Muckrach Lodge Limited Marketing Strategy

Muckrach Lodge Limited is a company that operates a lodge hotel and restaurant in the highlands of Scotland in the United Kingdom. Muckrach became a hotel in the 1960. The current owners however ventured in the production of a variety of table and cooking sauces. This report is aimed at providing a brand name and branding strategy for the company by focusing on one of the sauces, the chilli sauce called No.17 at the moment.

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The first section of the report provided a market analysis of the sauce and condiment industry in the United Kingdom. The findings in the analysis highlights the current trends in the industry, the competitor activities and predictions for the industry. Trends include customers increase in home cooking due to slow recovery of the recession and the growth of the chilli sauce category.
The second section highlighted brand identity, brand awareness, brand equity and brand positioning. These branding ideas follow up a brand building strategy. The Customer Based Brand Equity (CBBE) pyramid explained how a product can attain brand equity by reaching the peak which is brand resonance, emphasising on the relationship a brand should form with its customer to finally attain brand loyalty
The third section uses the market analysis and branding strategies to develop a brand name for the chilli sauce and brand strategy suggested for the company. The name HYLANDISH versatile chilli sauce which was chosen depicts the brand identity of the product, expressing place of production and features of the chilli sauce. Positioning the brand by features and benefits of product was designated.
In conclusion, the report draws findings from the market analysis and branding strategies to provide recommendations for the company. Recommendations include: Smaller bottling and price, increase awareness, advertising with celebrity chefs and supermarket sales.
INTRODUCTION
The relationship between a product or service and its intended customer is immensely changing due to the increasing awareness, attachment and values placed on products purchased. For most companies, the customer plays the most essential part in the development of a product. In other to pass the intended message of a product to customers as well as be a market leader, a good brand image must be created.
A sauce and condiment company are producing a range of sauces and intend to push it into the market. Sauce includes: chutney sauce, chilli sauce, spicy ketchup, non-spicy ketchup. The company is going to be referred to as the “client” and is herewith looking for a good brand image, a branding strategy which would be directed to a good launch position for their products. This report is aimed at providing the requirements needed by the client, using the known brand theories and strategies to best place the chilli sauce product in a comfortable position.
THE CLIENT
A new production line born out the kitchens of Muckrach Lodge Hotel & Restaurant, located in the highlands of Scotland. The hotel is owned by Muckrach limited under operations run by Andy Picheta and Rebecca Ferrand. The duo actually are in charge of the production of the range of sauces as well as the hotel’s restaurant services. (Muckrach, 2007)
The client however decided to venture into sauces production based on the good reviews from their lodging customers, this led to their participation in the BBC good food show. The owners believe they have tapped into the holy grail of cooking by producing versatile sauces. A versatile sauce has the ability to be used as sauce on its own and in cooking as well.
There’s a long Scottish heritage attached to the company and the client believes in the use of fresh products in their dish making process and evidently in their imminent sauces production (Muckrach, 2007)
CHILLI SAUCE
Amongst the variety of sauces produced by the client, the chilli sauce aims to be the launching front man. The sauce initially named as No. 17 is produced by the finest freshest ingredients which consists of garlic, lemongrass, ginger and 17 fresh chillies. This is made by fresh traditional methods and uses vinegar and sugar as preservatives. The cost of production is £1.20 per bottle and therefore commands a costlier selling cost at £4.50 at retail and £3.50 a wholesale as compared to other sauces in the UK sauces and condiment market.
The chilli sauce boasts of a high anti-oxidant content, which shows the health benefits accompanied with the consumption. However due to funds constraints, the chilli sauce distributed for testing at the moment amounts to 700 and have received good feedbacks without a website or a label. The client intends to shift 20,000- 30,000 bottles by the end of the year. At the moment, there would be no compromise on price as the client is willing to compete based on differentiation and they believe the product is worth the price. Providing a way to communicate that belief to customers through branding is therefore the task.
This next section of the report provide analysis of the UK sauce and condiments market, further sections would provide the branding strategies with the guidance of the market analysis and the some branding theories.
MARKET ANALYSIS
Globally there has been an upsurge in the amount of sauces and condiments manufacturers, from the existing players in the market to supermarket labels and restaurant owners. The UK market significantly is actually accrued to this surge, this report lays emphasis on the UK sauce and condiments market because the client intends for his product to compete within the UK market at the initial start.
MARKET SIZE
The sauce and condiments market has increased in size and value, referred to as sauce and food seasoning industry by (keynote, 2013). This value increase is based on the switch in consumer eating habit and the effect of the recession. However growth over a 5 year period since 2008 has experienced a 12.4% growth (Keynote, 2013) and cooking sauce accounting for the most part of the growth.
COMPETITOR ANALYSIS
The market is dominated by major competitors which include Heinz, HP foods, and Premier foods group ltd, mars UK Ltd, Nando’s group holdings Ltd and McCormick (UK) plc. (Passport, 2013). These competitors lead in different sauce categories and have the private label small players to compete with, private labels include Asda, Tesco, supermarket brands and other in-house restaurant sauces.
Sharwood and Loyd grossman which are products of the Premier foods group Ltd constitutes to make the leading company in the cooking sauces category with a high share of 23%, while Dalmio by Mars Ltd aided the company to retain the brand leading position with a value share of 12%, however the company is into major promotion and marketing hence acquiring that top leading spot. Despite the loss of momentum by the Heinz Company with the rising competition by private labels, they still seem to hold the leading position in table sauces. HP foods Holdings td, producer of Amoy experienced growth in capitalising on the eat-in trend and form the growing popularity of consumption of continental dishes.
TRENDS
The introduction of sachets and small pouches have provided a new sensation by customers as they find it attractive and can try the sauces without worries of buying a full bottle with no assurance of the taste, in the aspects of un-tested brands. The perception of paying cheaper for this new packaging methods also in the long run constitutes to more demand for the products. This method is influential in the cooking sauce category.
The recession that hit the United Kingdom in the previous years have seen a slow recovery and hence customers have switched lifestyles and now prefer to eat at home, hereby investing in purchasing cooking sauces increasing the sale of sauces and condiments by 5%. Hence companies now invest in innovative packaging and a varied forms of sauces and flavours.
The table sauce however noticed a drop in share value by the leading players as own labels are applying innovativeness in products and offering reductions in prices which is leading to high pressures on promotions to remain competitive (Keynote, 2013). Promotion has been seen to play a major role in the sale of sauces and condiments as customers spend most of their eating time at home. The chilli sauce category is experiencing major growth as consumers in the UK are shifting more into continental dishes and are appreciating spicy foods. The growth increased by 9% in 2012 and shows a 51% increase in volume sales over 5years (Passport, 2013)
Residents in the UK have busy schedules and are acceptable to sauces that provide them with the littlest of time to spend in the kitchen, with this trend the stir-fry is acquiring massive popularity which is driving the sales of wet cooking sauces. Pasta sauces also gained value sales growth in 2012, with the main brand, Dolmio by Mars Ltd. The growth is however undermined by the level of promotion undertaken in this category edging out smaller players.
PREDICTIONS
The lifestyle of sauces and condiments consumers is predicted not to have a significant change because of the outlook of the economic situation in the UK, which means that consumers would still remain in their homes doing more cooking than eating out, which in-turn should see a upward growth of the industry. Forecast predict a 3% growth in volume sales but a shift in the type of sauces sold, because of the shift into smaller packages.
Soy and chilli based sauces are expected to have the strongest growth of 6% and 7% respectively reflecting the growing consumption of foreign cuisines in the UK. Online retailing might see some growth but it is also predicted that supermarkets and hyper markets would be the main distribution line and customers would purchase more from them. Promotions would continue to drive growth of sales and companies would yield more growth if they invest in advertising and promotion of products as well as sell cheaper or differentiated products (Passport, 2013)
BRANDING STRATEGIES
The market analysis shows that there are already established players in the industry and customer are aware of brands but they are also acceptable to new innovations. However for the chilli sauce product to compete effectively, it has to have a strong brand which would provide a difference from the other available sauces. The theories behind building a brand would be discussed in this section.
BRAND
The widely used definition of brand by the American Marketing Association emphasises that whatever brand form a product takes, forms including, design, name, logo, sign of a mixture of all or some, that form must provide a distinguishable characteristic from other competitors (Keller et al, 2012). Which implies that the brand should have a distinguishable identity. The difference between a branded and an unbranded product is the associations an individual has to the branded one, based on either the performance of the product or the feelings it creates. This shows the essentiality of branding a product to achieve market success (Kapferer, 2008)
A brand should tend to conjure three different appeals to a customer, rational, emotional and sensual (De Chernatony et al, 2011) to create an impression and connection with the customer. Rational appeal involves the physicality of the product, emotional appeal stirs up emotions about the product for example Toms buy one shoe give one to a shoeless person, and lastly sensual appeal, the feelings the brand triggers. For example Axe temptation brand triggers a sensual feeling.
BRAND IDENTITY
An identity of a brand represents a company’s values and promises of a brand to a customer, a company creates a linkage between the brand and the customer by creating value propositions (Aaker, 1996)
The identity consists of a core and an extended identity, the former indicates the brands existence and would should remain constant whilst a product breaks into different categories or markets, for example the Gillette brand instigates shaving for men. The extended identity provides the brand personality required to express the core identity (Kozak & Baloglu, 2011). An extended identity could be slogans used by a brand, for example Nike “just do it”.
BRAND AWARENESS & BRAND IMAGE
Once the brand identity has been created, the brand has to be made aware to the audience it intends to market to. Awareness in this context relates to strength of a brands presence in a consumers memory (Keller et al, 2012). It can therefore be measured by the ability of the consumer to remember the brand in different conditions. Brand awareness is often associated with brand image, a perception about a brand constitutes the image a brand creates to a consumer. The association brings about a higher recall rate by the consumer. There are certain issues that are conversant with creating brand awareness and image as well
Brand name: An essential effect on brand awareness is the name the brand possesses. The ease of pronunciation, spelling and easy to recall plays a vital role. However whether it be meaningful or not, it still affects a brand image and awareness.
Company: the company behind the brand is also essential, as if people are aware of the company, they become more conversant with the brand. If the company uses its name in promoting the brand, the brand awareness increases.
Advertising: using different methods to do advertising to create brand awareness is a major boost to a brand image, especially if the adverts are eye catching and interesting. For example footlocker uses sensual adverts which interest the youths. Forms of advertising could include, magazine, Television and billboard advertising. Celebrity or icon involvement as form of some advertising also improves brand awareness, usually when individuals are associated with the celebrity or icon. It provides some form of attachment to the brand.
Promotions, sales & sponsorships: conducting some form of promotion and instances sales create a buzz in the customer mind as customer are often triggered by reduction in prices via sales as well as gaining from promotional offers (Gregory & Johnson, 2013)
Online and Mobile advertising: the increase in the online and mobile activities of consumers have created a means of pushing the awareness of brands into the consumer’s habit. One in 10 consumers possess a phone and are connected to the internet almost all the time. Brands that tap into that advertising stream create strong awareness.
Direct Sales: Companies also sell directly to customers, either business to business or business to customers create awareness of brands.
Brand Awareness and image are constituent of brand knowledge, the knowledge of the brand affects customer decision-making process. According to (Keller et al, 2012), below are forms in which knowledge affects consumers.
The brand knowledge provides a learning advantage, because after the initial initiated brand registration in the consumer’s mind, further attachments to that mind-set could be easily assimilated by the consumer.
It also gives the brand a consideration advantage, due to the awareness created by the brand, customers tend to add the product in their consideration list when the need be purchase from an involved category.
Thirdly, the choice advantage which is influenced by familiarity associated with the brands, consumers tend to buy brands they are familiar with or have some form of knowledge about.
BRAND EQUITY
Defined by (Aaker, 1996) “as a set of assets and/or liabilities linked to a brand or symbol that either add or subtract values provided by the production of a product or a service to a firm or a firms customers”. It is the reason why a customer would purchase a product over an identical product.
Brand equity is built by the brand building blocks, known as the customer-based brand equity (CBBE) pyramid. Attaining brand equity involves reaching the top of the pyramid, which is the brand resonance, firstly four steps are required to be carried out in building a brand and they consist accordingly; identity, meaning, response and relationships (Keller, 2001). However there are six structures used to create the four steps of brand equity creation illustrated in the diagram below.
Figure 1: CBBE PYRAMID (Paulycreative, 2001)
The brand identity requires the brand salience which depicts providing the right awareness of the brand to the customer. In itself brand salience is not enough, hence for the brand to have meaning to customers, performance and imagery of the brand must be clear in consumers mind, thus establishing points of parity and differentiations. The third stage involves the customer perception about the brand and the feelings the brand creates towards the customer. The pinnacle of the pyramid, the brand resonance which relates to the relationship created to exist with the customer denotes the created brand equity. The resonance is characterised by the intensity of the bond the brand shares with its customer, this would stamp a loyalty mark on the customer and a deep attachment, and engagement with the brand (Campbell, 2002). At this level the company should be aware of the kind of relationship created. A negative brand equity would decrease the brand imagery and perception to customers.
BRAND POSITIONING
Positioning involves how the product is placed in the mind of a consumer as compared to other competitors. Kotler & Keller (2006) defined positioning as the “act of designing the company’s offering and image to occupy a distinctive place in the targets market’s mind”. Positioning categories can be characterised by the following;
Positioning by product features and benefits: in this form, companies can position their product by emphasising on the benefits and attributes of the product, creating a importance for consumers as well as a differentiation from competitors
Positioning by price and/or quality: most commonly marketers use price and quality characteristics to push for positioning, various ways include high quality for cheaper price compared to competitors. The expressed value of the quality can make customers accept a high price.
Positioning by Application of use: communicating the usage of the product also provide a positioning strategy as customers are aware of their needs and would look for products specific to the intent of usage.
BRANDING OF THE CHILLI SAUCE
Results however from the sauces and condiments industry analysis coupled with the theoretical aspects of branding has led to the delivery of a brand name as well as a branding strategy for the chilli sauce product. The client is situated in the highlands of Scotland and hence promises freshness, traditional methods of production by pickling and health benefits. In-other to create an identity, a name or a symbol has to depict the client’s information, clearly understandable to the consumer (Gunelis, 2013).
Hence the name “HYLANDISH” versatile chilli sauce, created from the word highland and dish, the highlands where the product is created and denotes that the product as a sauce is also intended for dishes. Highland dishes are noted for their traditional fresh content and great taste, so the name answers to the definition of a brand which is characterised by having an identity, distinguishable and passes an information across to intended customers.
However to add to the brands identity, a slogan is provided to aid in delivering the brand message. The slogan recommended for the brand is therefore “nature’s gift to those who prefer healthy hot and spicy stuff”. This message aims to pass several messages to consumers, nature meaning freshness and traditional methods; healthy, to capitalise that the sauce provides health benefits to consumers. Lastly hot, with the increasing growth of hot sauce consumption in the UK (Creasy, 2012), it is necessary to emphasize the category of chilli sauce, either sweet or hot and spicy.
CREATING THE BRAND AWARENESS
The client stated financial difficulties and however cannot sufficiently invest in heavy television and billboard advertising, but can do some other form of advertising like direct sales to customers through their restaurants and some form of promotion by giving free samples to their customers to try at home. This would encourage word of mouth advertising and a bandwagon effect, but this would be based solely on how good the chilli sauce tastes. It is therefore suggested that since the product is intending to command a premium price, customers must be aware of the product value.
Food magazines and food shows also provide an opportunity to show forth how good the product is, the increase of food shows attributed to the increasing level of home cooking could provide a great opportunity to increase awareness.
CREATING A BRAND POSITIONING STRATEGY
The client has put a selling price on the product which is almost more than half of the most expensive chilli sauces in supermarkets like Tesco, Asda, Cooperatives, Sainsbury, and grocery stores. However the client intends to make sales in stores like marks and spencer and Waitrose, and health stores as well. The strategy suggested for positioning a brand like this HYLANDISH chilli sauce product is suggested that the brand is positioned by product features and benefits.
CONCLUSION
Branding is highly important for a company’s marketing strategy, because customers have increased their bargaining position towards products they purchase. The values of a product therefore must be expressed through the brand created, which means brands must communicate efficiently to customers. This can be done through different means like creating a strong brand identity
The market industry of sauces and condiment was analysed and was found that trends in consumer behaviour has changed and surprisingly increased the growth rate of the industry. UK residents tend to shift towards cooking at home rather than eating out, increasing the cooking sauce category of the industry. The rise of continental cuisines consumed by individuals in the United Kingdom has contributed to the immense increase of consumption of spicy foods.
However the competition still favours big players like Heinz, HP and Premier Foods. (Passport, 2013). Keynote (2013) analysis however notes that though the market is still owned by big players, owned label sauce consumption has also increased due to the influx of consumers going for cheaper products due to recession.
Brand building was analysed using the CBBE customer based brand equity pyramid, to providing insight to how a brand can be built, the highest point resonance on the pyramid provides the relationship a brand has with its customers, depicting the loyalty of customers.
From the analysis of branding strategies, a brand name was provided for the client and a brand positioning strategy as well. In conclusion a strong brand must have a good identity, make sure to provide awareness, attain a positive brand equity and lastly position itself rightly to be able to have a competitive advantage.
RECCOMMENDATIONS
Further recommendations to add to the strategy proposed for HYLANDISH. They are explained below.
Bottling and price: the products offers a premium price and looks to compete in a market driven by cheap prices, drawing data from the market analysis. Manufacturers are opting to smaller and innovative packaging. The expensive sauce found in supermarket is priced at £2.39/425ml on the average. However the product can compete in the high end sauce market which has a low share in the market and also the medium-low end of the sauce market. Suggestions include providing a smaller bottle to be sold at a slightly cheaper price like £2.20/195ml and still provide large bottles at the intended price of £4.50/425ml. In this way the product still maintains the quality of the product and compete on both ends. The logo and design on the bottle should depict what the brand stands for, since involvement in making a decision to purchase a sauce brand tends to be low. The bottle should also be transparent enough and clearly readable content as well (Fournier & Avery, 2011)
Celebrity advertising: minimal funds are available for advertising, hence it is suggested that the product should be advertised by providing free samples to celebrity chefs for their usage during food shows, this would boost the image of the brand.
Sales: the company’s idea of marketing to high end supermarkets like Waitrose, and M&S would help the company maintain the premium product they intend to sell to the public. However predictions from the market analysis sees that customers would keep performing most shopping activities in supermarkets and hypermarkets.
Increase awareness: the company can increase awareness by creating a website, so that consumers can learn more about the product and attributes. As brand knowledge provides consumers with a learning advantage, consideration and choice advantage.