Marketing Plan for D J Miles & Co Ltd - Case Study Example

Contents 1Executive Summary 4 2Introduction 5 2.1Key performance indicators 5 2.2Vision 5 2.3Mission 6 2.4Values 6 2.5Business objectives 7 1.Analyze Strengths, Weaknesses, Opportunities, and Threats of the company when marketing of Miles coffee and tea 7 3To accomplish a retail sales value of £500,000 of tea bags (260,000 boxes) and£ 600,000 of coffee in the North West in the next 12 months, 20% of which to be sold online. 7 4Embark on a financial appraisal of coffee and tea processing and marketing for a time frame of one year. 7 3External Marketing Audit 7 3.1Macro environment Analysis 7 3.2Microenvironment Analysis 9 Consumers 9 4Internal Marketing Audit 11 4.1Operating Results 11 4.2Marketing Mix Effectiveness 12 4.3Marketing Structure and System 12 4.4SWOT Analysis 12 5Marketing Objectives 14 5.1Strategic Thrust 14 6Core Strategies 14 6.1Product marketing core strategies 14 6.2Competitor Targets 15 6.3Competitive Advantage 16 7Marketing Mix Decisions 16 7.1Product 16 7.2Promotion 17 18 Trade Allowances 18 Trade allowances will include gifts and special offers which are hot chocolate, tea gifts, and coffee gifts. 18 Push money- buyers will be encouraged to buy by being offered discounts of 5% for every£ 50 spent 18 Training- the company will offer a free training to its employees on company management and the sales team of how to maximize their sales. 18 Free Merchandise-this will include free samples for instance if one buys the products worth £100 he will be given a Miles storage jar for free, others will be T-shirts, Wrist watches, pens etc. 18 Store demonstrations- the company will offer free store demonstrations to the customers from all over the region on the processing of tea and coffee twice in a year 18 Business meetings, Conventions, Trade shows- this will be done after every three months on the company premises 19 7.3Price 19 7.4Place 19 7.5People 20 7.6Process 20 7.7Physical evidence 20 8Organizations and Implementation 20 8.1Integrated Marketing Communication 20 The objectives the integrated market mix are: 20 To create awareness of our products in the market 20 To inform the consumers that we are rebranding our products to suit both the 18-34 age groups and the 35-54 age groups. 21 To inform the consumers about the location of our company in the North West. 21 8.1.1Key promotion mix; 21 8.2Branding decisions 23 These are some of the brands the company will offer; 23 24 8.3Distribution/delivery plan 24 Company distribution tracks do the daily deliveries in Somerset North Devon and Mid Devon from the headquarters in Somerset 24 9Controls 25 It is important that the company uses complete control measures so as to undertake proper implementation of the marketing plan. The company will insist on stress on the financial plan since the survival of any agency directly depends on its financial position and control. 26 10A 12 month Budget Plan 26 Marketing Plan for D J Miles & Co Ltd 1 Executive Summary D J Miles & Co Ltd is run by the Miles family. The company is 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 emphasizes on the provision of quality services for grounding, roasting and packing. The company has a strategic located in the West Country and has an operational experience of 100 years and beyond in using the finest ingredients in tea blending and coffee roasting. The company factory shop is situated in the Vale Yard, in Porlock, and supplies numerous businesses throughout England’s South West, which include pubs, hotels, supermarkets, and delis. The Company is owned by the Miles family that has a well-established art of tea blending. The history of tea blending within the Miles family dates back to 1888, where Henry Miles started a tea blending business in Birmingham. DJ Miles Company was incorporated in 1974 by Derek Miles and Norman Halls. The company quarters are situated 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 in the Board of Directors. The company Managing Director is John Halls, son of Norman Halls. Richard Knight is the organization’s Marketer/Designer and co-ordinates marketing activities. The company has a group of distributors and a fleet of their own delivery trucks. The company is dedicated to purchasing of the finest tea and coffee; the blending/roasting and packing of tea/coffee are done using sophisticated equipment for quality products (Miles Tea and Coffee Merchants). The Company is considering rebranding of its coffee and tea products. The target consumers are the 18-34 and the 35-54 age groups 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. 2 Introduction DJ Miles Company is considering rebranding of its coffee, and tea products. The target market segments are 18-34, and the 35-54 age groups. 2.1 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 and sophisticated 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 2.2 Vision To be the best standard specialty coffee and tea company with brands that offers a highly dedicated and loyal customer attraction. 2.3 Mission 1 Family run business, our expertise in tasting, blending and roasting which shines through all our products and it is this artisan approach that gives Miles its distinguishing taste. 2 To facilitate and inspire customers to enjoy the daily pleasure of Miles coffees and teas through daily provision of distinctive, finer products, better-quality coffee and tea knowledge, and superior service to every customer. Guiding rules for the mission Provide a good work environment and treat each other with respect and dignity Encourage diversity as an essential component in the way we do business Apply excellent standards to the purchasing, roasting of coffee and fresh delivery of our coffee and tea Develop customer satisfaction enthusiasm all the time Be beneficial to our communities and our environment Recognize the importance of profitability to our future success 2.4 Values We endeavor to encourage a culture that inspires people to exercise their unique, personal passion and expertise toward achieving the company vision and mission since consumers are the key to our company success. This culture is in grounded in four values; Mastery; with the highest quality and integrity, we are deeply concerned about our expertise, and pursue excellence in everything we do, Curiosity; We forecast to discover new possibilities, challenge the status quo, investigate, innovate and lead in our industry. Responsibility; the company is committed to sustainable practices through personal accountability among employees, our customers and the community. Prosperity; the company considers the principle of abundance; through the creation of exciting careers for our people, prospering local communities, and healthy lives for our global partners. 2.5 Business objectives 1. Analyze Strengths, Weaknesses, Opportunities, and Threats of the company when marketing of Miles coffee and tea 2. To gain distribution for our range of fresh coffee, instant coffee, syrup coffee, specialty tea, and fruit & herbal tea in Booths stores in the North West. 3. To achieve a 2.5% market-share of tea and coffee drinkers aged 18-34 in the North West of England within the next 12 months (23,800 tea drinkers). 3 To accomplish a retail sales value of £500,000 of tea bags (260,000 boxes) and£ 600,000 of coffee in the North West in the next 12 months, 20% of which to be sold online. 4 Embark on a financial appraisal of coffee and tea processing and marketing for a time frame of one year. 3 External Marketing Audit 3.1 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’s operational period is 100 years, and beyond which makes the company has a political influence, therefore, may not face serious political issues. Economic The present economic decline indicates that customers will rather buy cheaper products to cut on spending. This directly affects the company’s implementation of the plan since the introduction of a high-end tea product to the market will go together with higher cost of production that will cause a raise in prices and an increase in the reluctance of consumers to buy the commodities. This affects the 18-34 age groups. Social-Cultural factors 18-34 age groups feel that there is a need for the rebranding of the commodity as they feel that it has lost its center values and only appealing to the 35-54 age groups. The 18-34 age group consumers are of the judgment that the product packaging is outdated, displays a lack of co-ordination in designs and that the visual identity does not indicate the central company values thus the company will address these issues immediately the elephant Logo will be replaced with a more appealing logo. Technological The management should identify changing technology, study, analyze, and evaluate to favor the 18-34 age groups and the 35-54 age groups (Luther, 2001). Technological improvements will be achieved through habitual utilization of the internet as much is being done on the internet. Legal The company will implement the following legal requirements 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’ assurance in the safety of the purchased products. The Consumer Packaging and Labeling Act requirements. Environment Some of the environmental issues brought about by tea and coffee include; Habitat conversion; due to establishment of coffee and tea plantations, conversion of such habitats leads to a reduction in species reduction and considerable soil erosion before the establishment of the plantations. Energy use; Vast energy is needed to drying tea and is carried using firewood from natural forests, which leads to deforestation. Agrochemical use; the application of hazardous agrochemicals negatively affect the locals and the wider environment: lowering soil biodiversity and water pollution causes harm to aquatic and terrestrial living organisms that solely depend on the river water. 3.2 Microenvironment Analysis Consumers 1) Tea and coffee consumers aged 18-34 Innovative: Adventurous in trying, fresh coffee, instant coffee, syrup coffee, specialty tea, and fruit & herbal tea. Drink all three categories – black; specialty tea, fruit/herbal tea, instant coffee, and fresh coffee. Curious to try new brands. Conscious decision-making process: Different herbal teas dependent on mood. Busy lifestyle Concerned about branding, packaging and quality of the product. 2) Tea and coffee consumers aged 35-54 Concerned about the quality of the tea and coffee and ready to pay for fair trade and organic products Standard English breakfast tea and coffee is popular with this group as an energy booster. Heavy drinkers of tea and coffee Interested in quality of the products. Competitors There is no specific local competition (Dorset Tea and Devonshire Tea are not considered direct competitor the two are situated in the far south western tea brand, demonstrating some similarities with Yorkshire Tea, but the company competes with Fait trade, Escoresso, Earl, and Grey. D J Miles prices who are slightly below Tetley and on a par with Tesco’s own label brand of tea. Distributors The company has distributors including independent distributors in the south west and Wales. Product distributors will include: 1. DJ Miles & Company Ltd- West Somerset, North, Mid & South Devon 2. Salter supplies – Somerset, south East Devon & west Dorset 3. Peninsula Food Services –Cornwall 4. Keith Bartram Coffee- Nottingham & Derbyshire 5. David & Margaret Ingham-Warwickshire & surrounding The distributors supply Miles tea and coffee to shops, tea rooms, hotels, etc. the company Marketer/Designer, Richard Knight, does the co-ordination of Marketing activities and manages the sales force. The company owns a fleet of their own delivery trucks. The company practices 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 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 dedicated to acquiring best quality tea and coffee. 4 Internal Marketing Audit 4.1 Operating Results The company has operating experience of more than 100 years at south west of England. Its sales performance is satisfying as it is earning huge profits. The company’s is seeking to advance its performance in England’s North West this performance advancement will be achieved by setting up new marketing strategies and consulting more from the company’s existing in the North West 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’s intention is to serve 18-34 age groups and the 35-54 age groups while maintaining high quality products. The company will adjust on its current marketing mix and strategies, since the 18-34 age group is part of in the target consumers; blending, packaging, promotion and price will be reviewed to enable the company achieve its objectives. 4.2 Marketing Mix Effectiveness Previously the company mainly emphasized on quality for people above 40 years and did not consider the packaging. This must be changed immediately since the 18 -34 age group consumers have complained about the taste and exterior of the product being outdated and not appealing to them. Comparing the prices of Mile with the competitors it is seen that Miles is expensive, the company will adjust the prices in order to maintain the customers while participating in product promotion activities without interfering with the product quality. 4.3 Marketing Structure and System The company must tirelessly work on the marketing communications since it is the most efficient approach of improving the company’s performance. The company has ample website (www.djmiles.co.uk), and the company has registered on Facebook, Twitter, and on eBay will be overhauled as a measure of the re-branding process in the re-branding initiative, while participating in various events which mostly target the 18-34 age groups, since they are aware of the changes in technology. 4.4 SWOT Analysis Strengths Members of the Ethical Tea partnership and Fair trade certified. Free deliveries to the West Country which have placed few orders. Unpaid national delivery on orders over £50. Practice, skill and expertise in both Tea and Coffee. Supplier of all hot beverages needs (Mr. Miles Blend Ground Coffee) Distinctive taste of the products ( Fresh ground Coffee) 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, to offer the right nature of the assessed teas. Weaknesses Finance Limited knowledge of the younger customers Low bargaining power with distributors There is a feeling that the product packaging is outdated Opportunities Potential of survival of the business Potential to expand to smaller towns and other areas. Available markets are not fully tapped, and company can easily penetrate further. Expansion of product folio by adding more brands 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 where consumers have been given advice on health concerning 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 the 18-34 age groups and 35-54 age groups. Brand positioning in the north west of England while recognizing the current re-branding initiative for the target groups of the 18-34 age groups and 35-54 age 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 18-34 age groups and 35-54 age groups in the North West. 5.1 Strategic Thrust The company is targeting the West Country it believes that the West will offer a suitable atmosphere for company operation and has potential consumers, and these qualities will focus on the production of quality blends and roasts. 6 Core Strategies The company core strategies include; 6.1 Product marketing core strategies In order to appreciate the philosophies of the Board of directors company management must have management direction; this management direction will be achieved if the company addresses the issues listed below; The What: the product to meet the demands of the 18-34 age groups and the 35-54 age groups in the south West England. The Who: The typical customers are 18-34 age groups and the 34-54 age groups of genders found in (south west of England) and affluent. The brand has currently failed to attract a younger audience; thus, the re-branding task will be done carefully. The company will have a clear and formal picture of their target markets. The Where: the targeted place is the West Country which has a ready market and an appropriate atmosphere for the performance of business operations The How: The Company is buying floor space to further market their product. The company is planning to spread out through planned hire of non-licensed locations so as to promote brand recognition. Miles is seeking on increasing the number of contracts with distributors to advance their supply chain across the country. 6.2 Competitor Targets D J Miles & Co Ltd business strategy is expansion through various channels of distribution. The company implementation of their business strategy will depend on their ability to; sell products on a national scale and over the Internet go 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 6.3 Competitive Advantage The company owns the essential experience since it has operated for over 100 years Members of the Ethical Tea partnership and Fair trade certified. West Country free deliveries for lowest orders. Unpaid 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 Market mix strategy will be achieved by the company by developing products which will satisfy the needs of 18-34 age groups and the 35-54 age groups, recommend low price and raise product promotions budget by 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 cautious in order to capture more customers to facilitate quick penetration of the market by developing new channels and exploitation of the existing distribution channels. 7.1 Product Coffee Incredible range of skillfully roasted coffees perfect for all types of business i.e. Mr. Miles Blend Ground Coffee, Colombian ground Coffee, Costa Rica Ground Coffee etc. Beans for Espresso and Cup machines the fresh coffee beans are Colombian raw Coffee Beans, Honduras raw coffee Beans, and Costa Rica raw coffee Beans. Fresh ground coffee for filter, cafeterias and now aero press which are; Breakfast blend Ground Coffee, Cathedral blend ground coffee, among others Tea Company tea blenders taste tea on a daily warranty use of the finest teas which i.e. traditional tea bags, traditional leaf tea, specialty leaf tea, specialty tea bags etc. Numerous quality and special tea from around the world which include London fruit, West Country loose tea, decaffeinated leaf tea etc. Various loose, bagged and tagged teas which include traditional tea leaves, specialty leaf tea. A full loose tea retail package, traditional tea bags, specialty tea bags 7.2 Promotion Trade Allowances Trade allowances will include gifts and special offers which are hot chocolate, tea gifts, and coffee gifts. Push money- buyers will be encouraged to buy by being offered discounts of 5% for every£ 50 spent Training- the company will offer a free training to its employees on company management and the sales team of how to maximize their sales. Free Merchandise-this will include free samples for instance if one buys the products worth £100 he will be given a Miles storage jar for free, others will be T-shirts, Wrist watches, pens etc. Store demonstrations- the company will offer free store demonstrations to the customers from all over the region on the processing of tea and coffee twice in a year Business meetings, Conventions, Trade shows- this will be done after every three months on the company premises 7.3 Price Appropriate adjustments will be done on the prices after considering the market competitors, geographic location, period for special sales, distributors etc. Consumers near the industry will be offered lower prices while those far away will be offered higher prices. Prices will be different depending on 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 and all members of the channel (wholesalers, retailers) that link the brand owner and the end- customer when coming up with the prices. 7.4 Place The strategic place of the company is the West Country. The place has a well established communication system where it is served with good roads and is strategically located. The company has their own direct distribution to trade, and there is a factory shop conducting retail trade at The Vale Yard in Porlock (head office). Customers can be located nation-wide to purchase using the website to enlighten themselves about the products and location. The company is run through a system of distributors in the south west and Wales. These distributors supply Miles tea and coffee to shops, tea rooms, hotels, etc. the company will open more distribution channels. 7.5 People The company is targeting consumers of 18-34 age groups and the 34-54 age groups, thus; the company must carry out proper research to satisfy the customers. Employees play an important role in boosting organizational survival; therefore, the company must satisfy all employees’ needs. 7.6 Process The company concentrated on product quality by employing proper production processes. This should further be improved since proper processing wins the confidence of consumers both young and old. 7.7 Physical evidence In this case, cleanliness, and beauty is vital; thus, the company must ensure that it operates under a clean environment, the packages of their products are attractive, and employees are neat to give a good image of the company. This boosts the company name and confidence. 8 Organizations and Implementation The company will function effectively if appropriate management systems to coordinate the organizational resources and effectively execute the marketing plan are employed. In plan implementation the following must be done. 8.1 Integrated Marketing Communication The objectives the integrated market mix are: To create awareness of our products in the market To inform the consumers that we are rebranding our products to suit both the 18-34 age groups and the 35-54 age groups. To inform the consumers about the location of our company in the North West. The main aims for the campaign are Rebranding of tea and coffee products to suit the 18-34 age Groups and the 34-54 age The location of the Business in the North West of England. The company shall employ the following IMC tools 8.1.1 Key promotion mix; Advertising Our advertisements will be put in the in Lancashire Life magazine the British Food Magazine, as well as in local magazines such as the Exmoor Visitor which will target the 35 -54 age group. More advertisements will be done on Capital FM radio, choice FM, Heart Digital and Magic 105.4 and on BBC television to meet both the 18-34 age group and the 35- 54 age groups. The advertisements will be on the location of the business and persuasion of consumers to buy. Direct marketing In carrying out direct marketing campaign the company intends to achieve the following key objectives: escalating sales to presented customers customer devotion building re-establishing former customer relationships Direct marketing will be done by use of direct mails where the company shall address the target market through envelope mailers, catalogues, brochures, calendars and postcards containing information about the product and the location of the business. Others will include telemarketing and Emailing of the target consumers. Sales promotion The company will carry out its sales promotions by allowing trade allowances, trade contests, and proper product strategic displays and offering of training programs to the sales team. Sales promotion will also be done by the company giving special offers this are Mini Tea Chest with 50g of tea. The mini tea chests are designed to resemble classic tea chests and would look great in any kitchen. Each chest contains 50g of tea 3 Flower Burst Tea pack of three This is a handmade green tea. A combination of jasmine, lily, and osmanthus flowers- when water is added it explodes in to a dramatic vision of color. A hint of smooth green tea and a taste of lily and jasmine Sponsorship The company will use its products in sponsoring activities such as sports .e.g. bicycle riding, marathons, soccer etc., and contests for Instance provision of sportswear with the company logo and products and giving it products as presents to the participants and serving Miles tea and Coffee to the participants. Publicity To create good public relations the company will be involved in local events. These events will include Derek Miles exhibitions with a pleasant Cup of Tea at Porlock’s Dovery Museum. The company will sponsor local events, such as the South Devon Marathon. Personal selling This will be done by company 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 website is (www.djmiles.co.uk) titled Miles Tea and Coffee Merchants and it outlines the range of the products, company history Newsletter and business Customers. The website will receive a makeover as part of the re-branding process. The company is available on Facebook, Twitter and eBay as DJ Miles Tea and Coffee Merchants (the best tea and coffee) which will favor the 18-34 age groups who will learn more about Miles Company and the products offered. 8.2 Branding decisions These are some of the brands the company will offer; The brand is ‘Miles’, an umbrella brand that is applied to the various product categories, i.e. ‘Miles Tea’ and ‘Miles Coffee’ Mr Miles Tea Rooms & Coffee House in Taunton, Somerset. The sub-brands are flavoured Sprinkles, instant Hot Chocolate Mini Tea Chest with 50g loose tea and 3 Flower burst Tea pack of three. Brand extensions will be, tea pots, mugs, Strainers, sugar bowls and milk and tea Cosies and tea The brand will stay at the top if the company consider the quality, branding and packaging requirements of the products and allow consumers to give their view about the products order to know what the company should do in order to satisfy them. 8.3 Distribution/delivery plan Company distribution tracks do the daily deliveries in Somerset North Devon and Mid Devon from the headquarters in Somerset The company will take on the following distribution pattern for its products whereby the manufacturers will be replaced by master distributors and/or brokers who in turn will avail the product to express 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 Channel Design 9 Controls It is important that the company uses complete control measures so as to undertake proper implementation of the marketing plan. The company will insist on stress on the financial plan since the survival of any agency directly depends on its financial position and control. 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 on internet 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 Luther, W. (2001). The marketing plan: how to prepare and implement it. New York: AMACOM. Miles Tea and Coffee Merchants. (n.d.). Retrieved from http://www.djmiles.co.uk/contact-us/i51 Read More