Haifas Market Segmentation - Case Study Example

Haifa Development and Marketing Outline Introduction Organisation background Product overview Market segmentation New product development Strategy Product Design Process design Growth Potential Competitive environment Marketing Market tests Product positioning Sales plan Media plan Promotion plan Commercialisation Table of contents Introduction 3 Organisation background 3 Product overview 4 Market segmentation 4 New product development 4 Competitive environment 7 Marketing 8 Commercialisation 10 References 11 Introduction Better Drinks Ltd success in the beverage market has been facilitated by an inbuilt resilience on the production processes of the company and an aggressive research and development department. The aptitude of the Better Drinks Ltd to continuously evolve and develop innovative products meeting the requirements of their customers at different times has been the source of the growth and expansion. With the inception of Haifa, the company’s product portfolio will increase to three making the company’s risk profile substantially manageable. This report will document the necessary strategies for the successful development and launch of Haifa drink which will revolutionize the beverage industry. The drink being the first non carbonated, sugar free and nutritive soft drink in the UK market will be the first to respond to the consumer health issues raised on the carbonated soft drinks in the market. The inbuilt environmental compliance in the packaging of the drink will ensure that Better Drinks Ltd complies with climate change and related environmental policies. Haifa drink and brand is expected to penetrate the market with ease based on its qualities and proposed promotion campaigns to be launched by Better Drinks Ltd. Organisation background Better Drinks LTD is a company that has been in beverage production for a period of over 20 years since its inception and registration in the year 1990 in the UK. The company has been the market leader in the product of carbonated beverages in the UK market until the last two years where the target sales began to drop due the general market orientation away from the carbonated drinks. This has made the company’s research and development unit to further investigate the market for the main reasons for the sales drop and emerging consumer needs. The company has its main production unit in London and supplies the whole of the UK and its environs. The plant is based on state-of-the-art technology for processing and packaging of drinks on a large scale. The company has been associated with the brands like the Cola and Soday which have been successful brands in the UK market. The Company’s research and development has identified the need for the non carbonated sub product in order to be relevant in the market. The sub product should be nutritional with a varied fruit ingredients and flavours. This has lead to the development of the non carbonated mango and orange flavoured drink; Haifa. Product overview Haifa drink is proposed to be non carbonated, sugar free and highly nutritive. The drink concept is based on the consumers need for sugar free products and the growing dislike for non carbonated drinks. The drink blends the concept of fresh juices and the need for healthy living to bring out a market positioning of rejuvenation and health. The drinks will be produced on the same plant as the other brands of the company but requiring a slight adjustment in the mixing segment. The sugar free aspect of the drink has been catered for by use of plant sweeteners which have no health hazards. Market segmentation Beverage market has been in a continuous evolution and this has lead to the influx of a number of drinks to meet the varying needs in this market segment. The introduction of energy drinks, fresh juices, concentrated juices drinks and different variations of stimulants has made the market highly segmented into niches that are unique. Based on the recent survey by the company carbonated drinks segment is losing its share of the market to the non carbonated fresh juices. Further research by Kasper & Piet (2000) indicates that there is a drift towards energy drinks and food supplements. This has made the company’s research and development to act responsibility and develop Haifa drinks which blends all this needs into one. Haifa drink design being based on a whole family drink concept intends to be friendly to young children therefore making it a choice of drinks in family day outs (Wierenga 2008). This makes the drink acquire a market orientation of satisfying everyone in the UK market. New product development Haifa Product being still in the development stage requires total collaboration within the company’s strategic departments of marketing, production, legal affairs and finance. In order to ensure that the products meet its all intended attributes, collaboration is inevitable amongst all the departments of Better Drinks ltd. The external stakeholders like the regulators, distributors and retailers also needs to be involved in a controlled manner so that the intellectual property of the company is preserved at the same time their inputs will ensure that the product meets the basic compliance regulations and market needs (Lehu 2007). Strategy Haifa drink development being an initiative of an already existing organisation needs to be designed in a way to reflect accumulated knowledge for the twenty years of operations by Better Drinks ltd. The product development strategy is therefore not only based on the customer needs in the beverage market but also sales forecasting modelling (Lilien & Rangaswamy 2004). The drinks also will ensure that it is successfully launched by being accorded all the necessary support required for beverage licensing and other compliance regulators in the UK. The development team also do have an aspiration of making Haifa one of the first products of Better Drinks to be certified as being environmental friendly not only by their ingredients but even in their packaging. The development strategy therefore should be involving but controlled so that the intellectual capital of better foods is preserved at the same time meeting the customer requirements. Product Design Haifa’s design being a whole family drink requires meeting high level design specifications in the domains of health, safety, usage and packaging. For the drink to be declared healthy and fit for use by every person it should undergo a rigorous testing by the standardization body of the UK and even further collaboration with the health workers council is required. This initial pilot product needs further production support through a strict quality control system in the plant. The intended packaging design not only meets the attributes of safety and convenience but also brand imagery and environmental friendliness. The design is required to reflect rejuvenation of lost energy and healthy living. The proposed packing is designs are as shown below. The designs are on a disposable paper cans which are biodegradable therefore making it environmentally friendly and will be certified for sale in all major UK stores. Process design The production process for a revolutionizing drink like Haifa needs to be perfect as regards quality and production capacity. The current plant of the Better drinks Ltd is of a technology which is current but for the production of Haifa, it is necessary that different subsections of drinks production are adjusted. The quality control equipment needs further upgrades to provide a high precision checks and ensure consumer safety therefore it has to be re-gauged and installed. The packaging section needs an additional special packaging machine for Haifa since it uses biodegradable packaging materials Growth Potential Haifa drinks being energy cum health drink has poses a challenge to most beverages in the market. The initial phase of Haifa development being dependent on the Coke and the Soday brands of Better Drinks Ltd has been much a spending phase and there has been no income from this product. The potential of the product is based not just on the overall decline on the consumption of carbonated drinks in the UK but also on the ingenuity interred in the product that uniquely satisfies a unique niche of customers. Initially based on the diffusion process the intake of Haifa is expected to be low but with a gradually product improvement and support to the early adaptors and the innovators, the product can be refined from the feedback of the early adaptors. With an already established distribution and customer feedback collection, Better drinks Ltd has an inbuilt capacity to improve on Haifa based on the early adaptors who mainly constitute their distributors and other market agents. This advantage gives Haifa drink development team an opportunity to further improve on the drink as it awaits the penetration in to the early majority market as stated by Hanssens & Parsons (2003). In order to enhance the social perception of the Haifa Drink during this period, the company intend to use the services of one of the leading sports personality of the UK as the product ambassador so as to provide necessary influence for the early adaptors and early majority. The promotional activities at this phase will be much to do with the prestige and adoption to the existing social setting. The distribution of Haifa car drink holders and even gift items will enhance the adoption at this stage. The early majority market for the drink will be expected to be experience after the sixth month after the product launch. This phase change is expected to be fast since the Better Drinks Ltd has an already existing and successful distribution system. With the reduction in the consumption of the carbonated drinks, the company expects not to lose any customer to other producers and therefore this phase will see a number of promotions being undertaken by the Better Drinks ltd. The early majority, according to Rodgers (1983) is approximately 34% and constitute mainly the middle class. This group requires aggressive marketing and persuasion in order to adapt to the new products. Use of mass media and main stream advertising and focussing much on endorsements from key opinion leaders and sports personalities will enhance the relevance of the products to the early adaptors since they constitute people which cannot just be easily convinced without tangible facts. Better Drinks ltd has the necessary strong points to this group with reference to Haifa Drink as being energy cum health drink. The late majority preceded by the laggards are people who are generally conservative and are the rigid to change. This group requires leadership from their own backyard therefore commercials and other media communication should use one of the people befitting this category as their ambassador. The promotion at this level should emphasise the risks and disadvantages of not being a user of Haifa drink. Competitive environment Haifa being an energy and nutritional drink is not categorised as just a mere soft drink. The product has been positioned as being non carbonated and functional therefore much differentiated from the energy drinks in the market which are mostly carbonated. The main direct competitors of Better Drinks Ltd will include all producers of all soft drinks. Being a unique drink, Haifa has no direct substitute product. The innovation in the product requires that it is in fact recognised as a product responding to the more challenges facing the soft drinks industry. The main competitors of the product are mainly from Redbull Energy drink, Lucozade and Coca cola drinks. The competitors are mainly foreign to the UK market but have international endorsements which give them an advantage. Haifa’s positioning and its quest to seek the green revolution endorsement intends to be the first beverage drink to be packaged in an environmentally friendly way, while upholding to a greater reverence to the consumer safety by being non carbonated and sugar free drink. Marketing The marketing plan of Haifa drink shall be supported by it functional capabilities therefore marketing department must be able to pass the consumer feedback on the drink to the production and research and development units for improvements where necessary. As noted by Lusch & Vargo (2006), use of media in the marketing of this product shall be secondary and not direct so as to as to establish a good foundation for the clients understanding of the functionalities of Haifa. Marketing strategies shall include; sports sponsorships, events sponsorship, having pinups for clubs and restaurant. The use of celebrities and health professionals to endorse the drinks shall be part of the marketing strategies. Immediately the use of the Haifa trickles down to the early majority group, mass media marketing and promotions shall be engaged so as to allow an easy entry by the late majority. Market tests The market tests for the Haifa are intended to be in Universities and other public places like clubs and public events. The market tests are intended for communicating the benefits of the Haifa to the potential customers and also collection of product feedback from the customer. Market tests shall be undertaken by a joint team from the Better Drinks Ltd who will collect customers’ feedback on the drinks for further improvements where necessary. The market testing results and feedback shall form part of the forecasting data on the general market perception of the drink. Product positioning Haifa product will be positioned as being a healthy and revitalising drink for the whole family. The drinks positioning should be able to give a peace of mind to the consumer who is fatigued not just as a source of energy but crucial vitamins for the replacement of worn out cells. The drinks positioning should confirm the drinks foundational blocks of being non carbonated and Sugar free consequently making it one of the drinks for a healthy living. Sales plan Sales plan for Haifa shall be supported by the already existing channels for Better Drinks ltd. In the initial stages, the product shall be availed directly to specialised stores and clubs where the early adaptors shall be able to access (Stavros & Winzar 2008). The store shall be selectively chosen so as to create the necessary acceptance by this group of consumers. The point of sales shall be enhanced by use of Haifa branded refrigerators. Better Drinks Ltd shall endeavour to distribute Haifa drinks through chemists and pharmaceutical supply chain so as to enhance its health related values. Media plan Communication on the availability and attributes of the Haifa to the potential clients in necessary in order to ensure that the customers have the necessary understanding in order to purchase the product. The use of media should be planned in such a way as to ensure the flow of the right information to the customers at the right stage of product growth. The initial media communication should be limited to endorsements by the opinion shapers in the early adaptors group. It should bring out the positioning of Haifa as being a drink to a unique class of people having taste as regards trends. Media cannot be able to influence the market creation but it will enhance the penetration of Haifa to the market (Becherer & Halstead 2003). The use of the following media strategies should be able to enhance the acceptance of the product through a positive positioning as long as they are integrated and harmonised. a) TV and radio advertising b) Internet marketing c) Mobile marketing Promotion plan Haifa promotions should be enhanced in order to ensure that product is accepted with the relevant information being distributed to the potential customers. The various promotions will make the entry of the new customers easier and the brand awareness will be enhanced. Customer promotions will be targeted at increasing the number of customers through the use of coupons while trade promotions will be targeted at increasing the sales value directly from the existing customers. The promotion packages will be added to the normal packages so every purchase of a number of Haifa products will be accompanied by a promotional Haifa product. The promotion programs are intended to increase the number of customers and the amount of sales. This will further bring in new customers especially the late majority group who will need a big push to be initiated into a new product like Haifa. Promotion strategy should be well merged with the media strategy to ensure that they are meant to harmonize product communications to the market (Kasper & Piet 2000). In the case of Haifa, promotions strategy should not exclude the product differentiation since Haifa is uniquely placed in the market. The promotion strategy should increase sales of Haifa by bringing out the reasons that makes Haifa a superior product. Haifa therefore will institute a promotion strategy that will cover the whole distribution chain in order to make all the product stakeholders have the necessary impetus in the product sales. The sales promotions also should be enhanced at the point of sales by use of product brochures, branded dispensers and other promotional pinups. Commercialisation The commercialisations of Haifa product will justify the development and marketing costs of Haifa as a product. The shareholders of Better Drinks Ltd will need a return on their investment and this means that the product future returns should not be limited to the UK market but prospects for international expansion should be instituted in the initial production and distribution of the product. Every aspect of the product development should be justified in terms of costs and benefits consequently making the aggregate process to have a positive cost-benefit analysis. The requisition of the relevant commercial licenses and compliance to the necessary trade legislations should be one of the most important aspects to be undertaken before the product is launched into the market. 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