Marketing Strategy: Plan for Ferrero Spearmint Gum - Essay Example

Marketing Strategy: Plan for Ferrero Spearmint Gum Executive summary Ferrero Spearmint Gum is an organic product from the Ferrero Spa, which is already a popular brand among consumers and vendors in the market. The current marketing plan would emphasize on developing a concrete promotional and market positioning plan. The marketing plan would consider the internal and external environmental factors in situational analysis, in order to determine what might be the influencing factors on the marketing activities of the new brand. By the end of this marketing plan, the management of the new brand would know their target customers, what are their preferences and what could be the best way to market the new product into the marketplace with efficient utilization of resources. Situation analysis PEST Analysis Political Analysis Majority of the markets in which Ferrero is operating, possesses a stable and sound political scenario. As the key markets that Ferrero serves are United States of America, European Union and East Asia, Ferrero maintains healthy relationships with governments and chamber of commerce in countries falling in this region. This piece of information can be supported by the fact that Ferrero has already won a number of continental and international awards for quality of its products and ability to cater a diverse customer base with efficient marketing and promotion of the products. On the other hand, Ferrero is also popular in North America and the company has formed strategic partnerships with the government and trade and finance facilitators of these countries to develop a unique and attractive marketing strategy. Economic Scenario As listed above, these regions in the world are considered as being the richest and economically most stable regions. This is the reason, that Ferrero enjoys a customer base, which is ready to pay a good price for quality products and facilitating services. Moreover, the economic stability of these regions and positive attitude of consumer sin the market place encourages Ferrero to invest in research and development, just in order to cater the customer base with quality and more diversified product line. Social Scenario Gums and candies are considered as an integral part of events, celebrations and festivities in the regions where Ferrero operates. For this reason, the social acceptance of the gum and its derivatives allows gum manufacturing organizations to invest their resource sin identifying what pleases their customers and manufacture and market products that matches the taste of consumers. Keeping this in view, Ferrero has established a unique product line for each region, depending upon the preferences of consumers in that market. Technological Scenario Without taking help of technology to innovate unique and differentiated products, one must rely on the external technological landscape. Regions where Ferrero operates are technologically advanced and considered as pioneers of innovative products. For this reason, Ferrero enjoys a highly advance working environment where it can use technology to enhance the scope of its business and cater a larger customer base by investing less time in production and marketing of its products. SWOT Analysis Strengths Ferrero is considered as being the leader of candies and gum manufacturing industry in the world Ferrero introduces innovative, unique and delicious products which can not be matched by its competitors in the market place Ferrero caters the largest market, i.e. the upper middle class of the society, which enables the company to serve a customer base which is not price sensitive Strong corporate image of Ferrero across the globe allows it to achieve a good reputation amongst the members of the society, which reflects in the form of strong brand heritage and equity Being a specialized candy and gum manufacturer, Ferrero enjoys a loyal customer base, which is very difficult to be diverted to some other brands (Research and Markets, 2011). Weaknesses The informational model that Ferrero has adopted to communicate with the market, customers and stakeholders is weak which reflects in the form of distorted communication with these stakeholders Ferrero has no direct communication channel to address the concerns and suggestions of end consumers of its products Consumers of Ferrero reflect less involvement while shopping for Ferrero’s gum or candies, which implies less consumer knowledge about the product The segmentation and targeting strategy of Ferrero is weak which results in the form of wasted resources in production and finance (Research and Markets, 2011). Opportunities By triggering impulse buying behavior of consumers and placing its products in large retail outlets and hyper markets on front counters, Ferrero can attract new customer base Ferrero have the opportunity to enter emerging markets of South Asia and Africa to expand its business scope Ferrero can also increase the size of its customer base by improving its segmentation and positioning strategy (Research and Markets, 2011). Threats The biggest threat to Ferrero is the perception of people that candies are not suitable for health, and they cause dental disease Another health related threat to Ferrero is the perception people hold, that candies and gums cause obesity and diabetics Lastly, Ferrero’s products are easily imitable which makes it vulnerable in the highly competitive environment The low quality standards and unpleasant taste of Ferrero’s imitated products also causes harmful effects on sales and reputation of Ferrero as a brand in the marketplace (Research and Markets, 2011). Segmentation, Targeting and Positioning Market Segmentation To create segments within the target market, Ferrero would evaluate the market in terms of consumers’ demographic attributes and psychographic attributes. This means that the new product will be offered to every individual of each continent. Moreover, the new product would be marketed in such a manner that it can be used at any occasion or matches the taste bud of all consumers. From this, we assert that the new product would come in different sizes and in two tastes, one for normal customers and the second for diabetic customers, sugar-free spearmint gum (Dibb & Simkin, 1991; Bruning et al., 2009). Targeting Strategy The target market of Ferrero’s new Spearmint Gum would consist of children, male and female of all ages who can afford and prefer to buy Ferrero’s products. In this sense, the target market would comprise of people belonging to upper middle and middle class of the respective societies where the product is intended to be launched (Dibb & Simkin, 1991; El-Ansary, 2006). Positioning Strategy From the analysis of the external environment, the management would go for positioning the new product as gum candy. The new product would give direct competition to already established bands like Wrigley’s (Dibb & Simkin, 1991; Zahay & Griffin, 2010). Objectives The financial objectives of the marketing strategy are to achieve the break-even point within 18 months of launching the product into the market place. The marketing objectives of the marketing strategy is to create awareness amongst the target market, regarding how the new spearmint gum is different from other available brands and how it delivers the value that it promises through advertising campaigns. The social objectives of the marketing strategy would be to deliver a quality product that matches the taste and preferences of the end consumers. The secondary financial objective would be to allow sales to increase by 20% To attract and retain new customers To satisfy the needs and wants of the customers and end consumers Revitalize the brand image of Ferrero To increase the earning capacity of partners in the market by providing them additional coverage area for the new product (Hart et al., 1999). Marketing Strategy In order to achieve the desired objectives, Ferrero would use the following academic models to enhance the scope of the marketability of t he product. Ansoff’s Market Growth Metrics Keeping in view the grids of Ansoff’s Market growth Metrics, the proposed new product, i.e. Ferrero Spearmint Gum would be positioned in product penetration grid. This is because the market in which Ferrero is aiming to enter is already established and other competitors are also present in the market with the same product. Keeping this in view, the marketing strategy for the new product should be able to penetrate into the marketplace and make its unique place there. The penetrating marketing strategy would enable Ferrero to divert the customer base of its current products to try the new products and take advantage of the loyal customer base. Initially, Ferrero will have to offer the product on free trial basis or offer some discounts on the purchase of this product. Moreover, the marketing strategy would also require the sales force of Ferrero to put special emphasize on increasing sales of this new product and make it readily available. Another marketing tact that Ferrero could apply is to purchase a competing firm within the same category and industry to take a good start in the marketplace against other competitors (Hart et al., 1999). Porter’s Generic Strategies As there are already a number of spearmint gum brands available in the brand, Ferrero will adopt a unique feature of its product to compete with the competitors on the basis of differentiation strategy. By doing so, Ferrero would also expand the marketplace scope of its product and attract a large number of customers. This strategy would be beneficial in a sense, that the target consumers are not price sensitive and competition in the market place is highly saturated. Moreover, the customers in the market possess a specific need, which is not properly addressed or marketed by the competitors. By addressing and implementing consumers’ preferences in the product taste, quality and packaging, Ferrero would get hold of competitive advantage over the competitors (Kim et al., 2004; Akan et al., 2006). Marketing Programs The marketing program is discussed in the coming line with the help of 7 P’s of marketing framework. Product The new spearmint gum of Ferrero will be marketed with the name “Breezer”. The reason for selecting this name is that spearmint has a refreshing and cooling effect, which makes its consumers feel chilled inside their mouth. Breezer would be positioned in the marketplace as soft gum candy. The gum candy will have the ability to refresh its consumer, give him/her a chilled effect and make the consumer avoid bad breathing problems (Rafiq & Ahmed, 1995; Ivy, 2008). Pricing Ferrero will adopt a market-oriented pricing strategy, which would enable the company to carry out market research and understand the affordability and preferences of the end consumers. By adopting this strategy, Ferrero would ignore what prices Breezer’s competitors are charging, and upon determining that price level, Ferrero would price its product on the lower side (Rafiq & Ahmed, 1995; Ivy, 2008). Place Ferrero would place Breezer in retail outlets and wholesale centers. The benefit of this placement strategy is that, it would allow Breezer to trigger the impulse buying behavior of the end consumers and ensure that the majority of consumers purchases bulk quantity of the spearmint gum (Rafiq & Ahmed, 1995; Ivy, 2008). Physical Evidence The marketing campaign for Breezer would initiate by telling a story associated with the farming of spearmint and its utilization for producing gum based products. In addition, Ferrero will establish a separate Manufacturing and Business facility for Breezer and market these facilities to enhance the objective achieving the ability of the marketing campaign (Rafiq & Ahmed, 1995; Ivy, 2008). Process Ferrero would ensure that the story associated with the marketing campaign of Breezer is embedded into every marketing activity of the new product. By doing this, uniformity of quality and marketing campaign will be achieved which would result in the form of increased consumption of Breezer (Rafiq & Ahmed, 1995; Ivy, 2008). People Staff of around 25 to 30 individuals would be hired to carry out the daily operations at Breezer. The senior management of Breezer will be required to report on the development in marketing Breezer, to the board of directors of the Ferrero Group and ensure superior quality and taste is delivered to consumers (Rafiq & Ahmed, 1995; Ivy, 2008). Promotion Ferrero will provide discounts and fee samples to consumers and other members of the supply chain so that they become aware of uniqueness and refreshing taste of Breezer. Moreover, Breezer’s posters and brochures will be placed and distributed at college or university canteens and office blocks in each city. Celebrities, especially sports celebrities can prove to be more influential on consumer behavior of the target markets. In addition, a story-based advertisement will be on-aired four times during primetime and children’s time on televisions and radio. Moreover, a social media campaign will also be held by the company to engage consumers and other members of the society in open discussion pertaining to the new brand, its taste and quality (Rafiq & Ahmed, 1995; Ivy, 2008). Implementation controls As the marketing strategy is implemented and operationalized, the marketers and brand managers starts to identify loopholes in the strategy and rectify them before the general masses are attracted towards the promotional material and communication. It tells marketers whether the strategy is useful in achieving the objectives of the marketing campaign or not. Considering this, it can be asserted that the control of marketing and brand managers on the flow of activity and their consequences is pivotal for the success of the marketing strategy. This section of the strategy report would outline the activities and their schedule: Teasers of the marketing campaign in print and electronic media. (From 1st January, 2014 - 15th January, 2014) Full fledge launch of marketing campaign in print and electronic media (from January 16th, 2014 - Onwards) Placement of billboards and a radio shows (From 16th January, 2014 - 20th February, 2014). It is noticeable here that the current marketing plan would serve as a basis to guide the company through the brand lifecycle management and facilitate the identification of most suitable marketing strategies for Breezer, that can be applied anytime when required. The management of Ferrero can assess the success or failure of the brand by monitoring the quarterly revenue returns of the brands. In this way, Ferrero would be able to gauge if Breezer is returning the finances in an appropriate manner to reach the breakeven point. List of References Akan, O., Allen, R.S., Helms, M.M. & Spralls, S.A., 2006. Critical tactics for implementing Porter's generic strategies. Journal of Business Strategy, 27(1), pp.43-53. Bruning, E.R., Hu, M.Y. & Hao, W., 2009. Cross-national segmentation: An application to the NAFTA airline passenger market. European Journal of Marketing, 43(1), pp.1498-522. Dibb, S. & Simkin, L., 1991. Targeting, Segments and Positioning. International Journal of Retail & Distribution Management, 19(3). El-Ansary, A., 2006. Marketing strategy: taxonomy and frameworks. European Business Review, 18(4), pp.266-93. Hart, S., Tzokas, N. & Saren, M., 1999. The effectiveness of market information in enhancing new product success rates. European Journal of Innovation Management, 2(1), pp.20-35. Ivy, J., 2008. A new higher education marketing mix: the 7Ps for MBA marketing. Emerald, 22(4), pp.288-99. Kim, E., Name, D. & Stimpert, J.L., 2004. The Applicability of Porter’s Generic Strategies in the Digital Age: Assumptions, Conjectures, and Suggestions. Journal of Management, 30(5), pp.569-89. Rafiq, M. & Ahmed, P.K., 1995. Using the 7Ps as a generic marketing mix: an exploratory survey of UK and European marketing academics. Emerald, 13(9), pp.4-15. Research and Markets, 2011. Ferrero S.p.A. - Strategic SWOT Analysis Review. Strategic Analysis. London: Research and Markets Research and Markets. Zahay, D. & Griffin, A., 2010. Marketing strategy selection, marketing metrics, and firm performance. Journal of Business & Industrial Marketing, 25(2), pp.84-93. Read More