research to find out exactly what this is.
The organisation chart at Dexter’s is a hierarchy because it has all the people in charge at the top down to the workers at the bottom. The chain of command is who is in charge of whom. A short chain of command is good because everyone communicates well and mistakes aren’t made often. However, in a long chain of command communication is bad because, like in a game of Chinese whispers, information is changed as it is passed down the chain and by the time it gets to the workers it can change a lot so lots of mistakes are made. An example of a chain of command in Dexter’s is:
The marketing manager is in charge of the sales and marketing, he/she makes sure the people lower down the chain of command are doing what they are supposed to be doing. The marketing managers span of control is the sales manager, the promotions manager and the market research manager. The market research manager is responsible for the researchers. He/she will check they are researching the right information and are getting the work done efficiently. The researchers are responsible for the research assistants; these will work together researching information for the product. The research assistants are the last in the chain of command and are responsible for no one.
A line manager is the first in a line of command. They give orders and the information is passed down the line to the workers. An example of this in Dexter’s is the marketing manager. He/she gives out orders and they are passed down to the research assistants.
A span of control is the people a person is responsible for. For example, in Dexter’s the marketing managers span of control is the sales manager, the promotions manager and the market research manager. The marketing manager is responsible for them and they report directly to him/her.
The five main functions of the organisation:
The manufacturing department makes the product. It is responsible for the purchasing of raw materials and making sure the product is of a high quality. It puts the product together. Checking at each stage that nothings going wrong.
The personnel department recruits and trains new employees. It decides the best recruitment methods, internal or external, and who is the best person for the job. The personnel department also trains employees deciding whether to use on or off the job training.
The finance department keeps all the books in order, sees how much profit or loss is being made, and sorts out the employee’s wages. It also makes sure the business is breaking even and is going to survive. It decides when to order new stock etc.
SALES AND MARKETING:
The sales and marketing department sells the product, promotes the product, advertises the product, makes sure the customers are happy and researches any competition they have or if there is a gap in the market they could cater for.
The distribution department distributes the product to all the stores it will be sold in. Processes in the distribution department include the producer, the wholesaler and the retailer.
The aims of Dexter’s ltd are to gain a larger market share of each individual drink they sell, and to increase their range of products (the amount of different drinks they sell). To do this, the company want to diversify by launching a new line of fizzy drinks. They also need to survive and make a profit.
To achieve these objectives the company want to introduce four new flavours of fizzy drink to attract more customers. They still have to decide on what these flavours will be and whether they will be packaged in bottles or cans. To find this out they will need to do some market research to find out what the customers want. They could do some questionnaires to find out what people will pick when they are given options. This is an example of field research because the business will have to go out and do the research themselves. They will have to find out what flavours people want, whether people prefer cans or bottles. If they prefer bottles they will need to find out how much people are willing to pay.
They need to make the packaging as attractive as possible so that their target customers will pick it over their usual brand. Also, to promote their product and to try and persuade the target customers to buy their product they could introduce special offers. For example, “buy one get one free” or discounts like “half price”. This will attract the target customer to their product and if they like it they will stay loyal. To get more people to buy Dexter’s product the only way is to convince their target customers that Dexter’s is better than their competitors brand because then people will change to buying Dexter’s instead and this will increase their sales, therefore profit.
The running of Dexter’s will be affected by these proposed developments for expansion. It should improve their reputation by improving the quality of their product and the quality of their service. They will need to employ more people and buy more machinery in order to produce the amount of products they will need quickly and efficiently. They may need to extend their factory to fit all the new equipment in. There could be communication problems because there will be more workers and they will all have to understand what they are supposed to be doing.
There will be a longer chain of command so messages will change or information will be forgotten as it is passed down the line. If people don’t get the correct message they will make mistakes and the customers will be let down. Mistakes cost money so the workers can’t really afford to make them. There will be an increase in the amount of products made so there will be an increase in sales. The new products will have to be advertised too so that people hear about them and hopefully buy it. Advertising costs a lot of money though and takes a lot of organising so people would need to be employed to research the marketing side.
Like all businesses Dexter’s face problems. There are two types of constraint on a business, internal and external.
Internal constraints are problems within a business that affect how it is run or how successful it is. Communication between the workers is a main part of the internal organisation of a business. Long chains of command are bad for the business because the message could change a lot as it is passed down the chain; which means the business will suffer because mistakes will be made. Lack of finance within a business is also a problem because if a business has no money it can’t buy more machinery or hire more people, this means it can’t expand. The skill level of employees is a minor but still a constraint on a business. If the people hired aren’t trained properly for their job or don’t have the skills needed then it could take a lot of time and money to train them. Meaning work doesn’t get done during this time and the business will probably lose money if they are spending a lot but getting none back.
External constraints are problems outside of a business that it can’t control. A big problem outside a business is its competitors. When a business starts up its main objective is to survive. If its competitors have more money they can advertise to get a wider range of people to buy their product. If other businesses are more successful they can afford to have lower prices and probably have a better quality product to sell. If they are providing a service and they’ve been running longer they might provide a higher standard of service. The customer’s opinion counts a lot towards the success of a business too.
If the customer doesn’t like the product or the flavour, colour etc. then they will look elsewhere to find what they want and your business will lose out. If you can’t produce your product though you business is bound to fail. You have to be able to get the materials needed that aren’t too expensive. If you need raw materials that need to be shipped from far away then is it going to lose you money? The government also have a part to play in how well the business is run. If a business doesn’t meet the health and safety laws then it can be closed down and there’s nothing the owner can do about it. If the government has high tax levels and the business needs to pay more money out then it has less to spend on expanding the business.
Market research is when you research the market. You look for gaps in the market and where there are demands for a product so that the product you make will sell well.
A business needs to give the customer what they want in order to do well and make a profit. Market research is all about finding out what this is.
Some businesses go out and do research on what the customer wants. They find out what sells out quickly and what there isn’t enough of. They then adapt their product to meet the customer’s needs. This type of business is called a market-orientated company.
However, other businesses produce their product first, then spend a large sum of money on convincing the target customers they want or need the product. They spend the money on advertising and promotion to do this.
There are two types of market research, field research and desk research:
FIELD RESEARCH (doing research yourself) can also be called primary research or original research. This type of research is useful for finding out new information and for finding out what customers think of a product. Field research includes questionnaires, telephone surveys, product testing and working with consumer groups. The advantages of field research are that it provides up to date information that’s relevant to your products. The disadvantages are it costs a lot to collect all the data, its very time consuming and needs a lot of collected data to make it accurate.
DESK RESEARCH (looking at other peoples research) can also be called secondary research or occasionally published research. This type of research is useful for looking at the whole market. It can also be used to look at the past trends and predict future ones. This research includes looking at things like market research reports, government publications and newspaper or magazine articles. The advantages of desk research are it is a lot less expensive than field research, the information is easy to find and available straightaway. However the disadvantages are its not always what you’re looking for, it’s not always relevant to your product and its often out of date.
Dexter’s would use market research to find out if there is a demand for fizzy drinks on the market. Also, by establishing the customer needs they will increase sales. There wouldn’t be much point and they would only lose money if the current available products weren’t selling chances are, theirs probably won’t either. However if there was a demand, then Dexter’s could research the flavours people would buy, what packaging they would prefer, how much they would be willing to pay etc.
For my research I am going to design a questionnaire to find out what customers want. I will use random sampling to get a random set of results to produce charts and graphs from. I will go into Alnwick and pick people at random to answer my questions. I will also look at the current brand names that are selling and which ones sell well.
A questionnaire is a good method of finding the information that I need to find out because I can ask questions that are relevant to what I want to know. This means that I will find out specific information that will help me decide what my target customers want and I won’t waste their time asking pointless questions. I will also be able to target different types of people to answer the questionnaire so I can try and attract a different type of person to my product, which would increase sales.
Unfortunately I would have to ask a huge amount of people to get a very accurate idea of what to produce. By just asking 30 people I’m missing out on the opinions of other people who I want to attract.