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Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 7 - 2019
Question 7
Read the information supplied and answer the questions which follow. Intezx - Sugar Free Soft Drink Beveraton PLC is a global manufacturer of soft drinks. It devel... show full transcript
Worked Solution & Example Answer:Read the information supplied and answer the questions which follow - Leaving Cert Business - Question 7 - 2019
Step 1
Explain the factors that should be considered before deciding on the price to charge consumers for a product.
Answer
When deciding on a price for a new product like Intezx, several key factors need to be considered:
- Production Costs: Understand all costs involved in making the soft drink, including raw materials and labor.
- Demand in the Marketplace: Assess the demand for sugar-free drinks and consumer preferences in the market.
- Competition: Analyze the pricing strategies of competitors offering similar products.
- Consumer Expectations/Image of Product: Align the pricing with how the target customers view the product—premium, budget, etc.
- Taxation: Consider any tariffs or import taxes that may affect pricing.
- Product Life Cycle: Consider the stage of the product life cycle—introduction, growth, maturity, or decline—and how that affects pricing.
- Legal Restrictions: Be aware of any regulations regarding pricing in the beverage industry.
- Target Market: Identify your target market and adjust pricing based on their income and spending habits.
Step 2
Outline the pricing strategy best suited to the introductory stage of Intezx and explain the reason for your choice.
Answer
The pricing strategy best suited for the introductory stage of Intezx is Penetration Pricing. This approach involves setting a low price to attract a large market share quickly. The idea is to encourage consumers to try the new product by making it more affordable than competitors. Once brand loyalty is established and market presence is secured, prices can gradually increase without significant loss of customers. This strategy is particularly effective in competitive markets where consumer switching costs are low.
Step 3
Describe the role of Public Relations (PR) in a business.
Answer
Public Relations (PR) plays a crucial role in shaping a company's image and maintaining relationships with its stakeholders. Key functions include:
- Creating Positive Publicity: PR efforts aim to generate positive stories and articles in media sources to enhance the company's reputation.
- Crisis Management: In times of crises, PR is responsible for managing responses to mitigate negative impacts on the company's reputation.
- Building Relationships: PR fosters relationships with customers, investors, and the general public, helping to maintain trust and loyalty.
- Communicating with Stakeholders: PR ensures consistent and transparent communication with all stakeholders to keep them informed about company activities, changes, and other relevant updates.
Step 4
Discuss the methods Beveraton could consider to develop good PR, providing examples to support your answer.
Answer
To develop good Public Relations, Beveraton could employ several strategies, including:
- Sponsorship: Engaging in sponsorships, such as sponsoring a local sports team to gain visibility and positively associate the brand with local culture.
- Celebrity Endorsements: Collaborating with popular figures to promote Intezx can increase brand appeal. For example, using influencers who are advocates of healthy living can effectively reach target audiences.
- Press Conferences and Product Launches: Organizing events to launch Intezx can attract media attention and generate buzz, making it more visible to potential customers.
- Social Media Campaigns: Utilizing platforms like Instagram and Twitter to share user-generated content and interact with consumers can foster community engagement and provide real-time feedback.
- Local Community Involvement: Running community events or charity drives can improve brand image and foster a connection with the local populace.
Step 5
Outline the factors the marketing manager of Intezx should consider when designing the packaging for the brand.
Answer
When designing packaging for Intezx, the marketing manager should consider the following factors:
- Promotion/Coloring/Design: The packaging should be attractive and distinguishable from competitors to catch consumer attention.
- Differentiation from Competitors: Packaging should clearly communicate the unique benefits of Intezx, such as its sugar-free formulation.
- Image/Aesthetics: A clean and modern design can enhance brand perception; it must reflect the product's health-oriented identity.
- Protection: Ensure the packaging protects the drink from damage during transportation and handling.
- Convenience: The design should consider user-friendliness, such as resealable caps or easy-to-hold shapes.
- Recyclability: Opt for environmentally friendly materials to appeal to eco-conscious consumers.
- Cost: Balance quality and aesthetics with production costs to maintain profitability.