Cravendale - Branding Objectives for New Product - Research Proposal Example

Cravendale Contents Introduction 2 Branding 2 Branding for Cravandale 2 Cravandale’s competitors, target market and/or brand architecture strategy 3 Brand Positioning 5 Defining and Selecting the Target Market 5 Cravandales’ Product Strategy and Positioning 6 Cravandale’s Marketing Plan: 8 Cravandale’s Brand analysis 9 Brand Pyramid 10 PRICING IN CRAVANDALE 13 Conclusion 17 Reference 18 Introduction The statement of branding objectives for new products represents a decision criterion-a goal that the team strives to achieve. A statement of clearly defined, measurable, time-bound objectives is critical, especially if the new product team is large and diverse. Branding objectives clearly written down and communicated can have a synergizing effect on the activities of the new product team. Typical marketing objectives for the new product should contain: Unit value sales of the product by the year. Branding According to AMA (American Market Association) brand is a sign, term, name, design or symbol which distinctively identifies a product or service from its competitor and apparently conveys a clear message about the quality of the product or service. So to Certo & Peter (1993), branding is not just a marketing strategy but it bonds a relation with its customers for ever. Hence the characteristics of a good brand used to convey the message very clearly, link your product or service with the customer with a pinch of emotional attachment, ensures product credibility, encourages the buyer, bonds user loyalty. LePla & Parker (2002) say or deeper, more loyal customer relationships and enhanced profit margins, companies must actually "live" the brands they sell. This approach is called "integrated branding" and it's not just a communications strategy. Branding for Cravandale According to Aaker (2001), branding usually represents the thrust of communication efforts in case of a service or product. The new product management is a new line of venture for the company and may involve approaching different markets. A very close interaction with the branding therefore, is the norm in case of new product branding. To Ahiakpor (2003), developing the branding plan in case of new products involves the following decisions. Deciding upon the branding objective - The firm should clearly define what the branding for the new product would/should focus on: generating awareness, interest, or favorable attitude? Establishing a unique image? Promoting trial promoting repurchase? Determining the branding budget - In the absence of precise information about market definition, determination of branding budget is a difficult task. Normally the objective and task method is utilized, in conjunction with estimates of Expected expenditures on the new product. Deciding on the branding strategy- Branding strategy decisions closely follow the positioning decision and are designed to establish the communication components of positioning. Pre-communication research is used to provide inputs to the positioning by segment decision, and also to provide guidelines for copy development says Ansoff (1984). The generation of a number of messages instead of just one has now become the rule rather than the exception in the development of product campaigns, all focusing on the same theme/positioning. Cravandale’s competitors, target market and/or brand architecture strategy Product: Cravandale Milk Name & Logo: Cravandale Slogan: Milk matters, Fresh milk only purer. Economic: UK Citizens are high income citizens. Milk products are described as necessary for people so they are high demand products. Social & Technological: Children are an important segment of UK Environmental: UK is generally concerned with recycling and fair trade products. Our target market: Age: 1-100 years old Sex: male and female Occupation: student – undergraduate, postgraduate and all segments Race: local and international Life-style: Milk is inevitable for healthy life Competitors: Slimmer, Candia, Arla, Skimmer To Anthony & Govindarajan (2003), many marketers use this technique in combination with the more traditional approach, especially in case of packaged goods or food items. It is, partially, because the traditional test marketing is viewed as very expensive, time consuming and open to spying by competitors. The cost difference can be amazing: less than one-tenth. A time period of three months is considered good enough in the simulated technique. Still, it is yet to win wide acceptance for the experts opine that simulations are able to identify potential product failures more than predicting the upside potential of products like Cravandale. Brand Positioning Defining and Selecting the Target Market To ASBURY S. 2001, Market segmentation, the definition of clusters of consumers within the UK market such that there is relative homogeneity within each group, can utilize several bases. Perhaps the most prevalent method of segmentation for new products is benefit segmentation. Benefit segmentation recognizes that people seek different benefits from their purchases and have different motivation to purchase. Using this approach it is possible for the market to define the benefits and attributes that must be built into the new product Cravandale and communicated to the consumers. In fact, the positioning and communication strategies are largely defined by Clifton & Ahmad (2009) is the benefit segment selected. In any segmentation analysis as per Randall (2000), it would yield a number of potential segments and present alternative attribute packages that can be built into the product to make it more suited to a segment. It is, therefore, important to identify criteria used to select an appropriate market segment for the new product. Some commonly used criteria are: Segment attractiveness in terms of market size, growth and future potential. Ease of access in terms of selling effort distribution channels etc. Degree of fit in terms of the closeness of match between needs and preferences of each segment and the attributes and possibilities of the new product. Competitive situation in terms of where the competition is lowest, weakest or most vulnerable. Relative advantage in terms of the differential advantage that you may have relating to product features and benefits as well as entry strategy. Fit and ease I of access only suggest adequacy of the segment. In order to be desirable a segment must offer possibilities of competitive edge. Profitability in terms of offering you to the greatest possibility of meeting your profit and sales targets. Cravandales’ Product Strategy and Positioning According to Kotler et al., (2006) principles, Cravandale’s Product strategy takes shape side by side with the definition of target markets. Product strategy in the context of new products would mean finalization of the product benefits features and attributes and developing growth strategy. The product benefit of Cravandale is distinct from a feature, which forms part of the physical design of the product, is a character that is of some value to the consumer. As per Blanchard et al., (1997) management principles, it helps to list your product benefits as they become important determinants of your positioning. For example, a benefit of a new lawn-mower may be that it can be easily operated by elderly people. This benefit may be translated into a product feature in the form of rotor wheels to give easy maneuverability and relatively lighter weight material used. Feature and attribute definition in detail may bring you very close to the defining the product specification but it does help to bring the product profile into a sharp focus. Product Positioning: Cravandale’s positioning in the market-place means deciding how the product will be perceived by potential customers. As per Bhupta & Kothari (2002), product positioning statement should clearly show the end-use, and the benefit sought to be delivered. For example, a possible positioning statement for a light commercial vehicle could be "a’ tough, long lasting, durable, reliable, premium-priced vehicle designed for fast and easy loading and maintenance”. Likewise Cravandale’s positioning in the market-place is tough, long lasting, durable, reliable, premium-priced one. The specific consumer benefit offer by a product is an integral part of the products position, but position is a more comprehensive concept. Positioning reflects the fusion of product class, product proposition and distance from competing brands to enable the best possible approach to the target consumers. Perceptual mapping and other marketing research inputs are used to map positions in consumer perceptions and products are targeted at these. Here Cravandale’s positioning in the market-place is that the product will be placed in the market and in consumer perceptions relative to the Arla the competitor's products. Coade (1997). The company considered the following positioning options: Cravandale’s Superior Modern Technology position: A valid positioning, but it would again force comparison with others and the competitive edge will be lost once competitors like Arla and Skimmer. (F. Joseph LePla, Lynn M. Parker 2002,) Performance Positioning: This positioning more than any other would hurt. Cravandale is more than its competitors as it would have implied inferiority for the entire standard range of milk products which comprise 45% of the total dairy market. End-Use Positioning: Market research studies conducted for dairy products had clearly indicated that consumers had a definite hierarchical perception of quality relative to the end-use for dairy products. Like all that, the Cravandale should be well in nature, beautifully designed, exceptionally diversified, qualitatively product designed product. Cravandale’s Marketing Plan: Cronje ET AL., (2004) highlights a marketing plan as: when the test marketing results are positive, the product is ready to enter the final batter ground - the market. Here we look at the factors and steps involved in developing marketing plan for the launch of a new product- Cravandale. The marketing plan for launch is simply a statement of the course of action to be followed for the product’s introduction into the market. As per Covey (1994), should clearly specify the marketing objectives, strategies and programmer. Though this section is placed towards the end of the product development process, it is not to imply that marketing planning for launch can be left till the end to commence just prior to the launch. Marketing planning is a continuous activity in the new product development process and informally may start at the time of idea development itself. Formally, it should commence as soon as the product development stage begins. Like all important plans, marketing planning for launch is an iterative process. Setting objectives for new products: The statement of marketing objectives for new products represents a decision criterion-a goal that the team strives to achieve. Fahey & Narayaman (1986). States that in statement of clearly defined, measurable, time-bound objectives is critical, especially if the new product team is large and diverse. Marketing objectives clearly written down and communicated can have a synergizing effect on the activities of the new product team. Typical marketing objectives for the new product should contain: Unit value sales of the product by the year (Drucker, 2003.) Market share by the year Product profitability in terms of percentage margins and payback, In the early stages of the new product development process, the information at the disposal of the marketer may permit only rough estimates. As more information starts coming in as a result of market studies and test marketing feedback, as well internal cost data, the objectives can be refined and made more realistic. Cravandale’s Brand analysis An analysis of the environment, surrounding the product Cravandale is critical to its success and usually is one of the early steps in the development process. It is here being discussed only as an ingredient of the marketing plan. In the situation analysis in this respect to Ferreira (2000), it would comprise of the macro environmental analysis, the market analysis and the internal analysis. The macro environmental analysis involves the study of variables that lie outside the firm and may have implication on the products market and the company. Specifically, it would include a study of the economic situation, the political-legal situation, the demographic and social trends as well as the technological developments. The analysis gives a useful framework for the marketing plan to be developed. The brand analysis is essentially undertaken to provide an input in designing a successful marketing strategy. It should include: UK Market overview-An assessment of the quantitative and qualitative aspects of market size and growth. Segment overview - What is the target segment? How are the segments distinguished, and defined in terms of size and growth trends? Consumer overview-A definition of who are the buyers, the purchase influencers? What, when and how do these target consumers buy? Why do they buy? What are their preferences, needs and wants? Competition overview –A definition of the competitors and their relative strengths and weaknesses segment wise. A critical assessment of their products and consumer’s perceptions of their products, Competitors, strategies for pricing, branding, advertising, distribution; an assessment of their marketing position. Time invested in market analysis usually gives rich dividend at the time of planning the positioning strategies of Cravandale. Brand Pyramid Brand Pyramid is the diagrammatic representation which shows the place a brand occupies in the minds of consumers. And also it helps to visualize where a brand is seen relative to its competitors. Illustration shows the Branding Concept through Brand Pyramid We can see the top of the pyramid is the brand that exists at the top of the user’s mind. To the market’s view point this is the happy and the most desired condition. What is the first brand that comes into your mind if you think of dairy products ? That is regarded as the "Top of The Mind" This the place that always stays deep within you and you always tend to stick to the brands that are top of the mind. As they are now very much part of your desire you may hesitate shifting the brands. Hence, when I think of it, its "Cravandale". The other brands that are recalled by the customer in an unaided form is the next level is of all. The customer is asked to recall as many brands as he or she is able to whenever one thinks of a product. Brand recognition is the third level and perhaps the lowest level. And also known as brand recall. Is this a comparative concept? Actually Brand Pyramid is the clear indicator which shows where the brand is positioned in. As far as the performance is concerned, the product can be well designed and systematically positioned. But it could be relatively too far in the market. Similarly even if the product is good in market, it could be nowhere in consumers mind owing to many reasons. Since the branding need a constant hold both in market and in the customers mind, it has to improve constantly. The very same constant competition may take the product to greater heights within this period. Branding is truly an identity through which one can assess the performance of the products vis a vis competing brands. Central positioning: Branding can focus on the main benefits associated with the product category because the brand is the market leader and perceived as the best brand in the category. Differential positioning: Brand name stresses a particular benefit that a non-leader brand delivers differently to the brand leader. Expanded pyramid Attributes: The product benefit of Cravandale is distinct from a feature, which forms part of the physical design of the product, is a character that is of some value to the consumer. As per management principles, it helps to list the product benefits as they become important determinants of the positioning. Cravandale is available in 1 and 2 litre bottles. It is just as pure milk that we get from our farm. The company concentrates more on its purity. Benefits: Cravandale is more than its competitors as it would have implied inferiority for the entire standard range of milk products which comprise 45% of the total dairy market Emotional rewards: As far as the customer is concerned, they feel proud to use this branded product. As it is inevitable to the daily use, there is a self esteem when they use the product. So branding pays an important role associated with the emotional part of the customers. Values: Here as far as Cravandale is concerned, they keep the credibility through ethics. We can take Cravandale pricing as its best example here for their ethics. Personality traits: Viewing it from another angle, consumer behaviour and consumer research are important allies of the marketer as far as branding is concerned. They are the ideas, give a foretaste of the market and lead to innovations. The more diverse the market, the more is the need for consumer behaviour. Here the quality contributes much to the value of Cravandale. Special Interest Ethics In any business, ethics makes the brand more motivational to the consumers. It makes the real bond between the product and the company. The public expect some sort of justice from the business firm. If they believe that it keeps the pace, there will not be any downfall from the customers’ side. Here as far as Cravandale is concerned, they keep the credibility through ethics. We can take Cravandale pricing as its best example here for their ethics. PRICING IN CRAVANDALE There are two basic approaches to pricing a new product, the cost plus pricing and the market oriented pricing. The former involves estimation of all cost elements and adding of the targeted rate of return to arrive at the price. Market oriented approach on the other hand centers on estimation of consumer's valuation of the product/some basic guidelines could be: A) Use the products target market and positioning strategy: If the product is arrived at a niche market, one with specialized needs and if the positioning is a highly differentiated one, in essence you have a mini monopoly situation. A premium price strategy would be a good route to follow. Conversely if the product is not well differentiated from competitive products and if the target market is also served by others, a competitive pricing policy would be more appropriate./ Low price marks a good weapon to apply when you have a real and sustainable advantage. Similarly, a low price strategy makes sense when it is a part of a long-term strategy to sacrifice profits to cultivate market share. b) Skimming versus penetration pricing: The skimming pricing policy the product is aimed at the market segment for which the product has most value and which will pay a premium for it. Profit per unit will therefore be high but volume, lower. The strategy makes good sense when the product is something of a novelty and those who are aware of the product are willing to pay a high price for it. Skimming is also used when the firm expects potential competition and wants-to build up brand preference. A rapid penetration strategy aims at launching the product at a low price and spending heavily on promotion to lower buyer resistance, and bring about a fast penetration. The strategy may lead to a readily growing market share especially when the market is large with a fair reaction of the target market being price sensitive and the company is expecting growing potential competition. The underlying assumption of the penetration strategy is that units’ costs fall with the scale of production. The aim in this case is to attain market dominance and high market shares as a key to profitability, says Holt (2005). A combination of the two strategies over time is also possible. Initially a skimming strategy, attracting the high value markets can be adopted, keeping the initial risk low. As the product gains acceptance and when the investment is partly paid back then production is increased, prices are lowered and a dominant share of the entire market is sought. In such cases timing is the critical factor, the shift should be timed before the competitors have had a chance to develop similar offerings. c) The product pricing needs to be in line with the corporate strategy as no new product is a stand-by itself item, it is a part of the larger game plan. In keeping with the long-term corporate plans, high profits and high margins may be sacrificed in return for the effective corporate market development. d) Promotional pricing: When there is a certain degree of perceived buyer resistance, an introductory promotional pricing may be used to induce first sales. This generally takes the form of coupons offering money off deal. In case of industrial goods it simply takes the shape of an introductory low price offer. The advantage of promotional pricing is that it allows the normal price to be retained as the consumer is fully aware that the low price is only introductory in nature. Brand Management Recommendation New idea that will enhance the brand’s consumer image New Product Launch - Cravandale skimmed Milk Launch - End of this year, Cravandale, there would be maker of the world's most branded milk is going to enter the 800 million UK dairy markets despite protracted delays and intense opposition by competitors Cusumano & Markides (2001). Moving cautiously in the face of tough competition, Cravandale launches its product selectively in East and the South. Two months after the entry, it will be launched its 90 second television advertisement on the national network, the longest among UK commercials. While Cravandale is framing aggressive marketing strategies to take on its giant competitors, the latter is reacting by bringing out new products and improving dealer terms. Cravandale is treading cautiously in a competitive market, Vice President of the company has the confidence to say: "we would be happy with a 3 per cent market share this year. We plan to build our shares slowly. It is too early to be anywhere remotely near our competitor". Cravandale is now busy finalizing its plans for an October launch in major markets which constitute 40 per cent of the Country's milk drinks market. By the year-end we plan to be all over the country. We are planning to come out with UK flavors and with plastic bottles, an orange flavored drink too and even cans". Yet that does not mean that everything is hunky-dory for Cravandale. It is setting up merely 10 bottling plants which is no match for competitor’s 60. Due to a nine-month delay in getting clearance, Cravandale is forced to enter the market only by end-May- when the peak Cravandale drinks season (nearly 70 per cent of soft drink sales are between March and June) was about to be over. According to a conservative estimate the company has already lost 8 million, as a result of the delay, on an investment of 75,000 pounds. That obviously bothers Cravandale, however, it is now trying to overcome bottlenecks by attacking the market. Asserts says that it is their first task is to get people to try a new product in an innovative way first. Secondly, it is to provide better services to the retailer and also build loyalty to the product". Backing, of course, by a media coverage whose budget is a closely guarded secret. Cravandale is trying all stratagems from the marketing lexicon. Consumers are being prodded to cut the newspaper advertisement of the Cravandale Launch in their-city and exchange it for a free bottle from any shop. The company claims the offer is a resounding success and will reach as much as 25 per cent of the households in each of these cities. At least .1million consumers drink Cravandale free in London!) In order to woo the dealer Cravandale has introduced plastic crates instead of the wooden one in Manchester and is offering specially designed plastic ice-chests which will cut down the ice costs by as much as 30 per cent for the retailer. In London retail outlets would be serviced twice daily in order to keep retailer investments on storage low in many places Cravandale is going to be adopted a Village near the historical fort by painting the entire market with Cravandale hoardings and stocking the product in virtually every- shop in the market. To encourage retailers to push Cravandale in all over the company introduce a scheme by which a retailer would be given one crate of Cravandale free if on being asked for a drink by name he would recommend Cravandale. lf the company sent mystery buyers to various shops to check up on this. In order to mop up margins to the retailer, the company will be launched a refill scheme for every crate sold, two packets would be given free of cost virtually giving the retailer an extra 8 per cent margin. Conclusion Here we encompass the final stages of the Cravandale product brand development process, namely test making and product launch. The section on test marketing explains the rationale for test marketing and discusses the strategies used to test market. The section on product launch gives a detailed description of the marketing plan for new product launch and the steps needed for defining and selecting the target market. The product strategies including product positioning, pricing and promotional strategy have also been explained. Reference Aaker, D.A. (1995). Developing business strategies. NY: Wiley and Sons Inc. Ahiakpor. J.C.W. (2003). Classical macroeconomics: some modern variations and distortions. NY: Routledge Ansoff, H.I. (1984). Implementing strategic management. 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