Marketing Plan for the Next Year for Atlantic Quench - Essay Example

Marketing plan for the next year for Atlantic Quench 092 Table of Contents Egan, J.2007. Marketing Communications, Thomson Learning, London 17 Kotler, P. 2006. Marketing Management-Analysis, Planning, Implementation & 18 Marketing plan for the next year for Atlantic Quench 092 Chapter 1 Introduction The soft-drinks and beverages market comprises different kinds of drinks that include bottled water, carbonates, concentrates, juices, tea, coffee amongst other soft drinks. The U.S. soft drink industry comprises two separate sub-industries based on North American Industry Classification System, these are Flavoring Syrup and Concentrate Manufacturing Industry and the Soft Drink Manufacturing Industry (Kopylovsky, 2010). As per 2010 statistics, a total of 151 companies in the United States Soft Drink industry manufactured flavoring syrup concentrates, powdered concentrates as well as related products. While 1,209 companies in the U.S. soft drink industry deals with soft drink manufacturing where they blend ingredients such as water, syrup and sweeteners and sell the packages as beverage (Kaczanowska, 2010). The U.S. soft drink market is dominatd by main players such as Cocacola and Pepsi Inc Companies commanding 40% and 33% respectively of total flavoring syrup and concentrate manufacturing market and 28.6% and 26.8% respectively of soft drink manufacturing market in the U.S (Sicher, 2009). The remaining percentage is shared amongst many small soft drink manufacturing companies. The global market incorporates North America, South America, Western Europe, Eastern Europe and Asia-Pacific. The United Kingdom market the perfomance of fruit juice has great impact on the overall market, the industry includes fruit juice, juice drinks and smoothies. According to Mintel, the fruit juice, juice drinks and smoothies market in the UK is expected to grow by 13% in 2018. Manufacturer’s focus on added value especially on health matters and convenience is also expected to fuel value growth (Mintel, 2010a). The plan focuses on Atlantic Quench Cranberries Inc which is an agricultural co-operative company operating from Unites States. Currently, the company is owned by approximately 630 cranberry and 46 grapefruit farmers and known as the leading producer of juice drinks, canned and bottled juices in North America. Their brand is recognized as best-selling in the last three decades dating back to 1981. The report focuses on marketing plan for the next year for Atlantic Quench Cranberries Inc (Luther, 2013). The main objective being marketing Atlantic Quench Cranberries products through increasing sales accrued to this brand and product line items as well as offering diversified products tailor made to cater for customer demands (Ahmed and Rafiq, 2002). These two objectives can be met through use of strategic product pricing, provision of robust distribution infrastructure as well as extensive product diversification. Diversification of product portfolio ensures production of products that satisfies all consumer categories within the market. For the purposes of achieving significant market share there is need to focus on taste and nutritive requirements. Additionally, the production process should incorporate convenient sizes economically feasible to consumers as well as the producer. Other strategy involves enhancement of channels of distribution. Elaborate investment in distribution infrastructure is necessary for the purposes of capturing significant market share (Baker and Hart, 2007). Chapter 2 Current Marketing Situation 2.1 Internal Analysis 2.1.1. Market Description According to Kotler and Armstrong (2012), a market is made up of all people or organization and they all demand for a certain product depending on individual’s tastes and preferences. This also depends on customer’s ability to purchase them. Market segmentation is a course of action where a given market is divided into unique clusters or firms that have reasonably comparable demands (ACNielsen, 2010). According to Kotler (2006) elaborate knowledge and understanding of target markets is an essential element especially in the current competitive business environment. The UK market uses the term juice when the product presented contains 100% fruit juice. Fruit juice sector in the UK is didvided into ‘ambient’ and ‘chilled’ sectors with ambient juices accounting for an approximated 45% of all juices sales in the United Kingdom. However, in the U.S soft drink products are supplied to segments such as supermarkets and general merchandisers. Ultimate consumer accounts for 46% of the total food and beverage market. Other segments included in the soft drink market include food service and drinks accounting for 20% of beverage market, convenience stores and gas stations 12%, vending machine operations 11%, others which includes smaller outlets and private clubs accounts for 8% with export accounting for only 1% (Andruss, 2010) 2.1.2. Product Review The product portfolio of the company comprises of fruit juice products (Cranberry Original Juice, Cranberry Mixed Juice Drinks, Juice Max – pure Juice, Grab ‘n’ Go – Single Serve) and non-juice drinks (Cranberry Sauces, Cranberry Cordial Juice Drinks, Fresh Cranberries, New Dried Cranberries, New Conserve). The fruit juice beverages accounts for 15% of total revenue, with non-juice drinks contributing to 11% of total revenue and others contribute 8% (Mintel, 2011). 2.1.3. Competitive Review The structure of the industry can be considered to be oligopolistic since the industry is dominated by three lead players which are Coca-Cola, PepsiCo and Cadbury Schweppes. However, the analysis of soft-drinks and other beverage products in relation to competition is based on market share (Fifield, 2007). The industry is further characterized by stiff competition with rivalry between Pepsi and Coca-Cola dominating the market for fairly longer time (The Coca-Cola Company, 2011). The UK market analysis shows top ten ranked companies in beverage market on the basis of market coverage which comprises of Coca-Cola at the top of the rank, followed by Pepsi, then others like Snapple, Cott, National heritage, Hansen natural, Red bull, Big red and Rock star at the bottom rank with only 0.4% market coverage (Keegan and Green, 2002). 2.1.4. Distribution Review The company should utilize supermarkets due to their capacity to stock variety of products under the same brand name, conversely, convenience stores deals with limited product line. At later stages, the distribution should be enhanced by making products available to both off-premise and on-premise retailers (Eggert and Ulaga, 2002). 2.2 Macro Environment Analysis (Porter’s Five Forces analysis) 2.2.1. Bargaining power of buyers: Medium The bergaining power of buyers is moderate in this industry. The key buyers of soft drinks are mainly distributors, independent retailers, on-trade establishments as well as shopping malls. There are numerous opportunities and challenges as a result of changing consumer preferences that requires up-to-date strategies for the purposes of attracting and retaining consumers (Fill, 2009). Buyer power is increased by the presence of large supermarkets and hypermarkets which account for 55% of total market volume where buyers are granted the opportunity for greater negotiating power. Consumers in beverage market are usually influenced by strong brands, therefore, putting demand on the company to develop strong brand that will contribute towards decreasing buyer power (Close, 2012). 2.2.2. Bargaining power of suppliers: Low The supplier power is relatively low in this industry since most inputs can be readily obtained. In this case, new entrants are expected to deal with global influence as a result of strong brands within local markets despite high exploitation on niche markets. However, some of the primary inputs are always subject to price fluctuatuions despite availability from different sources. For instance, water as a major input can cause major challenge to multinationals since in some regions experience water scarcity hence possess a risk to the business (Lamb et al., 2006). 2.2.3. Rivalry: Moderate The soft drink global market is dominated by multinationals such as Coca-Cola and Pepsi that generates significant volume of global market sales (Porter, 2013). These multinationals benefit from large economies of scale, positioned brands and large product portfolio. Therefore, there is high rivalry in this industry making players to try distinguishing their products based on health benefits and taste. The similarity of players within food and bevarage market increases rivalry since switching costs are low. Buyers can switch to preferred products without incurring any costs. However, the existence of moderate growth within the industry decreases level of rivalry intensity (Wooten, 2011). 2.2.4. Threat from substitutes: High The threat from substitutes is high since they are readily available and easily accessed. Some of the substitututes include tap-water, hot drinks such as tea and coffee as well as alcoholic beverages. However, leading multinationals in this market produces wide range of products that tend to reduce threat from substitutes (Mintel, 2010a). 2.2.5. Entry Barriers: High There are several barriers to new entrants in this industry due to distintictive qualities of the multinationals already operating within the industry. New entrants would find it difficult to compete with characteristics such as brand strength of existing players (Porter, 2013). However, small scale success is possible based on unique production processes and nutritional benefits. New players are exposed to business models that are capital intensive such as production process performed by licensed bottling partners. High levels of regulations also tend to reduce interest of newcomers (Mintel, 2010b). Chapter 3 SWOT analysis 3.1 Strengths Innovative packaging that increases the appeal of Atlantic Quench’s products Presence of a strong brand image and consumer loyalty in the market Diverse product portfolio that ensures satisfaction of consumer needs Presence of hybrid distribution system (Rajan, 2007) 3.2 Weaknesses There is low profit margin The company is limited only to some regions There is high levels of fixed costs of businesses 3.3 Opportunities There is larger markets in developing countries that awaits exploitation The industry offers chances for producing new healthy beverage and fruit drinks The market offers opportunities towards shifting focus to volume/price/mix (Ulaga and Chacour, 2001) 3.4 Threats There is high chances on customer changing prefernces Existence of global economic recession possess potential threat to profitability Some instances on foreign exchange fluctuations is also apotential threat High competition from leading multinational beverage manufacturers Chapter 4 Objectives and issues 4.1 Objectives From the current market demand on soft drinks and beverages, Atlantic Quench Cranberries Inc hopes to achieve EBIT of around 12% within the next one year. At the same time, the company focuses on increasing the market share by 5% by the end of 2015 (Ulaga and Eggert, 2005). The idea requires change in pricing strategy where penetration pricing technique seems appropriate since it works well in situations where intensive distribution channel is utilized for the purposes of capturing target markets (Fill, 2005). In the statistics from different market segments there is clear show that ethnic groups prefer using flavoured drinks. The research has made it possible for Atlantic Quench Cranberries to major on ethnic groups with demographic targets on low to middle income consumers, those with low education levels as well as large families. The main objective is to satisfy consumers who look for value and quality in products in different market segments. Development of partnerships with large retailers in each market segment expands distribution channels that eventually boost sales. The strategy ensures greater product placement and subsequently revamp brand awareness amongst consumers (Piercy, 2009). 4.2 Issues There are some key issues that the sales of Cranberry products could face in the target markets. The fierce competition within the market including entry of new suppliers makes terms of advertising and marketing expensive hence making it cumbersome the process of launching new products. The other issue involves health consciousness amongst the UK populations, according to research by Mintel (2010), most consumers respond by rejecting juice and juice drinks having high sugar content. The issue presents a challenge to Cranberry Company since they have to mobilize enough resources towards production of either bottled water or low-calorie soft drinks. They also have to emphasize on functional properties such as fibre or stanol esters. Chapter 5 Marketing strategy 5.1 Positioning Generally, consumers within the same market, have different needs hence attracted to distinctive offers within the market. Efficient services should satisfy selected distinctive characteristics based on certain criteria such as; importance, distinctiveness, communicability, superiority, affordability as well as profitability (Kotler and Keller, 2007). The other positioning strategy includes supplying the market with healthier non-caloric sweeteners, which satisfies consumer’s desire for natural ingredients in food and beverages. Apart from health benefits fruit beverages should also offer functional attributes that includes additional fortifying elements like vitamins and antioxidants (Payne and Holt, 2001). Potential of various market segments is perceived through Graham’s Easy Matrix as shown below. Figure 2: Graham’s Easy Matrix High Company’s ability to meet demand Low High Low High Segment Attractiveness Rainbow = England, Wales, Ireland= geographic segements Blue = Demographic: Children; Middle aged; Teenagers; Old generation 5.2 Product strategy Atlantic Quench Cranberries Inc focuses on making available variety of products. According to market statistics on sales, other flavors apart from cola sells better in the UK market. The Cranberry Classic range of products incorporates variety of juice and juice drinks with core flavour being cranberry, light and high juice cranberry cordial. The portfolio range also included light low calorie fruit drinks, and juices with sweeter, smoother alternative (Omar and Nwankwo, 2011). 5.3 Pricing strategy Prices in juice industry are considered highly elastic; therefore change in pricing technique significantly affects the demand since consumers would prefer lower prices of substitute products with same qualities (Lindgreen and Finn, 2005). However, the use of discounts on large purchases of company products and use of loyalty programs through distributors can be utilized to counter issues on price elasticity. The application of premium pricing as a strategy would assist in price justification of products based on qualities. This system has maximum benefits to distributors and retailers of the products with Coca Cola and Pepsi companies being major competitors within the market (Sicher, 2009). 5.4 Distribution strategy Efficient distribution of the company products require that the distribution infrastructure incorporates as many distribution centers as possible within every market segment (Khanna, 2010). Storage facilities should be located within the proximity of bottling plants and distribution done through the company’s own network comprising of convenience stores and supermarkets. However, distribution done through convenience stores seems most effective since owners reap maximum gross returns with supermarkets receiving a lesser gross return (Weihrich, 2010). 5.5 Marketing Communication Strategy Atlantic Quench Cranberries Company does internet marketing through their website page that helps in promotional programs (Chaffey et al., 2009). All the adverts in the internet depend on online brand recognition to sale. This is since these adverts depict product qualities through graphic looks, a quality that is necessary for increase in sales with the brand maintaining leadership in market (Egan, 2007). Promotional activities through social sites target the largest market segments for Cranberry products which comprises of majority youth. Such marketing strategy would have significant influence on product sales within UK market. In the current global market internet marketing has the advantage of easy accessibility and being inexpensive compared to other forms (Clakins, 2012). The use of creative advertising on media should account for 70% of all resources allocated aimed at informing consumers about benefits of cranberry juices, this has been used for successful launching of the white cranberry drink. Print media and internet advertising should be given 29% (Duncan, 1997). Media advertising portrays Cranberry juices as of superior qualities compared to competitors. However, personal selling presents one of the most effective forms of advertising due to cost effectiveness and is executed through the use of face to face communication, use of coupons and loyalty programs amongst consumers (Drewniany and Jewler, 2008). 5.6 Marketing research Atlantic Quench will undertake market research on key industry analysis to establish major players, market size, current and future industry trends as well as consumer needs (Johnson et al., 2008). The research on industry trends will assist the company determine economic drivers, key buyers and available markets within the industry. Further, research on buyers assists in establishing factors challenging consumer conditions and leading to trade down or preference for carbonated soft drinks alongside more economical beverages such as squash (McElhaney, 2009). 5.7 Marketing Organization Atlantic Quench approaches the UK market by forming joint ventures and signing contracts with largest supermarket groups to assist in selling all its product lines. The UK market will be segmented by product form that includes fruit beverages, functional beverages, cranberry blends such as pomegranates and acerola. The market also responds highly to lifestyle trends that demands healthy drinks (Dubois et al., 2007). Chapter 6 Marketing implementation According to Paas (2009), sound strategy in the market calls for implementation and development of new technologies. This calls for the company to utilize the art of direct marketing through the internet. In this case consumers are approached through the social sites, email and the company’s website (Harris, 1998). At later stages the company would more so use actionable data which include sales database, customer information databases, inventory control databases as well as database used to track product returns. The idea would easily assist the company in identification of potential customers who are closely associated with company products. In such cases, easy delivery to potential target markets is facilitated. Multi-channel marketing system would present the best means since current consumers within the market uses different channels through which they purchase products (Barnes et al, 2009). Marketing executives will be involved in products marketing with executives endowed with the responsibility of appropriate allocation of resources necessary in promotion of product sales. However, the marketing process incorporates public relations, advertising and sales promotions. Detailed research will precede any implementation plan on the target markets since this would guarantee solid relationship between consumers and company products (Kotler and Keller, 2007). Promotion mix utilized in this case involves awareness campaigns through intended means such as social media and internet (Barker et al, 2013). The company would capture potential customers through creative advertisements used in the description of product qualities. Such distinctive qualities require extensive publicity and personal selling amongst other potential promotional activities. At the same time, identifying relationship between effective marketing and through productivity is an essential factor for market positioning (Omera and Bernard, 2007). Consequently, the use of celebrities and third party endorsement figures reinforces product brand image. Chapter 7: Budget ($) Expenditure Matrix 2014 2015 Personnel Salaries and Wages 100,200,000 150,000,000 Allowances 500,000 550,000 Other s 300,000 400,000 Total 101,000,000 150,950,000 Production costs 220,000,000 300,000,000 Research Primary Research 20,000 25,000 Secondary Research 3000 4000 Total 23,000 29,000 Marketing Media 1,300, 420 1, 540,000 Internet 120,000 160,000 Events 800,200 1,000,300 Print media 120,000 145,000 Social sites 280,000 325,000 Total 2620620 3170300 Grand Total 323,643,620 454,149,300 Response Matrix Product units 40,000 42,000 Growth rate 5% 5% Value per product 60,000 61,000 Gross Revenue 2,400,000,000 2,562,000,000 Profits 2076356380 2,107,850,700 Chapter 8 Control The marketing plan as presented also includes a review of the actual achievement against planned achievement (Schneider and Hall, 2011). This allows for early corrections before actual operations in the target markets. However, the overall operations of the company outside United States proves viable since the projections points to generation of approximately 35% of the total net revenue with close to 20% generated from potential hubs. References ACNielsen. 2010. Marketing Information Company providing research, information, Analysis and Insights to consumer products and service industries. Available at http://www.acnielsen.com/ Ahmed, K., & Rafiq, M .2002, Internal Marketing tools and concepts for customer Focused management, Heinemann Elsevier, London Andruss, P. 2010. Market Segmentation. Marketing News, 6(44), 25 Baker, M., & Hart, S. 2007. The Marketing Book. London: Routledge. Barker, M., Barker, D., Borman, N., & Neher, K. 2013. Social Media Marketing: A strategic approach. Connecticut: South-Western CENGAGE Learning Barnes, C, Blake, H., & Pinder, D. 2009. Creating & Delivering your Value Proposition. Kogan Publishers, London Chaffey, D., Mayer, R., Johnston, K., & Ellis-Chadwick, F. 2009. Internet Marketing: Strategy, Implementation and Practice. London: Prentice Hall Clakins, T. 2012. Breakthrough Marketing Plans: How to Stop Wasting Time and Start Driving Growth. NewYork: Palgrave Macmillan. Close, A. G. 2012. Online Consumer Behaviour: theory and research in social media, advertising and e-tail. London: Routledge Drewniany, B. J., & Jewler, A. J. 2008. Creative Strategy in Advertising. Boston: Thomson Dubois, P, Jolibert, A & Muhlbacher, H. 2007. Marketing Management a Value Creation Process. Macmillan publishers, London Duncan, T.1997. Integrated marketing communication, Academy of Marketing, Johannesburg. Egan, J.2007. Marketing Communications, Thomson Learning, London Eggert, A., & Ulaga, W. 2002. Customer-perceived value: a substitute for satisfaction In business markets? Journal of Business & Industrial Marketing, 3 (17), 107-125 Fifield, P.2007. Marketing Strategy: The Difference between Marketing and Markets, (3rd Ed), Heinemann Publishers, London Fill, C.2009. Marketing Communications: Interactivity, Communications and Content, 5th edition, FT prentice Hall, Italy. Harris, T .1998. Value-added public relations, the secret weapon of integrated Marketing, NTC Business, Lincolnwood Johnson, M., Christensen, C., & Kagermann, H. 2008. Reinventing your Business Model. Harvard Business Review, 12 (2), 51-59. Kaczanowska A.2010. Soda Production in the US. IBISWorld Industry Report, 31211. Available at www.ibisworld.com/industry/default.aspx?indid=285 Keegan, M., & Green, K. 2002.Global Marketing management. NY: Prentice hall Khanna, T.2010. Winning in Emerging Markets: a Road Map for Strategy and Execution, Harvard Business Press, Massachusetts, US Kopylovsky, D. 2010. Syrup & Flavoring Production in the US. IBISWorld Industry Report, 31193. Available at:www.ibisworld.com/industry/default.aspx?indid=275 Kotler, P. 2006. Marketing Management-Analysis, Planning, Implementation & Control. Prentice Hall, London Kotler, P., & Keller, K. 2007. Marketing Management. Upper Saddle River, New Jersey: Pearson Kotler, P., & Armstrong, G. 2012. Principles of marketing. 14 edn. New Jersey, NJ: Prentice Hall Lamb, C., Hair, J., & McDaniel, C. 2006. Essentials of Marketing: Dubuque, IA: Thomson South Western Lindgreen, A. & Finn, W., 2005. Value in business markets: What do we know? Where are we going? Industrial Marketing Management, 34, 732- 748 Luther, W. M. 2013. The Marketing Plan How to prepare and implement it. New York: Amacom McElhaney K. 2009. A Strategic Approach to Corporate Social Responsibility. Leader-to-Leader, 52, 30–36. 2009. Available at: http://responsiblebusiness.haas.berkeley.edu/documents/Strategic%20CSR%20%28Leader%20to%20Leader,%20McElhaney%29.pdf. Mintel. 2010a. Fruit Juice and Juice Drinks: The Market – US – February 2010. November. Available at: http://oxygen.mintel.com/sinatra/oxygen/display/id=482462 Mintel. 2010b. Functional Beverages. May. Available at: http://oxygen.mintel.com/sinatra/oxygen/search_results/show&/display/id=482636 Mintel. 2011. Non-alcoholic Beverages: The Market – US. April 2011. Available at: http://oxygen.mintel.com/sinatra/oxygen/search_results/show&/display/id=542968 Omar, M., & Nwankwo, S. 2011. Internet Marketing and Customer Satisfaction in Emerging Markets: The case of Chinese online shoppers. Competitiveness review, 21 (2), 224-237. Omera, K., & Bernard, B. 2007. Risk and supply chain management: creating a Research Agenda. The International Journal of Logistics Management, 18 (2), 197 - 216 Paas, L.2009. Database Marketing Practices and Opportunities in a newly emerging African market. Journal of Database Marketing & Customer Strategy Management, 16 (2), 92-100 Payne, A. & Holt, S. 2001. Diagnosing Customer Value: Integrating the Value Process and Relationship Marketing. British Journal of Management, 2 (12), pp 159 - 182 Piercy, F. 2009. Market-Led Strategic Change, (4th Ed.), Butterworth Heinemann, Oxford Porter, M. E. 2013. On Competition. Massachusetts: Harvard Business Press. Rajan, V.2007. CRM Implementation: Effectiveness Issues and Insights. Journal of Service Research, 9 (2), 184-194 Schneider, J., & Hall, J. 2011.Why most Launches fail. Harvard Business Review, 4 Sicher, J. 2009. Top-10 CSD Results for 2008. Beverage Digest 54 (7) from http://www.beverage-digest.com/pdf/top-10_2009.pdf/ The Coca-Cola Company. 2011. The Coca-Cola Company Fact Sheet. Viewed from http://www.thecoca-colacompany.com/ourcompany/pdf/Company_Fact_Sh eet.pdf/ Ulaga, W., & Chacour, S. 2001. Measuring Customer-perceived Value in Business Markets: a prerequisite for marketing strategy development and implementation. Industrial Marketing Management, 6 (30), 525 – 540 Ulaga, W. & Eggert, A. 2005. Relationship value in business markets: the construct and its dimensions. Journal of Business-to-Business Marketing, 1 (12), 73-99 Weihrich, H .2010. Management: a Global and Entrepreneurial Perspective. Tata McGraw-Hill, New Delhi Wooten, A. 2011. Preserving Brand Strength in Global Markets. Deseret News, WEB Read More