Marketing Strategies LAP Health the Product a Healthy Breakfast Substitute - Case Study Example

Marketing Strategies and Section # of This report analyzes and documents a part of the marketing plan of LAP breakfast alternative drink It begins with a background of LAP and goes on to establish a target market for it. This is followed by setting out objectives for the product and finally identifying the 4Ps of marketing for it with explanation and ideas. Introduction My organization is LAP Health and Beauty Pvt Limited and the product is a healthy breakfast substitute called LAP. It is an organic, low fat and high protein diet component for everyone. The organization is in Sydney whereas the manufacturing plan is near soybean plantation. Factors identified that can affect the marketing strategy of the firm include; the marketing environment which includes everything from lifestyle changes to consumer education and the economic environment. Other than that the demographic environment with a special consideration to those who are interested in convenience eating , the cultural, natural, technological and political environment all play a key role in shaping the marketing strategy of this firm. Target Market The target market is an important consideration for any firm selling whichever product. A target market is the group of people for which a certain product is intended. It could be an age group for example products targeted for children such as Nesquik- a milkshake, a social class such as products targeted for the rich and status conscious like Rolex watches and a particular gender like Maybelline- it is a cosmetic targeted at women only. Other factors can also be brought into the picture and often integrated with other variables to form a target profile of the consumer. It is essential that the right target market is targeted so as to achieve the relevant objectives. If the right target market is not targeted any amount of promotional effort will not achieve marketing objectives and all efforts will go to waste. The target group for the product includes people who are health conscious and who are able and willing to invest in their health. They are also people who are willing to pay a premium price for the product therefore being loyal to the product. These are people who want a convenient lifestyle and are looking for on the go breakfasts which serve their nutritional purpose but are still not heavy on the stomach. The rising health concerns amidst the general public can be capitalized on and used for this purpose. It is expected that the target market will have some attachment for the product even though they have not been educated culturally on careful health choices.3 Market segmentation is the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix. Initially the world began with mass marketing. Products were targeted to anyone and everyone without any changes and modifications. This is exemplified by Henry Ford's model T example; ' in any colour they want it as long as it is black'. With time marketers have learnt that not all consumers are alike and they have different needs and wants. They need to be targeted differently and given different offerings to appeal to their taste. There are certain bases for segmentation that can be used to give a coherent and homogeneous cluster of individuals. These include geographic segmentation, demographic segmentation, psychographic segmentation and use-related segmentation etc. Not all bases are used at one time and only the relevant ones are considered. 9 The relevant segmentation bases for this product include demographic segmentation, psychological segmentation, and psychographic segmentation, use related segmentation and benefit segmentation. Therefore demographically the target market profile that we are looking at is an age group of 16-25, male and female, single and usually studying or just started working. Other than them young executives who have a busy and hectic schedule and do not have time for breakfast are also a part of the target market. These are young people who are relatively well off and are usually so busy that they have little time for 'frivolities' like breakfast. Other than that these are people who belong to SEC A and B are highly health conscious. The personality profile of these people is such that they believe that they have to be healthy in order to look good and this comprises their major motivation to consume a healthy breakfast. They are loyal consumers because LAP gives them a chance to live healthy along with maintaining their fitness levels. They derive a particular benefit from LAP and that is the feeling of being healthy, smart and slim and that of hassle free food.1 Marketing Objectives for the Organization The marketing objectives set out targets for the organization which it wishes to achieve. These are non-financial market metrics and they are important because they shed some light on underlying issues faced by the company that are not easily seen my financial measure. Marketing objectives are essential because the provide the platform of where to go for a company. 8 To raise consumer awareness about healthy, breakfast alternatives and convenience options by 20%. Results will be measured with the help of dipstick studies conducted before and after the awareness programs. The awareness program will last for six months and will involve extensive media coverage and direct consumer contacts. To achieve $ 2 million sales in the first six months. Since the product is for $ 20 this would mean unit sales of 100,000 units. 80% of which would come from the core-target market of 16-25 while 20% can be attributed to the spillover effect.4 To capture 6% of the organic foods market within a year. To create an image of being a premium product and to acquire 2% hardcore loyalists from among the target market within one year. The loyalty will be measured by switching studies conducted at the end of an year. The Marketing Mix The marketing mix is a combination of a product, how it is distributed and promoted and its price, together these four components of strategy must satisfy the needs and desires of the target market and at the same time achieve the organizations marketing objectives.7 Product Strategy The product LAP is a beverage with the following qualities; it is high in protein, low in carbohydrates and fats. It is a breakfast alternative therefore one can consume one bottle of LAP instead of having breakfast. It provides all the essential breakfast nutrients including soybean. Antioxidants are a main component of the drink which are essential for an increased metabolism, maintaining a feeling of fullness thereby leading to the consumer getting hungry all the time. In addition to this it will also provide an important diet component called dietary fiber. The product is of high quality to ensure that there is an image of premium attached to the brand. It is to be stored at room temperature and will have an expiry time of 2 weeks. It is thick and creamy and gives a perception of being good in quality. The highest quality control standards are employed to bring the product alive. The packaging is such that the product has a seal on top of it and is covered in parchment. It is a plastic bottle for half a litre which has a screw cap on. The packaging is transparent to give a perception of purity and cleanliness. In the middle of the bottle there is a label saying 'LAP- the healthiest breakfast on the go'. The label is orange and blue in combination giving a feel of energy and enthusiasm. The bottle is shaped like a Lucozade bottle sleek and sporty. It is cylindrical from the bottom and slightly turned in from the top. Its benefits include convenience, being able to provide hassle free breakfast on the go. No preparation and cooking time involved. The packaging of the product will be environment friendly, made from recycled material which would be biodegradable. In this way it would be serving an important role in the society by making things environmental and nature friendly aura around the product. It also serves a huge corporate social responsibility initiative.4 Time is also not wasted in consuming the product as you can have it anywhere, while doing anything unlike a proper breakfast. Other than that it is a natural product which provides health benefits and an act9ive lifestyle to its consumers. It has a nutritional benefit attached to itself. It can also be seen as a drink providing instant energy and gratification. The product can be exchanged or returned if there are any signs of a faulty product. The product is a shopping item. It is a grocery shop item which will be bought as part of grocery shopping or even on the go shopping. People may stop by and buy this drink when they are heading to work and they haven't had breakfast. The product is currently placed on benefits level of the brand value pyramid. It tells the consumer what it can do for him. Therefore it is on the second niter of the brand value pyramid. It is positioned as a filling, nutritious and healthy drink for people with an on the go lifestyle and people looking for convenience in their lifestyle and eating habits. It comes under the category of breakfast alternatives and not beverages. This is because it provides a lot more than any ordinary beverage. 2 Price Strategy The price is currently based on benefits. It is priced slightly above its competition to give an image of quality and premium pricing in order to generate brand loyalty. Other breakfast alternatives both drinks and energy bars are priced between $10- $12. The brand LAP is therefore charging a premium for its superior quality and wonderful health benefits that it provides. Since the product is superior in terms of quality its price is also kept keeping in mind essential margins and the profit making objective. However, this is not the main determinant of the price and essentially there has been competition-based and benefit based pricing for this product. Prices are sometimes set in relation to the market alone. Therefore prices are often set in relation to the competitor's products. The marketer conducts an analysis of the market and the products shaping it, and therefore in relation to those determines his own selling price. Many firms price their products below competition in order to rapidly establish their presence in the market and make quick sales. On the other hand is pricing above the competition to create an image of a superior product offering. 4 The product in question ' LAP' is doing exactly that. Pricing above competition in order to create an image of high quality and reliability thereby leading to brand loyalty and repeat purchases. The price strategy is such that it is not market penetration. Market penetration is when products are priced below competition so that they get huge sales and are able to penetrate the market. On the other hand a market skimming technique is being used here. Since the product is different from its competitors in that it is a completely natural and healthy diet supplement unlike others which are merely energy boosters with a lot of chemicals, it can price its product above that of competition. Mostly such an approach is undertaken in order to recoup technological costs; this technique is being undertaken firstly in order to recoup all the research costs that have been incurred and additionally create an image of being a superior and herbal product.4 Currently the product is competing on a non-price basis. This is because if it competes on price it will be a sheer loser due to its high price. Price is also never a sustainable point of advantage of differentiation. Therefore the competition is on a non-price basis such. On the playing field of attributes and benefits which are the core of the LAP drink. The drink leaves no room for longing or desire. It is a perfect, complete and nutritious drink therefore competing on image and benefits now. Place Strategy Another component of the four Ps of marketing is the distribution of the product. Considering that the above mentioned product is a consumer product which in not intended for a niche market in particular, its availability is a key issue. Before the distribution in place a place for the manufacturing plant and an office must be determined. The manufacturing plant should be essentially close to the production site. This will allow saving of transportation cost and will prevent raw materials from getting stale or old. Since this is a food product and the image of being healthy must be maintained it is important that such considerations be given due attention. The head office will however be in the capital city. 4 This is because this is the hub of business activities and presence in the business hub is necessary to establish a sustainable and dominant position in the market. The administrative centre will be placed in Sydney from where all other operation; other than manufacturing will be carried out. Distribution will also be handled from Sydney because this product in intended for urban rather than rural centers. Being at the business center will reduce costs and make distribution easier to the required outlets.10 Distribution is a key aspect of the success of a certain product. If the product is not available at the right place and at the right time, it is an indication that it is time to close down your business or get your distribution sorted immediately. There are two key aspects of distribution. These include availability and visibility. The product must be on the store shelf for the consumer to buy it and it must be in such a location that the consumer can see it clearly. Many brands therefore books special aisles in modern trade stores in order to acquire better visibility. Since it is a known fact that a lot of consumer purchases are instantaneous and not predetermined it is essential that shelf space and point of sale displays and promotional material be monitored. This will be further discussed in the promotional aspect of the four Ps. 11 Since the product is a food product ordering on the internet etc won't work. Instead for this product one must go the retail way. The initial stage of product distribution will ensure a very direct channel of distribution. From the seller LAP comes directly to retailers without the use of middle men and then consumers buy it directly from here. When demand and in turn sales grow such a change will propel the distribution channel to change and include wholesalers in the picture to make the work of the distribution department and the make the arrangement proper and hassle-free. However, currently with the initiation of LAP the direct setup is quite adequate. Product availability should be ensure at all big superstores. For specific targeting of SEC(Socio Economic Class; based on education and occupation )A and B and health conscious people LAP should be available at stores near gyms, parks and universities. 4 It should be available in university canteens because a lot of students come to the university without having breakfast and they would be glad to have a chance to have LAP before classes begin. Other than stores, kiosks can be set up for LAP at metro stations, train stations and bus stops, so that people can grab a bottle while on the go. These kiosks will be shaped like a LAP bottle and brand ambassadors representing LAP will be selling the product. They will be wearing orange uniforms to give an image of perky, fun and freshness. Such an approach should be used only initially to make people aware of the brand, its benefits and uses. Kiosks will communicate the brand message and therefore should only be existence for the first five months of the product launch. However, later it should be ensures that LAP is available at all vending machines on the locations mentioned earlier.4 Promotion The promotion of the product is another aspect which should be given a lot of attention. This is because the awareness levels about healthy breakfast alternatives are pretty low, secondly because LAP is a new product it is essential that initial levels of interest be created through awareness. However to create this awareness a complete three sixty degree approach to communication should be followed. It is important that people not just know about the product but be strategically aware of it.5 First of all mediums of communication must be decided. It is important that LAP's presence be everywhere, in order to create a big impact. A television advertisement depicting the LAP benefit and highlighting its convenience, nutritional and true to nature features must be made and aired. Care must be taken that this advertisement be aired during programs which the 16-25 market watches such as music shows, game shows and certain soaps. The channels must also be selected keeping the target market in mind. In addition to this billboards should be put up at various areas mostly during young people's hangouts, university and colleges as well as outside offices. Although working people are not our primary target market, they form a huge chunk of our secondary market, people who live life on the go and are in need for convenient and healthy foods. The third medium to be used is youth magazines and fitness magazines. Lastly, radio and internet are popular mediums for the youth and these too should be explored. Spreading word through social networking online communities is a good idea to reach the youth as well.4 Second when deciding on a synchronous message it should say something like 'giving you health your way' indicating both an idea of convenience and health that consumers would like and appreciate. There is a reliance on advertising ; firstly because its not b2b marketing, neither is it industrial marketing, therefore to appeal to consumers at their level advertising is essentially needed. Personal selling will also be done but on a trade level only where the product will be sold convincingly to retailers and they would be persuaded to assure the best maximum retail space and visibility for LAP. Another aspect of promotion that is very important in this case is that of public relations. This is because health is a concern for many and is a social cause. Any product which has a health message can create hype and generate awareness through that general platform. To use this medium; articles must be written detailing the importance of breakfast as the most important meal in the day and encouraging healthy breakfast habits in people and there should be content integration in television program health segments endorsing the message of healthy breakfasts.6 Conclusion LAP is a breakfast alternative which is intended for a target market of sec A and B, age group 16-25. It is intended for people who are on the go and are health conscious. They would appreciate hassle free breakfast options. The ideal consumer would be a student or someone who recently started working, who does not have too much time but is still motivated to remain healthy as he feels that being healthy is part of a positive self image. The marketing objectives for the product including raising awareness in people by 20%, capturing a market share of 6%, creating brand loyalty and achieving $2million sales. Keeping the marketing objectives in mind the four Ps of marketing have been designed. The price factor focuses on pricing the product above competition so as to create an image of a superior product offering with high standards of quality. Secondly, the product factor focuses on what the product is going to be like. LAP is a breakfast alternative drink which would have a transparent bottle with an orange and blue LAP label. Its benefits include providing a healthy and convenient breakfast alternative. The business is to be located in Sydney, however soy being a key ingredient the manufacturing plant has to be near the soy farm. Other than that methods of distribution include mainly retail as well as experimental kiosks outside universities and young people's hangouts. Lastly, promotion will ensure heavy presence in all mediums with a synchronized message according to the principles of integrated marketing communication. Bibliography 1. Armstrong.G and P.Kotler.( 2006). Marketing: An Introduction. Prentice Hall 2. Berman. B and J. Evans. (1982). Marketing. Collier Macmillan Publishers 3. Hisrich.R. (2000). Marketing. Barrons Educational Series 4. Kotler, P., L. Brown, S. Adam, S.Burton, & G. Armstrong (2007). Marketing 7th Edition. Pearson Education Australia 5. Kotler.P. (1984). Marketing Australia and New Zealand. Prentice Hall 6. Luther.W. (2001). The Marketing Plan: How to Prepare and Implement It. AMACOM Div American Mgmt Assn 7. Sandhuesen.R. ( 2000). Marketing. Barrons Educational Series 8. Thomas.M and J. Stapleton. (1998). How to Prepare a Marketing Plan: A Guide to Reaching the Consumer Market. Gower Publishing Ltd. 9. Trout.J and A.Ries.( 1986). Marketing Warfare. McGraw Hill-Professional 10. William.M and O.C.ferrel. ( 1983). 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