The Marketing Strategies and Competitive Advantage - Assignment Example

 The Marketing Strategies and Competitive Advantage 1. The Marketing Strategies of Candy Flake The marketing strategies are formulated by a business to achieve its business objectives in a specific market. Thackeray et al. (2008) suggests that the marketing strategies are designed to increase sales, and achieve a sustainable competitive advantage for itself. The marketing strategies of Candy Flake and its extension of Chocofill are existent in the north east markets of US with a growing potential in southern Canadian markets. Therefore the marketing strategies for the business are developed in accordance with these markets where the business also keeps the scope of e-commerce sales in international market open. Talke & Hultink (2010) suggests that the tasks and achievements of a strategy are based out of measured outcomes over a multiyear period with specific actions and tactical plans. The brands mission and vision statements are kept in mind while designing the plan. The objective of the business is to operate and fulfil the visions that have been set forth for itself. Further, Hallback & Gabrielsson (2013) argues that the marketing strategies are based on market dominance plans of the brand, where each phase of business includes different elements in its strategy formulation. The product of Candy Flake is been launched in the market and is in a primary phase of its business life cycle. Therefore the launching strategies would include the branding, pricing and distribution plans. Branding Strategies The brand is the name of a product offered which implies a certain values and offerings to the market (Mishra, 2012). The mission of Candy Flake suggests the business wants to project as the major stakeholder in the US and Canada market and reap the benefits from the candy industry for next 5 years. The launching of the product have the objectives of creating an identity for itself, positioning in accordance to the segment of its choice, create a value perception among its consumers and thereby develop a differentiation for itself as a distinct brand. Therefore the plan would include developing the package, image for the brand, develop a promotion budget and distribution channel creation. The identified weaknesses of the competitors in the market is the oligopoly that exists where no one have an edge over others and irregularity product availability in market. However the identity due to prolonged presence and variety of assortments at competitive price are the strengths for the competing brand. Candy flake would exploit the weaknesses of competitors to develop its brand and develop on those areas where the competitors are strong. Identity: The Candy Fill has the identity that has a brand logo to feature the healthy and tasty aspect of the offerings. The identity that the business wishes to create is similar to skimming and penetration strategies. The brand would launch its product to create the identity of healthy and tasty offerings where the pricing is kept a bit higher to the other brand’s offerings. Korda & Itani (2011) suggests that the skimming and penetration strategies selects a specific segment and promotes the product to the segment. Once the segment is ‘milked’ the strategy would be to reduce prices and further have the price sensitive segment join the target audience. Each competitive price segment is identified with a set time to explore each of the segments. The brand would thus build its image with people using Internet to start its promotions to make people aware of the brand. Distribution Strategy The distribution strategies for Candy Flake would take into its fold the e-commerce channels, super-markets of the targeted states and wholesalers of candies from different states. The strategies formulated implies that the retailers have to order for the required material one week in advance to get the same amount of product delivered to them within time. The pricing for the distribution is taken into the product’s retail prices to accommodate the cost incurred. However, the e-commerce channels along with supermarket channels have needs business development initiatives from the proprietor. The pricing for bulk sales and pre-order routines, as like distributors remains the same. The distribution from retail outlets would be directly over seen by the wholesalers of each state who are found qualified as stockist (one in each state) would be handed over the entire state’s demands. This keeps the demand and supply information come from one single source therefore the state wise sales can be better observed and kept in account. Pricing Strategies and position intentions The strategy in pricing would indicate the long term and short term plans for the business. Tannous & Sarkar (1993) suggests that the pricing is set to recover the cost incurred by the business in manufacturing and distribution of the product with a profit margin for all stakeholders. However, Peuchaud (2014) argues that the pricing strategies are used as a strategic tool to increase market share by generating volume of sales in a specific market. The Candy Flake would use the pricing to create a position for itself. The first phase of the pricing plan is meant to provide the business with its initial production and promotion expenses or Absorption cost. Papasolomou & Melanthiou (2012) viewed the absorption pricing to be the mix of all variable cost with an appropriate amount of fixed cost that the business plans to recover from the market. This follows the aforesaid skimming price trends. The same can be stated in a mathematical term as: Absorption Pricing = Variable cost+ Part of fixed cost /total number of units to be sold in that price bracket. 2.a. Intra and Inter Brand Competition Strategies The inter brand (between two similar brands) strategy aims in developing an identity for itself out of competing candy brands. Again for the intra brand competition between retailers a scheme has been developed where with increased sales the revenue earning for the competent retailer and distributor increases. Since the offerings of the competing brands are similar, thus to create a space for itself, the brand would use the price to skim the market and position itself as a healthy alternative to its substitutes. Further the same strategies are used to have inter brand differentials while volume based sales (10 pounds of Product each week) are given 10% of retail price while below it have 7% share making the intra brand competitions more acute. 2.b. Differentiating Strategies The strategy is to attract consumers who seek value in products. The product Candy Flake would develop an identity where the pricing is the differentiating factor. Therefore the offerings need to have value that suites the price. Once the Smartphone using clients of the brand has given sales of 250 Tons (Candy Flakes) and 300 Tons (Choco-fill) of product, the pricing would be revised along with new offers to attract the price sensitive audience of US-Canada market. The most important differentiating factor that the product would use in the first phase (sales lesser than 300 and 250 Tons respectively) is the perception of good food and value addition from health and well being point of view. The price differential shall exist till the identity for the brand in the post launch phase reaches the targeted volume when the business would revise the price for a bigger audience. Positioning against nearest Competitor The brand of Candy Flake targets the people from all age group with higher income and has affection for healthy and tasty offerings to its competitors like ‘Health Bar’ ‘Gello’ in chocolate and candy respectively. Roman (2014) opined that the positioning strategies answers the aspect of audience for whom the branding and promotion strategies are formulated. Market segmentation or consumer demography wise the business wish to make its promotions strategies to meet its branding objectives. The sale in the North Eastern markets of US and Canada for the first year was planned which would have an open access to e-commerce channels. The purpose of such focus keeps the promotion strategies much more planned and the budget allocation more objective. Kids up to 14 years of age for Candy Flake and Choco Fill for people of all age in US market using Smartphone is considered as target audience for the case. 2.d. Macro Environmental Issues: The targeted volume of sales is the economic achievement for the product is gained by competitive pricing adopted. The pricing would be market oriented where the social trends of similar products and consumer’s taste and perception etc are taken in to consideration to price the units likewise that makes them competent in a specific market (O'Mara, 2012). Technically the price quality perception of the market is achieved by superior product recipe. However the strategic plan is to offer skimming price in the launch phase and then go for competitive price, after the initial target sales and identity building. 2.e. Market research strategies The market research strategies formulated would be to assess the taste preference and monitor the area wise sales. The consumer survey with a sample size of 100 in each state is planned. The sales of the product are expected to be received from the distributors of the state, as planned to be taken at the closing of each week in Saturday. The mean of the weekly sales would give the projection for the sales trends for further product distribution and modifications. 3. Implementation strategies The business has planned to establish its own identity based upon the mission and visions goals of the business. The sales team of 5 along with the proprietor is responsible for the area sales and distributions. Product Tentative Pricing Tentative Pricing Competitors Price of similar product Choco-Fill (8 gms Per Unit) Up to 300 Tons (50 cents per unit) After 300 tons sales (3 units in 1 USD) 3 units in 1 USD Candy-Flakes (10 gms per unit) Up to 250 Tons (3 units in 1 USD) After 250 Ton (4 Units in 1USD) 4 Units in 1 USD Table 1: The tentative Pricing Table for the Products of Candy Flake The product communication shall carry the retail price and quantity message. The retailer and distributor’s communication is to be designed separately for the push sales scheme for them. The implementation would be done before the product launches. 4. The expansion plan The 5 years plan has the objective of becoming the market leader by volume (as in Graph 1) in the North Eastern US and Canada markets. Graph1: Plans for market development over the next 5 years in Volume (North East US states only)1 The blue column shows the planned sales for the Candy Flake brand to red that represents the competitors volume if the same market. The objective is to become the market leader in its product segment within next five years. The brand starts with its promotions where it uses the billboards and social media to promote product information in the market. The billboards and hoardings with brand and product message having graphics of the product that projects the healthy aspect of the brand are designed. Location wise 86 hoardings for north East US states with southern Canadian states are targeted for the first set of promotion campaign covering major highway junctions is planned. In social media Tweeter and Facebook are chosen to develop promotion campaign to reach the target audience. 5. Media for promotions Billboards are used to invoke the interest of people specially school going children where the roads seems the best place to attract them in and out of school each day. Again the traditional Newspaper and radio are costlier and have very less visibility so far the children (target audience) are concerned. The cartoons from children comic series are planned to be used on the billboards. The social media is a common tool today with people using Smartphone. The message is not only specific but also instant via social media (Honeyman 2008). A design has been made where the famous cartoon figure “Poppy- the Sailor man” is planned to be used to attract children towards the business communication. Korda & Itani (2011) suggested that the promotion and its effects are best monitored via modern day social media as it’s is competitively lesser in cost to its alternatives and the number of people that it can reach. 6. Performance measures The business vision is to have the objectives fulfilled in terms of market share and products perceived value. The business would use SMART as a tool to measure the performance in each of the planned steps. The objectives for production, distribution and sales have its own specific, measurable, achievable, and relevant and time bound measures to identify the achieved score to the targeted one. The difference shows the gap between planned and actual determining what needs to be done for better performance. For the same Balanced score card would be used along with quality evaluation based out of consumer survey to evaluate the business performance. The balance score card evaluates the performance on financial, stakeholder’s capacity and process efficiency lines. The strategized figures are matched with actual achievements to determine the strategic success or deviations and likewise the path for next period can be altered for objective fulfilments. Financial Control Measure The cost incurred to the outputs received from the process would suggest the strategic outcomes of the plans executed (Tannous & Sarkar, 1993). The project would have ratio analysis and market competition based measures would be followed as financial control. The ratio would make an analysis of the targeted revenue to revenue earned each 6 months as per strategized plans. The market size would be used as base to calculate the growth of the Candy Flake in the target market. Each year, for the next 5 years, the increment of market volume would be assessed to determine the market share growth achieved by Candy flake. Monitoring Method The performance standards for the promotion campaigns are set based upon the objective of the plan. The monitoring would be done in the initial phase with cost benefits analysis and survey methods. The cost benefit analysis is the technique used where the total cost of a specific process is valued against the benefits that the business receives from the spending. The cost incurred projections for the next five years is evaluated on the market share gained and tentative revenue that the business expects to generate in the planned period to its actual cost incurred. The survey would give the idea of how well the strategies of promotion and distribution are working for the brand across the north eastern states. Such monitoring is planned to be done every 6 months. 7. Potential: Candy Flakes Candy industry is expected to add another 5 million in the next 5 years as seen in previous research (part2). Candy Flake’s objective is to occupy that space and contribute to be the biggest candy manufacturing unit in next 5 years. The potential is good as the brand is looking to enter international markets by second year. The skimming price that the business offers is also expected to gain good value and develop its identity. 8. Integrated marketing Plan The first year of the plan wish to have billboard and social media for the promotions while the second year on the budget for promotions is planned to be 7% of the revenue earned in first year. The social media would encourage school children to participate in the brands social media campaigns. The promotional offers as planned for the children and their families, Disney land trip (All expenses paid) on contest winning shall have news paper coverage. The radio message broadcast is planned in the second half of the second year. The communication would be health aspect of the product that the brand slogan carries. Further the branding via Popeye cartoons are expected to attract a good deal of attention via social media communications. References Mishra, A. (2012). Not For Free: Revenue Strategies for a New Business Review Press 2011. 224 pp., Journal Of Consumer Marketing, 29(4), 312-313. Candyindustry.com,. (2014). The Future of the Confectionary Market in the US, to 2016. Retrieved 23 February 2015, from http://www.candyindustry.com/products/541-the-future-of-the-confectionary-market-in-the-us--to-2016 Hallback, J., & Gabrielsson, P. (2013). Entrepreneurial marketing strategies during the growth of international new ventures originating in small and open economies. International Business Review, 22(6), 1008-1020 Honeyman, S. (2008). Trick or Treat? Halloween Lore, Passive Consumerism, and the Candy Industry. 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