Launching of Yummee Brand of Fresh Fruit Juice to UK Market - Essay Example

Executive Summary With the increased competition in the market place, companies need to use effective marketing communication strategies to create successful brand images in the mind of the targeted consumers so that a desired response can be secured by way of purchasing the product and being loyal in the long run. However, to launch a product effectively to a market and create successful brands, the challenge is to create effective marketing communication plans, which are well aligned and linked with product’s overall marketing strategies and executed to project a cohesive message to the target audience. The report provides a comprehensive marketing communication plan for the new product “Yummee” a fresh fruit juice to be launched in to the UK market. A market analysis along with target market segments is discussed prior to setting marketing objectives. The marketing communication plan is linked to these overall marketing objectives to ensure a fully integrated marketing communication strategy. 1. Company and Product Background The Exotic Juice Company Ltd (TEJCL) is in the second position in the UK’s fresh fruit juice and fruit based drinks such as smoothies market behind the market leader, Innocence. The company has earned a reputation for product quality over the past hundred years of its existence and have a brand image, which is of “value for money” contrary to the high-end premium priced Innocence products. With their product portfolio currently carting orange, grapefruit and pineapple based products, the company wishes to expand their range with introduction of products, which targets the growing segment of health conscious consumers. After intensive investments in product development and market research, the company is ready to launch “Yummee” a product made of Yumberry, a “super fruit” from Australia, which is a rare and precious berry that provides a deep red colored juice and is purported to carry healthy benefits. 2. Situation Analysis For a company to be successful in business, it needs to respond to the changes in the market place by developing and implementing business strategies, that takes in to account the dynamic micro and macro business environment (Abell 1980, Thomson & Strickland 2003). The report provides a market analysis of the Fresh Fruit Juice market in UK and also assess the new product, Yummee’s strengths and weaknesses in relation to environmental conditions. . 2.1 SWOT A SWOT analysis can be used in drawing conclusions on how a company can best align its resource base to take advantage of the business opportunities while safeguarding against the threats (Duncan, Ginter & Swayne 1998). Following SWOT analysis is carried out for Yummee in the UK market. Strengths The well-established parent company image. The financial strength of the company which can support R&D, Market research and a comprehensive marketing communication campaign. The reputation of Australia as a source of quality natural juices – i.e. established brands such as Berri, which is internationally recognized for quality. The health benefits associated with Yumberry juice. Weaknesses The totally exotic and new nature of the ingredient (Yumberri), which the consumers are unfamiliar with. The possibility of canibalising in to existing own product sales. Need for intensive product awareness creation at the launch stage to establish the product benefits which will be costly. Need for importing products initially and subsequently the ingredients from Australia, which will attract import duties, adding to product costs. The secondary position in the market and the strength of the market leader – Innocent brand. Opportunities The increasing segment of health conscious consumers who prefer fruit juice to other soft drinks such as carbonated fizz drinks. The growing segment of younger generation who is keen to consumer natural products and increasingly cool image of fruit smoothies and juices within this segment (Carbonates – UK February 2007). Increased level of free trade in the market, which will reduce and eliminate tax barriers so that costs of importing from Australia will be low. The high market growth rate of close to 20% in the fruit juice segment. Government interventions in promoting healthy food. Legislature limiting the promotion of carbonated drinks to younger generation on the premise of health concerns. Limited number of fresh fruit juices specifically positioned with health benefits other than the normal health benefits associated with natural fruit juices. Threats Threat of new and cheap fresh fruit juices coming from cheaper destination in to UK market. The growth of other competitive beverage segments such as sports drinks, which will affect the demand for fresh juice (Sports Drinks and Sports Nutrition - UK 2005). Reduced spending power of people, which affects the propensity to spend on products such as fresh juice, which are comparably high price to other substitute drinks. 2.2 PEST Analysis Political factors such as increased free trade and relaxed import duties will impact Yummee brand in different ways. Cost of product will be reduced due to reduced taxes but competition from cheaper supply sources as India and China may also pose threats. The economic integration taking place within the EU can also affect the Yummee brand by way of increased competition coming in from other EU suppliers. Economic factors needing consideration involves the increasing level of per capita spending power across the world and how people move away from cheap product options to premium products. On the other hand, changing employment patterns where job security is no longer a standard offer in employment provides less financial stability. This may reduce the peoples’ propensity to spend on products such as premium fresh fruit drinks (Armstrong & Kotler 2000). As Yummee is being manufactured in Australia, which is a developed nation, the cost will be already high compared to cheap supply sources. Social factors needing consideration includes the changing demographic make up of the society (Zeithaml & Zeithaml 1984). The increasing aging population of the world means that more and more mature people will be representing the markets. These people will be more interested in healthy drinks, which is beneficial for Yummee. Even the younger generation is turning to natural products more and more and this too increase the market size for Yummee. Lifestyles today indicate small families, low rates of marriages, and many bachelor people. These trends impact on consumption patterns and package sizes of drinks. Technology factors needing consideration includes the widespread use of Internet, which facilitates online exposure to branding of the product. State of the art manufacturing facilities are being utilised by many companies in fresh juice industry to keep costs down through increased productivity and efficiencies. Innocent for example is using new technology to keep the costs low in their fruit smoothies and fruit yoghurt line. 3. Target Market Segments Today most companies are moving away from mass marketing and instead adopting market segmentation and targeting as their strategy which involves the identification of market segments, selecting the ones to be targeted with the organizational resources and efforts and then position the product in these chosen segments with suitable marketing mix (Kotler & Armstrong, 2000, Wisner 1996). In the case of Yummee a niche marketing strategy is being adopted. This is done deliberately to ensure that only one segment is targeted without cannibalizing in to the existing product range’s market shares. Although segmenting can be based on factors such as demographics or geographic segregation or on economic classifications, the more sophisticated segmenting tools combine above factors with “Key Benefits Sought” (KBS) Analysis. These KBS are dependent on the health benefits, natural ingredients, and image factors. Table 1 below provides the segmentation of the UK soft drink market, and the selected segments by the Yummee product based on “Key Benefits Sought” and further qualified by demographic, and Psychographics factors. Table 1 – Segmentation of UK Soft Drinks Market Key Benefit Sought Age Groups Economic Group Usage Occasion Mind Set Juices with Health benefits 30+ years High Income Daily consumption Fresh fruits are healthy “Apple a day keeps the doctor away” Fresh juice with Natural ingredients. 18-60 years High income Daily consumption “My way to Pure and Natural Life style” Economy soft drinks 15-45 years Low income Sports events, parties, and other consumption occasions. “A juice to quench my thirst and to fit my pocket” Soft drinks which are funky in image 10-20 years Low to middle income Sports events and daily consumption “Fizz is funky” 4. Marketing Objectives Following marketing objectives are set for the current year of launch 2007-2008 period. A market share of 10% from the Fresh Fruit Juice market. Positioning Yummee as a product of high health benefits and preventive cure for diabetic and high cholesterol. Establishing product availability nationwide through multiple distribution channels. I.e. – Supermarkets, pharmacies, grocers, sandwich counters, sports, and health center cafeterias. Generating over 60% of repeat purchase from the targeted niche market segment through intensive marketing communicational efforts which are integrated in to the overall marketing strategy. 5. Interactive Marketing Communications Objectives Following Marketing Communication Objectives are set for the current year in line with the aggressive marketing objectives set for the brand. The need to keep these objectives specific, measurable, achievable and time bound (Thomson & Strickland 2003) is recognized. An initial brand awareness of over 75% on national level supported by the aggressive MC efforts planned for the launching of the new brand. A Top Of Mind (TOM) brand recall rate over 80% during the high frequency launch period and a subsequent rate over 65% during sustenance stage of campaigns. A reach of 60% of the target audience through TV & radio programs. A reach of 60% of the target audience through the sales promotion campaigns where leading Parent brand – Natura Juice can be used as vehicles for free sampling. A 45% repeat purchase rate to be generated through sales promotions campaign, which are designed specifically to induce repeat purchases. A 15% long terms brand loyalty target set to be achieved through sponsorships of senior sports events, health camps, and other events involving the target group. 6. Interactive Marketing Communications Strategy An Integrated Marketing Communication’s aim is to create the correct and indented brand image in the minds of the prospective customers (Coulson-Thomas, 1983). Brand image is defined simply as how customers and others perceive the brand (Rise & Trout 1986). In the case of Yummee, the positioning message being proposed to differentiate the product and communicate its benefits to the targeted niche market would be as follow: “ Yummee”- the berry in a bottle that will keep your health in a high throttle..” A drink a day will keep the doctor away….. The positioning message proposed above communicates the freshness, naturalness and the health benefits associated with the Yummee product and highlight the key benefit offered by the product by way of preventive cure for many health concerns. The above positioning has to be communicated and established in the minds of the target audience with a combination of interactive marketing communication tools which can be selected from advertising, sales promotions, direct marketing, public elations and personal selling. Depending up on the target audience, the effectiveness and impact of each MC tool will vary (Wisner 1996). Advertising – Its proposed that TV be the main media of advertising to create brand awareness, recognition, and reinforcement of brand superiority. It is common for consumers to associate superiority perceptions with frequently exposed brands with high media presence (Belch & Belch 2004). Outdoor advertising and magazine to be also used in conjunction to support the campaign is recommended. Public Relations function uses a variety of tools such as publicity, involvement in community service projects, fund raising, special sponsorships, and various public affairs activities (Aaker & Joachimsthaler 1997). It is proposed that Yummee make use of this relatively low cost tool extensively to establish long-term product awareness and create authenticity of product benefit claims. Sales Promotions, which refers to those marketing activities, which provide extra value or incentives to the sales force, distributors or to the ultimate consumer with the aim of stimulating sales volumes. Sales promotions are generally either consumer oriented or trade oriented (Belch & Belch 2004). This should be one of the major components of the company’s communication strategy whereby the mechanisms of the promotions should aim at initiating trial and inducing repeat purchase. Online Marketing - The company’s website can be used as a highly effective tool for interactive marketing communications. This can be used to support, product launches, PR activities, create and maintain members clubs and carryout sales promotions. Direct selling can be also done via the company’s online shop. The site is also used in launching ad campaigns and to gain pre-wetting for the creative content. 7. Communications Budget Table 2– Preliminary Communication Budget for year 2006 IMC Tool Details Budget Allocation £ Allocation % TV Advertising Scheduling of 30 sec. Advert with new creative theme. Prime time and non prime time programs of selected channels. 3.5 Million 35% Press & Magazines ½ page ads in health and diet magazines at the rate of £ 2000 per insertion combined with negotiated editorial write-ups on Yumberry. 0.5 million 5% IMC Tool Details Budget Allocation £ Allocation % Outdoor – Billboards & Signage Outdoor billboards, bus and train branding, outdoor signage, sandwich stands signs with Yummee logos etc. 1 million 10% Sales Promotions Three sales promotion campaigns including a year end grand draw. Sampling drives during first half of the year. Branded item giveaways as caps, T shirts and coasters 2.0 million 20% Public Relations Sponsorship of health club and spa merchandise such as branded coasters, outdoor umbrellas etc. 0.5 million 5% Social service projects related to prevention of diabetic and high cholesterol related illnesses, press conferences, and establishing a Yummee loyalty club. 1 million 10% Direct marketing Email campaigns, online dietary and other health magazine site ads. Building of interactive Yummee website and web store. 1 million 10% Sponsorships Sponsorship of events such as health camps, events for senior citizens and community walks and health runs. 0.5 million 5% Total Budget 10.0 million 100% Budget allocation justifications: 35% of budget is allocated to TV advertising, as high brand awareness needs to be created at the launch stage with high frequency ads. Press has not been proposed due to high cost and low life span within this national level advertising campaign. Magazine ads are proposed in specific interest fields such as lifestyle, health, and nutrition to create long-term awareness of health benefits of the product. Billboard and outdoor ads are used to reinforce the brand awareness at lower cost per reach over long term. Sales promotions are given a high priority so that trail and repeat purchase can be induced. Public relations and sponsorship activities are proposed with the aim of building long brand loyalty and image. Direct marketing means mainly using Internet and email campaigns are proposed for cost effective and highly targeted communications as well as building in-depth product awareness on long-term basis. Interactive nature of some of the direct marketing such as the proposed website and online store and Yummee club will add excitement and increase consumer involvement. 8. Interactive Marketing Communications Tactics Following IMC tactics are developed from the strategies proposed above Advertising TV ad campaign within programs which target 30+ age group. Health and nutrition talk shows in TV 1 Prime time Soap Opera with older female viewer ship – Cable TV Ads in Cosmopolitan, Nutri Life and Good Life magazines Yummee branded signage in sandwich counters and cafeterias in health clubs Branded bottle coolers 10 bill boards located in routes, which leads to suburban residential areas, major health, and fitness centers. Sales Promotions Offer of 50 ml sample packs banded to all Natura brand products in the market. Special sampling campaigns at events such as health camps and community walks etc. Promotion which involves the return of 5 logos from empty packs to win a free Yummee brand T shirt or cap A sales volume driven competition targeting sales force with prizes including a year-end trip to Australia with visit to the Yummee factory. Volume driven extra product margins to distributors and retailers. Public Relations Collaborations with UK’s national Diabetic Council and Health Ministry to sponsor health camps, awareness campaigns etc. Press conferences to announce and create awareness of various activities related to the product. Establishing a Yummee loyalty club, which has special members benefits and activities. Sponsorship of health club and spa merchandise such as branded coasters, outdoor umbrellas etc. Direct marketing Editorial writ ups in online magazines with dietary and health focus. Email campaigns targeting 30+ age groups with product benefit information and monthly free Yummee newsletter for subscribers. Building of interactive Yummee website and web store where the Yummee club members and interested prospective members can register and take part in competitions. The site will also provide newsletters and advice on preventive measures for health concerns. Nutritional value information of natural fruits and vegetables will also be made available through the site. 9. Proposed Methods of Evaluating the Effectiveness of Proposed Plans A plan once implemented needs to be evaluated for its effectiveness and there should be valid evaluation criteria against which the results can be assessed. The most important evaluation criteria would be whether or not the executed tactics will result in the achievement of the marketing communication objectives set and in turn result in the achievement of the marketing objectives set for the year. To facilitate effective evaluation, these objectives have to be translated in to monthly targets. The evaluations needs to be carried out on a monthly rolling plan basis where any deviations of achievements of the set targets by a variance of more than 20% should be closely looked in to and necessary changes to tactical plans have to be carried out. Quarterly reviews and half yearly reviews will indicate more longer term effectiveness of strategies implemented and corrective actions should be taken if deviations are greater than 25% from targets. At the end of the year, if the evaluations against set objectives differ markedly, then the overall strategy needs to be re evaluated to identify areas of weaknesses. 10. Conclusion In conclusion, it should be noted that success of a new product will not only depend upon how well the marketing strategies are deployed but also on how well the product R&D and market research process has been carried out. It is hoped that above areas have been carried out effectively for Yummee so that the subsequent marketing activities being proposed are correct and not a blind man’s shot. The proposals made have taken in to consideration the need for integrated effort between the overall marketing strategies and the marketing communication strategies. The importance of linking the tactical level plans to overall strategy is one key area, which all marketers need to bear in mind. Lastly an area, which is neglected by many, is the evaluation of the implemented strategies, which Yummee should address on a continuous basis to stay on the right course of action. Reference List Abell, D. F. (1980). Defining the Business: The Starting Point of Strategic Planning. Englewood Cliff, New Jersey: Prentice Hall. Armstrong, G. & Kotler, P. (2000). Marketing: An Introduction. 5th ed. Singapore: Person Education Inc. Duncan, J. W., Ginter, P. & Swayne, L.E. (1998). Competitive Advantage and Internal Organisational Assessment. Academy of Management Executives, Vol.12, No 3. pp. 6 –16. Thomson, A. A. Jr. & Strickland, A. J. (2003). Strategic Management Concepts and Cases. 13th ed. New York: McGraw-Hill Publishing Company Ltd. Zeithaml, C. & Zeithaml, V. A. (1984) “Environmental Management: Revising the Marketing perspective”. Journal of Marketing, spring pp. 44-53. “Sports Drinks and Sports Nutrition - UK” (2005). Market Intelligence Food and Drink, Market Intelligence: UK. Retrieved 15 March 2007 from: http://academic.mintel.com/sinatra/academic/index/&letter=19/display/id=114678&anchor=a114678 “Carbonates – UK” (February 2007) Just Drinks. Retrieved 15 March 2007 from: http://www.just-drinks.com/store/productprint.aspx?ID=32645 Aaker, D. A & Joachimsthaler, H. (1997) “Building Brands without Mass Media,” Harvard Business Review. Jan-Feb. pp.39-50. Belch, G. E. & Belch, M. A. (2004) Advertising & Promotion: An Integrated Marketing communication perspective. Illinois: Irwin. Wisner, B. (1996) Applied Marketing. New Jersey: Prentice-Hall Inc. Table Of Content Content Page Executive Summary 1. Company and Product Background 01 2. Situation Analysis 01 3. Target Market Segments 04 4. Marketing Objectives 05 5. Interactive Marketing Communications Objectives 06 6. Interactive Marketing Communications Strategy 07 7. Communications Budget 08 8. Interactive Marketing Communications Tactics 10 9. Proposed Methods of Evaluating the Effectiveness 11 of Proposed Plans 10. Conclusion 12 11 References 13 Interactive Marketing Communication Plan Launching of Yummee Brand of Fresh Fruit Juice to UK Market Name Tutors Name Module Details Date Read More