Marketing Plan for Atlantic Quench - Report Example

Marketing plan for the next year for Atlantic Quench Chapter Introduction Atlantic Quench Cranberries Inc. (AQC) is a pioneering company in NorthAmerica for producing and distributing of canned and bottled juices and juice drinks. Operating mainly in Florida, Massachusetts and New Jersey since 1974, this co-operative company has gained substantial credibility for developing cranberry juice business. In fact, in order to meet huge demand from the market, the co-operative has extended their production capacity and presently own approximately cranberry and 46 grapefruit farmers. Kind efforts of Atlantic Quench Cranberries Inc. to enhance brand visibility and market reputation through producing high quality of canned and bottled fruit juices enabled the company to maintain its status as the best-selling canned and bottled juice provider since 1981 in US and UK markets. However, in spite of boasting such superior market position, recently Atlantic Quench is experiencing complications in market sue to emergence of a large number of competitors in this segment and changes in consumer specification. Therefore, it has been necessitated for the company to review its current market plan and come up with a new market plan and strategies by the next year to regain its recently questioned market position in near future. In this paper, next year’s market plan for Atlantic Quench Cranberries Inc. (AQC) will be outlined through analysing the internal and external environment in which the company is operating and associated strategies will be reformulated on the basis of the environmental analysis. Chapter 2 Current Market Situation 2.1. Marco Environmental Analysis Macro environmental analysis assists a company to evaluate the macroeconomic variables such as political, economic, social and technological considerations prevailing in the external environment. For analysing the external environment of Atlantic Quench Cranberries Inc the strategic management technique of PEST analysis will be incorporated. 2.1.1. Political Factors Atlantic Quench Cranberries Inc. operates mainly operates in US and UK markets. Therefore, the company must comply with the political considerations of both the countries. Considering UK market, the company signed a licensing agreement in 2013 with a large scale supplier in UK Gerber to take care of their UK operations starting from manufacturing to distribution of juice under the brand name of Atlantic Quench. It has also successfully negotiated with three large supermarkets in UK to shelf all its product line. However, as UK is experiencing a dilemma with regard to whether it will exit from European Union, significant policy changes can be expected from the province that in turn may require the company to change its business procedure as well (Alvesson, 2008). 2.1.2. Economic Factors Considering economic factors, statistics show that the population of UK and US is growing at an average rate of 0.8% and 1.22%. In fact, these two big economies in the world have been able to manage their internal financial and economic condition after the financial crisis which is reflected in the level of disposable income and purchasing power of the citizen of these two countries. Therefore, steady growth of population with handsome financial position indicates favourable condition for sales of packaged fruit juices (Anderson and Narus, 2007). 2.1.3. Social Factors As the economic conditions of US and UK are improving, consequently the standard of living is also increasing in this region. Health consciousness is also increasing among all individuals. Moreover, as complexities are also increasing in the corporate lives of individuals, people are more inclining towards consumption of healthy drinks. Naturally, branded packaged fruit juice becomes the primary option to them (Beard, 2008). 2.1.4. Technological Factors In terms of technological consideration, Atlantic Quench must use the latest technologies in every aspects of business starting from harvesting, extracting, concentration and pasteurization for production, using tetra packs and sterilised bottles for packaging as well as including technologies in distribution procedure as well (Bendapudi and Leone, 2007). 2.2 Market analysis (Market size, growth, forecast) The market for soft drinks and beverages includes packaged bottled water, carbonates, lemonades, tea and coffee, packaged and normal fruit juices, energy drinks etc. The market value of such products is determined according to the retail selling price, inclusive taxes as applicable. As a result of improving standard of living and increasing health awareness among individuals, the global market for soft drinks has been increasing at a steady rate. In 2013, the annual average growth rate of the industry was 4.2%. This is expected to continue in the forecast period as capturing revenue of $624,363.5 million in which the contribution of Europe and US constitute for $188,413.7 million. Consumption volume also increases by 3.9% till 2013 and it is expected to increase by further 5.1% within the period of 2018. Though the carbonate segment is the most lucrative segment in this regard capturing 23% of the market share, gradually the share of packaged fruit juice is also increasing and it is expected that soon it will outnumber the carbonated beverage market (Berry and Yadav, 2008). 2.3. Competitors Analysis Competition is becoming intense over the period of time because of penetration of a number of discounters in this segment. Coca cola tops the chart with 23% of market share in the total beverage industry. Though the focus business of Coca Cola and Pepsi is into carbonated soft drinks sector, all these companies are entering into the packaged fruit juice segment of market. This is creating high threats for Atlantic Quench Cranberries Inc. The PepsiCo products in fruit juice segment named Tropicana dominate the market with 23% market share (Clancy, 2008). 2.4. Customer Analysis A study has shown that the reasons behind increasing consumer choice towards consuming packaged fruit juice are its refreshing tastes, health considerations, requirements for re-hydration etc. More than 83% of the US and UK population are preferring juice and smoothies over tea or coffee signifying the maturity of the market. Among this, popularity of such drinks has been seen in maximum among the age group under 35. Considering the consumption pattern, almost 51% of the population drinks fruit juice at least once per week. Chapter 3 Internal Analysis 3.1. Overall Performance of Atlantic Quench Cranberries Inc. The current operations and overall performance of Atlantic Quench Cranberries Inc. shows the company’s efficiency to diversify their product basket according to the consumers need and to make their production and distribution process most contemporary. Atlantic Quench includes a vast product basket consisting of a large number of juices and non-juice drinks such as new dried cranberries and cranberry sauces. The company also gives emphasis on the well-being of the farmers as the farmers are responsible for growing quality raw materials which is the main foundation of their business. The company purchases the crops at the highest possible price; in this way the company shares a part of its profit with the farmers. This is considered to be a strategy of the organization that has made the company distinct from any other companies in the market segment and facilitates it to continue as a market leader since long. Over the last four years of time, the sales of the company have grown up to 7%. As the consumption of Crantanas, the brand of Atlantic Quench that sells dried cranberries have increased up to 26%, the company has shift its focus towards enhancing the manufacturing capacity of this product line to a great extend. Considering market share, the company has outperformed in Europe by capturing a market share of more than 16%. However, lack of health consciousness in US as compared to UK has resulted the company to experience a lower market share in this market (DAmico, 2007). 3.2. Marketing Mix of Atlantic Quench Cranberries Inc. 3.2.1. Product Atlantic Quench is associated with producing and distributing a wide range of products. In general, the product category of the company is divided into two segments such as juice and non-juice drinks. Juice category includes various kinds of cranberry, raspberry etc juices, famous as Grab ‘n’ Go, Juice Max etc. In the non- juice category, cordial juice drinks, fresh and dried cranberries, cranberry sauces etc are available. Use of sugar free and low carbonated products as ingredients of preparing juices has made the products more acceptable as compared to its competitors (Devinney and Dowling, 2008). 3.2.2. Price Price of the products is kept at a level which is affordable to the middle and upper middle classed. Generally, price of the juices and Crantanas are kept within the range between $30-$60 depending on the ingredients used and value of the products. However, recently, the company has to bring down its price level to $20 for the purpose of stock clearance requirement due to over production of approximately 2000 cranberries (Duncan and Everett, 2008). 3.2.3. Packaging The packaging of Atlantic Quench has always shown implementation of the most innovative techniques. Recyclable glasses, polyethylene terephthalate, cans and cartoons are used effectively for packaging of fruit juices. While packaging is done, emphasis has been given on maintaining quality of their products so that the nutritious quotients and vitamins in the processed fruit juices remain unchanged. 3.2.4. Promotion Advertisement is the most important strategy of Atlantic Quench to run their promotional activities. The company highlights the key attributes of its products i.e. health benefits combining with a sense of humour. Effectiveness of such advertisements became prominent when the company noticed a 6% growth in yearly sales. In fact, the newly launched advertisement of Diet Atlantic Quench Juice Drinks is ranked fourth among the top 10 Most-Recalled New TV Ads (Elliotta, 2015). Chapter 4 SWOT Analysis SWOT analysis will depict the internal strength and weakness of Atlantic Quench Cranberries Inc. as well as the opportunities and threats the company witness from their external environment. 4.1. Strength The cost of production of packaged fruit juice is relatively low as the production process does not require utilization of heavy technologies or any other considerations that involves huge cost. This enables Atlantic Quench to experience huge profitability. Soft drinks such as fruit juice is categorised under impulsive buying i.e. it has been experienced that consumers often purchases fruit juices in addition to confectioneries whenever they need to energise themselves. Purchase of fruit juice is also complementary with snacks such as crisps and chocolates. Therefore, the company standardises its sales easily with the sales of snacks and chocolates. Considering brand enhancement, when the company decided to enter into smoothies segment, Atlantic Quench gained an added advantage of business by using existing equipments, technologies and supply chain. With the increasing health consciousness among the individuals due to high level of stress in the workplace as well as living a fast paced lifestyle, more and more individuals are relying on packaged fresh fruit juices. Therefore, scope of the company for augmenting sales is also increasing. Moreover, as drinking packaged fruit juice is regarded as the sign of fashionable life style and status symbol, Atlantic Quench is also en-cashing this opportunity to strengthen its sales opportunity. 4.2. Weakness Recently, the company is noticing that a part of their consumer base is shifting their drinking pattern towards plain water due to involvement in sugar content in the fruit juices. Cheaper and non branded substitutes that are largely available in the marketplace attract the economy classes of the consumers. In fact, maintaining the quality of the packaged fruit juices forms the major weakness for the company as a result of increasing price of raw materials, packaging charges and advertisement cost. 4.3. Opportunity Immense opportunity is there for the company as the demand for packaged fruit juice is continuously increasing and level of awareness is also rising fast among the consumers. Therefore, a large part of consumer has understood the benefits of consuming packaged fruit juice and they are opting for the products of Atlantic Quench. Brand visibility and positive brand reputation for a very long time is another opportunity for the company that Atlantic Quench can use to mitigate a number of new entrants in this market segment. In fact, the company can highlight its special features such as using sugar free in production process. Such effort will attract more and more consumer towards the products of the company. 4.4. Threats Due to emergence of a large number of competitors in this segment, the company witness considerable amount of threats due to less scope of increment in price level. If the price differential is very high, the consumer will shift to a low priced brand. On contrary, it is becoming very tough for the company to maintain the price level and procure the best quality of packaged fruit juice at the same time. Apart from that, preference for packaged bottled water over packaged fruit juices in order to avoid sugar contains is also posing a threat for Atlantic Quench. As the business is totally dependent of growth of cranberries and other fruits, poor condition of weather, especially during summer may indirectly lead to affect the sales. Emergence of various substitutes such as energy drinks and smoothies are also attracting the youth population to a great extends. Moreover, many companies which are specialised in carbonated soft drinks are gradually entering into the packaged fruit juice segment. Therefore, these considerations are also posing severe threats to the sales of Atlantic Quench. Chapter 5 Marketing Programs As Atlantic Quench is suffering from several threats and weaknesses and the company is experiencing a large number of organizational issues, requirement for the company to bring changes into the existing marketing strategies has become prominent. 5.1. Product Strategy Though Atlantic Quench is having a large number of products in their basket, it is required to diversify the product line to a great extent. In spite of concentrating only on producing cranberry juices, the company should start harvesting oranges, grapes, lychee, strawberry etc and introduce packaged fruit juice of all these fruits in the market under the same brand name. As smoothies of different flavour have gained considerable interest in recent times, Atlantic Quench should also producing smoothies in order to capture the changing consumption pattern of consumers. In fact, the company can also consider production of alternative products such as jellies, fruit pulps, toffees, shakes etc (Fournier, 2007). 5.2. Pricing Strategy Pricing should be kept in such a way that it can attract premium customers such as corporate and professionals as well as the youth of the nations. Therefore, products should be categorized in two parts. For the premium products, premium pricing should be charged so that the consumers can derive the value of the products through the pricing strategies. Another product segment should be designed for the youth peoples to meet their requirements mainly after gyms and energise them. For this product segment, competitive pricing should be introduced by the company so that the products can be affordable to such youth consumers (Gabriel, Kottasz and Bennett, 2010). 5.3. Place As the consumer response is better from the market of United Kingdom rather that those of the US consumers, Atlantic Quench should focus more on the European market. More intensive marketing strategies should be conducted in terms of pricing and promotional activities. The company should also try to integrate more and more European countries and penetrate the products in those countries in order to widen the consumer base and make more profit. 5.4. Promotional Strategies Considering promotional strategies, there is a substantial scope for the company to bring improvements. Apart from advertisement, Atlantic Quench can run promotional activities in malls and other public areas in order to capture consumer attention and enhance consumer awareness. In fact the company can also go for corporate tie ups and associate with various gymnasiums and corporate houses. In this way, they will be able to capture large and trusted customer base. Distribution of free samples in malls and superstore will also enable many consumers to taste their products. Quality of the products supplied by Atlantic Quench will definitely aid the consumers to shift their buying pattern towards the products of the company (Kelly, Lawlor and ODonohoe, 2010). Conclusion Atlantic Quench is one of the most popular companies in the segment of packaged fruit juices. The company has been continuing to retain its position of bestselling brand since 1981. However, recent changes in consumer behaviour and emergence of a large number of new and existing brands in this beverage segment have necessitated the company to bring modification in its marketing strategies. Requirement for enhancing product line in spite of relying heavily on cranberries is of utmost importance. The company should also exploit other available promotional strategies in order to create massive awareness about the usefulness of consuming packaged fruit juices, especially from Atlantic Quench. Pricing should also be done keeping in mind the affordability and standard of different target consumers. In the company can successfully incorporate all such strategies, Atlantic Quench will definitely be able to maintain its position of bestselling brand in both US and UK market (Jaworski and Kohli, 2008). Reference List Alvesson, M., 2008. Critical theory and consumer marketing. Scandinavian Journal of Management, 10(3), pp. 291-313. Anderson, J. C. and Narus, J. A., 2007. Business marketing: Understand what customers value. Harvard Business Review, 76(6), pp. 53-62. Beard, F., 2008. Marketing client role ambiguity as a source of dissatisfaction in client-ad agency relationships. Journal of Advertising Research, 36(5), pp. 9-21. Bendapudi, N. and Leone, R. P., 2007. 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