For many products, such as crisps, packaging is there simply to protect goods being transported and for Walkers it plays a big part in the final sale of a product. For Walkers it is very important to have a colourful and attractive pack for their crisps. In this type of product, a great deal of care goes into the design of the packaging in order to make the product successful and to attract people to buy it. After the slicing process, they're further washed to remove starch, they are then fried, and flavours are then added. More quality checks and then they're weighed before final packaging. Packaging is one of the strengths and weakness of the Walkers. There’s a variety of different types of packaging Walkers uses, in case to make sure their crisps are suitable for all groups of people. Walkers Crisps are available in pack sizes of 34.5g, 50g and a Family size 175g. In addition you can get multi packs of 6, 12, 18 and 24.
Each flavour has a different colour pack in order to aid recognition. For example the Barbecue flavour comes in a lovely little black pack and like all the rest this has the Walkers logo emblazoned across the front. The reverse side of each pack contains all the nutritional info, ingredients, Customer services info and Best before date.
But like in any product, there are some weaknesses in the Walkers packaging. For example, crisp packets in the multi packs are only a measly 25g! Also, some of the crisps are broken and have different size. If to compare Walkers packaging to Pringles, in this extent Pringles has more strength than Walkers. Pringles have strong cans made from the aluminum. Strong pack helps to protect the crisps and prevent its braking. Therefore, I think Walkers should try to introduce some crisps in the aluminum cans and see whether people like it or not.
Price
Although Walkers’ prices can vary slightly, you should be able to pick up a standard 34.5g pack for about 28p. However, in some machines the price for one 25g pack can be 40p. 50g "Grab bag" commonly sells between 40p-50p. On South West Trains it is possible to find a price equal to an incredible 85p for one standard pack of crisps. The multi packs work out cheaper. It is about 16p for each pack in the 6 pack bag, 14p for the 12 pack bag and 11p for the 24 pack bag. So in this case, it may attract more people to buy more crisps for lower price. It is possible to find these available just about everywhere.
The product (particularly Walkers) can be priced, according to the size of the pack, the amount of the product inside, brand and district, or place where the product is being bought.
If there’s a decrease for potatoes supplied for the Walkers, the company- supplier can charge a higher price, so Walkers will probably have to charge a higher price on its products as well. Of course, such big companies as Walkers don’t have this problem at all, because they have contracts with one or a number of different suppliers, which for e.g. don’t allow increasing the price more than 10%. However, any contract can be annulled due to a number of reasons. These can be earthquakes, explosion of the factory, inundation and etc.
Walkers can use different methods of pricing the products. For example, Walkers can charge lower price on the bigger amount of their crisps being sold. Also Walkers can charge lower prices to their consumers, if consumers periodically buy big amounts of their products. Also, Walkers can make a special contract with a consumer, which says, that if consumer buys the amount of the product mentioned in that contract, there will be a lower price on it. Walkers don’t have any major problems with its pricing. However, there are some competitors in the market, which in some ways have better pricing than Walkers, what may have an affect on the sales of the Walkers.
Although, we mustn’t forget about market forces, which can sometimes affect the price of Walkers products. For example ingredients, which Walkers uses for snacks potatoes are mostly agricultural products and come from all around the world. So, if there’s a problem with one of the farms, the cost of making a product may increase, and sometimes, as a cause of that, price on the product increases as well. So Walkers needs to have a good of control of pricing on the supplied materials from the other companies, to make sure they don’t suddenly increase the price. Usually the price between Supplier Company and another firm is controlled by making special agreements or contracts. In the Internet I found definitions of different methods by which the product may be priced. I knew most of them before and I tried to explain them in my own words.
Different methods by which the product may be priced:
Promotion
There are many different promotional methods which can be used by the business. The first method can be a donation or charity campaign which can introduce people to buy the product in order to help to the other people. It’s quite effective, because there’s a big chance that after the campaign people will still buy the products. They will also know that the company won’t waste their money and make sure that costumers are satisfied by their production and charity funds get some money and help from time to time.
The second method can be making different presentations and participating in different exhibitions. In order to advertise the products businesses can do different presentations. For example, the company can take a part in the exhibition. It helps to find new business partners, but it also helps to advertise the products which company produces. Obviously, companies shall participate in the particular exhibitions, which can lead to their businesses.
The third method is writing an article about the product some particular magazines. The company can ask someone in the newspaper or magazine (which is more effective) to write an article about the product. The writer will write an article, discussing all positive sides of the product. Usually in such articles they don’t write or are not allowed to write something negative about the product. So, if the reader reads the article about the product first and then, after two pages he sees and advertisement of this product, he will probably be going to buy it. At least, he will think about it, which is also very useful. Advertising in the magazines is more effective than in the newspapers, because newspaper’s life cycle is just one day. For the magazine it can one month, so there’s more chance that someone will see your advert and buy your product. Therefore, usually magazines advertise quite expansive products. There’s a lot to focus, companies want their advert to be as big as possible, so magazines earn quite lot of money on this. It was a little bit out of the topic, but from my point of view quite useful.
The fourth method of promotion, which is usually the most popular one, is an advertising of the products by using the sources of mass media. It includes: TV, Radio, Magazine, Internet, and many other parts of media, which help to get to the people’s attention some particular information about the products.
Also there they are few advertising methods which can be used by businesses. They are: added value, price reduction, free item and loss leaders methods. Of course there are many other different methods, but they may not relate to Walkers.
Unfortunately I don’t have an access to all Walkers adverts, because I don’t live in England and I have no opportunity to watch TV adverts. However, I found some Walkers adverts in the Internet and now I want to discuss whether they were strong and effective or not.
Now, let’s have a look at the Walkers’ adverts. They advertise that they have just 5% of GDA of saturated fat and 8% of salt in the original pack of Walkers crisps. They say that they have decreased the saturated fat by 70% which is quite a good improvement. Above all, they adverts are very funny. They hide all their promotion targets by making their adverts funny. Even, if the people understand that Walkers makes this adverts in order to meet their targets in the future, people still buy Walkers crisps just because their adverts make them laugh and feel better. Gary Lineker is a well known football player. He used to be a football player, but it still reassures people that they can trust to Gary. “If Gary eats Walkers crisps, why can’t we?” - That’s what most people may think. And then they go and buy Walkers. So we see that it is also very important to have a well known man or sportsman in your adverts. This will reassure people that your products are healthy, or at least don’t have any negative effects.
For Walkers a successful promotion means a win for retailers and consumers as well. For Walkers promotion is probably the most important aspect. Successful promotion campaign will reassure the company that people know about their products and are going to buy them. Walkers Crisps had 46.5% value share of the bagged snacks market but was facing increasing competition from own label brands.
The growing importance of Cause Related Marketing was an opportunity to launch a campaign that built brand equity and delivered a significant donation to charity. What was it all for? Here’s the answer. It was to make sure people trust to Walkers and know that they also do some donations in order to help to the other people. The objective of this campaign is loyalty. Walkers guaranteed a donation of £1m to Comic Relief that was not linked to purchase. To run an activity, which would raise funds for Comic Relief and build brand equity for Walkers, they had to ensure that promotion was memorable with consumers and would stand out among the crowd. They wanted to run an innovative campaign with universal appeal. It should be on a grand scale and above all be fun, in order to introduce people to buy Walkers’ products to help to the other people who needed their help. The solution for this advertising campaign was to get to people’s attention that Walkers were giving a guaranteed £1,000,000 to Comic Relief. Walkers wanted to ensure that the consumer understood that the £1,000,000 was not linked to purchase. Therefore Walkers decided to introduce limited edition flavours (Baked Bean flavour), which highlighted how consumers could make a difference. This information was right in the front of the pack of crisps.
1p was donated for every single pack of limited edition Baked Bean flavour Crisps and Monster Munch snacks sold, and an additional 5p was donated for every limited edition Baked Bean flavour multi pack sold. Special limited edition Baked Bean flavour multi packs each contained a free Whoopee Cushion. This technique is called Free Item technique. A heavy TV campaign, which advertised those three designs of Whoopee Cushions was very effective and helped very much in introduction of the new limited flavours. Remember that mini ipod competition? Walkers offered gifts in their packets such as £5 notes and £10 note. AlsoThis method was successful as they managed to sell over 5 million packets. Out the packets only certain crisps had the gift in it. Anyway, as the result of that strong and effective promotion campaign, it met Walkers objectives and delivered funds to Comic Relief in the way they wanted. After that, Walkers got many awards for ‘Highly Commended campaign’ and ‘Fundraising and Cause Related Marketing’, and had joined Pepsi Co in a massive pack promotion. That was one of the examples how successful and strong the promotion campaign might be.
In my primary research (Questionnaire) there was a question, which asked people to choose a type of promotion strategy which might encourage them to try Walkers crisps. According to my research, I’ve plotted a graph, which shows people’s preferences to the strategies which Walkers may use in the future.
If we look at this carefully, we see that most people said that it would be a good idea for Walkers to give 25% free, BOGOF (Buy One Get One Free) or free DVD. There were less people, who advised to have special coupons, samples, scratch cards and etc. It’s quite interesting that much less people advised to have a competition promotion strategy. From my point of view, the best alternative is to give special coupons, which people can change to something else. For example, Walkers offers to the people to collect 30 coupons and get an exclusive Walkers T-shirt or watches or whatever. I think this information might be quite useful for Walkers in the future. A very strong TV campaign, which reassures people that Walkers products are healthy, is the main Walkers’ strength. But if we have a big plasma TV and look at the bottom, we can see this one millimeter print text, which says that there’s less salt just in the original pack of Walkers crisps. As we have already known, it excludes some other flavours and snacks. What about the price? Walkers don’t advertise price on their products at all. But other snack and crisps companies proved that sometimes it works very well. If you hear “29p for the pack of Walkers crisps!” everyday, and then you go to the shop and see Golden Wonder or other crisps for 60 or 80p, there’s more chance that you will buy Walkers. But again, it is up to Walkers to decide whether they should do so or not.
However there, still are some other little weaknesses. Comparing to the other snack companies Walkers doesn’t advertise their products in any magazines, newspapers and some TV channels. I can’t really say whether it’s good or not, because Walkers could do some primary research, in order to find out on which channels their adverts are more effective. If we look at the Walkers’ promotional material, we can see that they’ve done a lot of work to reduce the amount of saturated fat and salt in their products, but we can’t see any adverts about how healthy Walkers crisps are. Of course, how I have already said, Gary Lineker has some “healthy effect” on the people, but it would be much better for Walkers to have more adverts telling us about the healthy side of their crisps. For example, it would be quite useful to advertise some healthy Walkers snacks for sportsmen or people on diet. The best place for these adverts will be EUROSPORT, EXREME TV and other popular sport TV channels. Gary Lineker still be an ex-sportsman, he doesn’t play now. Well, they used to have a Michel Owen in one of their adverts, but at the moment Walkers needs someone else, they need some new faces. Therefore, I would suggest to Walkers to introduce some other well known sportsmen, advertising their healthy products. From my point of view, it would have a better effect on the people. For Walkers it would give a name of not just the best known and sold brand, but of the healthiest snack brand as well.
Place
A distribution strategy defines how you are going to create and satisfy demand for your products.
It also defines how you are going to move products from point of creation to points of consumption in an efficient and cost-effective manner, and how to develop and maintain customer loyalty. For Walkers a distribution strategy must be coordinated with how customers want to shop and buy. Nowadays customers are absolutely different than ten or fifteen years ago. Today costumer has an access to the Internet, which ‘eats’ him with a sea of information, full of tricky adverts, sit ’n’ buy shops and etc. Despite this fact, manufacturers and distributors continue to support outdated distribution strategies that actually make it hard for customers to shop for and purchase their products. Maybe that’s why when we want to buy a car, we usually go to the car shop, test the car and, if we like it, buy it. However, some people are still seating near their computers, ordering chicken mc’nuggets, bigmac and something for the dinner. On one hand computerization on so high level helps us to save time by buying most of the products we need, using Internet, but on the other hand it’s bad because our life becomes IT fake. Some distributors think that, when a person wants the product, but can’t get it in the Internet, it makes this person to go to the shop and buy it. It’s a kind of psychological trick, and sometimes it helps to increase a demand on the particular product.
Walkers’ crisps are FMCG type of products. FMCG means they are Fast Moving Consumer Goods. FMCG also includes a packed food, beverages, toiletries, and tobacco. So one of the most important things Walkers should care about is how to deliver their crisps as quick as possible without losing the quality.
Walkers Company doesn’t have its own shops, so they have to provide their products to the wide range of different outlets. Outlets, where FMCG products can be sold in are: machines, supermarkets, newsagents, corner shops, pubs, tuck shops, petrol stations, convenience stores and etc. Walkers have over nine thousand individual outlets throughout the country. It helps to expand their business as far as possible, and provide their products to the different locations. Every big company as Walkers has a special logistics group, which analyses all population areas where their business may be located. They do different resources, which help to find out in what areas their distribution centers shall be located. Walkers have six factories and seven distribution centers throughout the UK. Walkers’ products are transported right from the factories and around the distribution network. Then their products are transported to the different tuck shops, pubs, and supermarkets. Walkers have to make sure that people from all parts of the country, city or town are able to find and buy their products. In order to supply all the shops Walkers has a busy, 24hour distribution and 200 vehicles, which help to provide the Walkers’ products to their consumers at the right time. Walkers deliver in excess of 70 million cases each year. Guaranty of delivering of the products at the right time is one of the most important parts of their work. For example, FedEx has a similar structure to Walkers but much more complicated.
To know were Walkers crisps available in all outlets or not, I’ve done a primary research, and the graph below shows the results of it. Let’s have a look at Walkers’ competitors and compare, where most people buy Walkers and other crisps. As we see on the graph below, about 46% of people buy crisps in the supermarket, or how some people call them ‘shop in shops’. ‘Shop in shop’ system means that there’s a place or the whole row in the supermarket, where people can buy some particular products. It is quite sensible to buy crisps in the supermarkets while you’re shopping and buying something else. Usually a pack of crisps is not the only product in the costumer’s trolley. People go to the supermarket buy ‘daily products’ and products of the first need, such as: bread, milk, meat and etc. Newsagents and tuck shops take the second place after supermarket. It’s very easy to explain. Crisps are a type of product, which is basically oriented on the young people between the ages 13-19. Sometimes people in this category don’t want to go to the supermarket, because they don’t need to buy a lot of food or because it’s too far away. People go to the tuck shops to have a break and crunch something like crisps at the lunch time. Usually people don’t eat crisps because they’re hungry. Newsagents are quite popular as well, because when some buys a newspaper or a magazine, he is likely to have a snack and buy something else. Of course it doesn’t include all people groups, so it’s not very accurate. What place can be better than a pub, if you want to relax, have a glass of beer and a pack of salty crisps? Snacks and crisps are sold very well especially at the time of football or rugby match. Many people, particularly men, go to the pub to watch their favourite game and have a snack. Machines, where you can buy cold tankards, crisps, and chocolate bars are quite popular in the schools. Students have to study very hard and, of course, they need a lot of energy. These snack machines help to feed the students as well as help to the school or owners of the machines to earn some money. Convenience store or any other kind of shop can also be an outlet. If there are a big number of different outlets where the products can be available, it’s very good for business. I put two graphs, which show that it doesn’t really matter what type of crisps people buy, the most important thing is that they buy them at the same place.(The first graph doesn’t include the percentage of people who doesn’t buy crisps).
On the second diagram I would like to show where people buy just Walkers crisps. On this diagram I showed the percentage out of 519 people, who buy Walkers. We can see, that actually there’s no real difference between those people who buy Walkers crisps and those who buy crisps of the other brands. People still go at the same place. I think that it also shows that Walkers crisps are available as well as any other crisp brand.
If we are talking about the whole Walkers’ distribution, at the moment it works very well. They have 24 Hour distribution, 200 vehicles, full supply and etc. They also guarantee a delivery of what a supermarket has ordered within 24 hours. All these are the main Walkers’ strengths. However there’s a lot to work in the future with their distribution web. On the Walkers website it says that Walkers has seven distribution centres. As the number of distributors increases, it becomes more difficult to control them. For Walkers it may cause some problems with controlling of quality in the other locations. Not all distributors always follow the rules the general director has established. People in the distribution centre may go to work in another company. A change of the head may cause some problems with personnel. To have a good control of distributors, it’s very important to go to these distribution centres and check them from time to time. When there are many distributors, some of them may not provide the information on the market and demand for the products at the right time. Walkers have a very wide range of products and if the demand on one of them becomes lower, and Walkers doesn’t find out about it at the right time, it will cause very many problems. For example, as the result of bad control of distributors and sales of the products, Walkers’ profit may decrease pretty much. Also people may choose alternative product of another company (e.g. Pringles crisps) and stop buying Walkers’. If this happens Walkers or any other company may lose a big value of shares on the snack & crisps market.
To avoid such unpleasant accidents, Walkers can have another look at their top-managers. This profession becomes very popular by now and includes a control of the whole distribution centre or whatever it is. The work of these top-managers is a control of almost everything, including a control of market share and demand on the product (types of crisps or flavour) in a particular area. Walkers may have top-managers’ meeting every month. They may have a SWOT analysis of the Walkers Company at the moment of meeting, look at all changes on the market, Walkers’ opportunities in the future and etc.
Overall, I think that Walkers develops very well and their business works. As any other businesses, Walkers sometimes have problems, but usually it doesn’t take them a long time to correct their mistakes. According to the statistics, 58% of the crisps market in Britain is a very good result and I’m sure it may increase, if Walkers does more researches and does it more regularly, in order to find out wants of the people. Also, according to my own research, Walkers crisps are available all most everywhere, and sometimes are even more available than other crisp brands. However, Walkers could make sure their crisps become more available in the machines and tuck shops, because these sorts of places are usually visited by students and they are the most important potential customers.
In the end I want to say that it would be very good for Walkers to have a massive feed project. For example, Walkers can supply by their products some language schools, summer camps, military camps or even the army like 92 years ago! They can develop new snacks which contain a lot of calories and energy. I think this offer will definitely have a pressing demand and will increase Walkers’ profit very much.
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