Devita Energy Drink - Case Study Example

 Marketing Table of Contents 1.Personal View 2 Introduction 2 Product Research 2 Modes of Transportation/Promotional Research 3 Marketing Mix 3 Market Segmentation 4 Target Group 5 Marketing Strategy 6 Competitive Advantage 7 Conclusion 8 References 9 1. Personal View Introduction The Product that we have decided to launch is called Devita. Devita energy drink is meant to improve the consumers’ alertness and activity level. Through research, the market has been found to have a gap in which the consumer is not satisfied by the products that are offered in the market. The role that I play in the group is to research on the market of the product that we are to launch. There are different researches that I intend to carry out which include product research, market research, price research, promotional research and distribution research. The researches are on the basis that they will address all the channels and intermediaries before the product reaches the consumer. Also the consumer behaviour should be addressed so as to ascertain the consumption and the success of the product in the highly competitive market. A reducing buying behaviour means that the product is either not frequent or it is very expensive. Product Research A habitual buying behaviour means that the product is satisfying the needs of the consumer. Product research is meant to evaluate the acceptance of the proposed new product in the market. It should make comparisons regarding to the other competitors products. Product research also studied the packaging and the various designs of the competitor’s products, the analysis of the future market share of the competitors’ products, test analysis of the product and the evaluation of the performance of a new the product. Price research is meant to test the flexibility of the demand in the market. It should give a full analysis of the costs that are likely to be incurred and the likely profit margin of this new product. The price research should also give an in-depth knowledge of the consumer perception of the pricing, loyalty and quality. Distribution research is meant to give solutions to the location and the design of centres of distribution. It further should provide a breakdown of the transport, supplier and advertising requirements. Modes of Transportation/Promotional Research This means that the expenses associated with different modes of transportation and warehousing are recognized. Promotional research should give an analysis of the effectiveness of the various types of advertising used, effectiveness of sales endorsement, the role and value of sales representatives and other valuable and successful promotional methods. Market research is to be carried out to analyse the potential of the market in the energy drinks line. Brown E. (1925 It give a forecast of the sales by the new and existing products in the market, the quality of the intended market, the trend in the energy drinks market, the market distribute by the other competitors and establish the untapped potential market and target market. This research criterion was arrived at because it is exploratory in that it gave ideas of the market and the market insights. It is also descriptive in the sense that it showed the relationship that existed between the market and other variables. This gives a basis for further research and investigation. The research also gives a casual relationship effect based on the relationship between the market variables. 2. Group Report. Marketing Mix Devita energy drink is evaluated to suit the different needs and different characteristics of the target groups. To achieve this, the product should have a different marketing mix. This means that the market segmentation should be a major factor to be considered. The market segmentation levels that we shall use include; niche marketing, segmented marketing, micro marketing and mass marketing. Niche marketing will involve the capturing of the consumers and retaining them (Brown, 2005). This will ensure they are loyal to the energy drink. Mass marketing will involve offering one product to the whole market. This is where the market has a large potential and the firm is reducing its costs while maximising on the economies of scale to achieve high profits. We agreed that this method was not going to be followed (Theodore & William, 1962). Market Segmentation Market segmentation method that we decided to use is meant to retain the consumers that are most profitable and use the tactics to get more customers. Market segmentation cannot be segmented in one definite way. We decided to consider and classify several factors of market segmentation that include age of the people under the target group, education level, demographic, gender, income, psychographic, occupation, religion and geographic setting (Brown, 2005). In segmenting the market according to age, we recognized the fact that the needs and preferences of consumers change with the change in age. Hence, a different flavour of Devita energy drink will serve to suit different age groups. Education levels influence the behaviour of the consumer. People of the same educational level are likely to behave in the same manner. Demographic segmentation recognises variables like income and family life stage. The needs and consumption behaviour of the same demographic groups are similar. Geographic segmentation is dividing the consumers according to the places like states and provinces since this people have the same habits of consumption (Brown, 2005). Gender segmentation recognises the fact that people of the same sex are likely to consume the same products. Income segmentation suggests that people of the same income group have similar behaviour in purchasing goods. Psychographic segmentation bases its argument on the similarity in behaviour between different social classes or personality traits. Market segmentation chosen benefits both the consumer and the organisation. It is to benefit the organisation by giving them criteria through which it will maximise profits as well as provide a solution to the problem facing the consumer. Weinstein A., (2004). To choose the segmentation method, there are several requirements that we decided have to be satisfied. The requirements include - measurability, market response, substantiality and accessibility. The market segmentation method has to be measurable. The marketers of Devita energy drink must be able to identify the similar characteristics being shared by a certain group. This serves to eliminate or include a consumer from the segment classification that he is put (Brown, 2005). The consumer also must respond to the drink that is designed to solve their problem, suit their need or preference. This means that the target group has to be responsive and the response should be buying the energy drink. The segmented market also has to be large enough to sustain consistent profits. The group has to be prove viable to venture and risk capital in that market (Theodore & William, 1962). Target Group The target group must also be accessible in that the communication, promotional and transportation channels reach them effectively. The promotional campaign is set to fit the budget and as well as achieve result by disseminating the information to the target market. The two types of promotional campaign are to be used are above the line promotion and below the line promotion. Above the line promotion is where the media hype is used to push the information to the target group at the same time. This includes newspapers, television, radio and the internet forums such as social websites. Below the line promotion included personal selling and trade shows. This should achieve product acceptance by the consumers, create brand equity and create a fantastic corporate image. This should proved by the conviction response through tremendous increased sales (Brown, 2005). The market segment chosen to be served and offered the product to has to be evaluated in terms of attractiveness and viability. The segment that is found to fit is one or more but has to prove that it has the size and potential growth to be profitable currently and in the future (Steenkamp and Hofstede, 2002). To establish this, there has to be data collection on the current sales and the rate at which it is growing to evaluate the expected profitability (Theodore & William, 1962). Segments with high sales and has potential or already have high growth rates and a high profit margin, will be the target of the energy drink. Evaluation of factors like competitors’ performance in that segment, the purchasing power of the segment and the availability of alternative products as substitutes then follows this. After the evaluation of all this factors, the favourable market segment is chosen as the target market (Roger, Steven & William, 2004). Marketing Strategy A marketing strategy that is deemed fit has to be employed to reach the targeted segment. The market strategy can be differentiated, concentrated or undifferentiated. A differentiated strategy targets several market segments and a concentrated strategy targets one segment and is likely to perform better. Differentiated marketing creates more total sales but tremendously increases the business costs. This is due to costs associated with research and development (Brown, 2005). A concentrated strategy has greater performance and therefore it enjoys economies of scale due to specialized promotion, production and distribution. Concentrated strategy performs best with limited resources when compared to differentiated and undifferentiated strategies. An undifferentiated marketing strategy ignores the market segments and goes after the whole market. Undifferentiated marketing is the alternative for mass marketing. It is characterised by low costs in production, transportation and stock. It also has low costs in advertising and marketing (Brown, 2005). However, undifferentiated market has a very big problem in trying to develop a product that will satisfy universally all consumers. They also face very heavy competition from all sides because they have a larger market segment. The strategy must be in accordance with the company’s resources, variability of the product and the variability of the market. Competitive Advantage After all those factors are considered, then it is time to take a position to achieve competitive advantage. A competitive advantage is the degree of importance that a consumer attributes the product in comparison to the competitor’s products. The company develops a potential competitive advantage strategy, then building strongly on the position then delivering the strategy to the market. When identifying a potential advantage, the company must give the consumers a much higher value than their competitor’s products. This will be creating a product with a lower value or adding value to a product to justify the high consumer price. To achieve this there has to be an analysis on product differentiation, image differentiation, channel differentiation, service differentiation and people differentiation. Product differentiation involves offering a product with a feature that is not available in the competitors’ product. This is to give the product a different taste and value with the aim to satisfy the consumer and leave a lasting impression (Weinstein, 2004). The expected result is making the customer to buy the product repeatedly. Service differentiation is offering the consumer a personalised service like delivering the product in his order. Channel differentiation makes a distinctive twist to the methods that the company uses to make the product available to the consumer. People differentiation is making the target group distinct from the other segments. This makes the product easy to distribute through the creation of a wide channel (Brown, 2005). Image differentiation is the colour, symbol and other elements that make a company different from the other companies. Conclusion The differentiations are to establish how the competitor’s positions should be challenged. They establish the offensive strategy where the competitors’ have their strongholds that should be exploited (McKenna, 1988). The product has to be profitable, important, affordable, communicable, distinctive and superior. The term profitable means that the margins between costs or expenses do not exceed the sales revenue. This means that the net profit margin is high and viable in the short and long run. The product should also not be pre-emptive and predictable especially by the competitors McKenna R. (1988). The product has to be communicable by clearly outlining the difference between it and the other products manufactured by the competitors. References Brown E. (2005). Marketing. California, Harper McKenna, R. 1988. Marketing in the age of diversity, Harvard Business Review Roger A. & Steven William H. & William R. 2004. Marketing: The Core. New York: McGraw-Hill/Irwi Steenkamp and Hofstede, T. 2002. International market segmentation: issues and perspectives. New York: Prentice Hall Publishers. Theodore N. & William R. 1962. Marketing as Field of Knowledge. London: Ronald Press Co. Weinstein A. 2004. Handbook of market segmentation: strategic targeting for business and technology firm. New York: Oxford University Press. Read More