Marketing and Entrepreneurship - Essay Example

Marketing and Entrepreneurship Introduction The effect of time is only realized in the changes that it makes. Nowhere is this change more conspicuous than the choices that are made available to the contemporary customers. Food, one of the basic elements of sustenance, has also undergone a paradigm change in treatment. The entire process of preparing food has become cumbersome for the present generation and hence they are resorting to more ‘readymade’ food that saves time and also guarantees nutritional value. This promising yet unexplored market has drawn companies of various orders to produce goods and services that cater to the needs of the customers. In the given project, a plan for developing and marketing of a new product will be discussed. First and foremost, the new product will be described in details, after that the potential customers and the target market will be identified. In the later part, a proper marketing plan will be discussed with the help of 4 Ps and then finally PEST analysis will be done to verify the sustainability as well as competitiveness of the product. Description of the new product The new health drink aims to become a drink with a difference. Unlike other sports drinks or fruit juices that only provide instant energy, this particular drink is designed, keeping in mind the nutritional quotient also. Modern lifestyle has taken the time away from the kitchen to the boardrooms. People have become increasingly busy and are often left with no time to prepare their own food on a regular basis. This has subsequently raised the demand for canned juices and other energy drinks. However, their adverse affect on health too cannot be ignored and is a matter of serious concern among the medical fraternity. While designing Neutrica (the proposed health drink), care has been taken to ensure that it fulfills the necessary quantum of nutrition that the body requires on a daily basis. The drink will be prepared with extracts from different cereals and fruits, so that it possesses carbohydrates, protein and fats in balanced proportion. It has been planned that no artificial chemicals will be used to add flavor and color to the product. The drink will be available in different flavors like orange, strawberry, mango etc where the natural color and flavor of the fruits will be preserved. For convenience sake, this drink will be available in ‘ready to drink’ form where the consumers can directly consume the drink. Before launching the product, it will be tested by the research team to certify that it contains no harmful chemicals that might affect the consumers in the long run. Identification of the customers This product (Neutrica) is not only a health drink but also has nutritive values, hence it can attract diversified consumer base. As per the market analysts, demand of carbonated drinks is high among the children. As compared to the adults or elderly persons, the children as well the teenagers are less concerned about their health and thus they often consume these carbonated drinks. Though, in the developed nations like US and UK, many companies have introduced healthy cold drinks but they have failed to provide balance nutrition to the children. Hence, it can be said that the children and teenagers are the potential customers of Neutrica. In this fast moving world, even the adults need health drink that can be used as a substitute of soft drinks. People in their old age suffer from several health-related complications like high blood pressure, cholesterol deposition and diabetes. For these people Neutrica is a good way of deriving required nutrition in a more convenient and simple manner. Till date, there are not too many health drinks that are popular among the aged people. The percentage of elderly people is likely to increase with time, thus adding to its potential customer base. Consumers are becoming increasingly conscious about their health and are willing to shell out money for those foods and drinks that promises better health. Therefore, the demand for health drink is likely to grow, mainly among the children and elderly persons. Target Market In developed nations like UK and US, the market is already flooded with different kinds of energy drinks, canned fruit juices and different type of health drinks. As a result, the degree of competition is also high in these markets. This coupled with low population growth will make these markets very stagnant in the years to come. On the other hand, developing countries are performing better because their economies are growing at a fast rate. The purchasing power of the consumers of the third world nations is growing because of high disposable income. In the last few years, drastic change has been noticed in the life style of these people. They are trying to imbibe the western living standards in their day to day life. European food habits are gaining fast popularity. These coupled with other factors like dense population, growing awareness among consumers have made it a lucrative market for such products. On the other hand, certain developing countries have stringent rules and regulations for foreign companies interested in operating in the local markets. For example, the Chinese government follows strict rules and regulations to protect the local companies (Yang, 2005).There are many developing nations like Brazil that are more open to foreign companies. India, the second fastest growing economy, after China, is also a potential market for health drink. These developing countries will be the potential target market of this company. Substitute products available in the market Neutrica, the new health drink, has many powerful rivals operating in this industry. Apart from the existing health drinks, there are many substitute products that adds to the competition. Among them, canned fruit juice is the commonly used substitute product. People have a strong affinity for fruit juices as they are known for their vitamins and minerals. Due to scarcity of time, people can no longer afford to extract juice from the fresh fruits; hence they heavily rely on canned fruit juices. However, too much consumption of such juices adds to high carbohydrate (sugar) and often people suffer with obesity and diabetes mellitus because of it (Bazzan, 2008). Many sports drinks are available that target the sports persons. Some of these products are considered as hydrating drinks that replenish the loss of water and ions needed by the body. Few of these sport drinks are introduced as protein shakes that can be used by the sport persons for instant energy. Some of these products are available in powder form that needs to be added to water or any other drinks (milk or juice), whereas others are available in ready to drink state. However, many people are apprehensive of it, and various researches are being conducted to study the effect of these protein shakes on the health of the sports persons in the long term basis. The new health product will take into account the threat associated with the substitute products prevailing in the market. This will also assist in developing the required strategy for gaining sustainable competency in the market. Marketing plan After identifying the potential customers and the target market, the next step is to develop an effective marketing plan for Neutrica. The product should then be subjected to a pilot test. Pilot Test: After analyzing the data collected from market research, the company has decided to first introduce the product in Brazil. The success of the company in this market will pave the way for other target markets. The company will be required to identify few specific shopping centers and super markets. At these locations, people will be asked to taste the product and give their feedback regarding the taste and the nutritional content of the health drink. They will be encouraged to give suggestion regarding the flavors they prefer to be introduced or the manner in which this product can be made more effective for fulfilling the nutritional requirement of their family members. After considering these suggestions, the company will incorporate required changes in the product to make the health drink more efficient in penetrating the target market. The 4Ps of the marketing plan has been discussed below: Product: The company has prepared a health drink that can be used for deriving nutrition (carbohydrates, protein and fats) required in a balanced diet. This product will possess no artificial color or flavor; hence use of artificial chemicals will be as low as possible. The product will be available in ready to drink form so that the consumers can directly consume it, as and when they feel like. Price: The markets of the developing countries are sensitive to price, so the company has decided to attain price leadership. The company will keep the price of the product marginally low as compared to other rival health drinks so that people from different parts of the society having different economic condition can afford to purchase the product. In the initial stage, the profit margin will be low but gradually as the company will achieve moderate market share, its production cost will reduce. Soon the company will attain healthy profitability. Place: The company needs to be cautious while managing its supply chain in the target market. Either the company has to develop its own supply chain else it can collaborate with other local companies and share their supply chain structure. The packaging of the product is also a vital factor that influences the customer base. It has been decided to use tetra packs of different sizes (100ml, 250ml, 500ml and 1000ml). As compared to PET bottles, tetra packs are more economical and environmental friendly. Promotion: When a company enters a new market, it has to make heavy investment in marketing of the product. The company has decided to rely more on advertisement through hoarding, leaflet distribution, advertisement in the print media as well as in the electronic media. Since personal marketing is a costly process, the company will avoid it. For attracting customers, different promotional tools like discount on the product, free sample distribution, free coupons, etc will be used. PEST Analysis PEST analysis is a common technique that assists to analyze the external environment. As the company has decided to enter Brazil first, so PEST analysis of this country will be conducted. Political Environment: In Brazil, nineteen political parties exist that reflects the instability and uncertainty associated with the government. However, the political conditions have gained stability in the last few years (U.S. Department of State, 2010). Economic Environment: Brazil is Latin America's largest economy and the economy of this country is growing at a healthy rate since the last few years. However, a large section of the population is still poor (BBC NEWS, 2010). Social Environment: The country holds the 5th position in world’s population where 26.7% of the population consists of 0-14 years and 66.8% of 15-64 year people. This reflects the potential consumer base. With time, the demand for goods and services are likely to increase in Brazil (Central Intelligence Agency, n.d.). Technological Environment: After recession, Brazil has emerged as an attractive market for foreign investors and many MNCs. Hence it can be assumed that in near future Brazil’s technological environment will show good progress. Conclusion Neutrica is a new health drink that will soon be launched in the market. The product has been designed keeping in mind the nutritional quotient which had become a buzz word with the modern health conscious people. The product is expected to gain huge acceptance since it will also be an instant provider of energy. Despite its innovativeness, it is not free from competition. There any many other substitute products that pose a strong threat to it, and hence the company has decided to introduce the product in the target markets in a step by step manner. Initially, the product will be launched in Brazil and later on in India and China. For minimizing the risk, the company has a well developed marketing plan that will address all the vital elements (4Ps). While developing the product and selecting the target market, the company had conducted an in-depth analysis so that Neutrica can emerge as one of the most successful company in the instant and readymade food sector. Reference Anderson, P. M. & Butcher, K. F. (2006). Changes in School and Child Care. Childhood Obesity: Trends and Potential Causes . The Future of Children. Volume 16 Number 1. Retrieved on September 3, 2010 from https://www.princeton.edu/futureofchildren/publications/journals/article/index.xml?journalid=36&articleid=94§ionid=582&submit. Bazzano, L. A. March 31, 2008. Intake of Fruit, Vegetables, and Fruit Juices and Risk of Diabetes in Women. American Diabetes Association. Retrieved on September 3, 2010 from http://care.diabetesjournals.org/content/31/7/1311.full. BBC NEWS. May 29, 2010. Brazil country profile. Retrieved on September 04, 2010 from http://news.bbc.co.uk/2/hi/europe/country_profiles/1227110.stm. Central Intelligence Agency. (No date). South America :: Brazil. The World fact Book. Retrieved on September 04, 2010 from https://www.cia.gov/library/publications/the-world-factbook/geos/br.html. U.S. Department of State. February 5, 2010. Background Note: Brazil. Retrieved on September 04, 2010 from http://www.state.gov/r/pa/ei/bgn/35640.htm. Yang, J. (June, 2005). Consumer Protection Policies for MNCs in China. Retrieved on September 4, 2010 from http://www.chinalawandpractice.com/Article/1692457/Channel/9930/Consumer-Protection-Policies-for-MNCs-in-China.html. Read More