Marketing Business Plan for Soy Protein - Assignment Example

? Marketing Business Plan for Soy Protein Executive Summary There is a huge demand for soy protein in the US markets as the consumers are getting more and more health conscious. Soy protein effectively meets the demand of low fat health product which also tastes good. The product has a great opportunity not only for individuals but to the retail sector also. Around 57% of US shoppers are considered to be health conscious, 73% of the shoppers are willing to pay more for healthy food products. The marketing strategy adopted by Soy protein is to cater to the health section of the target audience. The product would be distributed among the school, offices and retail outlets so to make them available at any point of time. Since there is a huge demand for the product, an effective three channel of management has been used, manufactures to distributors and to the retailers which will cater to the end users. Due to the demand for the product a huge amount of money need not be spent on the promotional activity. Only it should be made available at the each of its target audience like schools, offices and stores. As a result of the fact, a projection of sales in the US market to grow by 10% can be easily achieved. Also with consumers changing attitude towards health has made the product much more in demand in the recent years and is expected to grow by 5% in the near future. Thus the marketing plan of Soy protein takes into consideration the target market, the growing opportunities of the product along with industry and its competitor’s analysis, and an effective marketing mix to acquire a better market share in the US market and earn profits in the current fiscal. Contents Executive Summary 2 Part II: Marketing Plan 5 Business Review 5 Scope 5 Strength 5 Weakness 5 Opportunity 6 Threat 6 Product and Market Review 6 Analysis of the Product 6 Sales Trends for the Product 6 Consumer Behavior Trends 7 Pricing and Distribution 7 Competitive Review 7 Target Market Effectors 8 Target Market 8 Target Market Awareness 8 Target Market Attitude 8 Part III: Marketing Analysis: Market Characteristics/Trends 10 Market segment 10 Market trends 10 Market type 10 Product knowledge 11 Sales area 11 Part IV: Marketing Analysis: Competition 12 Part V: Target Market [CHANGES MADE] 14 Part VI: Marketing Mix [CHANGES MADE] 15 Reference 17 Appendix A 20 Executive Summary 2 Part II: Marketing Plan 5 Business Review 5 Scope 5 Strength 5 Weakness 5 Opportunity 6 Threat 6 Product and Market Review 6 Analysis of the Product 6 Sales Trends for the Product 6 Consumer Behavior Trends 7 Pricing and Distribution 7 Competitive Review 7 Target Market Effectors 8 Target Market 8 Target Market Awareness 8 Target Market Attitude 8 Part III: Marketing Analysis: Market Characteristics/Trends 10 Market segment 10 Market trends 10 Market type 10 Product knowledge 11 Sales area 11 Part IV: Marketing Analysis: Competition 12 Part V: Target Market [CHANGES MADE] 14 Part VI: Marketing Mix [CHANGES MADE] 15 Reference 17 Appendix A 20 Part II: Marketing Plan Business Review Scope The scope of this project is to create a marketing plan of Soy Protein in the United States of America and thereby capturing a decent market share and increasing its sales volume by 10% in USA. The project thereby endeavors to understand the potential strengths and weaknesses of the product which should be managed to gain advantage of the different opportunities and counter threats in the external market. Changes in desires and tastes of the target market and action of the competitors are studied in order to modify the product features so as to match the needs of the people. Strength Soy Protein has found increased use in regards to women in offering them large number of benefits across different stages of their life. It helps to improve the dietary and cardio-vascular positions of the women. Further the intake of Soy Protein has helped them in countering the effects of menopause and helps to prevent cancer and obesity related diseases (Montgomery, 2003, p.44). Weakness The product suffers from some minor weaknesses. Firstly the powder obtained from Soy Protein fails to dissolve easily. Secondly the product also renders an odd taste to the consumers. Thirdly the intake of the product is observed to render flatulence in regards to some people (Soya.be, n.d.). Opportunity The market for Soy Protein in United States counters huge opportunities in terms of both growth in both sales and revenue parameters. Out of the total protein market in United States which measured around $3955 million during 2007 the Soy Protein is held to contribute in a large manner. Thus the United States market reflects large amount of growth opportunities for the Soy Protein product. Opportunities are emerging in regards to innovation rendered in the processing functions that would help produce highly effective products. Moreover there has been a considerable shift in market demand towards the consumption of non-chemical or organic products (Soy 20/20, n.d.). Threat With the advent of crop technology the Soy Protein is largely being subjected to genetic modification. This happens to hamper its nutritional value and also creates allergies in certain individuals. This fact discourages the growth of Soy Protein in an extensive fashion in United States owing to rise of ethical and legal debates (Dharmananda, n.d.). Product and Market Review Analysis of the Product The Soy Protein is a vegetable protein mainly found in Soybeans. This protein acts as a potential substitute to the intake of animal proteins. This leguminous product is free of cholesterol and has low fat content. Further the product is composed of amino acids and different minerals with Vitamin B. it also has good fiber content (Montgomery, 2003, p.43). Sales Trends for the Product In United States the Soy Protein market depicts huge marketing and sales volume. The sales trend measurement for the 2004 period shows that the market grew to around 4.1 billion. This growth trend reflects a 5 percent growth from the previous year (Soyatech Inc. and Spins Inc., 2005). Consumer Behavior Trends While Soy Proteins is recognized as a healthy diet supplement to animal proteins, some consumers acceptance of Soy Proteins is limited due to its unfavorable taste and and the lack of proper knowledge of the product. Children are found not to favor the intake of Soy Proteins owing to unfavorable tastes. However the women and old age population also fail to intake needed quantities of Soy Proteins owing to unavailability of proper knowledge as to the varities available (Moon, Balasubramanium and Rimal, 2004, p.20). Pricing and Distribution In terms of pricing the Soy Protein products help in providing the consumers affordable healthy food items in comparison to animal proteins. The pricing of such food products are conducted based on stability parameters so as to avoid price fluctuations. Distribution parameters in regards to Soy Protein products earns effectiveness owing to the different types of production processes leading to the production of natural and synthetic soy protein in large volumes (Endres, 2001, p.45). Competitive Review In regards to competitive review the protein generated from milk products happen to render increased competition to the Soy protein market in United States. With large scale resources of dairy products the large scale availability and production of the same renders increased competition to the Soy Protein market. Raw and Processed products of milk like cheese, ice creams, milk powders and other such commodities tend to render increased competition to Soy Proteins (United States International Trade Commission, 2004, p.3.1-3.3). Target Market Effectors Target Market The Soy Protein has found a larger target market in United States which likes to consume the same being used in hamburgers and patties in substitute of animal proteins. Similarly other than the youth profile the Soy Protein is also consumed largely as a potential product by school children. The Soy Protein market in United States is found to grow from 1.4 MMT during 2000 to around 2.4 MMT during 2005. The rate of growth during the stated period is found to have risen by around 10.7 percent (Soyatech, 2006). This data shows that United States have become a substantial market for the Soy Protein. Target Market Awareness The target market for the Soy Protein Products comprising of women and children are increasingly made aware to largely consume healthy food products like Soy Protein. Large amount of consumer awareness is being made through increased promotions and product innovativeness The Council for Soy Protein based in United States works for the development of the food products concerning Soy Proteins and also works for the growth of the Soy Protein industry as a whole (Shurtleff and Aoyagi, 2008, p.218). Target Market Attitude The target market comprising children, women and old age people for the soy protein products reflect an increasing attitude of consuming low calorie and low cholesterol products. However the children and the women communities based in the target markets feel that the product needs to be favorable and must be of desired qualities. The women and old aged people suffering from coronary diseases and other ailments feel that taking resort to Soy Protein serves as an important substitute. Again in regards to the children the Soy Protein is increasingly consumed for it acts as a nutritional substitute (Moon, Balasubramanium and Rimal, 2004, p.20). Part III: Marketing Analysis: Market Characteristics/Trends Market segment The market segment for soy protein can be categorized into the following: Infant and child nutrition, Soy is a complete source of protein and it may help the kids to stay healthy and assisting in fight against obesity. For the aged people, maintaining a balanced diet is an important issue and intake of Soy Protein ensures a good health and prolongs the quality of life. For women, as they require a huge amount of protein in their day to day life activities. Also the use of soy is encouraged during pregnancy as expected women require the same benefits as other women. Soy protein acts as a substitute for Vitamin D and is useful for women who are sensitive to sun or do not enjoy outdoors. It is also an alternative for women who do not like regular milk. Market trends The market trend of Soy protein has shown a positive growth in the past years. With the approval of FDA, sales have increased from $1billion to $4.5billion as Soy has been linked with heart disease reduction. (Refer Appendix B) Market type Soy protein falls under the consumer markets and further it has been categorized into Fast moving consumer durables because of high volume, low unit value and fast repurchase. The product is used in the making of variety of foods which are may be found in dairy type products like beverages powders, liquid meals, infant formulas, in soups and sauces, breads and baked goods, breakfast cereals etc. Soy protein is an important market for consumers who love vegetarian food and does not prefer meat. The product is also available as coarsely chopped ground meats, the textured soy protein are mainly used. Thus it has been analyzed that for all food segments, soy based product have captured the market and the driving force for these products are the consumers choice of healthy eating which has helped the increase of its sale. Moreover the consumers the aware of the health benefits of soy protein. Product knowledge Soy protein has derived from soybeans and offers various health benefits particularly in women and children. Soybean contains no cholesterol and low fat. It is only vegetable food which contains all eight amino acids and also a good source of iron, calcium, fiber, vitamin B and zinc. According to a report, about 12000 food products were available which contained soy proteins and thus its sales rose to 82% in 1999 (Montgomery, 2003). Sales area Initially the sales area would be small; it would deal in with few retailers and gradually the operational market would increase to achieve the set target of a sales growth of 10% a year. The product can be supplied to school cafeterias, old age houses, women hostel and in local retail shops. According to a report of Soyatech, the Soy protein market is expected to grow at 7.4% per year. Heath and other key drivers have fueled growth of Soy protein and represented a CAGR of 10.7%. This trend is projected to continue as the need of protein in human diets is essential and with a low cost of soy protein, the industry is surely to grow worldwide and also in the US market (Soyatech, 2006). With a growth rate of 7.4%, it is possible to attain a decent market share and a sales target of 10% a year. Part IV: Marketing Analysis: Competition Porter’s framework of five forces would help the product, Soy protein to analyze the industry properly and therefore make substantial choices before launching it in the market. The five forces include rivalry among the firms, bargaining power of supplier, buyer, threat of substitute and threat of new entrant. The rivalry among the firms is high as there are traditional market leaders such as ADM, Cargill and Solae, which may not exhibit the issues of GMO and flexibility to response the price fluctuation that may drive the growth of new processors in this section and thus these Seecompanies would face a stiff competition from these market players (Soyatech, 2006). The bargaining power of the buyer is low because the customers are fragmented and usually have a little impact on price and product. The bargaining power of supplier is moderate as companies faces some amount of pressure from the supplier because of the cost they incur while switching suppliers. The threat of substitute in case of soy protein is high because consumers may go for other related health products which they think would benefit them. Kids might not like to consume Soy protein because of the smell and hence might go for some other product. Thus the threat of substitute is fairly high. The capital investment needed to set up a consumer product is quite high but also it cannot be denied that even with a small amount of capital, manufacturers can develop superior product. Therefore the threat of new entrant is low to moderate. (Refer appendix A) Soy protein has a high threat of substitute from its competitors such as ADM, Cargil and Solae which also deals in Soy protein. Therefore in order to stay ahead in the market, an analysis of its competitors would prove to be beneficial. Therefore with regards to this topic the strategy of ADM will be analyzed. Strategy: ADM has used the strategy of innovation in its product and with a global presence the company has become a market leader in protein solutions. Also the company has an extensive product line. Therefore ADM has used the leadership as well as the differentiation strategy. Objectives: the company’s vital purpose is to serve vital needs and thus the vision of the company is to become the most admired global agribusiness with values, responsibilities and serving the vital needs. The current strategy of ADM is to expand the size, volume of crops and value added portfolio. ADM mainly focus on Safety, sustainability, cost management and the ADM way. Assumptions: ADS has received awards for the most admired company in the food production industry by fortune magazine, best diversity company in 2011 and 2010 to name a few. The company is trying to expand more in other countries and expect to be the number one company in providing proteins globally (ADM-a, 2011). Resources and Capabilities: The Company has about 30,000 people who transform the crops such as corn, oilseeds, cocoa. With its transportation, storage and processing assets which are spread over more than 75 countries, the company connects farmer’s crop with the need of the global requirements. ADM are a member of more than 200 business and trade associations (ADM, 2011). Part V: Target Market [CHANGES MADE] The target market set for soy protein is children, women, old age people and the vegetarian people. Since the intake of protein is necessary in all stage of life, therefore the product is made available for all age groups. Soy Protein being a low cost consumer product, all income levels of people can consume it easily. Consumers products are made available for all the population irrespective of status, size, level of income, education etc. The target segment consist of children, as Soy is a complete healthy food and contains protein which helps kids to become healthy and assists in fight against obesity. Soy protein can be given to kids in form of supplements if they are allergic to dairy products. According to a report, in US there are more people of age 60 then under the age of 10, thus for maintaining a balance in the diet the aging people prefer having some proteins in their diet, thus soy protein has targeted this section because of high intake of protein required by the older generation. Women are the main and important target of soy protein as Soy protein offer benefits to women in particularly in their various stage of life. Some of the benefits include improved diet, prevention of cancer, obesity and other more benefits. Part VI: Marketing Mix [CHANGES MADE] Product The product in this report is Soy protein, a vegetable protein mainly found in soybeans and is an essential in day to day healthy living. Soy protein is a consumer product and is made available in every retail outlets. Place The product Soy protein being consumer goods is made available to the target audience which ranges from children to old age people. Therefore three level of distribution channel would be preferred, manufacturers to distributors to retailers. Being a fast moving consumer good, the demand for this product would always remain high so with a three level of distribution channel, Soy protein would be made available in the retail outlets, in school cafeterias, for older generation and also in offices targeting mainly the women. Promotion The most appropriate tool of promotion would be mass selling as the target audience indirectly comprises of all age groups. Thus the product can be advertised stating its special features and core competency. Other tool includes publicity and sales promotion. Soy protein can be tied up with other health related product and sample of it can be distributed to generate awareness. Since children are also a part of its target market the packaging can be made attractive with some added flavors as Soy generally does not smell good. In addition to it the product can also launch a mascot specially to attract the kids. This would indirectly help the product incur publicity and portray an image of healthy product Price With the right product, place and promotion, it is also important to decide on the right price which must consider the competition set in the target market. Soy protein price must be set based on its competitors pricing strategy because if the price is set at par consumers would prefer other substitute products. Therefore price of Soy protein is set at a competitors pricing so that the target group would make an effort to try the product at a same price as the competitors product. Reference ADM. (2011). Company Overview. Retrieved on November 18, 2011 from http://www.adm.com/en-US/news/overview/Pages/default.aspx. ADM-a. (2011). Recognition. Retrieved on November 18, 2011 from http://www.adm.com/en-US/news/recognition/Pages/default.aspx. Montgomery, K.S. (2003). Soy Protein. Retrieved on November 18, 2011 from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1595159/. Schermerhorn, J.R. (2011). Exploring Management. John Wiley and Sons. Soyatech. (2006). Soy Protein Market to Grow 7.4% per Year Through 2010, Says New Soyatech Report. Retrieved on November 18, 2011 from http://www.soyatech.com/news_story.php?id=152. Shurtleff, W. and Aoyagi, A. (2008). History of Cooperative Soybean Processing in the United States (1923-2008). Soyinfo Center. Soyatech. (2011). U.S. Sales of Soy-Based Foods Grow Despite Sluggish Economy, Increased Competition: Soyatech Industry Report. Retrieved on November 18, 2011 from: http://www.soyatech.com/news_story.php?id=23236 Soy 20/20. (No date). Soy Protein Processing. Retrieved on November 18, 2011 from: http://soy2020.ca/pdfs/Soy-2020-Protein-final.pdf Soya. be. (No date). Soya  -  Information about Soy and Soya Products. Retrieved on November 18, 2011 from: http://www.soya.be/soy-protein-powder.php Dharmananda, S. (No date). Issues Surrounding Genetically Modified (GM) Products. Retrieved on November 18, 2011 from: http://www.itmonline.org/arts/gmo.htm Soyatech Inc. and Spins Inc. (2005). Soyfoods: The U.S. Market2005 A Study by Soyatech, Inc. and SPINS, Inc. 5th Annual Edition. Retrieved on November 18, 2011 from: http://www.spins.com/assets/pdf/Soyfoods05.pdf Moon, W., Balasubramanium, S., and Rimal, A. (2004). Two Stage Decision Model of Soy Food Consumption Behavior. Retrieved on November 18, 2011 from: http://ageconsearch.umn.edu/bitstream/20096/1/sp04mo05.pdf Endres, J. (2011). Soy protein products: characteristics, nutritional aspects, and utilization. The American Oil Chemists Society. United States International Trade Commission. (2004). Conditions of competition for milk protein products in the U.S. market investigation no. 332-453. , Issues 332-453. DIANE Publishing. Appendix A Figure 1: Porter’s Five Force Model for Soy protein (Source: Author’s Creation) Appendix B: Figure 2: Sales Trend of Soy protein Year 1:2003 Year 2:2004 Read More