Reposition SAO Biscuits in the Australian Market - Business Plan Example

MARKETING PLAN REVIEW 1003MKTMarketing Plan Checklist THE WHOLE MARKETING PLAN MUST HAVE A LOGICAL FLOW Executive Summary (5 Explain why you have chosen to re-position your product Briefly summarise your marketing strategy decisions (4Ps). Table of Contents Page numbers correctly correspond to sections accurately Introduction and Situational Analysis (20%) Provide a brief background of the company and product (including past strategies if known) Identify what the current problem is? I.e. explain why your group has chosen that specific product? (E.g. Poor sales performance, bad image, minimal awareness, etc.). PESTL analysis discussed (Specific and relevant factors to your product identified). SWOT analysis discussed (Specific and relevant factors to your product identified). Provide a competitor analysis where direct competitors, and your companies/products competitive advantages are identified. Provide a brief customer analysis (i.e. describe your chosen products current customer/consumer). Objectives (5%) Include 1 goal & 2 to 3 objectives (marketing, and communication objectives). Target Market(s) (10%) Provide a detailed discussion of the target market. This should go beyond demographics. Include such considerations as their motivations, lifestyles, behaviours and why they were chosen. Discuss why they would want to buy your product. Discuss how you wish to re-position your product, and justify why this change. Remember the aim of the assignment is re-position. Include a positioning map Marketing Strategies (25%) Provide a detailed discussion of Product, Price, Place and Promotion Discuss how this marketing mix will meet the needs of the chosen target market. Justify why you have these decisions. Provide supporting information to warrant your decisions. Be specific. For instance, in promotion identify which mediums (e.g. TV) will be used and justify why this was chosen (benefits of this strategy). Ensure ideas suggested are practical and financially viable. Include a picture of the product and packaging (hand drawn is acceptable). Evaluation and Control (10%) Relate back to the original objectives your group have set Explain HOW you will evaluate if you met your objectives Explain who will evaluate if you meet your objectives (e.g. marketing manager). Implementation (5%) Create a Gantt chart to illustrate a timeline of the implementation activities. Discuss WHY these actions were done WHEN they were. Discuss further than what the Gantt chart pictures. Conclusion and Recommendations (10%) Briefly summarise the plan including the marketing strategies decisions and how these will meet your objectives. Provide at least 2 medium to long term recommendations. Overall Presentation (10%) All references referred to in the plan are included in the reference list. Use the same referencing style (APA/Harvard) throughout the entire report. Pages are numbered No Appendices are attached Use headings, and suggested (not explicit) Times New Roman 12 point font or 11 point Arial SINGLE spacing Same writing style throughout the marketing plan Is there a logical flow throughout the entire marketing plan? Adhere to word count (2500 words +/- 10%) Tables and figures are used appropriately Marketing Plan for XXXXX Author XXXXXXXXXXXXXXXXX SID XXXXXXXXXXXXXX MKT103 – Introduction to Marketing Tutor: XXXXXXXXXXXXXXXX Executive Summary Overview of plan including objective Arnott’s is one of the leading food companies in Asia Pacific. The company manufactures a wide variety of snacks that include SAO Biscuits. The company sells its products in Australia and forty other countries around the world. These include the United Kingdom, New Zealand, Japan, Canada, Tahiti and Indonesia. Currently, Arnotts employs about 2,500 Australians from across the country and several other people in the Asia Pacific countries where the company sells its products. This marketing plan is to increase the Australian market share of Arnotts SAOs from the current 60% to 90% by 2020. Summary of Marketplace Environment In 2008, Arnott’s led the Australian biscuits industry, controlling over 58% of all the sales made in that year. It is expected that currently the company’s share stands at 60%. Coming in a distant second place were generic brands (also called "house brands") that controls slightly over 10% of the market. House brands are cheaper and of lower quality. In the third and fourth positions are Paradise and Kraft, each with a market share of 5.68% and 5.57% respectively. Taking the fifth, sixth and seventh positions are Goodman Fielder (2.57%), Manassen (2.14%) and Smith’s (0.1%), respectively. This scenario places Arnott’s in a very strong position in the marketplace. Target Market and positioning Arnott’s targets the urban middle class that lives in Australia’s major cities. These have distinct tastes and preferences as far as biscuits are concerned. Arnott’s believe they are best placed to meet their needs given the companys privileged position in the marketplace Primary Marketing Mix Factors used in the plan This plan is based on the traditional 4 Ps of marketing: product, price, promotion and place. The plan illustrates how the company intends to accomplish the objective of this marketing plan by combining the four elements of marketing. Timeline The objective of this plan is to be attained by 2020. The plan outlines what will need to be done when and by whom in the first twelve months in order to reach the objective of the plan. Evaluation This section provides tools by which the progress of the plan will be measured during its implementation. Benefit to the company The successful implementation of this plan will see the company grow its market share from the current 60% to 90% by 2020. Table of Contents MARKETING PLAN REVIEW 1 Executive Summary 5 Table of Contents 7 Introduction and Company Background 9 Introduction 9 Company Background 9 Situation Analysis 10 Market Analysis 10 Macro Environment Analysis 10 Political Analysis 10 Economic Analysis 11 Social Analysis 11 Technological Analysis 11 Legal Analysis 11 Micro Environment Analysis 12 Company Analysis 12 Competitor Analysis 12 Competitive market Summary 13 Consumer Analysis 14 SWOT Analysis 15 Objectives 16 MarketingObjectives 16 Target Market & Positioning 16 Selection of Target Market 16 Positioning Strategy 17 Positioning Strategy 17 Positioning Attributes 17 Marketing Mix Strategies 17 Product/Service 17 Defining the product attributes 18 Price 18 Promotion 19 Place 20 Example of distribution model 21 Evaluation and Control 22 EVALUATION OF XX GOAL/OJECTIVE 22 Source: (Volpe, 2013) 23 Implementation & Schedule 23 Conclusions and Recommendations 24 Reference List 25 Introduction and Company Background Introduction SAO Biscuits are a recognized brand of biscuits that has been produced and sold in Australia by Arnott’s since 1906(Arnotts, 2014). The name "SAO", whose origins are not clear was registered as a trademark in 1904. However, many people believe that “SAO” is an abbreviation for “Salvation Army Officer”, and was named in honour Arthur, one of the Arnott brothers. Indeed, Arthur was an officer in the Australian Salvation Army. SAO Biscuits were among the earliest brands of biscuit to be advertised heavily in the Australian print media in the early 1900s(Simply Australian, 2014). The purpose of this plan is to reposition SAO Biscuits in the Australian market. Company Background Arnott’s is one of the leading food companies in Asia Pacific(Arnotts, 2014). The company manufactures a wide variety of snacks that include SAO Biscuits. The company sells its products in Australia and forty other countries around the world. These include the United Kingdom, New Zealand, Japan, Canada, Tahiti and Indonesia. Currently, Arnott’s employs about 2,500 Australians from across the country and several other people in the Asia Pacific countries where the company sells its products. Arnott’s was founded by William Arnott close to one and a half centuries ago. Because of its long history, many Australians, young and old, can identify with the company and its products. For them, the company claims, there is more to Arnott’s than the foods it makes. They see Arnott’s as a part of the history of Australia and a national icon. From its humble beginnings, Arnotts has grown to become of the leading manufactured food brands in Australia and the rest of Asia Pacific too. Situation Analysis Market Analysis In 2008, Arnott’s led the Australian biscuits industry, controlling over 58% of all the sales made in that year(Alexs Home, 2010). Beside SAO, the company’s other leading biscuit brands are Tim Tam and Shape. Coming in a distant second place were generic brands(also called “house brands”) that controls slightly over 10% of the market. House brands are cheaper and of lower quality. In the third and fourth positions are Paradise and Kraft, each with a market share of 5.68% and 5.57% respectively. Taking the fifth, sixth and seventh positions are Goodman Fielder (2.57%), Manassen (2.14%) and Smith’s (0.1%), respectively. This scenario places Arnott’s in a very strong position in the marketplace. Macro Environment Analysis Political Analysis Overall, Australia presents a stable political environment for businesses, both local and foreign to thrive(Committee for Economic Development of Australia (CEDA), 2014). In their 2014 New Year address, the Prime Minister, tony Abbot, urged both individual and corporate Australians to give their best in creating a more prosperous nation in the year. On their part, the Premier promised that their government would do everything necessary to create a conducive environment for individuals and businesses to flourish. For businesses, the Premier pledged to progressively remove all barriers to entry and growth. If effected, the Prime Minister pledge will create an even more conducive environment for Arnott’s to grow. Economic Analysis The Australian economy is faced with many economic uncertainties in 2014 and beyond(Committee for Economic Development of Australia (CEDA), 2014). These include a high currency and rising labour costs. In addition, Australia is highly dependent on the economy of Asian. Any economic setbacks in Asia could have far-reaching implications for Australia. This high dependency on Asia affects Arnotts as the company exports its SAO Biscuits and other products to several countries in Asia. Social Analysis Australia registered almost two uninterrupted decades of economic growth until the beginning of the economic downturn in 2008. This growth led to increases in wealth and incomes. However, as is often the case, these benefits did not trickledown to every Australian. In 2009-10. Nearly in every four Australians (23% or 4.9 Australians) were classified as living in the low-income bracket(Harper, 2012). Even though data for other areas could not be accessed for comparison, this situation is bad for Australian businesses. If more Australians are pushed into the low-income bracket, the effect be reduced revenue and profits for Arnott’s. Technological Analysis Technological advancements affect virtually every business in every sector. Food processing is no exception. Taking cognizance of this, Arnott has invested $400 million in state-of-the-art manufacturing facilities at its Australian plants since 1997(Arnotts, 2014). This investment places the company on a solid growth path in the years ahead. Legal Analysis No major legal issues impacting the biscuits market were found. Micro Environment Analysis Company Analysis 3 major positives regarding the company/brand Arnott’s is the clear leader of the Australian biscuits market. As of 2008, the company controlled over 58% of all the sales made by the industry (Alexs Home, 2010). It is expected that this share has since increased. Also, Arnott’s is the only manufacturer to produce the whole range of biscuits producible today. The company’s “Arnott” brand is well recognized throughout Australia. In addition, the company has succeeded in equating the brand with a certain standard that consumers have grown to expect and in keeping the brand visible through meticulous packaging(Federal Court of Australia, 1990). The company has a pricing policy that ensures good value for the consumer(Federal Court of Australia, 1990). Three major negatives regarding the company/brand No major negative was found Clearly, Arnotts occupies a very advantageous position in the Australian marketplace, which, if well, exploited, will steer the company along a growth path in years to come. Competitor Analysis Apart from generic or house brands, Arnott’s major direct competitors as of 2008 were Paradise, Kraft Foods, Goodman Fielder and Manassen. All these four combined have a total market share of about 15% (Alexs Home, 2010). By direct competitors is meant that they make and sell exactly the products as Arnott’s. Despite their small market share relative to Arnott’s 60%, these rivals cannot beignored. They charged less for their biscuits even though they are not as of high quality as those of Arnott’s. In the event that they improve the quality of their products to match or exceed Arnott’s, they pose a formidable threat to the latter. Information on the competitive situation in the Australian biscuits industry could not be obtained making it difficult to complete the table below: Competitive market Summary Competitor Target Market Positioning Product Price Promotional Distribution Strength/ Weakness Paradise Unknown 5.68% of the market Biscuits Lower than Arnott’s Advertising Retail outlets… Small market share Kraft Foods Not known 5.57% of the market Biscuits Lower than Arnott’s (actual price unknown) Unknown Retail outlets… Small market share Goodman Fielder Unknown 2.57% of the market Biscuits Not known Not known Retail outlets Small market share Manassen Unknown 2.14% Biscuits Not known Not known Retail outlets Small market share Source: (Alexs Home, 2010) Consumer Analysis The majority of consumers of Arnotts SAO Biscuits are the urban middle class. This category is more conscious of their health and will go for what they to be healthiest manufactured foods. For this reason, they go for SAOs because they know that they a healthy alternative to bread This segment is to be found in Australia’s leading cities. They shop at major large retail stores in these cities. They frequent these outlets because they offer them the exclusivity and variety they seek. Australias middle class have predictable purchasing habits. Usually, they purchase their supplies at end month in large quantities to last them the whole month. This habit contrasts with that of low-income households and individuals who buy their supplies in small quantities and several times in a month. For this reason, the middle-income consumers find SAOs to be convenient given their long shelf-life. They can buy several packets to last them the entire month. The middle class demands quality, not just of the products they buy, but also of their packaging. It is for this reason that Arnotts invests in the best packaging that technology can afford them today. This statement applies to all of the companys products, not just SAOs. Thus, the middle class, who constitute the majority of consumers of SAOs are very conscious of their health and clear in terms of what they want from a product. SWOT Analysis Objectives MarketingObjectives This marketing plan aims to increase the Australian market share of Arnotts SAOs from the current 60% to 90% by 2020. Justification: Arnott’s occupies a very advantageous position in the Australian market, controlling 60% of it against its closest rival, house brands, which account for about 10% of the market. Target Market & Positioning Selection of Target Market This plan targets the middle class(Arnotts Biscuits Limited, 2014). This segment of the Australian market is expanding rapidly, thanks to a steadily growing economy. Whats more, they are not ashamed of displaying their wealth. Provided that they are convinced that the product is of high quality and meets their needs, they go for it. In going for it, they purchase in large quantities. This purchasing habit boosts the companys sales revenue and, ultimately, profits. Another reason for going for this market segment is that they are readily accessible through large retail outlets where to do their shopping. Because these outlets are fewer relative to the small ones, it is easier and cheaper Arnott’s to service them. Also, dealing with a smaller number of retailers facilitates the companys monitoring and maintaining the quality of the product. If, on the other hand, several stores are carrying a product, the risk of counterfeit products being sneaked into the channel of distribution increases. Positioning Strategy Positioning Strategy Arnott’s is going to compete on quality, not price, even though the company’s competitors peg their success on selling their products at cheaper prices. As a result, Arnott’s is going to consistently improve the quality of SAOs in line with the tastes and preferences of consumers. Nonetheless, the pursuit of quality will be undertaken within the framework that guarantees the customer value for their money. This means that even if the costs of ingredients rise sharply, the company will exploit all possible options for absorbing the increments. Passing them on to the consumer will be the option of last resort. Positioning Attributes If this strategy is to be achieved, the company will pay more attention to how the SAOs are made at the factory and how they are packaged. Currently, SAOs’ seven layers of flaky pastry lend them their unmistakably light yet bubbly texture. Going forward, the company will invest in the latest technology that becomes available in order to enhance the look and appeal of the SAOs. About packaging, a lot of thought goes into packaging all of Arnott’s products. The idea is to create an irresistible appeal to the customer. The company will invest in better, bolder packaging for the SAOs. Marketing Mix Strategies Product/Service SAOs are rich in carbohydrates. For this reason, they provide energy to fuel the brain and body muscles. Regular, healthy snacking also helps in maintaining wellbeing. What’s more, SAOs have a long shelf-life that confers convenience to the customer. Supplies purchased at end month will last the entire month and beyond while maintaining its freshness. Each year, Arnott’s spends $250 million buying the best raw ingredients from Australian farmers, thereby improving the economy of rural Australia. As the best inputs go into making SAOs, the consumer is assured of the best and healthy snacking experience. The finished product is packaged meticulously to bear the unmistakable brand of “Arnott’s”. First baked in 1906, Arnott’s SAOs are still as popular today as they were back then. Behind this enduring popularity is continuous improvement of the product. For instance, one ate their SAOs dry or with a smear of butter. Salmon and crab pastes were favourites in the 1950s(Arnotts Biscuits Limited, 2003). Today, SAOs can be topped with fresh tomato, tuna or avocado among other toppings. Defining the product attributes Current Product Attributes New Product Attributes Resulting Consumer Benefit Bubbly texture Made from the best wheat Brilliant packaging Bubblier texture Made from improved wheat varieties Improved packaging Easier to use with toppings More carbohydrates, more energy Freshness for longer Price As competitor pricing information is hard to come by in the sources accessed, the pricing of the improved SAO Biscuits will be based on the current price of the product. Currently, a 250g packet of the product costs US $5.97 (Simply Australian, 2014). With the enhanced features and benefits, the price will increase marginally to US $6.50. This marginal price increment is informed by the fact that the Australian biscuits market is already a saturation. Consequently, even with significant improvement of the product, the company has very limited room to manoeuvre with the price. As already noted, Arnotts competitors are already charging less than the company. However, Arnotts can bank on the loyalty of their customers and their health consciousness to successfully introduce the new price. It is instructive to note that the type of competition Arnott’s is faced with is direct competition. Its competitors are dealing in essentially the same type of product, not substitutes. Under, these circumstances, Arnott’s best bet is to differentiate its product so that it will stand out in the marketplace. The company is not prepared to engage its competition in price wars. These are unhealthy and will kill the industry in the long-run. Promotion In order to promote the improved SAOs, the company will adopt a multi-media approach to promotion. First, the company will use the social media to render the product more visible in the virtual environment. The majority of the target segment are computer literate and have access to the internet either via a computer or on their smartphones. Secondly, as the target market is spread across the country, the company will also use national television stations to advertise the enhanced product. However, given the high cost of television advertising, the use of this channel of communication will be shorter than the others. Thirdly, Arnott’s will run advertisements in the print media, notably in the dailies and magazines. Again. The target market have access to these. Fourth, the company will display advertisements in strategically selected parts of the leading cities in the country. Finally, the company will prepare and deploy displays such as roll-up banners at leading retail outlets across the country. In all these channels, the message will be the same: "same great taste, bolder look". The company will sustain the campaign for twelve months of launching the improved product. Place The improved product is going to be sold to the consumer through leading retail outlets inmajor cities across the country. These are the outlets at which the target market does their shopping. In order to get the product to these outlets, the company is going to approach several distributors across the country and enter into partnerships with them. The emphasis here is to approach the distributors rather than wait for them to approach the company. The company is keen on maintaining the prestige associated with its brand. One way in which the company can realize scrutinizing potential distributors in the background for suitability then only approach them after they have passed the test. Otherwise, opening the door wide for everyone is likely to attract all manner of distributors and this could water down the value of the brand. The distribution channel that will be adopted is illustrated below. Example of distribution model Evaluation and Control EVALUATION OF XX GOAL/OJECTIVE Metric Method of Measure Timing Responsibility Outcome A Outcome B Customer Acquisition Cost (CAC) Total cost of discharging sales and marketing activities divided by the number of new customers Entire 12 months of the plan Department of sales and marketing Positive Negative Time to Payback CAC The number of months it takes to earn back the CAC spent on a new customer 12 moths Department of sales and marketing Positive Negative Marketing originated customer % Shows what ratio of new business is driven by marketing 12 months Department of sales and marketing Positive Negative Source: (Volpe, 2013) Implementation & Schedule The table below shows what must be done in the short-run in order to implement this plan: Activity When Actor Conduct research and development of an improved product Month 1 to Month 3 R & D S Department Commence production of new product Month 4 Production Department Implement a marketing strategy Month 1 to Month 12 Department of Sales and Marketing Monitor progress of new product Month 4 to month 12 Department of Sales and Marketing Prior to rolling out the production of an improved product, the R & D Department will spend three months improving the current product in terms of design and quality. This will pave the way for the production department to commence producing the new product in the fourth month of the plan. The sales and marketing department will start to implement a marketing strategy in the first month of the plan. The idea is to make all the necessary arrangements prior to the launch of the new product. The same department will monitor the progress of the marketing plan throughout the period of 12 months. Conclusions and Recommendations This marketing plan charts a clear path Arnott’s can take to increase its market share for SAO biscuits from the existing 60% to 90% by the year 2020. At a glance, this may seem a simple task given that the companys closest rival, house brands, controls just 10% of the market. However, the fact that that the firms rival charge significantly less poses a threat to the plan, even though there is hope: currently, the quality of Arnotts products is unmatched. Improving the SAOs will place the company even a notch higher. Then, Arnotts can ride on the wave of differentiation while taking advantage of the health consciousness and tastes and preferences of its target market. Even though the marketing plan is to be implemented over a period of twelve months, it must anticipate any unforeseen developments in the industry. As a result, the plan may need to be amended severally. Reference List Alexs Home. (2010, September 9). Australian Biscuit Industry Report. Retrieved from Alexs Home: http://alexdsn.wordpress.com/2010/09/09/australian-biscuit-industry-report/ Arnotts. (2014, November 8). About our company. Retrieved from Arnotts: http://www.arnotts.com/about-us/corporate-profile.aspx Arnotts. (2014, November 8). Our products. Retrieved from Arnotts: http://www.arnotts.com/our-products/products/crackers-and-crispbreads.aspx Arnotts Biscuits Limited. (2003). Health and Wellbeing. Melbourne: Arnotts Biscuits Limited. Arnotts Biscuits Limited. (2014). Snack Well. Retrieved from Arnotts Biscuits Limited: http://www.arnotts.com/about-us/corporate-profile.aspx Committee for Economic Development of Australia (CEDA). (2014). Economic and Political Overview 2014. Melbourne: Committee for Economic Development of Australia (CEDA). Federal Court of Australia. (1990). Re Arnotts Limited; Arnotts Biscuits Limited; Fledspac Limited and the Dickens Corporation Pty Limited v Trade Practices Commission. Canberra: Federal Court of Australia. Harper, P. (2012). Australian Social Trends. Canberra: Australian Bureau of Statistics. Simply Australian. (2014, November 8). Arnotts SAO. Retrieved from Simply Australian: https://www.simplyoz.com/products/australian_foods/tim_tams__biscuits__crackers__cookies/crackers/arnotts_sao Volpe, M. (2013, January 15). The 6 Marketing Metrics Your CEO Actually Cares About. 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