Marketing Strategy and Management for Soya-Energizer - Case Study Example

Marketing Plan: Soya-Energizer Table of Contents 2.0 The product 6 2.1 Mission 6 2.2 Objectives 6 2.3 Product Description 6 2.4 Value proposition 6 3.0 Market Analysis 7 3.1 Composition 7 3.2 Poorly Served Needs 7 3.2 Relevant Trends 8 4.0 Competitor Assessment 8 4.1 The Industry 8 4.2 Competitive Forces 9 4.3 Critical Success Factors 9 4.4 The Competitors 9 4.4.1 Competitor’s Competitive Advantages 10 4.4.2 Competitor’s Competitive Disadvantages 10 4.5 Own Competitive Advantages 11 5.0 Marketing Strategy 11 5.1 Marketing Objectives 11 5.2 Overall marketing Strategy 12 5.4 Pricing Decisions 13 5.5 Distribution 14 6.0Forecast Budget 15 6.1 Sales Spreadsheet for the first three years 15 6.2 Initial Budget for the new product introduction 15 7.0 Implementation Plan 16 7.1 Organizational Chart for Marketing Department 18 7.2 Dashboard for Key Marketing Function 18 8.0 Contingency Plan 19 9.0 References 21 1.0 Executive Summary Soya-Energizer is a food supplement that contains high levels of protein and carbohydrates integrated in the same product. The product offers a unique option for consumers who are looking for supplements of the two vital nutrients. The uniqueness of Soya-Energizer is exemplified by the combinational nature of proteins and carbohydrates which in all prior cases food experts have offered in separate packages. The product comes as a pre-cooked package where the proteins and carbohydrates are cooked separately before mixing the two. This checks the problem of denaturing vital nutrients of one type due to over cooking or exposure to under cooked food substances due to incomplete cooking. The final preparation by the consumer entails simple frying for a recommended eight to ten minutes that offers inclusion of vitamin additives for completion of the three basic food nutrients. The product idea is generated on account of expert evaluation of the food market trends. This phenomenon is based on the scholar’s view that wider involvement is integral in such engagements. The wider market idea is a new yet a critical tool for supporting the generation of a new product idea (Griffiths-Hermans &Grover, 2006). The major drive to coming up with a product with the said attributes is based o market information of what current players have offered and the potential needs of the consumers. The believe is that market information is central to creating product domains for which customers would be willing to pay for. Henceforth, looking at the current food market and the needs of consumers of the modern generation, an unsatisfied gap is notable. There exists some need for a simplified food complex that is precooked, easy to prepare, affordable by families of average income level, and has a high nutritional value (Sleep, 2005). Soya-Energizer is a multitasking product with the right mix of two major food categories which semi-informed consumers struggle to achieve the right mix through informal combinations of raw crops. The product targets the urban population, initially in Australia and gradually later to the entire Asia Pacific Region. The focus will mainly be directed, but not limited to urban marketing population particularly the middle and low income earners. This group is on the rise in numbers in the twenty first century thanks to modernization and transformation of economies of many countries. As economies continue striving to reach the millennium goals citizens become increasingly busy. There is also the aspect of over specialization and it is difficult for the people to take lessons on best eating practices. Little time is dedicated to the kitchen work now more than ever. No person in the family can be said to have command of the diet paraphernalia and hence the burden lies with food specialists and nutritionists (Robert, Andrew & John, 2005). The special formula of Soya-Energizer makes the kitchen work not only easy but also effective. Urban dwellers never get to gardens to gather raw food crops a scenario that makes them an ideal target. It will save the not only time but also the hassle of the market place. Based on the forecast herein; the market response can only be enticing. First and foremost is the consensus that food is a basic need for everyone. The only two questions to be answered is what food item to be purchased and from who. The two questions are interrelated, since consumers are likely to base their buying decision upon quality of the food commodity and specific traits it carries and probably pay little attention to the details of the manufacturer. In other words a consumer is simply looking for the best food item on offer and not the entity that dominates popularity in the food industry (Crawford & Benedetto, 2006). In regard of the discussion, Soya-Energizer will be marketed as an improved form of other pre-cooked products on offer by all other food and beverage organizations. Primarily about six percent of customers who shop for other related products would be willing to shift to the improved form and Soya-Energizer would provide that option (Robert, Andrew & John, 2005). New consumer groups can be created through a pull strategy from a campaign targeted to provide viable information on pre-cooked food items. 2.0 The product 2.1 Mission The mission of availing the product is to make it the most viable food supplement item on offer in the market. The main aim is to make it the sole choice of average and low income earners due to its price friendly nature. With its unique formula of preparation and ease of handling, Soya-Energizer will be the alternative that families have been looking for. 2.2 Objectives The product has been designed to meet a number of objectives as highlighted herein: (a) To provide the most efficient food supplement available in the market. (b) To meet all the basic nutritional needs of human body. (c) To offer the best solution for food shopping complexities. (d) To cover the demands of both middle and low income earners. 2.3 Product Description The brand name as stated shall be Soya-Energizer. Soya is taken to represent the protein value of the product while the Energizer is coined from energy to represent the energy giving attribute of carbohydrates which is the second attribute of the commodity. 2.4 Value proposition Soya-Energizer is unquestionably a valuable food item. This is highlighted by its unique combination of two vital nutrients. Another complement is the preparation process that it has under-gone. The nutrients have been pre-cooked separately at professionally recommended temperatures to ensure that no nutrients are denatured. The ratio of their combination is based on body requirements as specified by doctors and hence user will not suffer nutritional imbalance. 3.0 Market Analysis 3.1 Composition Soya-Energizer’s marketing approach with not target customers on lines of demographic traits. Instead the focus will be geographical divisions and economic status. In this regard the main focus group shall be the urban population which is available in millions. The major reason for choosing this niche is the information available amongst this block concerning food supplement and their vast desire for a healthy diet (Smith & Napier, 2002). This segment hence provides an awesome opportunity to introduce this product. Partially at first totally later, the target market will extend through informative product promotion to the rural population who majorly rely on unprocessed food commodities. 3.2 Poorly Served Needs The food market is currently concentrated with numerous food items mostly serving specified needs. For instance, there is the processed meat readily availed to provide an option for high protein content. On the other hand are many brands of starch related products starting with the basic and most common – biscuits. Consumers are left with the burden of looking for the right mix of these products to put in their shopping baskets. In the case of Australian market, which is a developed economy, the consumers are more conscious about the healthy issues of their bodies more than the associated cost. This consequently means that their desire to have food concentrate availed in the shelves is half way met (Robert, Andrew & John, 2005). On the case of low income earners, who are sensitive to cost, they are likely to sacrifice one food type for the other due to resource constraints. That implies, limited options for what they can include in their shopping basket thus they end up with an incomplete diet composition (Smith & Napier, 2002). 3.2 Relevant Trends Food market in the Asia Pacific region is relatively stable but it has not been with shocks that hamper supply and hike prices. Such are difficult to predict. For example, in 2001, investment in food research and development reduced by 2.9% as opposed to 3.3% increase in other industries. This trend saw the government launch the National Industry Strategy the following year. Also the emergence of new market particularly China has shifted demand levels and affected firm’s market destination choice (Soler, 2005). With respect to market dominance there is a massive invasion by multinationals for the processed foods. On the other hand, the case for unprocessed food items is opposite. In 2001, over a hundred and twenty livestock firms were family based. There are, however, significant sector by sector deviations; for instance, in poultry industry, there are only three major players (Soler, 2005). 4.0 Competitor Assessment 4.1 The Industry Food industry is highly fragmented. There exists no strong dominance as exhibited in other industries like software or automobiles industries. This is a plus for new entrants. This industry is frequented by supply shocks thanks to unpredictable weather patterns that adversely affect agricultural production. Nevertheless, there are inherent characteristics such as ready demand for food items that make the industry the most enticing (Smith & Napier, 2002). 4.2 Competitive Forces The forces of competition will emanate from the power of existing players and the hindrances they may impose to eliminate new entrants from participation in the market. There could be black cartels of the major players to defend their position. However there being no legal regulations against entry into the food market, these hurdles shall be overcome as they unveil. 4.3 Critical Success Factors The food industry can boast a number of attributes that can be designated as being success factors that can support growth and development in the industry. Some of these include: Firstly, is the anticipated world population growth. According to United Nation’s projections, the world population will continue on the rise going forward with an anticipated increase of 2.3 billion people before the year 2050. Population represents market and hence its growth cannot be slighted by marketers (Robert, Andrew & John, 2005). According to the same report the income of households will continue to be on the rise, with the world economy having successfully negotiated the crisis of 2008. Income levels of persons living in developing countries are expected to rise by 7% while that of residents in developed nations will rise by 2%. What this implies to the food industry is that as people’s income stabilizes, they run for quality food items (Robert, Andrew & John, 2005). 4.4 The Competitors There are many competitors in the food industry mostly the multinational companies. The competitive threat can only be tested against the strength of the existing products and market players. Today, the industry has been defined as highly fragmented with top three players Nestle, Kraft Foods Unilever and Cargill accounting for a minority less than 5% market share (Robert, Andrew & John, 2005). Competitors in the food industry can be analyzed in two categories: direct competitors and indirect competitors. For purposes of this report direct competitors will represent market players who deal with substantially transformed products similar to but not unanimous to Soya-Energizer. A good example here is processed meat. Indirect competitors are companies or individuals who offer unprocessed or minimally transformed products like live animals, raw wheat and such (Robert, Andrew & John, 2005). 4.4.1 Competitor’s Competitive Advantages Their major competitive advantage is the long-term presence in the market meaning they have already established a customer base and their products are known at least by a segment of the buyers. They can concentrate on satisfying this small segment by offering very competitive prices which they can use to block new market entry. Secondly, these companies are already enjoying benefits of economies of scale. They can consequently apply the accruing benefits of low production costs to out-do new entrants through price wars (Smith & Napier, 2002). 4.4.2 Competitor’s Competitive Disadvantages One major competitive disadvantage accruing to competitors is the growth stage of their product in the product life cycle. Due to long-term existence the products could already be in their stagnant or even regression stage. Such s scenario is difficult to negotiate in an industry with advent of numerous new entrants. 4.5 Own Competitive Advantages The product features and the target market of Soya-Energizer positions it on the precipice of vital competitive strengths. One of these is the differentiation strategy adopted in the development of the product. It is a combination of features of products that normally appear as separate commodities in the market. This is a major stepping stone upon which the product can thrive if presented in the market as such. Another complement for competitive edge is the market niche that is targeted by the product. The urban population is composed of people who are sensitive to diet and will be willing to articulate with such a product. Furthermore, market study show that people in the developed world are willing to pay higher for a product they perceive to be of relatively higher quality (Smith & Napier, 2002). Should the promotional campaign achieve the goal of designating Soya-Energizer as such, then that can be a vital competitive strength. 5.0 Marketing Strategy 5.1 Marketing Objectives The objectives that ought to be attained within the first twelve months of introduction to the food market include the following: (a) To designate Soya-Energizer as a hybrid food supplement in Australian market instigating consumers to pay more for it. (b) To present Soya-Energizer as an affordable food alternative to unprocessed food products to outside markets. (c) To sell over sixty million units of the products to a target customer base of five million consumers within the Asia Pacific region. 5.2 Overall marketing Strategy A pull strategy is to be adopted. This involves creating awareness and desire among the consumers who consequently pull the item from the manufacturer down through the distribution channel. Massive direct marketing will be carried out by many small teams who will transverse to streets and residential areas meeting with the potential customers and convincing them to buy. Once they learn of the product’s quality and unique features they will go to looking for it in retail shops and supermarkets (Soler, 2005). This will drive the retailers to accord some space for Soya-Energizer in their shelves and order for the same form the stores. 5.3 Product Decisions Product decisions refer to the product type to be offered, their physical attributes and the augmented traits such as product services, packaging and branding (Kotler, 2003). Soya-Energizer falls under the food product line specifically under the category of elaborately transformed food items. It is designed to function as a comprehensive nutritional product providing for the professionally proper ration of proteins and carbohydrates recommended for a unit body mass. In simpler terms the consumption mass is devised according to person’s body weight requirements. The protein-carbohydrate concentrates are dissolved in roughage foliar material that provides the body with the much needed fibre. Having been scientifically assembled it is a clear assurance for safety standards prescribed for all food items. It offers high quality formula for body diet requirements. Soya-Energizer is packaged to serve small scale and large-scale uses appearing in numerous size packets. The packet is properly sealed with brand colours well pronounced. Among the content on its cover are the ingredients, nutritional value details and most importantly a simple recipe for its preparation. 5.4 Pricing Decisions The pricing decisions will be based on the target market. This means that the pricing strategy will be discriminative due to the economic differences of consumers of geographical areas of focus (Emden, Calantone & Droge, 2006). The Australian market is made of well endowed customers who have vast knowledge of processed food. Here, the product will be marketed as an improved hybrid of the existing processed food items and hence price skimming will be applied. This approach entails quoting a price that is reasonably higher than that of similar existing products. The higher margin helps to recover the initial costs of product development. The prices are reduced gradually over time and finally get rationalized with the industry index (Goldenberg, Lehmann & Mazursky, 2001). The strategy for the regional market will be different. Due to uncommonness of the processed food among the population, a lot of consumer awareness will be required backed by reasonable persuasion. This market will consequently require friendlier prices for entry purposes, at least to entice consumers to the new idea. In light of this, penetration pricing approach will be applied. This means that entry prices will be kept as low as possible, and the same would be hiked gradually and over time as the product attains consumer acceptance (Goldenberg, Lehmann & Mazursky, 2001). 5.5 Distribution Initially the distribution will entail manufacturer to consumer in line with the pull strategy. This shall be executed through small groups of direct sales people who will pass information as they make sales at the customer contact point. Finally, the product with enter the normal food distribution channel of manufacturer – wholesaler – retailer – consumer (Goldenberg, Lehmann & Mazursky, 2001). This will be possible when consumers will have accepted the new product and start demanding its availability on shelves. Intermediaries on their part will accept the product as one of their trade item once they become aware of the product and will be willing to take the risk of handling it. 5.6 Promotional Strategy Product promotion will be focused on instigating desire through creating massive consumer awareness. Due to the specific target of the urban population, both print media and audio-visual media will be applied as the group has access to both (Ozer, 2005). Another significant platform will be the social media. The other method will involve direct marketing by the marketing team who will physically meet with potential customers. A special branch within the public Relations section will be established specifically to deal with issues of the new product. The duty of crafting the adverts will be outsourced to the marketing agents. They will devise the pictorial work, the video clip footage and the word art. The rationale is that these agencies have vast experience with the food market and are well fed with information regarding what excites consumers (Emden, Calantone & Droge, 2006). 6.0Forecast Budget 6.1 Sales Spreadsheet for the first three years Sales in $ ‘000’ Gross Margin ‘000’ Time Australian Market Regional Market Australian Market Regional Market 1st Month 1000 500 250 50 2nd 1500 750 375 75 3rd 1700 850 425 85 4th 1900 950 475 95 5th 2100 1050 525 105 6th 2200 1100 550 110 7th 3100 1550 775 150 8th 4000 2000 1000 200 9th 4500 2250 1150 230 10th 5000 2500 1225 305 11th 5400 2700 1350 270 12th 5900 2950 1475 590 Total 40000 20000 19575 2265 2nd Year 50000 25000 10000 5000 3rd Year 65000 32000 12500 8000 4th Year 84000 42000 15200 10500 5th Year 11000 50000 18000 12500 6.2 Initial Budget for the new product introduction Item Cost in $ ‘000’ Research & Development 2,000 Strategy formulation 500 Direct Marketing 1,500 Adverts on print media 400 Adverts on social media 250 Adverts on audio-visual media 500 Distribution 1,000 New Staff 1,200 Marketing Agency Services 800 Licenses and Government Authorization 150 Taxes and Tariffs 100 Miscellaneous Expenses 50 Total 8, 450 7.0 Implementation Plan The marketing strategy needs in depth reasoning and brainstorming in order to come up with a viable conclusion on the best way forward. The whole process of implementing the strategy will be conducted in stages ranging from crafting the marketing strategy all the way to implementation to control. The process will call for specific resources and skills in all stages and different personnel both within and outside the marketing department will be called upon to handle specific duties. The process is designed to follow five logical steps as exemplified herein. Step 1 – Drafting the pilot Marketing design The top management brainstorms on the suggested design integrating it into the organization’s term strategy. The strategy involves creating a completely new work process in the marketing functionality that is in line with the new product specifications. The strategy must focus on methodologies that promote customer satisfaction and particularly addresses the needs of clients. Primarily the management designs the new organizational structure by eliminating some positions and creating the suggested new ones for ease of entry of the product to the market. The plan spells out individual and departmental responsibilities and time frame for each function. Step 2 – Preliminary Testing A select team is established comprising of representatives from various departments to work out on finer details of the marketing. The team should come up with suggestions that can guide the process of implementation. For example they can draft a number of organizational arrangements for the marketing department with a view to selecting the best from the many. They should also design the job description or each position including the limits of authority. Step 3 – Communication The whole plan is communicated to all workers, allowing them to air their input and concerns through the select team. For example, a number of process lay outs can be distributed to workers and be requested to select the one they most prefer. Communication helps to minimize resistance (Baker & Freel, 1972). Step 4 – Actual Implementation Implementation takes course. This follows inclusion of experts’ views into the system and final approval by the top management. Officers and specialists start taking their accorded duties. All staff members start executing their roles as specified in the whole design. Step 5 – Monitor and Review This is usually a continuous process that should fall under an independent function to promote openness. The monitoring evaluates the progress and milestones that the strategy has attained over time and suggests corrective actions in case of deviations from plan. Review should focus on comparing actual results at a time period with the standard figure. This is with respect to sales volume, gross profit margin, and geographical coverage among other attributes. 7.1 Organizational Chart for Marketing Department Director of Marketing Local Sales Representative Regional Sales Representative Head of Promotions Head of Public Relations Head of Strategy Department Department Direct Sales Public Relations Officers Strategy Personnel Formulating Personnel 7.2 Dashboard for Key Marketing Function Position Roles Director of Marketing Representing the department in the top management board Giving direction to Sales representatives and Heads of Departments Chairing all Departmental meetings Communicating top management deliberations to the department’s staff Local Sales Representatives Directing all local sales activities Managing internal sales points Reporting to the Director of Marketing Regional Sales Representatives Directing all sales activities outside the country Managing external sales points Reporting to the Director of Marketing Head of Promotions Department Directing all promotional campaigns Handling all outsourcing all promotional activities Advising top management on promotional best practices Chairing all promotional strategy committees or sub-committees Head of Public Relations Department Giving direction to the public relations team Acting on information given by officers in the department Feeding the top management with information regarding customer feelings and perceptions. Head of Strategy Head of the market strategy team Advising top management on market strategy formulation technicalities. Crafting the pilot designs for new strategic direction in marketing Direct Sales Personnel Doing direct marketing duties Meeting with potential customers on the field Collecting information on consumer desires Collecting data on sales volume Executing all other operational duties pertaining to direct marketing function. Public Relations Officers Sorting customer complains Handling customer desk duties Communicating with customers by all channels available Reporting to head of public Relations department on customer concerns Maintaining customer data on past concerns Carrying out all operational duties relating to Public Relations functions Strategy Formulating Personnel Collecting data on the ground regarding the industry and the market at large Feeding the Head of Strategy with new developments on the field of marketing Executing all clerical and operational strategy formulation duties. 8.0 Contingency Plan This is an option chosen should the worst happen such that the initial plan cannot apply. Preparing this plan is safe as it enables a business to adapt significantly to a changing environment and mitigate probable losses that could accrue had the plan not been formulated. The approach to developing one starts with identifying the possible breakdowns within the company, industry or the market. Then an alternative model of business is formulated in light of the forecasted calamities (Goldenberg, Lehmann & Mazursky, 2001). For purposes of Soya-Energizer, should the plan formulated to endorse it to the market fail, the quickest alternative shall be to market it as a normal food supplement in the processed food category. The rationale is that the market performance of ordinary food supplements is known and there exists ready channels for their distribution. Pushing it as any another processed food item would prove a prudent move in order to recover initial costs of research and development and associated expenses. That move would go a long way in mitigating losses. Another argument to support this course of action is the fact that majority of consumers have information concerning food supplements and distributors may not find it difficult handling the new product as well at least for market trial. 9.0 References Baker N.R. & Freeland J.R. (1972). Structuring Information Flow to Enhance Innovation. Management Science 19, 105-116. Crawford M. & Benedetto A.D. (2006). New Products Management, Boston, MA: McGraw Hill. Emden Z., Calantone R.J. & Droge C. (2006). Collaborating for New Product Development: Selecting the Partner with Maximum Potential to Create Value, Journal of Product Innovation Management, 23, 330-341. Goldenberg J., Lehmann D.R. & Mazursky D. (2001). The Idea Itself and the Circumstances of Its Emergence as Predictors of New Product Success. Management Science 47, 69-84. Griffiths-Hemans J. & Grover R. (2006). Setting the Stage for Creative New Products: Investigating the Idea Fruition Process. Journal of the Academy of Marketing Science 34, 27-39. Mellentin J. (2005). A Tipping Point for Health and a Turning Point for Functional Foods: Ten Key Trends for 2005, London, New Nutrition Business. Ozer M. (2005). Factors Which Influence Decision Marking in New Product Evaluation. 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