Marketing Plan for D J Miles & Co Ltd - Assignment Example

Marketing Plan for D J Miles & Co Ltd Introduction D J Miles and Company Limited is a family business run that deals that has a well-established art of tea blending. The history of tea blending within the Miles family goes back to 1888, when Henry Miles started a tea blending business in Birmingham. D J Miles & Co Ltd was incorporated in 1974 by Derek Miles and Norman Halls. The head office is located in Porlock, Somerset, where the roasting and packing of coffee takes place. Tea blending and packing is carried out in Minehead, Somerset. The staff comprise of 36 employees. Derek Miles and John Halls are members on the Board of Directors. John Halls, son of Norman Halls, is the Managing Director of the company[ CITATION Lut01 \l 1033 ]. Key performance indicators The following are the company’s keys to success in this business. 1. Strategic locations - visibility, high traffic pattern, convenient access (in the Heart of the West Country). 2. Quality products - fresh coffee beans, clean equipment, premium serving containers, consistent flavor. 3. Friendly employees - cheerful, professional, articulate. 4. Finest status - word-of-mouth advertising, promotion of our community mission of charitable giving Executive Summary D J Miles & Co Ltd is run by the Miles family. The company is a tea and coffee merchants based in West Somerset. The company tastes, buys, blends and packs its own brand of tea 'Miles Tea', in Minehead and emphasises on provision of quality services where grounding and roasting of coffee is done and packing done in Porlock. The company has a factory shop at The Vale Yard in Porlock where it supplies numerous businesses throughout the South West of England which include pubs, hotels, supermarkets and delis since 1888. The business is centrally located in West Country the West Country and has an operational experience of 100 years and beyond in using the finest ingredients in tea blending and coffee roasting. Co-ordination of marketing activities is done by Richard Knight who is the organisation’s Marketer/Designer where he who manages the sales forces. The company has network of independent distributors and a fleet of their own delivery trucks. The company’s in-house tasters in Minehead does each unique blend of tea is creates. Local West Country water is used for tasting, to give accurate results which ensure that the true characters of the teas are assessed. A tasting is always done on more than 100 different teas before choosing a suitable tea for a particular blend. In Porlock, located in the Exmoor National Park, a wide range of coffees from around the world are roasted, ground (or left in whole bean form) and packed using sophisticated coffee roasting equipment. The company is dedicated to purchasing of the finest tea and coffee, the blending/roasting and packing of the tea/coffee are carefully done thus ensuring quality products[ CITATION Mil \l 1033 ]. Machines, Equipment and Services • Numerous coffee machines and equipment, with unrivalled training and after sales support. • Barista training for ideal extraction and profitability skills. • Links for the sales team to discuss particular packages in regard to the business requirements. 1 Mission Statement “A family run business, our expertise in tasting, blending and roasting shines through all our products and it's this artisan approach that gives Miles its distinguishing taste.” 2 External Marketing Audit 2.1 Macro environment Analysis Political The country’s political standing is stable therefore there are no significant political factors probable to affect the company’s strategic plan. The company has operated for100 years and beyond thus it has a political influence therefore may not face serious political issues. Economic Tea is “ready to drink” commodity, but the production stages such as blending, packing and marketing determine the profitability of the product and are controlled by tea packers and brokers, this considerably influence price leading to irregular value distribution along the supply chain.The present economic decline indicates that customers are will rather buy cheaper products to cut on spending. This directly affects the company’s implementation of the plan as the introduction of a high-end tea product to the market will go together with increased cost of production that will cause to an increase in prices and an increase in the reluctance of consumers to buy the commodities. Furthermore, it is doubted whether the investment for the marketing campaign can be recouped under the current economic condition. Social-Cultural factors Most consumers feel that there is need to for the rebrand of the commodity as they feel that it has lost its core values and only appealing to an ageing audience. According to the opinions of the consumers it is seen that the product packaging is outdated, displays a lack of co-ordination in designs and that the visual identity is not reflective of the core values of the organisation thus the organization must check on that as consumers are the most important people to the organization hence there issues must be given the first priority. The brand the logo of an elephant must be replaced with a more appealing Logo to the consumers. Tea and coffee are rooted in the British culture, making it an important part to the British people thus assurance of a ready market. Due to technological advancement a lot of online business is being done therefore company can include this in the strategic plan so as to capture the young generation as more young people are doing their shopping online and this will develop the company’s distribution strategy. Technological Business assets that keep the business running smoothly include; computers, software, business forms, regular agreements, internal process standards, and other specific company documentation. Concerning estimated technological changes, the changes dealt with are those that are likelihood to affect the company’s ability to compete. The management should identify changing technology, which will be studied, analyzed, and evaluated. Legal Legal requirements are the basis for market entry and products marketed in EU must meet these requirements. These requirements are established by law and must be obeyed by all doing business in the EU market. Any product that does not accomplish the legal requirements is not allowed in the EU market. The legal requirements that the company should obey include; The Food and Drug Regulations which gives conditions regarding health, quality, and composition and classification requirements applicable to coffee and tea manufacturers and other food and beverage manufacturers for consumers’ confidence in the safety of the purchased products. Consumer Packaging and Labeling Act, requires prepackaged foods, to bear any true information about the origin, quality, performance, net weight or quantity of the product. Compulsory Nutrition Labelling Nutrition labelling is mandatory on pre-packaged products. The company must adhere to the legal requirements discussed above. Environment Some of the environmental issues brought about by tea and coffee include; Habitat conversion; this is seen as the main harmful environmental impact of tea and coffee production as habitat for cultivation is often located in rugged and remote areas with highest biodiversity. Conversion of such habitats leads to a reduction in species reduction and considerable soil erosion before the establishment of the plantations. Energy use; more energy is used in processing tea these processes include withering, drying, grading and packing. In tea processing 4 to 18 kWh per kg of made tea are required. Firewood, oil, natural gas, electricity and sometimes hydroelectricity energy are used. Of the total energy used approximately 85 percent is thermal energy, while the rest is electricity for the machines. The environmental effect of tea processing depends on the use of renewable/renewed feedstock and the energy efficiency of the machinery. Drying, the most energy-intensive phase of tea processing is carried out by use of firewood from natural forests which leads to deforestation. Agrochemical use; various agrochemicals are used in the growing cycle on tea and coffee plantations to protect the bushes and to improve productivity. Various types and amounts of pesticides (herbicides, insecticides and fungicides) are used. Soil fertility is affected negatively when a particular plot is repeatedly used for a particular crop this results in soil erosion, which is magnified because tea and coffee are often grown on slopes. Both inorganic and organic fertilizers are applied to compensate for this loss. This all leads to a negative curve where more agrochemicals are desirable in the maintenance production in inverse proportion to the decreasing soil quality. The application of hazardous and toxic agrochemicals negatively affect the locals and wider environment: lowering soil biodiversity and water pollution which causes harm to aquatic and terrestrial animals and plants that solely depend on the river water. 2.2 Microenvironment Analysis Customers The targeted consumers are those above 40 years, of both genders but the company intends to include the younger market. The over 40 generation will select the products based on the taste but the under 40 will criticize the packaging thus the company should reconsider the branding of the products as the present branding is not appealing to the consumers. Competitors There is no specific local competition (Dorset Tea and Devonshire Tea are not considered direct competitors) as they are in the far south western tea brand, demonstrating some similarities with Yorkshire Tea but the company faces some competition from Fait trade, Escoresso, Earl and Grey . D J Miles prices are slightly below Tetley and on a par with Tesco’s own label brand of tea. Distributors The company has a group of distributors including independent distributors in the south west and Wales. The distributors supply Miles tea and coffee to shops, tea rooms, hotels, etc. Marketing activities are co-ordinated by the company Marketer/Designer, Richard Knight, who manages the sales force. The company has a fleet of their own delivery trucks. The company has its own direct distribution to trade; the factory shop conducts retail trade at The Vale Yard in Porlock (head office). Nation-wide purchasing is possible via the website. Miles Tea and Coffee are served at the Mr Miles Tea Rooms & Coffee House in Taunton, Somerset. Suppliers The company has worldwide suppliers of tea and coffee, whose deliveries tasted before selection. The company is committed to source the tea and coffee with best quality. 3 Internal Marketing Audit Operating Results The company has been operating for 100 years and beyond at south west of England. Following the current marketing strategies, its sales performance is satisfying and its operational cost have been well managed which has made the company to earn huge profits. The company is aiming at further improving in its performance at the North West of England. The aim will be achieved by setting up new marketing strategies to improve on the existing ones and consulting more from the existing companies in the region. Strategic Issue Analysis The company’s marketing objective is to enter the market at North West of England and continue its success by exploiting the company’s competitive advantage, which is the unique taste of the products. The company is also intending to serve a wider range of customers and introduce a high-end product in the market. This is a challenge to the company since it has to make adjustment on its current marketing mix and strategies, since the young generation is included in the target consumers; the issues of blending, packaging, promotion and price must be reviewed for the company to achieve its objectives.. Marketing Mix Effectiveness The company has to become more vigilant in its market mix. In the past the company only emphasised on quality for people above 40 years but now and did not have much to do with the product especially the packaging. This issue must be addressed immediately as young consumers have complained that the taste and exterior of the product looks outdated and is not appealing to them. There is little involvement of the company in the product promotion activities, comparing the prices of Mile with the competitors it is seem that Miles is expensive and this seems to repel customers as consumers will always like cheaper commodities thus without compromising quality the company has to adjust the market mix strategies in order to attain the company’s competitive advantage in the market. Thus the management is called upon to be more vigilant. Marketing Structure and System The company has made numerous efforts on the marketing communications; these efforts have proved to be effective. The company has a comprehensive website and it is available on both Facebook and Twitter which will receive a makeover as part of the re-branding process which will be part of the re-branding initiative. The company can be found on ebay and is involved in various events SWOT Analysis Strengths Members of the Ethical Tea partnership and Fair trade certified. Free deliveries to the West Country with low minimum orders. Free next day national delivery on orders over £50. Practice, skill and expertise in both Tea and Coffee. supplier of all hot beverage needs distinctive taste of the products Each unique blend of tea is created by the company’s own in-house tasters in Minehead. Local West Country water is used in tasting of tea, which allows the true character of the teas to be assessed Weaknesses Finance Limited knowledge of the younger customers Low bargaining power with distributors There is a feeling that the product packaging is out-dated Opportunities Potential of survival of the business Potential to expand to smaller towns and other areas. Existing markets are not fully tapped and company can easily penetrate further. Expansion of product folio by introducing more brands in addition to the existing ones. Improvement on its packaging to be appealing to the consumers especially the youth Threats uneven fiscal system Intense competition from other producers which include Fair trade, Escoresso, Earl Grey Changing consumer trends with a health advice of coffee having a health effect on the consumers poses a threat to the company. Increase in price of packaging and manufacturing costs which may not be fully passed to the consumers. Furthermore consumers can easily switch to other beverage brands 5 Marketing Objectives The marketing objectives that the company has set out are; Setting up target groups in the North West of England and setting up standard segmentation variables profile of those groups. Brand positioning in the north west of England while recognizing the current re-branding initiative for the target groups. Introduction of the Miles Tea and Coffee at the north west of England by employing a properly designed distribution strategy. To design an appropriate integrated marketing communications mix that will sustain brand positioning and allow for communication with the target groups in the North West. Strategic Thrust The company is targeting the West Country it believes that the West will provide a suitable environment for the running of the company and has potential consumers, and these qualities will allow the company to concentrate on the production of quality blends and roasts. Strategic Objectives 1. To design a distribution strategy to introduce Miles Tea and Coffee to the north west of England. 2. Analysis of Strengths, Weaknesses, Opportunities, and Threats of the company when marketing of high quality coffee and tea. 3. Undertake a financial appraisal of coffee and tea processing and marketing for a time frame of one year. 4. Carry out sensitivity analysis for identification of the sole profitability determinants. 5. Suggest a strategic plan that the company should implement during the next one year. 6 Centre Strategies The company core strategies include; Product marketing core strategies In order to appreciate the philosophies of the company board of directors, it is necessary to the company to have management direction; the management direction can be achieved if the company will address the issues listed below; The What: the niche fixed out by the company is essential to their image as a company. The company is highly reliant on consumer demand and preferences thus deviating from consumer demands would harm the business. The Who: The typical customers are the 40+, of genders, found in (south west of England) and affluent. The company would also wish to target a younger market. The brand as it is currently presented fails to attract a younger audience, thus the re-branding task should be done carefully. The company wants to have a clearer, more formal picture of their target markets in terms of their The Where: the targeted place is the West Country as it is it will provide favourable environment for the business operations and the resident’s value quality in all aspects of their life, which will be effectively used in the manufacture of high quality blends and roasts.. The How: the company goal will be achieved by increasing their involvement in opening more coffee and tea stores. The company is buying floor space to further market their product. The company is planning to expand through strategic leasing of non-licensed locations so as to promote brand recognition. Miles is seeking on increasing the number of contracts with distributors to further their supply chain across the country. Competitor Targets D J Miles & Co Ltd business strategy is expansion through various channels of distribution. Their ability to implement their business strategy will depend on their ability to; sell products on a national scale and over the Internet enter into distribution and other strategic arrangements with retailers and other probable distributors amplify brand appreciation on a national scale compete effectively in rising markets identify and establish strategic locations suitable for new stores handle expansion in administrative overhead and distribution expenses expected to result from the planned extension in the distribution channels Competitive Advantage The company has the necessary experience as it has operated for over 100 years Members of the Ethical Tea partnership and Fair trade certified. West Country free deliveries with minimum orders. Free next day national delivery on orders over £50. Practice, skill and expertise in both Tea and Coffee. Supplier of all hot beverage needs.  7 Marketing Mix Decisions For the company to achieve the market mix the company will develop product to meet the needs of young customers, recommend low price and raise product promotions budget in the participating more in the product promotion events both physically and online. The selected place is a strategic location therefore the company management should be more vigilant so as to capture more customers to facilitate quick penetration of the market, development of new channels and exploitation of the existing distribution channels. Product Coffee • Incredible range of skillfully roasted coffees ideal for all types of businesses. • Beans for Espresso and Cup machines • Fresh ground coffee for filter, cafeterias and now aero press. Tea • Company tea blenders taste tea on a daily basis to guarantee use of the finest teas. • Numerous quality and special teas from around the world • Various loose, bagged and tagged teas. • A full loose tea retail package, Promotion The company will employ various marketing communications activities. These will include advertisement on magazines such as the British Food Magazine, and local magazines such as the Exmoor Visitor. The company has a comprehensive website and is available on Facebook, Twitter and ebay. Public Relation Company is significance thus the company will be more involved in local events by sponsoring more local events. These events will include sports, contests etc. Price Before coming up with the price, the company must first consider the prices of its competitors in the market appropriate adjustments will be made to their prices. When administering the prices the company will also consider other factors which include geographic location, period for special sales, distributors, etc. will be considered at special situations. Consumers near the industry will buy at lower prices than those further away. Prices will be varied depending on the demand at a particular place. Price management strategy Selling through intermediaries (wholesalers, retailers) requires the list price (price to consumer) to reflect margins required by distributors. The company will appreciate the final consumer as well as members of the channel (wholesalers, retailers) that link the brand owner and the end- customer when coming up with the prices. Place The strategic place the company is the West Country and the company believes that it will effectively work with the people in this place and manufacture quality products for the consumers who are readily available. Coffee and tea are mainly sold in the south west of England. The place has a well-established communication system where it is served with good roads and is strategically located. This will ensure that all consumer need are met. The company have their own direct distribution to trade and there is a factory shop conducting retail trade at The Vale Yard in Porlock (head office). It is possible for customers located nation-wide to purchase via the website to enlighten themselves about the products and location. The company is run through system of distributors in the south west and Wales. These distributors supply Miles tea and coffee to shops, tea rooms, hotels, etc. this is not for enough for the company as there is need to open more distribution channels. People: the target of the company is the above 40 and under 40 years, thus the company must carry out proper research to meet with the needs of all its customers. Employees play an important role for the survival of the organization therefore the company must ensure that the employees’ needs are satisfied. Process; in the past the company has been strict on the quality of the product by ensure that the processes involved in production are proper. This should be improved further as proper processing wins the confidence of consumers. Physical evidence; this is what is visible. In this case cleanliness and beauty is vital, thus the company must ensure that its environment is clean, the packages of their products are attractive and the employees are neat. This boosts the company name and confidence. 8 Organisations and Implementation For effective operation of the company there should be an appropriate management system to coordinate the organisational resources and effectively execute the marketing plan. In plan implementation the following must be done. Mass communications techniques Key promotion mix; Advertising: The Company must make the consumers aware of its products through advertisement of the products. The adverts of the company products will be put in a newspaper/magazine for direct feedback from the reader to the company through the returning coupon/calling number that will be given in the adverts. The company will be able to identify the respondents. By the company management answering phone calls made by the respondents there will be more response than mail-answering method. Direct-response radio will generate direct response from listeners using the phone, post or internet. Direct mail, telemarketing and catalogues will play a vital role as it will enable the company to meet the target groups, and customise messages and offers which will enable the company to meet the strategy. Direct marketing: Direct marketing will allow the company to generate a specific response from targeted groups of customers. The company will focus on limited resources that will lead to high production, and measure the campaigns success accurately through response analysis. A direct marketing campaign will help the company in achieving the following key objectives: escalating sales to presented customers customer devotion building re-establishing former customer relationships Sales promotion: the company will carry out its sales promotions by allowing trade allowances, trade contests, and proper product strategic displays and by offering training programs to the sales team, hence increasing the sales. Sponsorship: the company will use its products in sponsoring activities such as sports i.e. bicycle riding, marathons soccer etc., and contests. This will enable the company will have the freedom to operate throughout the country Publicity: Product publicity will be done through a planned and organized campaign. The publicity plan will enable the company to obtain effective product media coverage, product promotion and interest creation for people will buy the product. The public relations team has a duty of ensuring that the products look appealing to the public using different mass media channels which are the press release and the press kit. Other means may be through holding contests, exhibition or demonstration, sponsoring events, conduct a survey or poll, presenting an award (invent one if necessary), and staging a debate. Personal selling: this will be done by sales team doing an oral communication with possible buyers and convincing them to buy the commodities. The personal selling will develop a relationship with the probable buyers. Internet marketing: the company is planning to increase its target customers by including the under 40 group. It must improve on its internet marketing as internet marketing there is real interactivity. It enables individual target group members to interact with the sender on the Internet. The internet will allow the customer in decision making sequence within one medium in one session. Web advertising as branding and direct marketing medium is very powerful in attraction of customers. The company must open more website and be alert on what other companies are doing via internet. Branding decisions: product branding plays a vital role in any organization as it will form a basis for product’s quality story, provide legal protection and help in market segmentation. Therefore since the company is considering rebranding of its products care must be taken so as to satisfy all the stakeholders. Distribution/delivery plan The company can adopt the following distribution pattern for its products in this case the manufacturers will be represented by master distributors and/or brokers who in turn will avail the product to direct distributors and other wholesale suppliers.  Other manufacturers will allow distributors and suppliers to purchase product direct.   Product will then be distributed or sold directly to wholesale stores to retail businesses as shown below Product distribution and delivery chart 9 Controls It is essential that proper control measures are embraced so as to ensure proper implementation of the marketing plan. The financial plan must be stressed as the survival of any organization directly depends on its financial status and management. 10 A 12 month Budget Plan Schedule Budget Month 1 Marketing Research of targeted customers in North West of England £5,000 Month 2 Develop right product range to serve the target market £5,000 Month 3 Product distribution system development £3,000 Month 4 to 6 Advertising the product brand on radio and social network sites due to limited funds. £30,000 Month 7 to 11 Occasional promotional activities to support the sales £4,000 Month 12 research conduction to evaluate the result of the marketing plan £2,000 Contingent budget to support any modification that might occur across the 12 months £1,000 Total £50,000 References CITATION Lut01 \l 1033 : , (Luther, 2001), CITATION Mil \l 1033 : , (Miles Tea and Coffee Merchants), Read More