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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. Mumtaz aims to be the market leader in Asian ready meals. To achieve ... 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
- The ready meals market grew by 2% in volume and value in 2016, indicating a rising market for Mumtaz to tap into.
- Supermarket own label ready meals have a combined market share of 68%, with major players like Tesco dominating.
- Mumtaz already supplies products to supermarkets, giving it an established connection.
- Producing own label meals allows Mumtaz to meet diverse customer needs and preferences, fine-tuning recipes based on customer insights accessed through supermarkets.
- Increased demand can lead to economies of scale, reducing costs and boosting profitability.
Step 2
Arguments for selling more Mumtaz premium brand name products
Answer
- There is a trend among consumers to prefer premium quality ready meals, which aligns with the Mumtaz brand image.
- The Halal baby food range introduction highlights Mumtaz's innovative approach, which can further drive sales of premium products.
- Consumers seeking quality will likely pay higher prices for Mumtaz premium products, enhancing brand reputation.
- Ansoff's matrix classifies this as a market penetration strategy with higher risks but potentially higher rewards if successful.
- Focusing on premium products could differentiate Mumtaz and leverage suppliers' unique selling propositions to stand out in the market.
Step 3
Recommendation
Answer
Based on the analysis, Mumtaz should choose to produce supermarket own label ready meals. This approach provides a lower-risk entry into the market due to the established demand and distribution channels that supermarkets offer. By leveraging the preferences of supermarket consumers, Mumtaz can achieve a broader reach and optimize its production capacity. Additionally, this strategy can complement Mumtaz's premium products in the long term, helping establish the brand as a market leader in Asian ready meals.