Marketing Plan for Atlantic Quench Cranberries Inc - Essay Example

ATLANTIC QUENCH CRANBERRIES Executive Summary Atlantic Quench Cranberries is a Juice producing co-operative with its base being in the United States. The cooperative was formed about 80 years ago by two grape farmers and later Florida grapefruit growers joined the co-operative. In the current time it has a composition of about 630 cranberry and 46 grapefruit farmers. The cooperative has grown to become the best-selling brand of canned and bottled juices in North America since 1981. The following is an outline of the marketing plan for Atlantic Quench Cranberries Inc. the aim of this plan is to maintain cranberry products the bestselling juice drink in North America and Europe. In order to carry out macro environment analysis for Atlantic Quench Cranberries (AQC), this plan will use Political, Economic, Sociological, Technological, Environmental and Legal (PESTEL) analysis, concentrating on the forces that are most relevant to the AQC company in order to evaluate any possible strengths, weaknesses opportunities and threats. The marketing plan main focus is the population that is highly demanding for natural and healthy drinks today. The budget for the marketing plan will cover the costs of doing market research, differentiating products, and advertising the improved products. The emphasis of this marketing plan is to ensure the healthy products from this company reach the target market. Introduction The Cranberry products include juice drinks with cranberry flavors. In 2002, the co-operative introduced to the market the Cranberry Classic in a 250 ml in an aim to target desire consumers in the convenience sector. In 2003 the organisation, AQC increased its products of the ‘light’ low calorie fruit drinks. These were inclusive of cranberry and blackcurrant, cranberry and raspberry, and cranberry and mango. Later in 2004, a white cranberry juice drink was launched and promoted as sweeter and smoother alternative to the red cranberry juice drinks. This measures have been introduced to specifically target the fast-growing chilled drinks sector. A cranberry and mandarin juice drink was introduced to the market in 2005. Situational Analysis (Marketing Audit) According to the publication by Public Health England (PHE), “Soft drinks account for the main cause of sugar consumption between 2008 and 2012” (Keynote, 2015). Several governmental and non-governmental bodies, such as National Health Service (NHS) and Scientific Advisory Committee on Nutrition (SACN) are; therefore, keen to reduce the consumption of sugary drinks by supporting and “pushing” sugar taxation (Mintel, 2014). Due to consumer awareness, buyers prefer more healthy drinks with less containing sugar. In the UK demand is increasing for healthy juice drinks, leaving carbonated soft drinks behind, because of the poor image created in recent years (AQC, 2015). Macro/Micro Environment Analysis: PESTEL “PESTEL analysis is used to audit environmental factors that can influence the organisation and gathered information can be used to guide strategic decision-making.” This is according to Chartered Institute of Personnel and Development (CIPD, 2013). In order to carry out macro environment analysis for Atlantic Quench Cranberries (AQC), this plan will use Political, Economic, Sociological, Technological, Environmental and Legal (PESTEL) analysis. Political Based on the emerging regulations on the health and safety of individual customers, this could be identified as an opportunity for AQC, because of the low saturated sugar in cranberries, it has a potential of becoming a society’s approved alternative in soft drinks market. When considering potential taxation on sugar, AQC has an advantage over several giant soft drink manufacturers (such as Coca Cola and PepsiCo) that are currently investing high amount of resources in order to develop beverages that contain less sugar. Economic In terms of market share, the fruit juices segment has been on the decline throughout the review period, falling year-on-year from a share of 37.4% in 2010 to 34.5% by 2014 (Key Note, ). This could be explained due to negative publicity that has affected fruit juice market because of the high saturated sugar (PWC, 2015). Sociological With the increased preference of less containing sugar, the demand of AQC is also increasing. This would indicate that there is an opportunity for AQC to access more consumers, who are no longer loyal to carbonated soft drinks and are seeking for products that can add the value by offering more suitable, healthier beverages. However there is a threat of consumers gaining a perception of juices containing high amount of sugar and choosing alternatives such as bottled water, which has not been associated with sugar. Technological The current trend is being referred as “Snacking on the go” this is as a result to the busy state of the people. AQC will benefit from this trend because they are able to access busy locations, such as train and bus stations, office buildings or even gyms and schools. In order to avoid high costs of developing and maintaining such technology AQC could potentially choose to “rent” these from already existing company Environmental Changes in climate pose a great threat to the growth of cranberries. Cranberries are mainly grown in regions of North America (PWC, 2015). It is expected that the rain patterns are predicted to continue changing (EPAGOV, 2015). It is therefore, a threat for AQC because all of their cranberries are grown in the areas. This potentially will affect the quality and quantity of cranberries which could lead to AQC fail to meet the demand for the end products. Market overview: In the recent past there has been an increase in demand of fruit juice in the UK. Fruit drinks are deemed as health drinks and therefore, as a result of interest in living healthy lifestyle it has led to the high demand. Consequently the juice sector is increasingly gaining market share as a result of loss of popularity of the carbonated sector, which has a poorer image among consumers. Market size The UK market for fruit juices increased over the review period, rising by 2.3% from £1.76bn in 2010 to an estimated value of £1.8bn in 2014, despite two consecutive years of decline in 2013 and 2014, of 2.2% and 1.1% (Key Note, ). By volume, the fruit juices sector declined year-on-year between 2010 and 2014, despite rising market values in 2011 and 2012, falling by a total of 15.7% from 1.18 billion litres to 995 million litres. The annual rate of decline in the sector has accelerated over the period, from 1.7% in 2011, to growth of 5.2% by 2014 (Key Note). Value sales of cordials and squashes are expected to fall by 2% year on year to £724 million (Mintel, 2014b). Volume sales are expected to have declined by 12% over 2009-14 to 450 litres, with four consecutive years of decline since 2010. This is could be explained due to formats, which cordials have been presented and directly linked to changes in concentrates now being double-concentrates (8% decline in 2010) (Mintel, 2014b). Growth rates Hot summer conditions have proven to increase the consumption of carbonates, juice drinks and other beverages that are popular mixed with ice (Key Note). Besides weather conditions, this ongoing decline in the fruit juices market is also attributable to the comparatively high price of products in this sector, with recent rising raw material costs pushing prices up further (Key Note), however this is not seen as a major threat for the industry as due to the raising economy is expected rise in consumer spending between 2014 and 2019 (Mintel, 2014). The cordial and squash market is considered to be fluctuating, as has proven that the demand is rising in when the weather is warm (due to the warm weather conditions in the summer of 2013, increased the market value return by 1% (Mintel, 2014b). AQC is presented with the opportunity, given that it is evident that the consumers are willing to pay more for the detoxing and healthier options and is exactly what AQC can offer to its customers. Customer and competitor analysis Customer analysis and Market Segmentation For fruit juices, consumption penetration in Great Britain was slightly higher among women than men, at 39.1% compared with 32.6% (Key Note, 2015). By age, consumption penetration was relatively similar across almost all age groups, ranging between 34.3% and 40.5% between the 15 to 19 and 55 to 64 age bands, with notably low penetration recorded among those age 65 and over, at 29.4% (Key Note, 2015). The highest level of penetration was recorded among those aged 25 to 34 and 20 to 24, at 40.5% and 40.3%, respectively (Key Note, 2015). Competitor Analysis Cranberry Juice has both direct and indirect competitors. The direct competitors are those organisations that are in the production of other verities of fruit Juices. One of the great direct competitors to cranberry juice is the super fruit juice. The company has brought about the introduction of other fruits such as gogi, pomegranates and acai into an industry that was traditionally dominated by the cranberries. The indirect competitors are the companies that are in the same industry, but are engaged in the production of other refreshment drinks. A good example is the Coca Cola Company. The juices blended from these fruits are believed by both Americans and the British to have a lot of nutrients, and they act as antioxidants. The uniqueness of these berries serves as strength for the competitors dealing in them thus the great impact they have created in the fruit juice industry. There has been a 20% increase in the volume of sales for the fruit juices. SWOT Analysis S Market demand for light drinks Cranberries low in sugar Differentiation from existing brands Environmentally friendly and modern packaging Variety of products that are matching current customer demand W Product positioning Customer perception of the fruit juices Highly saturated market O Market expansion Healthier products Snacking on the go - vending machines Gyms, leisure centres Market targeting Increasing elderly population T Economic downfall Brand loyalty Competitive environment Weather conditions Mission Make Atlantic Quench the leading producer of quality canned and bottled fruit juices in both North America and the U.K. To achieve the mission, the following objectives are going to be used in issuing directives for the marketing plan. Aim 1. Remain leading Juice retailer in both America and UK Objectives •To improve brand loyalty in America and introduce the loyalty in U.K also. This will be measurable through the increased sales that will be realized. Brand loyalty has helped the company remain at the top in U.S for many years. • Product awareness: To create complete awareness of the differentiated products that the company has been introducing over the years, for example, the cantatas that have been recording increased consumption. 2. Market penetration Objectives •To inform consumers of the lightest versions of juices the company is manufacturing so that weight-conscious customers do not shift to the low-calorie soft drinks produced by competitors. •To further diversify the advertisement of fruit juices through creativity so that more gains can be made from the impulse buying of this product. 3. Maintain healthy living standards To continues with provision of non-sugar juice products to improve the health of the loyal consumer of the product. Through creation of awareness of the dangers imposed from consumption of carbonated drinks. Strategies For this marketing plan that is aimed at the company taking over the U.K market also, the choice of products being introduced in various markets is critical. Therefore, the Ansoff matrix can be used to illustrate the strategies that will be taken by the marketing agents (Hunt, 2006). Ansoff Matrix Market\ Product Existing Product New Product Existing Market Market penetration Product development New Market Market development Diversification In market penetration, the company is going to target at selling more of the products it already has in the markets it operates at the moment. Better promotions for fruit juices is most likely to increase the sales of fruit juices among women aged between 25-34 who have been ranked as the best buyers in most regions of England (Mamula, 2012). Under the product development, slightly differentiated products will be introduced that are going to be openly accepted by customers aged over 55. The company gets the little revenue from these customers since they prefer drinks that are highly natural. Therefore, Atlantic Quench will have to introduce cordial juice drinks that have a lot of natural and healthy ingredients. Marketing Program The target is to make the potential consumers aware of the alternatives of the high sugar content which are being offered by Atlantic Quench. The demand for natural and healthy drinks has been on the rise (Luther, 2001). Therefore, these light versions of fruit drinks offered by the company are going to take over the market if properly advertised. Health oriented promotions also are part of the program that would see this fruit juice firm better their sales. Such promotions include free campaigns that alert the public of the increasing obesity cases in Europe. The benefit of this is going to be increased sales. Product Non-carbonated products Cranberry flavors Price Lowered prices for our products Discounts for repetitive customers Place Online buying Cranberry shops Promotion Discounts for repetitive customers Free samples Implementation and controls Activity Time period Responsibility Market Research Two months Research department Market Testing Six months Marketing department Differentiation Four months QA department Advertisement Six months Marketing department Within the first two months of each business year, there would always be a market research to analyze and note what the consumers want. The costs incurred here include hiring of the market researchers and acquiring the necessary materials required to conduct the search. The marketing heads will be in charge of this phase (Michman, Mazze & Greco, 2003). The other cost will be that of making differentiation and specifications to the products that the firm is already producing. The differentiation can be done within the next three to four months. The production manager will be held responsible at this level (Hanlon, 2013). Finally, it is crucial to make advertisements and awareness about these new or improved products. There are costs that are going to be incurred at this stage. They include, TV adverts, social media knowledge, and publication of leaflets. The marketing department will be in control of this stage. Marketing Expense Budget Year 1 Year 2 Year 3 Radio Advertising $6,000 $6,300 $6,615 Newspaper Advertising $2,400 $2,520 $2,646 Online Advertising $2,400 $2,520 $2,646 College Sponsorships $900 $945 $992 Membership Discounts $1,399 $2,365 $2,720 Other $6,000 $3,000 $3,000 Total Sales and Marketing Expenses $19,999 $17,650 $18,619 Conclusion With proper consideration of the customer and competitor analysis for the Atlantic Quench, the outlined marketing plan is expected to be successful in achieving the mission of becoming the best manufacture of health juice drinks across America and Europe. The strategies of market infiltration and product growth are also perceived to be the best option for making the objectives of the marketing plan achievable. References Abratt, R. (1993). Market segmentation practices of industrial marketers. Industrial Marketing Management, 22(2), 79-84. Bai, Y., Feldman, C., Wunderlich, S., & Aletras, S. (2011). The USDA Fresh Fruit and Vegetable Program Application in a Northern New Jersey Elementary School: Parent and Teacher Perceptions. Journal Of The American Dietetic Association, 111(9), A65. Biggadike, E. (1981). The Contributions of Marketing To Strategic Management. Academy Of Management Review, 6(4), 621-632. Bigné, E., Moliner, M.A. and Sánchez, J. (2003) Perceived quality and satisfaction in multiservice organizations: The case of Spanish public services. Journal of Services Marketing 17 (4/5): 420–442 Brochado, A., & Martins, F. (2008). Market Segmentation Methodology: segmentation basis and classification methods. Review Of Business Management, 132-149. Brochado, A., & Martins, F. (2008). Market Segmentation Methodology: segmentation basis and classification methods. Review Of Business Management, 132-149. Brooksbank, R. (1994). The Anatomy of Marketing Positioning Strategy. Mrkting Intelligence & Plan, 12(4), 10-14. Camanzi, L., Malorgio, G., & Azcárate, T. (2011). The Role of Producer Organizations in Supply Concentration and Marketing: A Comparison between European Countries in the Fruit and Vegetable Sector. Journal Of Food Products Marketing, 17(2-3), 327-354. Cherian, J., & Jacob, J. (2012). Green Marketing: A Study of Consumers’ Attitude towards Environment Friendly Products. ASS, 8(12). Chimhanzi, J. (2004). The impact of marketing/HR interactions on marketing strategy implementation. European Journal Of Marketing, 38(1/2), 73-98. Colonescu, C., & Schmitt, N. (2003). Market Segmentation, Market Integration, and Tacit Collusion. Review Of International Economics, 11(1), 175-192. Dahlström, P., & Edelman, D. (2013). The coming era of ‘on-demand’ marketing. Mckinsey.com. Retrieved 14 April 2015, from http://www.mckinsey.com/insights/marketing_sales/the_coming_era_of_on- demand_marketing Danaher, P., & Smith, M. (2011). Modeling Multivariate Distributions Using Copulas: Applications in Marketing. Marketing Science, 30(1), 4-21. Dibb, S., & Simkin, L. (1991). Targeting, Segments And Positioning. International Journal Of Retail & Distribution Management, 19(3). Doyle, P., & Saunders, J. (1985). Market Segmentation And Positioning In Specialized Industrial Markets. Journal Of Marketing, 49(2), 24. Dutta-Bergman, M. (2005). Psychographic Profiling Of Fruit And Vegetable Consumption: The Role Of Health Orientation. Social Marketing Quarterly, 11(1), 19-35. Gutić, D., & Petrić, T. (2012). Consumer Attitudes In Market Segmentation. Emc Review - Časopis Za Ekonomiju - Apeiron, 3(1). Hanlon, A. (2013). The Segmentation, Targeting and Positioning model - Smart Insights Digital Marketing Advice. Smart Insights. Retrieved 14 April 2015, from http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation- targeting/segmentation-targeting-positioning-model/ Hassan, S., & Craft, S. (2005). Linking global market segmentation decisions with strategic positioning options. Journal Of Consumer Marketing, 22(2), 81-89. Hunt, S. (2006). Teaching Marketing Strategy: Using Resource-Advantage Theory as an Integrative Theoretical Foundation. Journal Of Marketing Education, 28(2), 93-105. Imai, K., & Tingley, D. (2011). A Statistical Method for Empirical Testing of Competing Theories. American Journal Of Political Science, 56(1), 218-236. Jinhee Choi and Ayelet Fishbach. (2013) Choice as an End Versus a Means. Journal of Marketing Research 48:3, 544-554. Kerr, M. (2007). What Is Target Marketing? Bplans Blog. Retrieved 14 April 2015, from http://articles.bplans.com/target-marketing/ Knutson, R., Palma, M., Paggi, M., Seale, J., Ribera, L., & Bessler, D. (2014). Role of Trade in Satisfying U.S. Fresh Fruit and Vegetable Demand. Journal Of International Food & Agribusiness Marketing, 26(4), 326-343. Kotler, P., & Armstrong, G. (2004). Principles of Marketing (10th ed.). New Jersey: Pearson Education Inc. Kotler, P., & Keller, K. (2009). A framework for marketing management. Upper Saddle River,N.J.: Pearson Prentice Hall. Lazer, W., & Shaw, E. (2000). Global Marketing Management: At the Dawn of the New Millennium. Journal Of International Marketing, 8(1), 65-77. Loon, J. (1994). Competitive positioning: The key to marketing strategy by Graham J. Hooley and John Saunders. New York: Prentice Hall, 1993. 260 + xi pages, $32.00. Journal Of Product Innovation Management, 11(5), 479. Luo, J. (2014). Entrepreneurial Marketing- How Marketers Can Satisfy Customers’ Needs When Applying Entrepreneurial Marketing Approaches. International Journal Of Advances In Management Science, 3(4), 109. Luther, W. (2001). The Marketing Plan. New York: AMACOM. Malhotra, N., & Peterson, M. (2001). Marketing research in the new millennium: emerging issues and trends. Mrkting Intelligence & Plan, 19(4), 216-232. Mamula, T. (2012). Role of marketing metrics in strategic brand management. Marketing, 43(1), 49-61. McDaniel, C., & Gates, R. (2012). Marketing research essentials. Hoboken, N.J.: Wiley. Mengwasser, D. (1974). H. R. Jones: Waste Disposal Control in The Fruit and Vegetable Industry. 261 Seiten, 43 Zeichn., 60 Tab. Noyes Data Corporation, Park Ridge (New Jersey/USA) und London (England) 1973. Preis: 36, – $. Nahrung, 18(2), 235-236. Michman, R., Mazze, E., & Greco, A. (2003). Lifestyle marketing. Westport, Conn.: Praeger. Min Zhao, Steve hoeffler and Gal ZauberMan. (2013) Mental Simulation and Product evaluation: the affective and Cognitive Dimensions of Process versus outcome Simulation. Journal of Marketing Research 48:5, 827-839 Moorthy, K. (1993). Theoretical Modeling in Marketing. Journal Of Marketing, 57(2), 92. Olsen, H. (2015). Customer Targeting. On Strategy. Retrieved 14 April 2015, from http://onstrategyhq.com/resources/customer-targeting/ Perez-Mujica, L., Duncan, R., & Bossomaier, T. (2014). Using agent-based models to design social marketing campaign. Australasian Marketing Journal (AMJ), 22(1), 36-44. Piercy, N., Harris, L., Peters, L., & Lane, N. (1997). Marketing management, market strategy and strategic management: domain realignment and redefinition. Journal Of Strategic Marketing, 5(1), 51-63. Ravi Dhar, Klaus Wertenbroch (2000) Consumer Choice Between Hedonic and Utilitarian Goods. Journal of Marketing Research: February 2000, Vol. 37, No. 1, pp. 60-71 Roger Brooksbank, (1994) "The Anatomy of Marketing Positioning Strategy", Marketing Intelligence & Planning, Vol. 12 Iss: 4, pp.10 – 14 Singh, R. (2003). Developing Relationship Marketing with Customers: A Scandinavian Perspective. Library Management, 24(1/2), 34-43. Slemmer, J., Livingston-Thomas, J., Gottschall-Pass, K., & Sweeney, M. (2013). Cranberries and Wild Blueberries Treated with Gastrointestinal Enzymes Positively Modify Glutathione Mechanisms in Caco-2 Cells In Vitro. Journal Of Food Science, 78(6). Söllner, A., & Rese, M. (2001). Market segmentation and the structure of competition: applicability of the strategic group concept for improved market segmentation on industrial markets. Journal Of Business Research, 51(1), 25-36 Srivastava, R., & Sakunke, S. (2011). Impact of Future Trends on Marketing Strategy. Far East Journal Of Marketing And Management, 1(1), 11-13. T.P. Beane, D.M. Ennis, (1987) "Market Segmentation: A Review", European Journal of Marketing, Vol. 21 Iss: 5, pp.20 – 42 Varadarajan, R. (2009). Strategic marketing and marketing strategy: domain, definition, fundamental issues and foundational premises. Journal Of The Academy Of Marketing Science, 38(2), 119-140. Read More