Marketing Strategy Plan: Christmas 2011 R. Twining and Company Limited - Essay Example

? Marketing Strategy Plan: Christmas R. Twining and Company Limited Word Count Excluding Summary and Appendices - 2913 Executive summary This marketing strategy plan is launched to designed an effective approach for Hull, UK market to increase the market share and profitability of Twinings, a renowned and reliable tea brand. The plan will investigate the current standing of the company in UK an especially in Hull. However, the primary purpose of this plan is to devise a marketing strategy, which can help Twinings to increase its market share in Hull and thereby bridge the wide performance gap vis-a-vis other popular brands. Initially, the marketing strategy plan presents a SWOT matrix. The matrix provides an overview of the internal strengths, weaknesses and external opportunities and threats to the Twinings. Based on the SWOT analysis appropriate marketing objectives are set for the target market of Hull. The market segmentation is grounded on the demographic facts of Hull population that is dominated by young and middle age working people. Various marketing strategies are discussed at length to find out a best market mix that can help to achieve the marketing objectives. The most important objective of this marketing mix is to increasing the market share for Twining based on an aggressive promotion strategy. Twinings is investing a handsome amount on the media campaign to win considerable market shares within Hull using Christmas greetings at its forefront. 1. Introduction In today’s highly competitive business environment, a marketing strategic planning can play a decisive role in maximization of market share and profitability. Capitalizing on social and cultural events is an important corporate strategy to realize marketing plans. (Perreault, 2007). Christmas in Great Britain is a serious opportunity for businesses to hit target market segments and to ensure increased corporate profitability and competitiveness. This marketing plan is designed to augment Twinings rich experience of UK markets through a concentrated insight into marketing strategies. The plan will catch on the opportunities through better marketing mix, communications, promotions, pricing and other marketing manoeuvres within Hull in Christmas 2011. (i) Historical Background Twinings enjoys a history of industrious pursuit of success. The company has now become a part of UK tradition where its presence ranges from daily life to royal ceremonies. Twinings has always come up to the challenge with it finest tea collections to combat daily hectic routines of men and women while keeping in touch with hearts through its custom made commemorative tea blends for Royal marriages. (Twinings, 2011). (ii) Mission Statement Twinings mission is to provide finest blends to millions of tea lovers around the globe while fulfilling the requirements of Corporate Social Responsibility (CSR). Twining’s aim was to turn a simple passion for tea into the nation’s favourite beverage. (Twinings, 2011). Twinings readiness to engage itself into the systems of governance, regulation and responsibility has instigated a range of collaborative efforts with renowned international organizations. Twinings membership with Ethical Tea Partnership (ETP) has resulted in serious effort to make standards, based on the UK Ethical Trading Initiative and the International Labour Organization conventions. (Ethics, 2011). 2. SWOT Matrix Strengths Weaknesses 1. Customer loyalty and goodwill 2. Brand image and quality heritage 3. Competitive strength in tea market 4. Assorted flavours to suit diverse customer range 5. Use of innovative technologies 1. Slow corporate growth in terms of market share (Appendix 1) 2. Downward trend in net income (Appendix 2) 3. Premium prices in a period of economic recession. 4. Dependence on external suppliers 5. Rise in operating costs Opportunities Threats 1. Christmas a bumper sales season 2. Supportive Age Structure (Appendix 3) 3. Tea a natural respite for working and retired people 4. Targeted and personal advertising 5. Conducive climate for hot beverages 1. Price war by competitors 2. Under utilization of old population 3. Suppliers manoeuvres for profit maximization 4. Challenges of cheaper alternatives 5. Excess of competitors 3. Marketing Objectives The purpose of defining marketing objectives is to set clear and realistic targets for marketing managers in terms of increased market share, time to achieve this increase against a predefined scale. Twining is already operational in Hull, however, the higher management may safely plan to increase its market share by 5 percent in a last quarter of 2011 i.e. Oct-Dec 2011. This is a realistic objective in the presence of tough competitors like Tetley and PG tips and may contribute a reasonable increase it the overall market share, recorded 11.2 last year. (Appendix, 6). Because Twinings is already present in the market and the target customers are familiar with the range of products to be used in the Christmas campaign, Market penetration strategy is selected for the implementation of the plan. Strategically, Twining will focus on increased market share through increased product use and increased frequency of use. (Lamb, Hair & McDaniel, 2010). 4. Target markets This marketing plan focuses the demographic and behaviouristic variables to shape target market segments for Twining in Hull. The plan will engage more than 80 per cent population among which more than 65 percent belong either to employed group or to working class. Working people reliance on tea as a preferable solution for stress and pressure can influence the market share statistics. Moreover, after working hour they might chose to intake a cup of tea with swift releasing agent. Similarly, the retired and old aged people can find a good time enjoying a flavoured tea of their choice with newspaper and at news. This knowledge of end-user can be utilized to predict customers’ behaviour and can leverage the formulation of product offerings and promotion details accordingly. Correct target market identification can result in increased market share, revenues and profitability for Twinings through better customer acquisition and retention. (Lake, 2009). Hull market is planned to be primarily focused for young working class specially health conscious women falling in the age bracket of 20-40. This market segment can determine major increase in sales because of their role in decision-making. The old retried population is also helpful in the stimulation of goodwill and heritage value that Twining enjoys because of its presence in the market for at least three centuries. Twining can charge premium price in the target market with 53 per cent of Hull population falling in social classes of A, B, C1 and C2. (Social Grade, 2011). (i) Hull Age Structure Age is a major factor in determining the target markets. The young segment of the market predominately belongs to working people and represents over 65.5 per cent of Hull population. (Hull City Council, 2011). Women constitute 49.4 per cent of 263,000 persons in Hull. (Appendix 4 & 5). The second important segment is aged population, which forms 16.3 per cent of the overall population. (Hull City Council, 2011). Therefore, the target market for the marketing plan represents 81.8 percent of the Hull population. (ii) Market Segmentation Businesses cannot afford to target population ambitiously. There has to be a rational segmentation based on consumer needs and wants as well as the business capacity and capability. In most cases, businesses have to identify most important segments that can generated maximum revenue within available resources. Consumer markets are essentially influenced by cultural, social, personal and psychological stimulus and value groups can be formed to focus on target market. (Kotler et al., 2009). However, consumer markets are normally segmented based on demographic, geographic, psychographic and behaviouristic variables. (Dibb et al, 2005). The product offering, promotion strategy and product positioning all depend on the target market. 5. Product / Brand Positioning Healthier life demands smart choices. Only Twinings know how to set you free of a whole day’s fatigues and make you happier and comfortable. Yet at a very special price and a surprise Christmas offer. Twinings need to reshape its image in the mind of Hull target consumers and tea lovers. The customers presently recognize Twinings brand as a market competitor should be persuaded through advertisement and more focused media campaigns to accept Twinings as their preferred brand. Similarly, the best mix of quality and price should promote consumer groups that prefer Twinings to consumer groups that insist on Twinings brand. Marketing plan while following a market penetration strategy offers a handful options to play with brand image repositioning. Events like Christmas may provide a fantastic opportunity to restructure the Twinings products image in consumers’ mind. Repositioning is all about the consumers’ mindset, it has nothing to do with the product. It requires reinforcement of brand loyalty, introducing new applications of the same product, drawing cognitive, easy to understand and perceivable differences in quality and price when a product comparison is drawn. The repositioning may catch on attributes that may attract the attention of health conscious customer segments. Similarly, the class of the product being a Queen Warrant Holder and brand image built and sustain through centuries may arouse several stimulus that can play pivotal role in final decision and product selection. 6. Marketing Mix Marketing mix is the major determinant of a successful marketing plan. The purpose of the blending product, price, place, and promotion strategies is to identify and a perfect mix that can best suit a target market. The success of the marketing plan is almost sure if a correct marketing mix is identified. (Jain, 2010). Moreover, each element of marketing mix is equally important in the achievement of marketing objectives. McDaniel & Gates (1998) describes this interdependence of 4P’s beautifully and states, “Any mix is as good as its weakest component.” A strategy laps in any of the P’s can bring about devastating results for the whole market plan. (i) Product Twinings products line depth and product mix width leverages marketers to produce a very flexible product offering. Twinings is in Tea market since 1706 and it has introduced several types of the tea and flavour blends. This has extended both the product line depth and product mix width. Moreover, the depth and width in types and varieties can be used to prepare a best product offering depending on the peculiar consumer group needs and demands. The overall product line length of Twinings is above hundred and each product line depth offers special attributes to suit the requirements of a carefully targeted consumer groups or target markets. (ii) Pricing Strategy Twinings enjoys a reputation where it is not bound to curtail prices to ensure competitive advantage over rest of the products in target market. The Twinings prices are already competitive with respect to existing major competitors PG Tips and Tetley. However, Christmas market strategy demands a special price discount to show a token of its attachment with public sentiment on such a special event. At the same time, the discount must be reasonably adjusted to ensure increased sales in various product lines. The discounts must also be offered to ensure that the ultimate objective of 5 per cent increase in market share is realized. Twinings brand loyalty and goodwill provides it the advantage of charging prime prices over the products that belong to a special class of society. This elite class is more interested in sustained product quality, availability and any upgrades that may be required to incorporate latest research findings in the preparation, blending and packing of the tea. Discounts seldom instigate the purchase decisions for this class of customer. The under discussion marking plan is designed with more 16 per cent of A, B and C1 clients, some of which may follow this pattern for behaviour in their purchases. However, discount may still be a factor in their decision if other competitors have adopted a sharp price drop policy to attract a major market segment. This strategy may be adopted to increase the market share without any profitability objectives. Twinings price policy should carefully assess and profess the customer behaviour relative to marketing strategies that may be adopted by the competitors. Keeping in view the market segments targeted in the plan a variable discount can be introduced for various consumer classes. A small discount for high profile product line and high discount for low profile product line can provide appropriate stimulus to identified consumer segments in the target market. Christmas is a bumper sales season in UK. Varley (2010) observes, “The most important seasonal influence on the UK retail market is Christmas.” A general concept that is established over the years is that peak sales time before Christmas that starts in last quarter of every year, falls considerably in January and February. (Frumkin, 2010). Christmas sales are major contributor for most of the business and can be decisive in meeting sales and market share targets. Therefore, Twinings need to catch the seasonal opportunity in the last quarter sales for the year 2011 through Christmas discounts and special offers. a) Discount Offerings This marketing plan will introduce ?1 and 0.5? flat discount at each 500g purchase for the whole range of low and high profile product lines respectively. The discount will be applicable on light and heavy packaging at the same ratio. In order to encourage bulk purchases an added discount of 0.25? will be applicable on special Christmas double packs. Keeping in view the seasonal bulk purchases an added discount of 0.5? with special packaging to support at home storage for long period will be applicable to all packs of more then 2Kg. This discount strategy will encourage bulk purchases for winter season and Christmas consumptions. Moreover, it will play a pivotal role in increasing the market share of Twinings. (iii) Place - Target Market Climate As far the location of the Hull is concerned, it is supportive for the increasing sales of hot beverages. Although, the winter is not as wild as it was last year by November 25 and mild winter days are predicted with an average temperature of 7C with little more cold air at night in Hull by the time Christmas is arrived. (Daily Mail, 2011). Predictions of a white Christmas from UK met office further increased the chances of snowfall on Christmas. (Met Office, 2011). As a result, consumer may like to store sufficient quantities of convenience products like tea, meat and other eatables. Conducive weather conditions for hot beverages may widely boost sales and demand curves during Christmas. The joint impact of Christmas and winter season creates a big window for Twinings to achieve its market share and profitability targets. (iv) Promotion - Communication Strategy The communication strategy will focus on induction of new customers through increased post purchase satisfaction of existing customers. The brands promotion and achieving the level of customer satisfaction where brand insistence follows will be the core drivers for the communication strategy. The communication strategy will portray and reinforce the Twinings’ image as a class and generation representative to a level where psychological association between the brand, class and generation may establish and dictate purchase decision. This strategy will rely on the existing goodwill and brand image to further strength it in the minds of target consumer groups. Discount offer recognition and details will form only a short part of the communication campaign because it is a limited time offer and mainly offered to maintain market competitiveness and increased sales in last quarter. The communication campaign will blend Christmas greetings in a seasonal background of winter. The stress of the campaign will remain on Twinings relationship with the society. The theme of partnership with target market will instigate a sense of brand ownership among audiences and viewers. a) Theoretical Modal Theoretically, right from the initial engagement of consumers’ attention to the purchase decision using interest and desire as being the drivers for the decision impulse, (Janoschka, 2004) pull policy will remain the modal of communication. The brand image will be woven into the theme and will only be voiced or text to conclude in a single relationship and mutual interest phrase towards the end of communication. The campaign will not use any emotional appeal because the Twining tea is a convenience product and rational decisions are primarily taken in such purchases. b) Media Mix The media campaign will engage target customers through all contemporary communication means. However, the stress will be laid over the fast means of communications specially television, radio, internet and personal emails. Magazines, professional journal and newspapers will be used as secondary sources to create a vast and encompassing impact of the media campaign. c) Time Factor in Media Campaign The media campaign has to cater for the time factor carefully because marketing plan will last for only three months. The frequency of the media campaign will be higher in the initial phase, which will last for 15 days. Moderate repetitions will follow for the Next 30 days and the last 45 days will consume maximum budget of the campaign. Secondly, the media campaign is required to be aligned with primary audiences’ daily schedule. As marketing plan is primarily focusing working class therefore, campaign will concentrate at evening hours and weekends. d) Budget Media Campaign is at the core of any market planning and to gain market share increase in a highly competitive market this plan has adopt an aggressive media policy with a heavy budget of 30 million Pound Sterling . Budgetary details of the media campaign are provided in Appendix # 6, Appendix #7 & Appendix #8. 7. Implementation and Control Implementation and control of a marketing plan is almost everything a company does to achieve the marketing objectives. It includes human resource control, design, development and implementation of various processes, these processes may include the production, supply and delivery processes. Moreover, control may include the control of application software and any other administrative control that may help to achieve marketing objectives. (Bauknecht, Proll, & Werthner, 2005). Twinings has a strong and mature mechanism of internal processes and procedures. These processes have evolved over the history of Twinings. Multiple control mechanisms are in place to oversee any discrepancy in processes or violation of laid down procedures. These control mechanisms include human, mechanical and digital subsystems and various other technologies to investigate any infringement and to implement the predefined remedial action plan. This marketing plan will utilize the existing implementation and control system for the conduct of its operations in Hull. 8. Conclusion The marketing strategic plan is an important business document. Twinings SWOT analysis had shown its strength in market therefore this marketing plan has not introduced big price cuts. The plan has instead used the demographics of the target market to increase its market share and profitability. The average age of 35, health conscious 50 percent ladies, 65 percent people falling in the age bracket of 20-40 and 16 percent retired and old aged people are some major and significant indicator in Hull population statistics that offer big corporate opportunity. However, the plan has spared a decent amount for media campaign because of it ultimate importance in this age of information. Under the circumstances, the marketing strategy plan is expected to achieve the corporate objectives. Appendix 1: Table showing the % brand share that tea companies share within the market. Appendix 2: Figure showing the change in Twinings reported figures over 2006-2010 Appendix 3: Figure Trends in the age structure of the Hull and UK population. (Source: Hull City Council) Appendix 4: Population Trends in Hull. (Source: Hull City Council) http://www.hullcc.gov.uk/pls/portal/docs/PAGE/HOME/COUNCIL%20GOVERNMENT%20AND%20DEMOCRACY/COUNCILS/COUNCIL%20POLICIES%20AND%20PLANS/LOCAL%20ECONOMIC%20ASSESSMENT/LOCALECONOMICASSESSMENT.PDF Appendix 5: Male and Female percentages in Hull, UK. (Source: Hull City Council) http://www.hullcc.gov.uk/pls/portal/docs/PAGE/HOME/COUNCIL%20GOVERNMENT%20AND%20DEMOCRACY/COUNCILS/COUNCIL%20POLICIES%20AND%20PLANS/LOCAL%20ECONOMIC%20ASSESSMENT/LOCALECONOMICASSESSMENT.PDF Appendix 6: Media Campaign Phase I Media Campaign (Phase-I) Media Medium Coverage Hours Budget 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Television BBC Network                                                 ?5   Discovery Network                                                   MTV Network                                                   Movies Network                                                   Sky Sports Network                                                 Newspapers The Times                                                 ?2   The Daily Telegraph                                                   The Guardian                                                 Magazines Times                                                 ?1   Girl Friend                                                   The Spectator                                                   The Businessweek                                                 Internet Entertainment sites                                                 ?0.5   Public Sector Sites                                                   Sports sites                                                   Search Engines                                                 Email Customers only                                                     Low Intensity (2 Ads/Hour at each Channel, 1 Ads Weekly)     Medium Intensity (3 Ads/Hour at each Channel, 1 Ads Twice a week)     High Intensity (5 Ads/Hour at each Channel, 1 Ads Thrice a week)     Continuous for three months     Weekly All amounts are in Million Appendix 7: Media Campaign Phase II Media Campaign (Phase-II) Media Medium Coverage Hours Budget 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Television BBC Network                                                 ?3   Discovery Network                                                   MTV Network                                                   Movies Network                                                   Sky Sports Network                                                 Newspapers The Times                                                 ?1   The Daily Telegraph                                                   The Guardian                                                 Magazines Times                                                 ?1   Girl Friend                                                   The Spectator                                                   The Businessweek                                                 Internet Entertainment sites                                                 ?0.5   Public Sector Sites                                                   Sports sites                                                   Search Engines                                                 Email Customers only                                                     Low Intensity (2 Ads/Hour at each Channel, 1 Ads Weekly)     Medium Intensity (3 Ads/Hour at each Channel, 1 Ads Twice a week)     High Intensity (5 Ads/Hour at each Channel, 1 Ads Thrice a week)     Continuous for three months     Weekly All amounts are in Million Appendix 8: Media Campaign Phase III Media Campaign (Phase-III) Media Medium Coverage Hours Budget 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Television BBC Network                                                 ?10   Discovery Network                                                   MTV Network                                                   Movies Network                                                   Sky Sports Network                                                 Newspapers The Times                                                 ?4.5   The Daily Telegraph                                                   The Guardian                                                 Magazines Times                                                 ?1   Girl Friend                                                   The Spectator                                                   The Businessweek                                                 Internet Entertainment sites                                                 ?0.5   Public Sector Sites                                                   Sports sites                                                   Search Engines                                                 Email Customers only                                                 ?     Low Intensity (2 Ads/Hour at each Channel, 1 Ads Weekly)     Medium Intensity (3 Ads/Hour at each Channel, 1 Ads Twice a week)     High Intensity (5 Ads/Hour at each Channel, 1 Ads Thrice a week)     Continuous for three months     Weekly All amounts are in MillionReferences 1. 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