Goodman Fielder Company - Essay Example

Goodman Fielder Company Preliminary Strategic Business Launch Report - Knowledge management and product innovationCampus: - Lecturer: - Assignment # Assignment 3 Date due: 29 October 2010 Weighting: x % Student name: Fahad Student number: # Executive Summary This report details the preliminary strategic launch plan for the Conversations product to be introduced into the Australian savoury market (for biscuits). Primary demand will need to be created for which a gap has been identified. A survey revealed demand for a high taste and low/high entertainment product, and a second survey helped to identify the target market, which will be for a biscuit with a high degree of taste and highly associated with entertainment. The positioning therefore are the twin qualities of high taste and high entertainment, which should also be the basis for securing competitive advantage. Both sets of findings were evaluated using perceptual maps. High taste will reflect the high quality and high entertainment is intended to serve as an excitement factor besides communicability to help maintain high customer satisfaction. Initially, the likely early adopters will be targeted specifically to ensure a successful start. Their traits are also identified in the report, and the brand name is justified. Recommendations are then given to address a number of possible issues that may arise and in anticipation of opportunities for learning. Table of Contents Table of Contents 2 1.1 Aims and Scope 3 2. Background 3 2.1 Demand 3 2.2 Target Market 4 2.3 Product Characteristics 6 2.4 Positioning 6 2.5 Brand 7 3. Conclusion 7 4. Recommendations 7 Reference List 9 Appendices 10 Appendix 1: Product concepts 10 Appendix 2: Brand image 12 1.1 Aims and Scope This report details the business launch strategy for the product identified in assessment 2 collectively referred to by the Conversations brand name. The ideas gathered earlier are now developed into a virtual product ready for launching. The aim is to have an enhanced understanding of all the elements necessary to make the launch successful and to ensure that this success transpires. This strategy could have been approached by means of a product launch checklist but this does not always prove to be effective (Daniels, n.d.). Therefore the goals, readiness and constraints are presented in the form of this report. In consideration are the areas (in terms of product qualities) in which demand can most likely be created, the potential competitive advantage, the target market, and suitable product characteristics. The positioning statement is also defined, and the chosen brand name is justified. The following areas are therefore covered in this report: Type of demand sought for Conversations Desired characteristics of Conversations Competitive advantage of Conversations Target market for Conversations derived from segmentation Positioning statement for Conversations Justification for the Conversations brand Recommendations are also made to deal with possible problems arising. The detailed planning could then ease the task of strategic marketing to ensure the launch is successful and that Conversations becomes a well-established brand in Australia. The marketing strategy usually poses the most significant challenge for all types of companies (Jain & Haley, 2009: 27), so the usefulness of this report extends beyond simply providing some pre-launch information of the company planning. 2. Background 2.1 Demand Ascertaining likely demand is a very important part of the pre-launch process because it gives an indication of the possible response and the degree of success that is achievable. Equally important though, is convincing stockists, especially supermarkets, of the potential high demand so that they are willing to accept and sell the product (Desai, 2000). The product is going to be a new introduction into the Australian market for biscuits. There is therefore, a need to develop an appropriate entry strategy and to create primary demand for the two concepts. The objective will be to stimulate the market and create demand for Conversations that can then diffuse throughout the marketplace. As there are already competitors in this market, there is also a need to stimulate some selective demand so as to attract the consumers of similar products of other companies. The strategy for attracting demand should focus particularly on the way Conversations will be produced, packaged and presented. Once established, demand for further varieties can be stimulated, for example by introducing new flavours. These can also be tried out through trials before going ahead with mass production. To ascertain the areas in which demand can most likely be created, four opportunities were initially chosen based on the information gathered in the individual reports for the first assessment. These opportunities were health, taste, entertainment and marketing. Health and marketing were then considered to be either too large in scope or not specific enough, so only the remaining two qualities of taste and entertainment were considered further. Five varieties of savoury biscuits were chosen: Jatz, Sao, Vita Wheat, Country Cheese and Salada. Ten questions were then asked in a short survey based on the two opportunities of taste and entertainment in order to derive the two product concepts. The findings were evaluated using a Perceptual Map (see Figure 1). The perceptual map helps to better understand the diversity of users’ perceptions and identify homogenous groups (Karapanos & Martens, 2007). The potential competitive advantage was thus ascertained through conducting a gap analysis in the product market. This helped to identify two areas of potential demand as follows: Gap 1: Demand for a high taste and high entertainment product Gap 2: Demand for a high taste and low entertainment product Therefore, the concepts to be introduced must have a high taste, but there is potential demand if in addition, it also has either a low or high degree of entertainment to accompany it. Figure 1: First Perceptual Map 2.2 Target Market The target market is selected in which the company is to operate or give the greater focus because of the potentially greater response. The criteria for identifying this market are usually profitability, accessibility and reachability (Loker & Perdue, 1992). The first step then is to segment the market to identify the segments to target specifically. Several options are available to segment the market such as in terms of end-use, by geography or demographics, etc. In the case of Conversations, psychographic variables will be used mainly for the segmentation, specifically activities and lifestyles. The Conversations brand will revolve around entertainment in order to influence their buying and eating habits. The entertainment is intended to serve as an excitement factor to maintain high customer satisfaction effectively. There is empirical evidence to support the adoption of this approach. For example, Fuller & Matzler (2007) showed it could make significant differences. The suitable activities and lifestyles to cater for were ascertained through carrying out the second survey. This second survey comprised of 15 questions divided into the following 2 areas in 3 parts: 1. Taste (I like the taste of the biscuits) – 5 questions 2. Entertainment (I am happy with the packaging of the biscuits) – 5 questions 3. Entertainment (I would like additional offers with the biscuit) – 5 questions The products were then revaluated on the second Perceptual Map (see Figure 2 below). After this second survey, it was realised that people are more interested in the first product concept, i.e. high taste and high entertainment. Therefore, the second concept was abandoned in favour of retaining only the first. Following this final product selection, the finance and sales data for Concept 1 were initiated. Figure 2: Second Perceptual Map In addition, the most promising demographics and geography will also be bourne in mind to target specific consumer groups, albeit secondary to the psychographic variables. The typical type of consumer is identified as aged between 25 and 45, may be either male or female, especially a childless working partner (dink), has a high income, and is likely to be a frequent visitor of cafes and bars. As Conversations will be an organic biscuit, it is also more likely to be successful in multicultural areas. 2.3 Product Characteristics Once the potential demand was ascertained in this way, the 2 products were then characterised and their packaging was also designed carefully. The characteristics pertain to features of the product, or the materials or processes involved in its making, particularly those which differentiate it from other similar existing products in the market (Barker, 2003). The end product, that possesses or embodies all the characteristics, is understood to be the total of all the physical and psychological satisfaction consumers receive when buying it (Miracle, 1965). The focus on high entertainment means that entertainment will be a central feature associated with the product. This is in addition to the attempt to provide it with a relative advantage through high taste, and to make it divisible so that trial size packets can also be given. The characteristic of communicability will therefore be achieved through this association with entertainment. That is, the product should most likely be seen in places where people expect to be entertained such as through sponsorship of music shows, advertising on music radio stations, in cafes and bars, etc. It is also important to consider who will likely constitute the early majority, i.e. those who will most likely adopt the product first as they could then help to diffuse it into the market. Gauvin & Sinha (1993) identify five traits of early adopters that can then be targeted specifically. These traits are venturesomeness, social integration, cosmopolitanism, social mobility and privilegedness. Thus, the target group of consumers could be those who seem daring enough to try new products, those who are in frequent contact with other people, those who have a wide point of view such as an interest in travel or world affairs, those who are perceived to be professional or successful young executives, and those who are generally better off financially. 2.4 Positioning Product positioning is based on the objective of “meeting customer differentiation demand” (Chen & Zhu, 2009), that is, to position the product so that it meets the demand identified as differentiating the product from other competing products. It is therefore a valuable part of the sales marketing strategy, as it can help to sell products well and in a short period of time (Cheng, 2008). It also has an important bearing on the pricing strategy according to whether there is symmetric or asymmetric competition (Thomadsen, 2007). The positioning statement for Conversations is drafted as follows: Buyers in the target market should buy our product rather than others being offered and used because of its high taste and because it is highly entertaining at the same time. This positioning statement will be used to align the product, brand, price, and its promotion and distribution strategies. It is important to give the right kind of first impressions, as these are most likely to remain for long. The close association with entertainment is therefore a very important decision because Conversations will long continue to be associated with it. The company has the advantage of an opportunity to get it right first time because at present the ‘memory slate’ of consumers for Conversations is yet to be created. Besides entertainment, the attention to high taste is also an important decision for the same reason because this should be maintained. Any decline in this standard could have negative repercussions further on. It should be clear to future consumers from the outset that Conversations stands for both high taste and high entertainment. 2.5 Brand Selecting the brand name is not an easy task because many names have already been taken, and on the other hand, it is important to make the selection very thoughtfully (Crawford & Benedetto, 2007: 391). To this end, it was decided to choose a unique name reflective of the product positioning. The name of the first product has been chosen as Cons and for the second product as Sations. Together, these two parts form the beginning and end portions of the word ‘conversation’. It is therefore a neologism. Together, Conversations will be established as the trade name. In addition, as the image for Conversations shows, the logo made up of pairs of large and small concentric circles, the font and the feminine shadowed images are also gong to become part of the overall image of the Conversations brand. The atmosphere that is presented by the image is of enjoyment through dining in a light-hearted way, which links together both qualities of taste and entertainment. The name Conversations was chosen very carefully. The reasoning is that entertainment always involves a conversation. It may seem that there would be no scope for further play on the name in case a third product is launched but in such case, it is proposed to use a second word instead. Examples for future possibilities are Conversations in full for a flagship variety, Conv Plus or Sations Light. Thus, future possibilities have already been anticipated. 3. Conclusion The proposed new Conversations brand of biscuits is a very promising product. The areas of potential demand, namely for high taste and high entertainment, are clearly identified and based on preliminary research. This positioning and the second survey helped to target the right market and identify the most desirable product characteristics. The brand name was also chosen accordingly. It is anticipated that if the suggestions made in this report are adhered to, Conversations can be successfully introduced into the Australian savoury biscuit market. 4. Recommendations It is recommended to devise a launch management system for identifying and controlling measures of control, potential problems, for developing contingency plans, and developing a suitable tracking system. Possible problems could be any one or more of the following, for which recommendations are made for each: The majority of people do not accept Conversations as having a highly good taste – A larger survey and trial period should be arranged to get the formula and taste right. Competitors try to associate their product with entertainment as well – As no existing similar product is associated with entertainment, Conversations will be the first so as long as the association is made strongly and is well consolidated, it will be clear that the competitors are simply copying the Conversations brand strategy. This should therefore have negligible effect. Strong competition is experienced with competitors heightening their marketing – The strategy of more targeted marketing will be adopted for the identified groups who are more likely to adopt Conversations early. Distribution channels will be secured for these groups first anyway and they can be offered greater incentives. Securing distribution channels is just as important as building image and customer loyalty (Prahalad & Hamel, 2006). Sales figures are slow – It will be necessary to know the likely seasonal variations so that advance preparations are made to launch the product just prior to a peak period. This should help to make a strong start to secure future growth. Areas with strong and weak sales will be tracked so that if necessary, areas with strong sales can be concentrated upon first in case of difficult times. Another strategy could be to temporarily lower prices. Doing so could lead to a stronger market position (Matthyssens & Vandenbempt, 2008) until the demand is so strong that not many consumers are likely to switch when the prices are raised again. Research and learning will be an integral part of the overall strategy so that the company can be better acquainted with the market, its customers, demand-side factors, risks, etc. and strive for continuous improvement and refinement in taste, packaging, marketing, etc. An After Action Review will be conducted within a month of launching Conversations to make sure all is going well as planned and if necessary start implementation of the contingency plans. Reference List Barker, Gene. 2003. Critical characteristics and key product characteristics (KC). American Society of Quality, The Aviation/Space and Defense Division newsletter, Vol. 35, No. 2. Chen, Jingdong & Zhu, Qisong. 2009. The theory and empirical research of differentiation benefit positioning based on product value. ACM International Conference Proceeding Series, Vol. 403. Proceedings of the 2nd International Conference on Interaction Sciences: Information Technology, Culture and Human, pp. 375-380. Cheng, Chiu-Hsueh. 2008. Strategy research on the best attribute positioning and house distribution rate for the residential building. Master’s thesis. http://203.64.120.207/ETD-db/ETD-search/view_etd?URN=etd-0725108-150711 [Accessed 25 October 2010]. Crawford, Merle C. & Benedetto, Anthony Di. 2007. New products management. McGraw-Hill. Daniels. N.d. Goals, readiness and constraints: The three dimensions of product launch. Class handout at Griffith University. Desai, Preyas S. 2000. Multiple messages to retain retailers: signaling new product demand. Marketing Science, Vol. 19, No. 4, pp. 381-389. Fuller, Johann & Matzler, Kurt. 2007. Customer delight and market segmentation: An application of the three-factor theory of customer satisfaction on life style groups. Tourism Management, Vol. 29, Issue 1, pp. 116-126. Gauvin, Stephane & Sinha, Rajiv K. 1993. Innovativeness in industrial organizations: A two-stage model of adoption. International Journal of Research in Marketing, Vol. 10, pp. 165-183. In Crawford & Benedetto, 2007. Jain, Subhash C. & Haley, George T. 2009. Marketing planning and strategy. 8th edition. Cengage Learning. Karapanos, Evangelos & Martens, Jean-Bernard. 2007. Characterizing the diversity in users’ perceptions. Human-Computer Interaction, lecture notes in computer science, Vol. 4662, pp. 515-518. Loker, Laurie E. & Perdue, Richard R. 1992. A benefit-based segmentation of a nonresident summer travel market. Journal of Travel Research, Vol. 31, No. 1, pp. 30-35. Matthyssens, Paul & Vandenbempt, Koen. 2008. Moving from basic offerings to value-added solutions: Strategies, barriers and alignment. Industrial Marketing Management, Vol. 37, Issue 3, pp. 316-328. Miracle, Gordon E. 1965. Product characteristics and marketing strategy. Journal of Marketing, Vol. 29, pp. 18-24. Prahaled, C. K. & Hamel, G. 2006. The core competence of the corporation. Strategische Unternihmungsplanung, Vol. B, pp. 275-292. Thomadsen, Raphael. 2007. Product positioning and competition: the role of location in the fast food industry. Marketing Science, Vol. 26, No. 6, pp. 792-804. Appendices Appendix 1: Product concepts Concept 1 Concept 1 High taste/High Ent Proposed Name "Sations" Survey Basis I like the taste of the biscuits (T) I am happy with the packaging of the biscuits E) I would like additional offers with the biscuit (E) Attributes Flavour Garlic/Oregano, organic Packaging Round two packs to container, reusable container, Plastic lid Size 500g Shape of biscuit packet Round Give away Move ticket, Lucky Draw, free Goodies Colour Container Funky colours (see sample) Biscuit colour Golden Market Segmentation Demographics Aged Group/Target Market 25 years - 45 years Gender Male and Female Income High/Double Income Marital Status Single/ married no kids Market area High end market target Baked/ Oven Baked Taste Crispy , crunchie General info Concept The two products are individual, separate concepts Both can be marketed separately but have the advantage that they can be joint marketed. The name Cons + Sations can come together as a jingle to form cons VS sations. = conversations which is what everyone does when they are involved in when entertaining. Basically a fun play on words. It entertains the consumer/ audience. Concept 2 Concept 2 High taste/Low Ent Proposed Name "Cons" Survey Basis I like the taste of the biscuits (T) I am happy with the packaging of the biscuits E) I would like additional offers with the biscuit (E) Attributes Flavour Cheese, Sour Cream, Salt and Spice Packaging See through packs, rectangular packs Size 250 grams/pack Shape of biscuit packet Rectangular Give away N/A Colour Container Black and White, Biscuit colour Golden brown, dark Market Segmentation Demographics Aged Group/Target Market 25 years - 45 years Gender Male and Female Income One Income Marital Status Single/ married kids Market area Medium end, market target Baked/ Oven Baked Taste Crispy , crunchie General info Concept The two products are individual, separate concepts Both can be marketed separately but have the advantage that they can be joint marketed. The name Cons + Sations can come together as a jingle to form cons VS sations. = conversations which is what everyone does when they are involved in when entertaining. Basically a fun play on words. It entertains the consumer/ audience. Appendix 2: Brand image Read More