Market Brief for Sagatiba Plc - Case Study Example

Market Brief for Sagatiba Plc. Introduction Cachaça, distilled from fresh sugarcane juice and key ingredient in the caipirinha, is Brazil’s most popular lime and sugar cocktail. As a ‘Brazil’s signature cane spirit (it) is an integral part of the country’s culture, like champagne to the French and tequila to the Mexicans. Cachaça has evolved alongside the country’s intellectual, political, and artistic movements since it first appeared at the beginning of the Sixteenth Century’ (Sagatiba.com). In 2000, it was taken over by South American Company B4 which is owned by Marcos de Moraes. Cachaca was renamed as Sagatiba. While, Cachaca was mainly marketed in Brazil, under the banner of Sagatiba, its market was has considerably expanded with nearly 50% of its output being exported to America and Europe. Strategic marketing plans are crucial part of promoting products and services of an organization. “Organizations must change because their environments change” (Bateman, 1990). They implement necessary changes in the organization to not only survive but compete with their rival with confidence. Changing environment of technological advancement has made it imperative for one to evolve new marketing strategy in order to maintain an edge over their rivals. The compulsions of the rapidly transforming societal paradigms and technological advancements are important factors that require more comprehensive and innovative approach to market strategy. Marketing Objectives The company needs to popularize its products and services in the global market and tap the emerging market of rapidly growing multicultural society Create a credible market brand for its products with value added services Start and popularize customised services for our foreign customers, meeting their local needs in a global environment. Make a significant impact on the consumer buying decision through innovative products and market strategies to meet their changing demands. Market Communication Plan The company needs to formulate marketing and communication strategy in a way that would not only uphold a high standard of corporate ethics but it must be able to ensure and exhibit understanding of the cross cultural values and handle issues with sensitivity. Any strategy that is formed needs to be localized to suit the local conditions. Retail marketing Strategic partnerships with other business must be made to meet the growing demands of the customers and such strategic relationship should be conformed and regulated within the given set of parameters so that the customer is not affected in any way and unconsciously becomes a scapegoat for our own lack of business understanding with our business partners. The partnership must facilitate business leverage over the rivals. At the same time, it should add value to our products and services, thereby, giving it a unique selling point to attract new and the old customers. Sagatiba needs to be more aggressive in its marketing strategy and forge partnership with various retail outlets and supermarket chains to market its various Sagatiba products. Website as major marketing tool In the recent times, internet has redefined the communication with its far reaching implications and has become one of the most important parts of any business strategy. With the fast changing business equations, a reassessment of business strategy has become imperative and organizations need to have an online presence to exploit the vast potential of internet for their business interests. Creation of company’s website is necessary to advertise its various goods and services to the huge potential market in the cyber space which is accessed daily by millions of people, spread across the world. The website provides an opportunity to showcase our products and services in a manner to attract the future customers and facilitates to meet their individual demand through customised features of the interactive website. The introduction of an online order service would enhance our customer base. The website would disseminate information about the business and the interactive module would facilitate and encourage usage of ecommerce for a win-win situation and help exploit the vast potential of the internet through the huge database of customers that internet provides at the click of a mouse. Integrated marketing communication with relevance to Sagatiba Kotler has defined IMC as ‘the concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent and compelling messages about the organisation and its products’ (Kotler et al 1999). Even though the customer base is increasing, it is becoming difficult not only to attract more customers but also to retain them. So, one need to add something ‘more’ on the existing products to make it more attractive without compromising much on the price. In fact, the more innovative the product and fancier the promotional techniques, the higher are its chances of capturing market space. Thereby, asserting that brands, advertising, and promotional techniques are very important tools of marketing. Brand Creation The brand creation has been another successful strategy that has brought in committed customers. Market strategies try to promote their goods and services by creating brands that guarantees the customers of getting high quality goods and services. ‘Brand building is needed because products are the same’ (Kotler, 2005). The brand name has ensured that the product maintains a high standard of excellence at a price that a customer is willing to pay for. Viral Marketing Initiatives In the era of rapid globalization and highly competitive business environment, viral marketing becomes relevant to increase the market share of Sagatiba in the global arena. It has great potential of exponential growth through diversity of new approaches and initiatives in its market strategies. Using posters, balloons, pamphlets, sponsorship, use various distribution channels tickets, carry-bags to advertise its products, blogs, internet messaging and various other gizmos for its promotion. In the recessive trends, this type of marketing becomes highly relevant for Sagatiba. Indeed, ‘we realized that the ”objects” of strategy – such as business units, industries, supply chains, customer relationships, organizational structure, and so forth – are held together by a “glue”, and that glue is essentially information’ (Evans, Wurster, 2000). Levitt says that the marketing takes into account the preferences of the customers and thereby builds a solid customer loyalty that result in sustainable customer base that has potential for growth because it continues to satisfy the changing requirements of their needs (Levitt, 1960). Sagatiba must use effective communication to overcome the barrier of socio-psychological paradigms that is increasingly becoming a major factor in the sales and market strategy. Client Brief Sagatiba Plc. needs to identify the segment that would best help to create a market position. Segmentation of the market as per the demographic compulsions has contributed towards more dominant market position vis-à-vis Sagatiba spirits with wide scope of innovative cocktail. Demographic segmentation would further make it easy for launching new products and help create a creditable position in the market. Consumer Psychology Consumer psychology and analysis of database of customers are important part of market strategy which helps one to know the changing preferences of the customers in the rapidly changing times. While the growth and the future prospects of the business depend on the input data as they are able to divulge vital information about the products and the customers, strategic marketing through widespread appealing advertisement is a vital factor that helps to bring in new clientele. Being an alcoholic drink, the target market for Sagatiba spirits and cocktails need primarily be above the age of 18 years. Since Sagatiba’s wide range of sugarcane based distilled products are popular amongst the upcoming young executives and dynamic business class who thrive on cocktail, it needs to base its market strategy on effective market segmentation. Market segmentation The fast changing socio-economic paradigms and advancing technology has tremendously changed the dynamics of market strategies. In the contemporary times, the customer has become much more informed and technology has provided him with more options within the similar product lines, but produced by different companies. In a highly competitive environment, Sagatiba needs to base the market segmentation according to psycho-demographic pattern so as to maximise the initial impact and create a creditable position within the UK market. Psycho-demographic is chosen as the focus area primarily because of the fact that the competition within the industry demands a creation of a niche market for Sagatiba to become a success. Being a recent entrant in the global market, Sagatiba faces stiff competition from the already established brands. Psychographic or lifestyle pattern categorises the market according to which people exhibit a well defined way of living, maintaining a set of standard and displaying a typical purchasing behaviour. Of the various demographic characteristics, the most useful would be the income and age-wise identification of the group that could be targeted through intense media blitz and other market techniques to attract them and make them a committed user and purchaser. The mixed segmentation is hugely popular in the contemporary times and gives a big leverage to the companies to plan its market strategy in a more flexible manner and successfully introduce their products in a new market. Demographic segmentation would split the market and provide better tool to develop strategies and make significant inroad into the world market for Sagatiba cocktails which are unique. The company too, needs to target people above the age of 20 years to market its products. The spirits and cocktails are popular amongst the youth and Sagatiba must target this group primarily because they are open to new ideas and products. They are also more vulnerable to eye catching advertisement campaigns and further incentives in terms of discounts, gifts etc. would provide a competitive edge over their rivals. By targeting this segment, Sagatiba can strengthen its market position. Another major target clients are the retailers and hotel industry. While retail market would need Sagatiba rum in the bottles, the hotel industry can also have it in cask format. The advertisements should be versatile in their approach to attract clientele from diverse segment of the market. Factors influencing decision power of the clients Cognitive theory of behavioural pattern The behavioural pattern of the people, in the decision making process of buying products and services, help provide important clues for preparing appropriate advertising strategies and campaigns so that maximum mileage could be garnered for the products. ‘In cognitive learning, the individual learns by listening, watching, touching, reading or experiencing and then processing and remembering the information’. (Think Quest, 2008). Theory of cognitive learning is important because it implies that that through various means of learning processes, people are able to retain the information in the memory and apply it as and when required. Advertisement When applied to advertisements, this theory becomes highly relevant. The impact of those visuals and the textual contents are reflected in the behavioural pattern of the people who may or may not become their client. In some cases, the low impact advertisements are known to even divert the committed clients. Hence, effective communication through appealing visuals and informative textual contents are important not only for retaining the old customers but they must also be able to attract new one. Newspapers and magazines are also quite popular among the young and the old people. Advertisements based on cognitive learning theory can aptly be applied to this particular medium of advertising. The growing popularity of international magazines like Cosmo, Elle, Good housekeeping etc. amply show that usefulness of media in popularizing new product and services. TV is a highly recommended media tool and is extensively used for corporate advertisements. Entertainment channels and talk shows which portray contemporary lifestyle are very popular among the younger generation and therefore offer great platform for the new brands to introduce themselves to the emerging markets. The companies must choose the target audience and strive for the appropriate timeslot in the television. Reference Bateman, Thomas S., and Carl P. Zeithaml. ‘Management: Function and Strategy’. Homewood, IL: Irwin, 1990. Evans, Philip & Wurster, Thomas S. (2000). ‘Blown to Bits: How the New Economics of Information Transforms Strategy’. HBS Press. Kotler, Philip. (2005). ‘Toward Stronger Marketing’. unpublished presentation to the ARF, “Future of Advertising” Conference, Chicago, 10.24.05. Levitt, Theodore.(1960). ‘Marketing Myopia’. Business Harvard School Review. Available from: [Accessed 28 August 2009]. Kotler, P., Armstrong, G., Saunders, J. and WONG V. (1999). ‘Principles of Marketing’. 2nd ed. Prentice Hall. Sagatiba Plc. Available from: [Accessed 28 August 2009]. THINK QUEST, (2008). ‘Understanding Human Behaviour: Cognitive Processes’. Available from: [Accessed 28 August 2009]. Read More