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Assessment Event 1 Knowledge Questions

Question 1

Source of information Internal / External Where can be sourced How it relates to forecasting
The business and strategic
objectives are the main
Internet research guideposts for the
Business and strategic
Internal Operational plans organisation to set its
objectives
Annual reports business paths and
development plans in the
long run.
It is absolutely critical for
organisations to make the
best possible use of both
Marketing plans objective and subjective
Marketing and Business
Internal Internet research information when
performance
Operational plans forecasting demand,
capacity, price sensitivity,
and other important drivers
of business decisions.
The market trends help the
Market analysis organisation to predict its
Comparative market
External SWOT analysis potential paths to reach out
information
Operational plans for the better business
opportunities.
Technological changes help
the business to identify its
Internet research technical requirements and
Changes in technology External
Technological analysis improvement opportunities
to facilitate its business
processes.
Businesses market products
or services through targeted
approaches to different
Market analysis segments of the population.
Demographic changes External SWOT analysis Demographics are the
Internet research statistical component of
marketing used to identify
population segments by
specific characteristics.
Social and cultural factors External PEST analysis Social and cultural factors are
Market analysis important to consider while
SWOT analysis creating and implementing a
marketing strategy of a
company. These often-linked
but somewhat different
factors have diverse effects
on the decisions of
consumers and buyers.
Basically, socio-cultural
factors are customs, lifestyles
and values that characterise
a society.
Economic trends can affect
almost every aspect of the
PEST analysis business operations, and
Economic trends External Market analysis therefore, it is important to
SWOT analysis consider every part of it such
as budgeting, operational
costs and requirements.
Governments establish many
rules and regulations that
guide businesses. Businesses
will normally change the way
they operate when
government changes these
rules and regulations.
PEST analysis
Government activities and Government economic policy
External Market analysis
legislative changes and market regulations have
SWOT analysis
an influence on the
competitiveness and
profitability of businesses.
Business owners must
comply with regulations
established by federal, state
and local governments.
These trends set out in
general how the specific
PEST analysis
industries and businesses
Industry trends External Market analysis
would behave according to
SWOT analysis
the particular time period or
seasons.
Information on the suppliers
for the business operation
would help to predict
PEST analysis potential requirements in
Supplier data Internal Market analysis terms of required costs to
SWOT analysis hire, acquire resources and
the involved costs to get the
right resources and
materials.

Question 2

Legislation Explanation
Australian Consumer The Act deals with almost all aspects of the marketplace: the relationships
Law 2011 between suppliers, wholesalers, retailers, competitors and customers.
An Act to regulate the supply, advertising and description of goods and
Fair Trading Act services. This Act constitutes the main law covering business behaviour in
NSW.
Privacy Act 1988 The information must only be collected if relevant to the agencies' functions.
Australians have a right to know why such information about them is being
acquired, and who will see the information.

Anti-Discrimination The Act prohibits unlawful racial, sexual and other types of discrimination in
Act certain circumstances and promotes equality of opportunity for all people.

Its purpose is to set up a scheme for the regulation of commercial e-mail and
other types of commercial electronic messages[disambiguation needed. It
Spam Act 2003
restricts spam, especially email spam and some types of phone spam, as well
as e-mail address harvesting,

Question 3

Australian Association of National Advertisers - The AANA represents the rights and responsibilities of
companies and individuals involved in Australias $30 billion a year advertising, marketing and media
industry. In the common cause of responsible advertising and marketing, the AANA today also serves to
protect the rights of consumers in ensuring commercial communication is conducted responsibly within
prevailing community standards. At a time of unprecedented change in advertising, marketing and
media, the AANA provides ethical leadership, advocates continuous improvement in commercial
communication practice, and promotes and protects freedom of commercial speech.
(www.aana.com.au)

Australian Marketing Institute (AMI) - The leading organisation for marketing professionals in Australia.
The Australian Marketing Institutes record of service to the marketing profession goes all the way back
to the institutes origin in 1933. Over the intervening years we have continually evolved to meet the
changing needs of marketers, delivering services to help members maximise their professional growth.
Today the AMI represents professional marketers throughout Australia, including practitioners from all
marketing functions and industries. Through our unified voice, the Institute has established strong links
with business, academia and government to become the voice of the marketing
profession. (www.ami.org.au)

Australian Direct Marketing Association (ADMA) - Australias leading direct marketing association. Since
our foundation in 1966, ADMAs mission has been to create an environment for the advancement of
responsible, effective and creative multi-channel marketing. During our history, the industry we
represent has been transformed technologically, legislatively and socially, placing increased demands on
marketers but also delivering new opportunities to connect with customers. (www.adma.com.au)

Australian Graphic Design Association (AGDA) - The Australian Graphic Design Association (AGDA) is the
peak national organisation for professional graphic designers. It was founded in 1988 to facilitate the
advancement of the graphic design profession in Australia. Our goal is the establishment of fair and
productive working relationships between graphic designers and their clients. (www.apsma.com.au)
Australian Professional Services Marketing Association (APSMA) - As a membership organisation for
marketing and business development experts in the professional services sector, the Asia-Pacific
Professional Services Marketing Association (APSMA) is committed to meeting our members needs
through personal development, professional development and industry expertise. (www.apsma.com.au)

Question 4

Software application Strengths Weaknesses


Problems in positioning graphics
Ease of use particularly with
precisely on the pages
Windows platform
Problems in editing graphs with
Supports a variety of charts and
SPSS limited graphical capabilities
graphs
Problems with importing
Ability to manage complex
external data in different
datasets
formats
Problems in positioning graphics
Ease of use particularly with
precisely on the pages
Windows platform
Problems in editing graphs with
Supports a variety of charts and
SAS limited graphical capabilities
graphs
Problems with importing
Ability to manage complex
external data in different
datasets
formats
Not able to produce complex
Use of functions to ease the
graphs or charts
calculations
Not able to do complex
Microsoft Excel Provision of simple charts and
calculations
graphs
Need to memorise functions to
Various formatting available
use them

Question 5

Statistical concepts, methods, techniques and


Example
reporting formats
The efficacy of conversion marketing is measured
by the conversion rate, that is, the number of
Conversion rate of leads to sales
customers who have completed a transaction
divided by the total number of website visitors.
Measures of central tendency Measures of central tendency can be used provide
a single figure that gives you a quick,
representative piece of information from a body of
data. There are several varying ways of measuring
central tendency. These measurement terms are
known as:
the mean
the median
the mode.
Measures of dispersion are used for describing the
spread of the data, or its variation around a central
Measures of dispersion
value, for example, to measure average
employees' salary dispersion.
Regression analysis is a statistical process for
estimating the relationships among variables. It
includes many techniques for modelling and
Correlation and regression analysis
analysing several variables, when the focus is on
the relationship between a dependent
variable and one or more independent variables.
Response rate is a measurement of the amount of
people who respond to a certain call-to-action.
Net response rate When marketers want to solicit a response from
consumers, they will distribute an offer to the
consumers.
The normal distribution, also known as the
Gaussian or standard normal distribution, is the
probability distribution that plots all of its values in
a symmetrical fashion, and most of the results are
Normal distribution probability curve situated around the probability's mean. Values are
equally likely to plot either above or below the
mean. Grouping takes place at values close to the
mean and then tails off symmetrically away from
the mean.
It is a shortcut method for investigating a whole
population. Data is gathered on a small part of the
Sampling
whole parent population or sampling frame, and
used to inform what the whole picture is like.
Measures of frequency and responsiveness of the
target market to research, for example, to
Speed of response curve
measure how effective a random marketing
technique is to people
Measures of frequency and responsiveness of the
target market to research, for example, to
Frequency grids
measure how effective a random marketing
technique is to people
Lifetime value of customers can be measured
quantitatively to show how much percentage the
Lifetime value of customers
business is able to retain against the total number
of the customers.
Lifetime value of customers can be measured
quantitatively to show how much percentage the
Net present value of customers
business is able to retain against the total number
of the customers.
Assessment Event 2 A & A Coffee Simulation

Task 1: Interpret Trends and Market Development

1.1 Statistical analysis of market data to interpret market trends and developments

Table 1: AUD vs USD Exchange Rate.


http://www.macrotrends.net/2551/australian-us-dollar-exchange-rate-historical-chart

Based on the table calculated from 2005 up to date, there has been a lot of fluctuation up and down
through the stated years. This would mean that the lower the figure is on the chart, the more AUD is
required to change to 1 USD. On the other hand, the higher the figure on the chart, the lesser AUD is
required to change to 1 USD. Looking at the history, the current exchange rate would be too critical if
USD is required to be converted from AUD, with additional costs to change to individual USD.
Table 2: Mild Arabica vs Robusta Coffee

The coffee prices in comparison between the Mild Arabica and Robusta Coffee are both showing
declines, but the Mild Arabica's decline is greater than the Robusta Coffee. This indicates that the
acquisition cost to get the Mild Arabica is relatively affordable and therefore the profitability level could
be improved by increasing the sales margin.

Table 3: Trends in coffee products in Australia.

The trends in coffee industry shows as above that there is an increasing concern in health and wellbeing
among the consumers. Demands in capsule coffee are also showing an increase, along with the single-
serve coffee sachets and bottled coffee drinks for quick grabs and convenience.
Direction

The trends in the coffee brewing and products among the consumers are getting more inclined to the
well-being consciousness and awareness. In addition to emphasising the wellbeing and such products
and marketing awareness to the public, A & A also leads the following criteria for its strategic directions
as well.

1. to retain market share in the distribution of its A & A hardware (equipment)


2. to retain market share in the sales of its consumables (raw coffee and pods)
3. to develop 10% market share of the cafe retail business.

Target

The board believes the following operations will need to be considered to achieve whatever the strategic
goals are:

Operations - to develop current stores to provide in house or take away brewed coffee
Sales & Marketing - to develop a range of marketing initiatives to support the growth of
whatever initiative is taken
Human Resources - to develop a new intern model to provide a ready source of labour for this
expansion
Manufacturing - to increase productivity of hardware, consumables
Logistics - to increase productivity in its warehouse and transport operations
Finance - to strengthen reporting procedures for financial viability and resourcing.

1.2 Analysis of market trends and developments for their potential impact on the business

Caffeine is a natural stimulant for humans and a cup of coffee contains enough to increase ones
metabolism before and during a workout. Having coffee before exercises enhances that effect and makes
people burn more calories throughout the day. With that in mind, people who regularly exercise seem to
drink bottle-blended coffee products prior training.

1.3 Quantitative data analysis to interpret comparative market data

Competitor 2015 Market Share 2014 Market Share 2013 Market Share
Roasted Amigos 24.2% 17.8% 13.4%
Mocha Del Mar 17.4% 14.6% 11.1%
Arabicana Colombia 11.9% 10.2% 11.4%
Caliente Canephora 8.1% 11.2% 13.5%
Magic Robusta 7.2% 8.4% 6.2%
Coffee Razzi 6.1% 7.2% 9.1%
Rooffee 4.9% 5.2% 7.8%
*A & A Coffee* 15.9% 20.6% 25.3%
Other 4.3% 4.8% 2.2%

Australian adults are overweight or obese More adults are overweight or obese than 1995

63% 10%
Australian children are overweight or obese Australias 2nd highest contributor to disease

Overweight &
25%
Obesity
More people living in outer regional and remote areas are overweight/obese than people living in
major cities

15%
Almost 2 in 3 Australians are overweight or 1 in 4 Australian children are overweight or
obese obese

1.4 Data analysis to review business performance

Majority of respondents (82 out of 100) stated that they drink coffee because they enjoy the taste and
need caffeine to stay focused. The remaining eighteen participants drink coffee every day to socialise
with others. The respondents offered a number of reasons for their decision to consume coffee
regularly:

Reasons Frequency Distribution of Respondents

health reasons:
increase daily fiber intake 5.5%
lowered risk of Type 2 Diabetes 2.7%
to increase the metabolism to burn more
81.1%
fat prior a workout
to improve fitness physical performance 89.0%
to get essential nutrients 4.8%
to inject antioxidants to my body 18.9%
a much better alternative to sugary hot
21.5%
chocolate

social reasons:
to wake up in the morning 87.2%
to socialise with people during break at
71.4%
work
to look cool drinking popular products 11.7%
enjoy having coffee and reading
newspaper, listening to morning radio talk
74.9%
shows or watching news early in the
morning
it is a cultural thing 25.4%

miscellaneous:
just for the taste, no particular reason 21.6%
smells great 18.3%
love to see latte art 6.8%
warms up in cold days 15.4%
stimulates my brain at work 75.4%
goes well with cigarettes 7.2%

1.5 Analysis of competitors to identify potential opportunities and threats

Strengths Weaknesses

Excellent brand awareness, strong brand image


and market leadership with current target
Lack of direct distribution in international markets
segments already well established in the public
and strategies.
Strong organisational cultures of cooperation and
High cost structure including service delivery,
lInterna

collaborative working and diversity


labour and maintenance
Innovative culture supported by high-class
Weak online presence making the business
employees and product analysts
unbalanced in terms of business presence
Omnipresence in major geographical areas in
Lack of effective financial budgeting strategies due
Sydney and many other regions across the
to budget overrun or under-allocation
Australian continents
Slow-paced innovation in terms of product
Executive management commitment and
introduction and customer attraction strategies
expertise for the business distribution and coffee-
related marketing materials

Opportunities Threats
Introducing new, more profitable products to The availability of substitute coffee selling business
attract more potential pools of customers entities into the market
Penetrating these new products into giant Lower cost competitors creating price
supermarkets (Coles, Woolworths, ALDI, etc.) discrepancies
Retiring less popular products to remove More creative products and marketing schemes by
External

unnecessary business costs and financial impacts competitors and methods such as cross-selling
Expanding into less competitive areas to create strategies.
more business strengths and strengthen the Projected success is likely to attract the interest of
foundation larger and more global competitors around the
Launching a counterattack to its main competitor world
by including in its product range brewed coffee Stronger branding strategies by the competitors to
using a variety of its in store raw coffee beans. create market sphere of influence and awareness

a. current situation of the business


Relative decline in the profit revenue level in the recent years
Rise of a new competitor with different products and concepts
Raising a concern to counterattack the new competitor's operation

b. trends of the market


Moving towards fast and quick grabs, that is, instant products
More emphasis on general and physical life well-being
Decline in the previously popular coffee espresso machines

c. opportunities and threats of the market


Opportunities

Introduction of online e-Commerce website to interact with the customers


More cross-selling opportunities with capsules
Promotional events to organise to attract more customers to sell more products

Threats

New ranges of equipment introduced by competitors


More features and functionalities by competitors
Possible decline in the coffee market due to the economic performance

d. organisations strategic direction


to retain market share in the distribution of its A & A hardware (equipment)
to retain market share in the sales of its consumables (raw coffee and pods)
to develop 10% market share of the cafe retail business.
e. strengths and weaknesses of the organisation
Strengths

Excellent brand awareness, strong brand image and market leadership with current target
segments already well established in the public
Strong organisational cultures of cooperation and collaborative working and diversity
Innovative culture supported by high-class employees and product analysts
Weaknesses

Lack of direct distribution in international markets and strategies.


High cost structure including service delivery, labour and maintenance
Weak online presence making the business unbalanced in terms of business presence

Types of risk

There are many different types of risk that risk management plans can mitigate, these risks can vary from
business to business and there are some risks most businesses have in common like:

Compliance risks
Employees risk
Environmental risks
Financial risks
Health and safety risks
Political and economic risk
Strategic risk

Causes of risk

There are three basic causes:

Physical causes, it is a tangible or material item failed in some way


Human causes, it happen when people do something wrong or did not do something required.
Organisation causes, it is a system, process or policy that people use to make decisions in doing
their work is faulty.