Marketing plan for Milk - Essay Example

Marketing Plan for Milk A marketing plan is prepared for assisting the business in integrating the total marketing efforts. The planning process begins with an attempt by the company to size up its present market situation and the factors responsible for it. Such a plan ensures a systematic approach to developing products and services to meet and satisfy the consumer's needs. An established milk beverage manufacturer is introducing a completely new product - flavored milk beverages for the segment 6-12 years old. The marketing plan for this product will be as follows; Current marketing situation: Flavoured milk also known as value added milk is being placed by British companies for different segments of the market. are increasingly targeting the value-added milk for growth opportunities as they re-align their businesses and move away from commodity products. Current competing available products: Apart from the dairies, big food MNCs like Nestl and Unilever are also in the market because of the growth potential and low barriers to market entry. Current competing market share: White milk accounts for 96% market share and 90% of market value. Likes of TESCO and Sainsbury command a good hold on the market. Current competing cost/profit ratio: In view of the stiff competition and presence of big players in the market place, the cost/profit ratio is likely to remain high with higher cost inputs and lower returns. We cannot put a higher price tag to recover all the costs involved. Current Milk campaign: After several years of decline the milk and cream market is back in growth reaching almost 5 billion litres in 2005. Value growth was also up by 7% between 2000-2005. Opportunity and issue analysis: So far in particular the flavoured milk market has managed to compete as some sectors of the milk and cream market still suffer from a lack of innovation and marketing support. Healthy eating trends are having an impact on the market which has started favouring semi-skimmed and skimmed milk. Competitive forces: Flavoured milk has the highest retail penetration. Fresh flavoured milk sales are expanding with retailers launching new products under their private labels. Entry/exit barriers: White milk accounts for 96% of the market share. Well established branded products are also in the market. Flavoured milk is facing increased competion in the chilled segment from functional yogurt drink. Benefiting from current Milk campaign: An increased awareness amongst the consumers about the benefits of flavoured milk. Objectives: To create a niche for itself in the existing market and mainly amongst the targeted segment. Money Goals: To start with the company is ready to bear some losses for the initial period but the efforts will continue with renewed vigour for attaining the breakeven point as soon as possible. Sales goals: In the first year of operation, company can target to lure away at least 2-3% of the existing market. The company will try to gain as many new customers as possible. Profit goals: Company is not looking for profits from the word go. It plans to go ahead with a longer perspective. But at the same time it is worth pondering that business needs to payback to financers, investors, employees and other stakeholders. Market Goals: The market will be 6-12 yrs old kids. That means we'll have to target the schools, schools administrators and other faculty so that they inform the students about the arrival of a new quality flavoured milk in the market. Market Share: Since we are a new entrant, that means we'll have to be realistic in our approach. We must understand that we'll be able to create the marketing space for our product only when we take good care of the consumer needs and quality. Consumer loyalty: Let us not expect the tiny tots to be our loyal consumers overnight, as they are the one's who are very difficult to divert enblock towards a new product. Their consumption pattern will be affected with the influence of their parents and teachers. Marketing communication and promotional strategies are very important in gaining the loyalty of this segment. Marketing strategy: Flavoured milk drinks have been launched as soft drinks and such sales are gaining volume over carbonated drinks. Therefore, this market needs to be further explored, besides the normal segment of 6-12 yrs. Target segment: Basic target segment is the school goings children group 6-12 yrs. Age: 6-12 yrs Location: UK Social status: Milk is such a product which appeals to all the sections of the society. Strategically we place it from middle strata to the higher one. Market Positioning: This product will be placed as a healthy alternative to the cold drink, as an energy drink and as a health drink. Challenger entry: If entering a race is a costly action for a challenger, then the very fact that a race is competitive can convey valuable information to consumers about the relative merits of challengers and existing companies. Leader maintenance: Pricing: Pricing has to be very competitive. In any case it should not be more than the prevalent market rate. The purpose of milk marketing is to get a good average price more consistently. Packaging: Packaging is extremely important to attract the 6-12 year segment. Action programs: Action program include the details of steps right from quality testing to ad campaign, looking for supply and distribution channels and then taking stock of the business activities regularly. Advertising: To attract the 6-12 yr segment TV commercials are the best mode of advertising. We must not expect this segment to read the print ads and then decide to go for our product. But once an imprint is left in the minds of our targeted consumers, we can gradually move towards print ads and internet advertising. Distribution: Distribution channel has to be very reliable and quick, since the shelf life of milk is very less and it is a perishable commodity. Placement: The product will be placed as a healthy alternative to the cold drink and other milk products. Financial projections: It has to be a realistic projection. Development cost: We need to cover the direct and overhead expenses Product cost: The cost involved in procuring, storing, handling the milk and producing the final product. Advertising cost: Includes the finances involved in launching a publicity campaign in the media as well as the awareness campaign in the schools. Payback period: The period before we attain the breakeven and start earning profits. 1-2 yrs should be the reasonable time. Profit margin: Initially we need to penetrate the crowded market place. Therefore let's not be too perturbed by the profit margin. Implementation controls: Good quality milk, hygienic, healthy ingredients and subjected to rigorous quality checks. Development period: The period during which we assess the market and start the production. Introduction period: Initial couple of months when the product is launched in the market. Customer satisfaction: The Company will keep track of the feedback from customers and act accordingly for the satisfaction of target customers. Quality: Maintaining quality standards for milk edible products in general and milk products in particular is extremely crucial. Value: Value is derived from a product by virtue of its quality and acceptance in the market place. References: 1. Margot Rudstrom, Extension Economist (Aug, 2007), "Milk Marketing".Things to Think About - Part I, available online at http://www.extension.umn.edu/dairy/dairystar/08-27-05-Rudstrom.htm 2. Milk and Cream - UK (March 2006), Market Research Report Mintel International Group Ltd. 3. Dairy sector focuses on UK functional growth, (March, 2006), http://www.foodnavigator.com/news-by-product/news.aspid=66499&idCat=73&k=dairy-sector-focuses Read More