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Evaluate these two options and recommend which is most suitable for Mumtaz to achieve its aim - Edexcel - A-Level Business - Question 1 - 2018 - Paper 2
Question 1
Evaluate these two options and recommend which is most suitable for Mumtaz to achieve its aim. The ready meals market grew by 2% in volume and value in 2016. Sales ... show full transcript
Worked Solution & Example Answer:Evaluate these two options and recommend which is most suitable for Mumtaz to achieve its aim - Edexcel - A-Level Business - Question 1 - 2018 - Paper 2
Step 1
Arguments for producing own label ready meals for supermarkets
Answer
Producing own label ready meals allows Mumtaz to tap into the expanding ready meals market, which grew by 2% in 2016. Supermarkets own label ready meals have a combined market share of 68%, giving Mumtaz the opportunity to benefit from increased distribution.
The option of supplying these products can lead to economies of scale and potentially lower production costs, enabling Mumtaz to remain competitive. By leveraging its existing relationships with major supermarkets like Tesco and Asda, Mumtaz could enhance its visibility within the market, catering to the preferences of consumers who prioritize convenience and quality.
Step 2
Arguments for selling more Mumtaz premium brand name products
Answer
Focusing on Mumtaz’s premium brand products can capitalize on the trend towards premiumization among consumers. As ready meal consumers seek higher quality, Mumtaz can position itself as a leader by offering innovative products that highlight authentic Asian cuisine.
This strategy also allows Mumtaz to differentiate itself from the supermarket’s own label brands, potentially commanding higher prices. With existing recognition in the market for premium products, Mumtaz could better establish its brand and build customer loyalty while seeking to achieve market leadership.