Marketing Management of Cocoa Importers - Research Paper Example

 Marketing Plan – Cocoa Importers Introduction Cocoa Importers is a small, but growing manufacturing and packaging facility which provides packaging services to various chocolatiers, both large and small, across the country. The business concept was developed by recognising that there was virtually no selection of different cocoa products for home consumers on market shelves. With research, there was no currently no system designed for raw cocoa distributors in foreign countries to have their products packaged and shipped or to ensure a local distribution network. By creating the first short-term business alliance with Blackshore Cocoa Distributors, Cocoa Importers was born and has been serving the local community with cocoa packaging needs since 2001. Cocoa Importers mission, since its conception, has always been about providing international consumers with well-packaged, biodegradable packaging to fulfill their baking and household needs. Being able to deliver on small, medium and large-sized package varieties, this is beginning to revolutionise the cocoa industry by offering a new convenience never experienced by consumers. Since the company’s inception, it has grown from a lean staff of only 14 employees, but today, including research and development teams, marketing teams, and in-house manufacturing and support roles, tops 38. This is tremendous growth for Cocoa Importers and has success has been a part of the business’ portfolio from 2001-2007. Today, however, revenues are down sharply and Cocoa Importers must consider repositioning the business from its current concept of earth-friendly products and focus on building a new brand for the company. Cocoa Importers Mission and Goals Coca Importers new mission is to be the leading, national marketer of cocoa packaging products for a wide variety of national and international businesses whilst also providing a new consumer-focused private label brand under the Cocoa Importers first expansion project, to create a trusted consumer product. During the next two years, Cocoa Importers hopes to achieve the following goals: Short-Term Strategic Goals Increase business revenues 40 percent in the two year marketing period. Introduce two new product brands – Consumer and Industrial clients. Development of a Business-to-Business (B2B) website to build stronger client relationships with domestic and foreign cocoa distributors. Core Competencies Sustainable competitive advantage is what Cocoa Importers hopes to achieve by providing the same level of quality and value that our packaging clients require. The business has developed core competencies in developing a reputation for easing supply chain needs of client businesses by providing superior customer service. This is due to the dedication of our two support representatives and sales and marketing management teams. This relationship-focused philosophy has contributed to business success since 2001 and will continue to carry the business forward. The business’ utilisation of existing client supply chain distribution networks and hubs, through our integrated, electronic communications network with logistic support, has cut the cost of supply chain by nearly 65 percent. This partnership focus saves clients a significant amount of money on packaging and reshipment costs and these opportunities are passed on to Cocoa Importers. The dedication of our IT support chief, David Soleburg, has made this core competency possible. Situation Analysis The current marketing environment provides for an enormous abundance of possibilities in strengthening client relationships and in getting the new private-label cocoa brand to consumer shelves within four months. The SWOT Analysis presented represents an analysis of company’s strengths, weaknesses, opportunities and threats in the current marketplaces. Strengths Cocoa Importers has very limited debt as it was funded by ownership private accounts. Having a strong cash balance allows for heavier focus on marketing and consumer behaviour research. Having an in-house manufacturing system allows for potential import of other commodity items for packaging under the Cocoa Importers brand name. Packaging client relationships have established the partnered marketing philosophy of co-branding products in small marketplaces. This partnership-focused strength is significant in terms of competitive advantage. Cocoa as a commodity is rising on the global marketplace and has hit a 24-year-high (Blas and Bintliff, 2009; Bintliff, 2009), which allows for pricing which is in-line with profit expectations and commodity trading volumes/demand. Weaknesses Consumer incomes in today’s global recession are not as disposable as in recent years. Many chocolate manufacturers, who buy our packaged product, are expected to raise prices on consumer products containing cocoa (Blas and Wiggins, 2009). This may impact our pricing models on packaging which could impact client relationships. A limited volume of consumers both nationally and internationally are aware of the Cocoa Importer name. Opportunities The utilisation of internet-based marketing tactics to build consumer incentives and special promotions on the new cocoa brand. The ability to expand by the Cocoa Importers brand of consumer-label cocoa products by utilising the existing, international supply chain and distribution network established by packaging clients. Because there are limited private-label consumer cocoa manufacturers, there is virtually no competition in this marketplace. Threats Potential local customers, coffee houses and bakeries, are seeing consumers, today, brewing their own coffee at home to save on costs (Blas, 2009). If business ratios are down in the local community, these potential users of cocoa products under the private label will be impacted on order volume. There is a need for reform in the current global supply chain network especially in countries like China which are shaking out the smaller suppliers (Yi and Jaffe, 2007). This could be a threat to our existing distribution partners if larger cocoa import companies begin a shakeout of supply options. The costs of biodegradable packaging continues to escalate. Forward Strategy Based on the situational analysis, the business must establish a repositioning strategy from that of an eco-friendly organisation to a quality staple consumer product and packaging solution for larger enterprise. Target Market The capability of distribution is limited to national routes via the existing distribution and logistics network in use with clients and short-term marketing partners. The target market will be to mass audiences, with a special focus on differentiation tactics using Cocoa Importers products in household cooking scenarios and industrial baking facilities as well. Potential, national target customers could exceed 500,000 by early 2010. For packaging clients, who deliver their raw cocoa for packaging and redelivery, customer volumes could reach an additional 10 percent by early 2010 with dedicated marketing, sales and customer support teams. The Marketing Mix Several marketing professionals reinforce the importance of knowing what customers expect where the customer is “an interaction inseparable from production” (Haksever, Cook and Chaganti, 2003, p.6). The new product offering will consist of medium-sized to industrial size and will be distributed to local retailers for sale on supermarket store shelves. Using the available distribution networks, where deliveries of Cocoa Importers brand cocoa can be routed for temporary dispatch, the company can achieve national distribution if demand increases through marketing efforts. Pricing will be consistent with commodity pricing, a profit expectation of no less than 28 percent, and the consumer willingness to purchase products at a particular price as part of a microeconomic analysis. The few, limited cocoa competitors generally price their cocoa products, in the mid-sized kitchen package, at £4.50 per package. If the pricing is within industry norms and consumers are drawn to a price which is lower than competition (and fits within profit models), this could represent a potential £2 million by the end of 2010. Promotional strategy will consist of local community flyers, broad internet-based viral marketing efforts in which Cocoa Importers products are illustrated in different consumer environments, and a focused-relationship marketing approach will promote the Cocoa Importers brand names. Local flyers distributed is a low-cost method of advertisements to local consumers about having a new cocoa option at a great value. Viral marketing efforts will utilise the Cocoa Importers logo (Appendices B) and our local IT expert will create the necessary programming and architecture to support both a humorous and quality-focused approach to creating connection with our target audiences. Local flyers and other promotional print literature will invite customers to visit the Cocoa Importers website for promotional incentives and recipes using Cocoa Importers products. If consumer demand is not high, the company has a contingency plan to reposition the business in terms of consumer attributes, where Cocoa Importers products simply make a better cake because of discriminating consumer values in choosing Cocoa Importers products. Risk Analysis, Strategy, and Forecasting Several marketing experts recognise that risks to a business model like Cocoa Importers includes not having the proper linkage between strategists and marketing professionals (Hosea, 2009; Angel, 2008). One of the advantages of Cocoa Importers is in its size and positive organisational culture where personnel relationships are rewarding. To avoid the risk of misaligning strategy with marketing, all marketing and sales representatives will meet with senior-level administration bi-weekly to discuss desired strategic outcomes and how they can be linked to marketing strategy. There are also opportunities available, long-term, for strategic alliances with various promoters for events associated with chocolate, cocoa, breakfast, or even baking and cook-offs. When these events are promoted, Cocoa Importers can partner with other marketing professionals. Louise (2008) offers that partnerships with the 2008 Beijing Olympic Games fueled brand recognition for a variety of brands in this short-term alliance. This would be highly-relevant in the local region to build awareness of Cocoa Importers and establish regional brand loyalty by spotlighting our products in local events and promotional activities. Marketing experts believe that private brands will make up approximately 30 percent of total grocery sales in the next five years (Hu and Chuang, 2009). This represents a very large-scale consumer shift toward lower-cost, private label brands which could represent significant opportunities for expanding the Cocoa Importers product varieties. Flour could be imported and packaged under similar agreements to create an entire line of Cocoa Importers baking products with the trusted quality and pricing expected of the products. There are other opportunities for building the business name in the long-term. One expert identifies the re-working of the traditional business card since it is the “most successful networking tool ever” (Bradshaw, 2009, p.12). The development of the corporate MiniCard, which is the standard width of a traditional business card, but only half the length. This noteworthy and contemporary change to leaving a business calling card should create viral buzz and excellent word-of-mouth advertising with packaging clients. Budget and Monitoring The packaging for the consumer-label cocoa products, Cocoa Importers brand, will allow for a yearly marketing budget of £100,000. This budget will be reviewed every three months to determine success in sales volumes as a product of marketing to determine whether budgets should be increased. Electronic sales receipts, with the assistance of IT support, will clearly illustrate the volume of products being sold off retailer and grocery shelves nationally. If the contingency repositioning strategy becomes necessary, new promotional strategies to differentiate the product from that of value to that of quality and discriminating tastes will be launched. If sales reach expected levels, the business will consider moving forward on rushing the development of the new product variety by working with various commodities traders and partners. Bibliography Angel, Robert. (2008). ‘Linking execution with strategy in support functions’, Ivey Business Journal, London. 72(2), 1. Bintliff, Esther. (2009). ‘Crude volatile amid surge for raw materials’. Financial Times, London. 27 Jan, 34. Blas, Javier. (2009). ‘The Short View’. Financial Times, London. 5 Feb, 15. Blas, J. and Bintliff, E. (2009). ‘Cocoa prices at 24-year high above pound(s) 2,000’. Financial Times, London. 23 Jan. Blas, Javier and Wiggins, Jenny. (2009). ‘Chocolate prices set for further increases’, Financial Times, London. 26 Jan, 14. Bradshaw, Tim. (2009). ‘Cult figure plays his cards right; Richard Moross’ start-up, Moo Print, survived a rocky start to reinvent the business card for the web 2.0 generation’. Financial Times, London. 25 Mar, 12. Haksever, C., Cook, r. and Chaganti, R. (2003). ‘Service Quality for Small firms: Can the Gaps Model Help?. Rider University. http://www.sbaer.uca.edu/research/sbida/1997/ PDF/03.pdf (accessed 18 Mar 2009). Hosea, Maeve. (2009). ‘Marketing Strategy: Marketers seek reconnection to power source’. Marketing Week, London. 12 Mar, 12. Hu, Fu-Ling and Chuang, Chao C. (2009). ‘How can different brand strategies lead to retailers’ Success? Comparing manufacturers brand for Coca-cola and private brand for Costco’. Journal of Global Business Issues, Burbank. 3(1), 129-136. Ebsco database. (accessed 19 Mar 2009). Louise, Jack. (2008). ‘London 2012 Olympics: Beyond a partnership’. Marketing Week, London. 7 Aug, 16. Yi, Ling and Jaffe, Eugene D. (2007). ‘Economic development and channel evolution in The People’s Republic of China’. Asia Pacific Journal of Marketing and Logistics, Patrington. 19(1), 22. Appendices A: SWOT Analysis for Cocoa Importers – Illustrating the cyclical nature of the inter-link between finding opportunities through the assessment of strengths (et al). Appendices B: Cocoa Importers Logo for Promotional Activities Appendices C: Promotional Budget – Allocation of £100,000 Year One Marketing Budget Read More