Marketing for Medical Cannabis Distribution - Business Plan Example

Marketing Plan of Affiliation Marketing Plan for Medical Cannabis Distribution Plan Executive Summary The Medical Distribution Firm is one of the companies that is devoted towards the production of marijuana for medical purposes. The company prioritizes quality and customer satisfaction in the production process. The mission and vision of the business is the provision of quality and satisfaction of its customers. The goals of the company are increasing competitiveness and profitability in the medical marijuana industry. The marketing plan targets the retailers and the medical institutions that incorporate marijuana in their therapy. It also targets other consumers in states that have legalized the consumption of marijuana. The situation analysis of the company portrays strengths that relate to competitiveness and implementation of technology in the production process. The company aims at expansion of its market beyond the states of Colorado and Denver. The major weaknesses and threats arise from the legal requirements and competition in the industry (Medical Marijuana Business Daily, 2013). The industry has experienced a growing demand of marijuana. The entry of other firms in this industry has increased competition. The customer demands are also rising towards specificity in satisfaction. The company will incorporate the price, product, promotion, and place strategies in the marketing plan. These strategies aim towards the establishment of a greater command in the market than their competitors in the industry. The financial data and projections have portrayed a rising demand for the marijuana. This is in relation to statistics that show a change in attitude towards marijuana legalization (Garvey, & Doyle, 2014). The organization structure is designed to promote the implementation of the marketing plan through training, research, and determining of the implementation schedule. This plan will then be evaluated and possible recommendations made in relation to the performance and financial controls. Company Description The Medical Distribution Farm is a company that is devoted towards the production of cannabis for medical reasons. The company was established following the efforts that have led to the legalization of the marijuana for use in the medical field. The company produces the cannabis on a large scale for the medical institutions and production of marijuana products for medical use. The company has partnered with the major stakeholders in the medical field for the promotion of the production of the marijuana for therapeutic reasons. Currently, the legislation of legalizing marijuana in Colorado and Denver has fostered the company’s efforts of provision of this product. The company sells directly to the medical institutions or through retailers to the final consumers. The company also provides wholesale product sales to the retail stores in the states that have legalized the sale of marijuana. The company also processes the marijuana to improve its quality before selling it to the consumers. Strategic Focus and Plan a. Mission /Vision Statement The Medical Marijuana Distribution Farm is a company dedicated towards the provision of high quality medical marijuana to clients who believe in quality. The company focuses on customer satisfaction as a major consideration for its existence. The company intends to obtain its revenues through the promotion of a culture of customer satisfaction and fair returns for its investors. The customers experience dignity, quality, and honest service and quality maximized products. b. Goals The major goal of the company is the provision of superiority products and services to its customers. Customer care and value will also be fostered through improvement of mechanisms of interacting with customers, and responding to the customer complaints. The company also aims at increasing its profitability by sustaining a competitive business reputation in the market. The market share of the business is expected to rise in the coming fiscal year, and this is fostered through customers centered production. It also aims at the provision of a sustainable employee environment that encourages creativity and innovativeness. c. Core Competency and Sustainable Competitive Advantage The company is a legally established entity that licenses for the production of marijuana for medical reasons. The company aims at prioritizing customer satisfaction rather than prioritizing profits. The customer loyalty to the company products and services is likely to be fostered. The company has also branded and priced its products to encourage fairness and quality. Technology has been incorporated in the production process to foster uniformity and sustainable production management and advertisement of the products to the target market. Situation Analysis a. SWOT Analysis The Strengths of this company emanate from the incorporation of technology in most of the production stages. They also have skilled management that encourages creativity and inclusiveness in the production process. The company has also fostered research and development in the production and marketing techniques of their products. The major weaknesses of the company arise from the legal and the regulatory authority that have taken a lot of time on the legalization of marijuana production (Medical Marijuana Business Daily, 2013). This has limited the market towards the states that have legalized the production of marijuana. The opportunities of the company arise from the growing campaigns that solicit the legalization of marijuana in major states. The company may benefit from the competitive advantage if these legalizations occur. The major threats to the company are the growing numbers of the competitors in the production of marijuana. The legal issues are also major threats due to the inability to expand production of marijuana (Garvey, & Doyle, 2014). b. Industry Analysis The medical marijuana production has greatly increased due to the adoption of legislations that allow for the production of marijuana. In the USA, there has been major debates relating to the legalization of the substances. In the 1960s, only 12% of the major adult population supported the legalization of marijuana. However, in 2012, 52% of the adults supported the legalization of the marijuana in major states (Garvey, & Doyle, 2014). This has overseen the shift of the production of marijuana towards an industry of higher demand and supply. In 2012, it was estimated that 18.9 million people aged beyond 12 years had also used marijuana in a month for medical or recreational reasons (Strauss, 2013). This has increased the need of production of marijuana for these consumers. c. Competitor Analysis The chief competitors for the business are the other companies that produce marijuana for medical reasons. The market for the companies is small owing to the legalization of marijuana in only a few states (Sacco, & Finklea, 2013). Other competitors are the criminal gangs that tend to sell the marijuana illegally on the streets of USA. These individuals sell their products at lower prices, thus providing a huge competition for this company. d. Company Analysis The company plays a essential role in the navigation between the competitors, the target market and the customers. The company has a competitive gain because it is licensed under the US law to sell the marijuana for medical reasons. It also has invested enormously in the production of the products through enforcing major marketing strategies. e. Customer Analysis The customers that are targeted by the company are the individuals that have a need for marijuana for medical reasons. Currently, a large proportion of the adult individuals are supporting the legalization of marijuana in the USA. The customers require products that are of high quality and fairly priced. The company provides these necessities in their products through promoting satisfaction rather than profits. Market Product Focus a. Marketing and Product Objectives The marketing plan aims at informing the potential customers about our products in the market set up. It also aims at the consideration of the major customer complaints that regard to the products that are sold by this business to the consumers. Another objective is increasing the profitability of the company through the encouragement of quality and customer satisfaction in the market (Sacco, & Finklea, 2013). This is likely to provide the satisfaction and returns to the investors, hence promoting the expansion of the production process of the company. The market share of this company requires to be expanded in order to obtain a competitive advantage over the major competitors in the industry. The marketing plan also aims at increasing customer loyalty and satisfaction in the product. This is through responding to the various customer related complaints that provide a platform for improvement of the production process. b. Target Markets The major target market for the company are the medical institutions that incorporate medical marijuana in their therapeutic process. These institutions are legally licensed to use the marijuana for medical reasons. In Denver and Colorado, marijuana has been legalized. The companies that have arisen have also increased their production capacity (Garvey, & Doyle, 2014). This company aims at the differentiation of its products to incorporate quality and customer satisfaction in its products. The institutions that value quality for its patients are likely to benefit immensely from these products. Another target market for the company are the retail shops that sell marijuana directly to consumers or to other institutions (Medical Marijuana Business Daily, 2013). Some stores have been licensed to sell small quantities of marijuana to the market. These stores are a part of the target in order to provide competitive against the major cartels that sell the product on the streets. This targets the final consumers that value quality and dignity in the consumption of marijuana. The marketing plan also targets the international market due to the legalization of marijuana in countries such as Uruguay. The expansion of this company to the boarders will be a chief feature for its growth. c. Points of Difference The differentiation of company products plays a vital role in the provision of a point of difference in the market. The products are differentiated through packaging, quality, level of satisfaction, and the dignity that arises from their use. The company also incorporates technology in the production process of the product. The technology will give the product a unique and uniform sense of quality in the target market. The customer will be able to identify the differences between these products and those that are produced by other companies. The company has designed strategies to improve production through researches in the ways of improving customer satisfaction in the product. This research will provide insights on the customer demands and priorities regarding to the product. d. Positioning The position of the product in the market is displayed by value and quality. The value that is obtained via the consumption of this marijuana has the effect of satisfaction to the consumers. The products will be positioned through branding, packaging, and quality (McDonald, 2011). The prices will also play a role in the market positioning because they will be cheap but high quality products. The brand shall entail the aspect of quality and outstanding features that relate to pricing, hence promoting a product that cannot be copied by competitors. Marketing Program a. Product Strategy The products shall be designed to portray quality through its attributes, branding, labelling and packaging. The key attributes will include quality that ranges from perception to consistency in the product (Rogers, 2001). The physical features that entails to the manufacturing process will also be promoted in the production process. Branding will be in terms of the name, symbols, and signs that are simple and easily identified in the market. The branding process shall be designed to incorporate the company culture of quality and personal satisfaction to the customers. The packaging process shall be made at the company level to allow for differentiated packaging techniques in the market. The product shall be packaged in suitable quality and conspicuous materials that promote quality. The labelling shall be made using stickers that provide information to the consumers (Ferrell, & Hartline, 2011). The information will also include warnings to the consumers that regards to the health effects of marijuana. b. Price Strategy The pricing strategy of the company is aimed at increasing profitability, increasing the size of market share, and increasing competitive advantage in terms of pricing. The prices shall be determined after the performance of the market analysis. The demand curve of the products shall be determined and the price formulated from the demand factors (Rogers, 2001). The prices shall then be designed to incorporate the costs of the production process. Since the company aims at the growth, the prices shall be determined to allow the company to obtain minimum profit but emphasize on quality. Therefore, the prices shall be low, relative to the competitors’ prices. The strategy that will be employed in pricing is the value-based pricing that will depend on the value of services delivered to the customer. For example, the specific customer demands will determine the price charged for the products. c. Promotion Strategy The promotional strategies that will be used include advertising, sales promotion, selling, and public relations. The advertisement techniques will be designed to incorporate attention, interest and desire for the products of the company. The techniques shall also be informed about the products, and the dangers that relate to the excessive consumption of marijuana. The media will include press advertising, television, billboards, radio advertising, and online advertising techniques. Another technique is selling where the customers shall be approached as one by one, and their concerns about the general perceptions of marijuana handled (US Department of Justice, 2013). Sales promotions shall be done in medical seminars, conferences, and trade show events in order to catch the attention of medical personnel. Sales representatives shall be employed to carry out the promotion of the product in both the medical and the retail market. Public relations shall also be fostered through the media, the local communities, and the clients. d. Place (Distribution) Strategy The situation of the business as well as the target market will be central in the marketing plan. The manufacturing process shall be carried out in one plant that is involved in the production of the product. The manufacturer will have a warehouse that stores the products that have been packaged and differentiated in the company (Ferrell, & Hartline, 2011). The warehouses will act as wholesale plants that will sell to the retailers directly. The retailers will then sell the products directly to the consumers in the market. The company will also sell directly to the medical institutions without involving the retailers. This is because of the need to control the pricing due to intermediaries. Therefore, the prices will be lower in relation to the final consumers’ demand. The company will also establish shops countrywide that is regulated and able to sell the product directly to individuals that would like to use the products. Financial Data and Projections a. Past Sales Revenues Marijuana consumption in the past has been affected by a variety of factors. The federal government has been reluctant in the initiation of a plan of legalization of the marijuana production in large scale. They have regulated consumption by rendering marijuana as an illegal product as listed in Schedule 1 controlled substances. So far, this regulation has led to the decreased revenues that arise from the marijuana. Individuals have not been consuming the products due to the fear of conviction. Furthermore, the individuals’ attitudes in the past relating to the production of marijuana have been radical and unprecedented. This narrowed the market for the medical marijuana towards the medical field only (US Department of Justice, 2013). The narrow market led to the narrowing of the revenues that relate to the consumption of marijuana. The criminalization of the consumption of marijuana has greatly affected the marijuana market, hence the lower returns due to the narrowed market. b. Five-Year Projections According to research, the size of the medical marijuana market is likely to rise to $23.54 billion by 2020 (Sacco, & Finklea, 2013). This next generation biometric worth of marijuana arises due to a variety of factors. The changing society has led to changes in the attitudes of the people regarding to the consumption of marijuana. In the 1950s, only about 12% of the adults in the USA supported the legalization of marijuana for medical use. In 2012, the number of adults that supported the legalization of marijuana had risen to 52%. It is projected that by 2020, the number will increase, thus increasing the market consumption of marijuana. Major states are also likely to legalize marijuana in controlled amounts, and thus promote the market (Sacco, & Finklea, 2013). Therefore, the revenues from this trade are likely to rise to exponential levels in five years’ time. Organizational Structure The marketing plan shall be designed in relation to the organizational structure. The company is made up of the executive, the managers, and the employees. The marketing department is comprised of a marketing manager and employees. The marketing manager is central towards the development and implementation of this marketing plan. The employees in the marketing department include the salesmen, the medical representatives, and market researchers. The executive makes the decisions regarding to the marketing plans and delegates them to the managers. The marketing manager then designs the platform of improving the marketing plan of this organization. The sales persons interact directly with the consumers as well as the retailers in the field. They provide a feedback on the reaction of the consumers in relation to the product. The medical representatives act as the marketing personnel in the medical field. They deliver the products directly to the medical institutions. Executive Marketing Manager Other Managers Employees Salesmen Medical Representative Market Researchers Implementation The implementation of this marketing plan will begin in the next quarter of trade. Unless specified, all the organization structures shall be involved in the implementation of this plan. First of all, all, the marketing department employees shall be trained on the rising platforms of marketing (McDonald, & Keegan, 2002). These include the online marketing skills and the customer relation marketing. They shall be required to learn all the requirements of marketing that relate to the marijuana industry. The trainings will empower them to become better marketers in the industry. A project group shall be formed to analyze the potential of the products in the market set up. They shall analyze the current consumption of the products and provide a report on the performance of the product in the market (Cuomo, et al 2014). They shall also analyze the factors for improvement of the product and the customer perceptions of the product. The marketing manager shall be accountable for the organization and promotion of this initiative in the production process. The new product advertisements, shall also be implemented through the media as stipulated. A committee shall be formed in the marketing department to plan a schedule for the implementation of the promotion techniques. They shall also research the pricing requirements of the market through the analysis of the competing considerations (McDonald, 2011). They will obtain the product design protocol that is directed towards the promotion of the customer demands in the market. The product manager shall be required to oversee the design of the product in terms of labeling, branding, and positioning. The distribution process shall be managed centrally by stationing transport systems that can avail the product to the final consumers. Trucks that are designed to transport marijuana in appropriate conditions shall be acquired. Evaluation and Control The evaluation process shall be designed in terms of performance and financial control. The financial expenditures towards the plan shall be reported in relation to the segments of the plan. A standard reporting protocol shall be initiated in order to control and account for all the financial expenditure (McDonald, 2011). The plan objectives and the performance shall be analyzed through the project management concepts. A comparison of the planned and the actual activities shall be initiated to determine the level of performance. The recommendations on any changes to the plan shall be submitted to the marketing manager for necessary action. References Cuomo, et al (2014). Few Business Opportunities in Cuomo’s Plan for Medical Marijuana Legalization in New York. Marijuana Business Daily. http://mmjbusinessdaily.com/few-business-opportunities-in-ny-medical-marijauna-legalization-plan/ Accessed on 13th September 2014. Ferrell, O. C., & Hartline, M. D. (2011). Marketing strategy. Australia: South-Western Cengage Learning. Garvey, T. & Doyle, C. (2014). Marijuana: Medical and Retail – An Abbreviated View of Selected Legal Issues. Congressional Research Service. http://nationalaglawcenter.org/wp-content/uploads//assets/crs/R43437.pdf Accessed on 13th September 2014. McDonald, M. (2011). Marketing plans: How to prepare them, how to use them. Chichester: Wiley. McDonald, M., & Keegan, W. J. (2002). Marketing plans that work: Targeting growth and profitability. Boston: Butterworth-Heinemann. Medical Marijuana Business Daily, (2013). Marijuana Business Fact book 2013. Marijuana Business Daily. http://mmjbusinessdaily.com/MMJFactbook2013ExecutiveSummary.pdf Accessed on 13th September 2014. Rogers, S. C. (2001). Marketing strategies, tactics, and techniques: A handbook for practitioners. Westport, Conn: Quorum Books. Sacco, L. N., & Finklea, K. (2013). State Marijuana Legalization Initiatives: Implications for Federal Law Enforcement. Congressional Research Service. http://fas.org/sgp/crs/misc/R43164.pdf Accessed on 13th September 2014. Strauss, K. (2013). Big Marijuana: Is it the Future? Forbes Magazine. http://www.forbes.com/sites/karstenstrauss/2013/12/30/big-marijuana-is-it-the-future/ Accessed on 13th September 2014. US Department of Justice (2013). The DEA Position on Marijuana. US Department of Justice. http://www.justice.gov/dea/docs/marijuana_position_2011.pdf Accessed on 13th September 2014 Read More