Table of Content
Executive summary Task 1 & 2
2 Situational Analysis
3 Assessment / evaluation of current marketing strategy
4 Differential advantages, competitive edge (USP)
5 Segmentation Targeting & Positioning (STP)
6 Recommended objectives and goals (SMART)
7 Recommended Marketing Strategies and Programmes
List of Works Cited
This Report introduces the Lorenz Bahlsen Snack-World GmbH & Co KG Germany and analysis its recent situation, as well as its marketing strategy. In this context, one of their product lines is taken in consideration in more detail. Special advantages of its products and potential objectives are represented. The marketing strategy is the decisive factor of the success of an organisation. This is why it is essential to analyse strategies and to figure out new indications, as markets change continuous.
Tas k 1 & 2
The Lorenz Bahlsen Snack-World GmbH & Co KG Germany is an international manufacturer of savoury snacks, such as potato crisps, pretzel snacks and nuts.
1999 it was founded in Neu-Isenburg, Germany and was named after its founder Lorenz Bahlsen. The company distributes its products to around 80 countries worldwide. Manufacturing sites and sales organisations have been established in Germany, Poland, Austria and Russia (Lorenz Snack-World, n.d.).
In 2014 the market share of the company Lorenz decreased to 13% (f2m - food multimedia GmbH, 2014), comparing to ca. 14% in 2011 (Thielking, 2011), showing that the company’s marketing strategy needs a revision.
Lorenz distributes 19 different product lines with a large portion of crisps.
One of their product lines is the well-known brand “Saltletts”. This year the brand celebrates its 80 birthday. 1935 it offered the first pretzel stick in Germany under the name “Salzletten” (Lorenz Snack-World, 2015). Saltletts offers different kinds of pretzel sticks, which distinct in shape and taste. Altogether Saltletts disposes of eleven products that distinguish in shape, size, flavour and toppings (Lorenz Snack- World, n.d.).
2 Situational Analysis
The PESTLE-Analysis is a method that identifies the environment of an organisation, by analysing the following factors:
P – Political
E – Economic
S – Socio-cultural T – Technological L – Legal
E – Environmental
These factors have an impact of the marketing strategy that a company uses. By defining the environmental factors, current trends like lifestyles or brand development can be recognized. With the help of a PESTLE-analysis it is possible to detect potential threats and opportunities applicable to the organisation (Ashok Ranchhod, 2007).
Factors the Lorenz Bahlsen Snack-World GmbH & Co KG Germany is facing:
Germany, as a democratic republic, is a member of the European Union. The political situation of Germany can be described as relatively stable. Agreements like the European single market support and facilitate the trade and working conditions. 1993 border controls between member countries of the EU were scraped, so that members are allowed to freely move goods, services, capital and labour (Die Bundesregierung , 2014). This facilitates Lorenz the trade within the European Union and gives it a strong advantage. However, the company functions in a lot of economies as it exports to around 80 countries worldwide. Therefore Lorenz has to consider all these political situations and regulations of the respective economies.
The economic environment has a big influence on the success of a company. Germany is relatively poor in raw material, however the ingredients needed for the production of Lorenz savoury snacks, like potatoes and grains are cultivated in Germany. The national output is constantly rising. Besides Germany is one of the leading exporters of vehicles and machinery (Wolfgang Gillmann, 2003).
As an international company, Lorenz has to consider the needs and engagements of their potential customers. Preferences and trends can affect the demand of customers. Nowadays the food industry is faced with trends like a vegetarian, vegan or healthy lifestyles. Besides more people take care of ingredients and nutrients and avoid harmful additives (World Health Organization , n.d.). Consequently the food industry has to customize their products to avoid losing customers. To adapt on these trends companies are offering products with lower fat or sugar content, especially savoury snack branch. Also sustainability plays a big part in the modern times. Therefore companies change the packages of the products in recyclable substances.
Germany puts a high effort into the technological development, which gives the country a competitive edge. Many well-established universities and a good school- and education system, providing a good foundation of research and well educated labour.
High technological standards are providing the business sector with resources, such as machinery, for production on an efficient and qualitative high level (DIGITAL AGENDA FOR EUROPE, 2012). This provides Lorenz well conditions concerning to the production process.
Germany has high nutrition standards and regulations on the production and the ingredients in the food industry, based on the EU regulations. This is an important factor that hast to be taken into consideration, when planning a price for a product and its production cost. Especially companies working in the food industry have to be careful by importing resources. These have to meet the requirements for the production process. Most of Lorenz products consist of potatoes and grain, which could be cultivated in Germany.
Germany has developed high restrictions fort he reduction on environmental pollution. Additionally a high focus was set on an environmentally friendly farming solution. The country is the leading country in renewable energy programs and has set its focus on solar- and wind energy transformation systems (Rehder, 2012).
In contrast to the PESTLE-analysis, the SWOT-analysis also refers to the internal environments of an organization. The strengths and weaknesses of the organization are taken in consideration, as well as the threats and opportunities. This method creates a foundation for developing a marketing strategy. It organizes facts, that are known a while longer, as well as information discovered lately (O. C. Ferrell, 2012). Strengths, weaknesses, opportunities and threats of Lorenz Bahlsen Snack-World GmbH & Co KG Germany:
Lorenz is a well-established company with a currently market share of 13 % (f2m - food multimedia GmbH, 2014) and a high brand awareness. This gives the company a competitive advantage, because customers associate it with tradition and awareness. As Lorenz exists since many years, it has a lot of knowledge and experiences in the food industries. By developing new marketing strategies and launching new products, their experience is most helpful. Lorenz offers a wide product range and therefore reaches a lot of customers with different needs. One of Lorenz most popular product lines is “Saltletts”. This product line offers a variety of pretzel sticks, which guarantees to comprise something for everyone’s taste. People are not forced to choose one kind of pretzel sticks, but can choose between a wide range. This is beneficial, as customers like to try new things and to have an option. (Sally Dibb, 2012) Some of their products show that Lorenz wants to reach nutrition- conscious customers, as they are made of healthier ingredients. One of the products of Saltletts is a double-package of pretzel sticks made of wholemeal. As nowadays the trend goes towards healthy and balanced eating (World Health Organization , n.d.) and snacks are rather considered as unhealthy, Saltletts still reaches customers from the healthy sector.
Although, Lorenz has invented many new products and additional varieties to their existing once, the company is facing changing market conditions constantly. The industry of snacks is in strong competition, as there are a lot of similar products and strong competitors. To distinguish themselves from competitors, manufacturer of savoury snacks are trying to create unique products. This strengthens the competition additionally and Lorenz is forced to create new incentives. Pretzel sticks and other savoury snacks are not very alterable in their composite of ingredients, which makes it difficult to distinguish from competition. Many other products and new inventions of existing once are entering the market in a fast rhythm. Market trends are changing constantly and customer needs are changing to a healthier lifestyle. This could lead to difficulties for the company, due to unhealthy ingredients of their products. Salt is one of the essentials of pretzel sticks, but it applies as an unhealthy ingredient, so that even wholemeal can’t convince everyone from the healthy sector. Opportunities:
Lorenz has the chance to win market share, with modifying its savoury snacks. Creating new flavours for the pastry, like for example chilli or wasabi could attract the customers.. Also pretzel sticks are alterable in shape and size, so that Lorenz could distinguish from competition and to cause a sensation. The package is also alterable. Sustainable consumers could wish for packages made of paper, which is no problem by packing light pretzel sticks. If new the new kinds of flavours are to customers liking, it is possible that they want to try even the other flavours or other products of the brand with same flavour. With the knowledge and experience of the organization, Lorenz could enter new markets and distribution channels to widen their marketing area. To avoid losing customers, Lorenz could reward customer loyalty.
Lorenz could lose his customers to competitors, especially if competitors offer similar products for lower prices or with special features. There is a high amount of providers in the savoury snack branch. Furthermore new flavours or products with a new image could be unappealing to customers, if traditional and classic pretzel sticks are most liked. That would cause that Lorenz can’t distinguish from competition. If a new flavour does not meet the taste of someone, it could be that the customer switches to products of a competitor, in all kinds of products. If the healthy craze furthermore proceeds, pretzel sticks are going to be more unpopular. To Consumers with routine response behaviour, the buying of fancy new flavours could be too risky (Sally Dibb, 2012).