Test marketing

SITUATION

The test marketing results suggest that to increase sales Maxy sauce needs to be redeveloped and repackaged as a more up-market product. Stephen Sablon and Anton Hiltmann have been given the task of making it work within six months. Can they do it?

CHARACTERS

LANGUAGE

Planning a campaign

23.1 Listen and read

In Anton Hiltmann's office in Dusseldorf, Michael Tsatsos, a Greek marketing consultant, presents his findings to the Hiltmann management. Listen to what they say. What was the purpose of Michael's enquiries in Creek supermarkets? What sort of results would Hiltmann regard as encouraging?

MICHAEL	First, the good news - we've got the results of the supermarket survey. You should have received a copy yesterday.
ANTON	On the face of it, I thought these figures looked encouraging. What exactly was the procedure, Mr Tsatsos?
MICHAEL	Twenty interviewers visited altogether one hundred supermarkets in five large towns on different days of the week, at different times of day. They interviewed a total of five hundred and thirty-seven women and twenty-four men.
ANTON	You say this is a summary - but you've also analysed these figures in more detail, haven't you?
MICHAEL	Well, yes, if you look on the second sheet you'll see we have got the computer to do a bar chart of the responses to question seven, broken down according to age. That's the bad news!

23.2 Document study

This is the questionnaire, and the bar chart of the responses to question 7. What good news tor Hiltmann can you find in these figures? What bad news appears in the bar chart?

Summary of responses to questionnaire

1 Male or female	M	24	F	537
2 How many people live in your household?	1	2	3-5	6-8	9+
	28	76	297	122	34
3 How often do you cook a main meal tor the household?	Every day	Most days	Some days	Once a week
	404	98	50	9
4 How many hours do you spend on cooking each day?	<1	1-2	2-3	3-4	5+
	150	238	84	51	27
5 How much have you spent in this supermarket today?	<1000	1000-2000	2000-5000	5000-10,000	10,000+
	10	25	48	286	177
6 What is your age group?	<20	21-30	31-40	41-50	51-60	60+
	64	145	161	164	48	21
7 Do you use ready-made flavourings, essences or sauces?	Regularly	Often	Sometimes	Rarely	Never
	237	72	51	62	123
8 If "Yes", what kind?	Savoury	Sweet	Greek	Foreign
	389	174	109	371
9 If "No", why not?	Don't need	Don't like them	Don't know	Bad for you
	58	7	43	17

Questionnaire responses

23.3 Writing practice: a customer profile

A profile is simply a short, factual description. Write a profile of the typical Creek food shopper, based on all the relevant information you can extract from the summary of responses and the bar chart.

23.4 Listen and read

The presentation continues. Listen to what they say. How is Michael going to try to reach the typical Greek food shopper as described in your profile in 23.3?

ANTON	All right, Mr Tsatsos, the marketing mix. Let's hear what you propose.
MICHAEL	The main thrust of our campaign will be through television commercials. Some of these will be at peak viewing times in the early evening , but many will be screened during the afternoon when rates are low, but many housewives watch.
ANTON	Mhm. You've costed the whole thing, I suppose?
MICHAEL	Yes, and we expect to come in at ten per cent below budget , even allowing for contingencies.
ANTON	I've heard that one before. What are you doing apart from TV?
MICHAEL	We obviously have to target the housewife. So, to soften up the market , a series of half-page ads in the four most popular women's magazines, running from mid-March through to the middle of April.

23.5 Listen and read

The presentation continues. Listen to what they say. Apart from advertising, what does Michael want to spend money on?

ANTON	Just that? Nothing else?
MICHAEL	That's it as far as the media are concerned - except for some interviews I've got lined up on some local radio stations' cookery programmes. They're going to mention Maxy in their 'new products' feature, you know the sort of thing. That won't cost us anything.
ANTON	What about in-store promotion?
MICHAEL	Naturally, there'll be point-of-sale merchandising : show cards, special display stands - where we can find room for them. You must remember floor space in supermarkets is at a premium.
ANTON	Can't you slip the manager something - a little backhander?
MICHAEL	Well, there are ways of offering little incentives, yes. And talking of incentives - we have allowed for a certain amount of below-the-line expenditure.

23.6 Reading for key words

Find the words or phrases in 23.1-23.5 that tell you the following:

Presenting the results

23.7 Document study

The test-marketing exercise produced many figures. The diagrams below show some of the results. Which of the diagrams is a bar chart? Which is a bar and line chart? Which is a line chart? Which is a pie chart? Which of the diagrams show a trend over a period of time? Which show an analysis at a given point in time?

23.8 Find the word: tendencies and trends

Choose the most suitable word from the box to fill each gap.

23.9 Listen and read

Stephen telephones Jerome Fantam to tell him about the test-marketing results. Listen to what they say, and to how Jerome asks for the figure to be broken down.

Key decision making

23.10 Listen and read

Patricia, Stephen and Leo are having a telephone conversation with Jerome Fantam. Listen to what they say. Does Jerome think that the test-marketing exercise has been a success? How do you know?

PATRICIA	Good morning, Mr President. Can you hear me? We have some figures for the Maxy test-marketing scheme in Greece.
JEROME	I hear you, you don't need to shout. And I've seen the results. First of all I have to ask, is Sablon's resignation still on the table?
STEPHEN	My offer to resign from the board still stands, of course. However, I...
JEROME	Ah... I'm not going to let you off the hook that easy. Leo, can we have your comments on the exercise?
LEO	Obviously the problem is the lack of repeat orders. We must, of course, bear in mind that this was only a three-month trial, of a product which the market perceived as being quite a high-priced luxury item.
STEPHEN	Right. Where we failed was we didn't get them using it every day.

23.11 Listen and read

The telephone conversation continues. Listen to what they say. What solutions to the problem of Maxy's future are proposed?

PATRICIA	So, Stephen, you think we should go down market, knock twenty or thirty per cent off the price?
LEO	Just a minute. On Anton's behalf, as he can't be with us today, may I point out that Maxy is a quality product. It's produced in small batches from high-grade materials, and the overheads are correspondingly high. They can't cut the price just like that.
JEROME	They can sell at a loss for up to three years if that's what it takes to get established in the market. Also they could manufacture somewhere else than that expensive site in the middle of Dusseldorf - that would bring their overheads down.
STEPHEN	I agree we may have got it wrong over pricing. But I'd suggest just the opposite from Patricia. Let's take Maxy up market, but make sure people buy every flavour in the Maxy range.
LEO	Ah, product differentiation - that's what you're suggesting, is it?
STEPHEN	I said at the outset , you remember, that we ought to diversify the product, but everyone said we didn't have time. Now we've got even less time, but we're just going to have to do it.

23.12 Listen and read

The telephone conversation continues. Listen to what they say. What solution has been chosen? What benefit is Jerome Fantam hoping to gain?

JEROME	OK. I think we're beginning to see some light at the end of the tunnel here. This is what I'm prepared to recommend to the board. Stephen and Anton can have carte blanche to redesign , redevelop and repackage the product any way they see fit. They've got six months to do it in.
STEPHEN	I think Anton will accept that offer.
JEROME	It's not an offer. And there are strings attached. He's going to have to relocate. The new Hiltmann factory and offices will be sited at Essen. You've seen the site, Stephen, you agreed it was ideal, it's got laboratories, everything.
STEPHEN	Well, I think...
JEROME	Let me know how you get on.

23.13 Find the right word: the marketing mix

Read the text below on the marketing mix. Write a word from the box to fill each of the gaps.

The marketing a is the combination of all the factors that affect the sale of a product. One of the most important is the product itself, its design, b and price. A lot depends on how the consumer perceives the product. c , like soap powder, are just as hard to sell as d items, like liqueur chocolates, but the problems are not the same.
Maxy, as a food flavouring, is somewhere in between these two extremes. People have to cook, and a high- e, low- f product that makes cooking easier should bring the customers back for more and bring plenty of g orders from the distributors. Patricia therefore assumes that Stephen wants go for the h end of the market, bringing the price i . But Stephen in fact wants to go j market. People who buy this type of product will go on buying it even if it k more; the problem is to make them buy another bottle before the first one is empty. This in turn means product l : Hiltmann must produce a range of sauces and flavourings under a name that already has excellent brand m .

23.14 Speaking practice: making a proposition

Listen to this conversation. Then listen again, and speak the part of the president.

23.15 Document study

Jerome Fantam sends this memo to Standard Can's managers world-wide. Read it carefully. Why do you think Jerome wrote point 3?