Current Purchasing Situation - Assignment Example

?Marketing Table of Contents Introduction 3 2.Target Market 4 a.Demographics 4 b.Geographic 6 c.Current Purchasing Situation 6 3.Marketing Objectives 8 4.The Marketing Mix 9 a.Product 9 b.Price 11 c.Place 13 d.Promotion 16 5.Conclusion 18 References 19 1. Introduction The discussion in this paper is focused on the development of a marketing plan for the product “GoodHealth” which is a breakfast cereal concentrated on the aspects of nutrition and taste as its key features. The product is intended to be marketed in Australia at its introductory stage and shall later be expanded in other regions of the global food market. As a nutritional product, it is quite likely that the product will be influenced by various macro-economic features, such as demographic, cultural, economic, political, natural and technological environment of the economy. With this concern, the recent market trends can be identified as significant for the growth of a nutrition product such as “GoodHealth” and shall be considered in the process of developing a strategic marketing plan to specify the target market with a set of marketing objectives for the organisation. 2. Target Market The current market trends in Australia are identified to be quite supportive for the growth of nutritional products. Consumer persuasion towards the consumption of healthier food products such as cereals and fat modified milk is observed to be at a growth phase in the current market scenario of Australian food industry (Cleanthous & Thuraisingam, 2010). The product, “GoodHealth” is also based on these two main ingredients, i.e. milk and cereal containing low fat and nutritional particles with due consideration to the tastes and preferences of the potential customers. With these virtues, the target market of the product will be determined in the following discussion in light of few significant segmentation variables, i.e. demographics, geographic, current purchasing situation of the potential customers in the region, purchase ready factor of the product and the local environmental influencing factors. a. Demographics Researches have revealed that two particular age-groups of customers, i.e. children and adolescents included in the age group of 2-15 years and the adults aged above 65 years are recorded to consume larger amounts of cereal based food products in comparison to the age group of 16-64 years olds (Australian Bureau of Statistics, 2008). This can be apparently identified from the diagram represented below: Fig. 1: Age Distribution of the Consumption of Cereal Based Products in Australia Source: (Australian Bureau of Statistics, 2008). However, in the current market scenario, the trend to consume cereal based products is also at a rise among the age group of 16–40 years. It is worth mentioning that the population of Australia majorly comprises of two age groups, i.e. 16-64 years and 0-15 years (Australian Bureau of Statistics, 2010). Therefore, concentrating on the age group of children and adolescents included in the age group of 5-20 years and above 45 years shall provide with better growth opportunities to the product in future. b. Geographic Considering the age distribution in terms of population in Australia, the targeted geographic regions can be recognised as Western Australia, Australian Capital Territory and South Australia. Western Australia and Australian Capital Territory can be identified as the geographic regions of the economy to grow with immense rapidity in terms of population (Australian Bureau of Statistics, 2010) while, South Australia provides with a competitive benefit of larger consumption of cereal based products in comparison to other regions. However, the market structure of South Australia is termed to be highly competitive that shall create a constraint to the growth of the “GoodHealth” (Williamson, 2011). Evaluating these regions in terms of availability of raw materials and distribution facilities, Australian Capital Territory and South Australia can be termed as suitable locations for the launch of this product (Australian Bureau of Statistics, 2010). Thus, prime focus shall be provided to South Australia as a target market for the product. c. Current Purchasing Situation The current purchasing situation of Australian food retail market is recognised to be growing at a sustainable rate. For instance, the food retail market trend is witnessed to grow by 0.4% on an average for consecutive three years. Market reports also state that consumption of nutritional food products is also at a rise with higher velocity than the population growth (NARGA, 2010). It is worth mentioning that a large number of the population in the state of South Australia attains an average earning of $0.15 on a yearly basis (South Australian Council of Social Service, 2011). Therefore, with prime focus on the South Australian food retail sector as a target market, it becomes essential for the organisation to render the product at a lower rate targeted towards the majority of the population in the region. 3. Marketing Objectives With due consideration to the economic factors, the target market of “GoodHealth” shall be the region of South Australia while the targeted potential customers shall be the local people of the region aged between 5-20 years and above 45 years. The product will further be sold at a low price range considering the fact that a majority of the population comprises of low income group. Based on these variables the marketing objectives of the organisation in relation to the launch of “GoodHealth” can be determined as follows: Sell the product as a superior brand and nutritional breakfast option with due consideration to its flavour and available substitutes in the market Attain a competitive market share in the targeted market within two years and grow as a market leader in the forthcoming five years after the launch of “GoodHealth” Expand globally as well as nationally within the forthcoming three years The product will be targeted towards the lower income group in the targeted region and thus will be sold at a lower price in comparison to the competitors The product will be initially distributed by Non-Governmental Organisations (NGOs) in the region with an intention to create and develop awareness among the customers regarding healthy diet Subsequently, the ultimate and most significant objective of the organisation related to the marketing of the product will be to attain sustainable growth in the long-run with due consideration to the ethical aspects of the business. With this concern, the marketing mix strategies of the organisation are described below. 4. The Marketing Mix According to Borden (1984), four factors tend to be quite crucial in determining the marketing competencies of the organisation. These are product, price, place and promotion. Notably, these factors tend to relate the most significant elements of business environment such as consumers, market competition, and trade regulations (Borden, 1984). With this concern, the market planning to launch “GoodHealth” with consideration to the four elements is described as follows: a. Product The product to be marketed in the targeted region is “GoodHealth”. The product is intended to be focussed on its nutritional base as the key competitive attribute. The product is further intended to be based on cereal ingredients considering the fact that the consumer preferences in the Australian food market is increasing significantly and thus shall prove to be beneficial for the growth of the product. However, the market is also stated to be highly competitive with almost homogeneous product segmentation among the marketers in the industry. For instance, the food market of Australia is strongly influenced by few major industry players such as Kellogg’s, Uncle Toby’s and few other local players. Although, the market serves with almost 200 different brands to the ultimate customers, most of them belong to similar categories (Australian Food and Grocery Council, 2009). Therefore, it becomes quite essential to differentiate the product from the substitutes currently available in the market with the intention to gain competitive advantage. With this concern, the product shall encompass with two chief attributes that will in turn lead the product to be differentiated from its competitors in the market. For instance, the product will focus on its efficiency to stay crispy for longer span of time in comparison to other cereal based breakfast products. With this concern, the product packaging strategies shall also be considered that will intend to store the cereals allowing it to be fresh for a longer period (such as the use of airtight lids). Moreover, the product will emphasise on the nutritional ingredients such as protein, vitamins, fibre, along with lesser amount of salt to control the daily intake of the potential customers. It is worth mentioning that as the targeted potential customers belong to two different age groups; it is quite likely that the requirement of daily intake, i.e. the daily requirement of energy and nutrients need to be healthy (Australian Food and Grocery Council, 2009). Hence, it shall be highly effective if the organisation concentrates on the launch of at least two products of similar kind based on the differing requirements of daily intake of the two sub-groups in the targeted market, i.e. the age group of 5-15 and the age group above 45. The sole consideration of the product in this regard will be to minimise the health problems faced by the two groups such as the risk of obesity in children and adolescents between the age group of 5-15 and heart diseases among the potential customers aged above 45 years. This will not only provide the product with effective competitive advantage but also secure the ethical objectives of the organisation. Significant consideration should also be provided to the aspect of food regulations imposed by the Australian Government with an intention to control the quality of food products marketed in the region (Food Regulation Standing Committee, 2008). b. Price Competitive advantage can also be attained through the efficiency in planning and executing the pricing strategies with due consideration to the competition in the business environment and the determined corporate objectives of the organisation. In this case, the pricing strategies will be determined with due consideration to the defined target market and potential customers. For instance, the determined target market is South Australian region and the potential customers of the product are the people belonging to the two age groups, i.e. 5-15 years and above 45 years in the region. According to the demographic features of South Australia, majority of the population include themselves in the low income group with an average earning of almost $1,288 on a weekly basis. However, the income of local people in South Australia is recorded to grow significantly (Australian Bureau of Statistics, 2011). These attributes indicate that the product should be focussed on low pricing strategies that would be affordable for the potential customers in the target market region to spend on the regular consumption of the product. From an in-depth perspective towards the demographic features of South Australia it can further be stated that the income level of the potential customers are growing significantly that in turn provides the company with an opportunity to increase the pricing structure of the products in the future with due consideration to the affordability of the potential customers. Furthermore, in the current local market situation, it shall be advantageous for the organisation to market the product at a comparatively low price than its competitors with an intention to persuade the potential customers for the regular consumption of the product. It is worth mentioning that the food retailers dealing with the similar market segment of nutritional products based on cereals had been witnessed to charge increasing prices that created a significant impact on the customer preferences. It is due to the fact that cereal based breakfast products are termed to be crucial in controlling obesity and cholesterol among children, adolescents and adults. This signified the companies responsible on the social and ethical grounds and thus created a constraint from the socio-economic aspect (Southern Sydney Retailers Association Ltd, 2008). It is in this context that focussing on lower pricing strategies in comparison to the major competitors in the market shall provide the product with enhanced competitive advantages as well as will refine the sustainability of the organisation. However, a significant constraint of maintaining profitability can arise due to intense consideration on the aspect of lower pricing strategies. To be specified, in order to render the products at a competitively lower price, the organisation shall have to focus on its cost variables, such as distributional channels that in turn shall create a constraint on quality aspect of the product. Thereby, the organisation will have to provide significant consideration to its cost structures in order to render its products at a lower price to the ultimate potential customers. c. Place The consumption trend in almost every region of Australia has been recorded to move in a favourable direction of healthy diet. This in turn rewards the product with greater opportunity of growth in the Australian Food Market. However, the selection of place is not only subject to the demand but it also depends largely on the availability of raw materials as well as the viability of distribution channel. In this case, due consideration has been provided to the aspect of demographic features and social trends in relation to cereal based breakfast products and with the intention of determining a target market. With these concerns, the South Australian region has been selected as the target market for the launch of “GoodHealth”. The fundamental demographic features of the region depict to be quite beneficial in supporting the introduction of the product, i.e. “GoodHealth” as a cereal based tasty and nutritional breakfast option. For instance, the region is identified to have a substantial population growth comprising a majority of the targeted age group, i.e. 5-15 years age children and adolescents and adults aged above 45 years (Australian Bureau of Statistics, 2011). This certain demographic feature can be identified as a significant opportunity for the product as it indicates future growth in demand prospects of the product. This statement is further supported by the growth of income level in the region. To be mentioned, the gross earning of the people residing in the region is observed to have a comparatively lower rate of earning in the current scenario. But in the forthcoming years, the income is expected to increase significantly providing a better opportunity to the organisation to grow (Australian Bureau of Statistics, 2011). On the similar context, the retail trade consumption pattern in the South Australian market was stated to be highly fluctuating during the end months of 2010 and is still noted to be instable to a noteworthy extent. However, with an in-depth analysis the market trend can be identified as favourable for food retailing with a positive change in terms of consumption growth in the fiscal year 2010-11 (Australian Bureau of Statistics, 2011). This can be well observed from the graphical representation below: Fig. 2: Seasonal Change of Retail Sector Consumption in South Australia Source: (Australian Bureau of Statistics, 2011). Therefore, it can be stated that with focus on the age groups of 5-15 and above 45 along with significant consideration to the aspect of lower pricing strategies, it shall be highly beneficial for the product in the growing market of South Australia. However considering the cultural aspects, the product should be marketed through competitive promotional strategies that shall essentially be coherent with the organisational objectives and the perceptions of the potential customers. d. Promotion The aspect of promotional strategies depends largely on the social as well as cultural perceptions of the potential customers. Thus, it is quite important to consider the social and cultural aspects along with the factor of cost probable to be incurred during the process (Kwok & Uncles, 2002). Other variables that should be considered are the corporate objectives of the company and the efficiency of the selected strategies to create a strong and effective impact on the customers buying decisions. Considering these factors, the organisation can promote the product through not-for-profit organisations at a lower price than other similar products available in the retail stores of the region. This will not only create awareness among the customers regarding the health issues but also promote the product as a socially responsible brand for the general good of the community. In turn, the organisation shall be benefited with significant competitive advantage in the target market. Simultaneously, the product can be promoted through advertisement campaigns and sponsorships with the intention to generate larger market share in the region. Notably, the campaigns shall be focussed on generating health awareness among the potential customers and also enhance brand recognition to an extent. Moreover, the costs incurred through these promotional strategies shall also be relevantly low providing the opportunity to the organisation to render the product at a lower price than that of its major competitors. These strategies can be implemented by the organisation in the introductory stage of the product, principally in the target market region of South Australia and later tend to distribute the products through retail stores. The prime objective of the promotional campaigns shall be to introduce the product not only as a cereal-based breakfast item but also as a nutritional food option intended to minimise the health risks associated with the age groups. Therefore, the organisation should consider its ethical and sustainable motives with significant consideration while distributing the product through retail outlets. It is due to the fact that marketing the product through retail outlets shall require aggressive marketing strategies to face the competitive challenges such as price hikes and other marketing promotion activities. These issues are likely to hamper the ethical motives of the organisation, subjected to sufficient emphasis on the sustainability of the product. 5. Conclusion The findings from the situational analysis and market trends suggest various opportunities for “GoodHealth” in the Australian market. For instance, the increasing consciousness of the potential customers regarding health issues creates a supporting business environment for the launch of the product as a nutritional breakfast option. However, there are also various challenges likely to arise in the introduction of the product such as the pricing constraints. The income growth of the South Australian market has been recorded to be lower in comparison to other regions that restrict the product to be rendered at a competitive price. Therefore, the product shall be rendered at a low price focussing in the sustainable and ethical outlook of the product. With a future-oriented point of view, it can further be stated that the competition in the region is likely to increase significantly that would signify the implementation of aggressive competitive strategies by the organisation. This in turn shall create a challenge for the organisation to maintain its profitability as well as sustainability accordingly in the future trend. Conclusively, the organisation should be focussed on its corporate social responsibility with significant consideration along with its competitive stance in the market. References Australian Bureau of Statistics, (2008). National Nutrition Survey: Foods Eaten, Australia, 1995. Summary of Findings. Retrieved Online on July 21, 2011 from http://www.abs.gov.au/AUSSTATS/abs@.nsf/0/9A125034802F94CECA2568A9001393CE?OpenDocument Australian Food and Grocery Council, (2009). The Daily Intake Guide Informing Consumer Choice. Data Fact Sheet. Australian Bureau of Statistics, (2010). Population by Age and Sex, Australian States and Territories, Jun 2010. Summary Commentary. Retrieved Online on July 21, 2011 from http://www.abs.gov.au/Ausstats/abs@.nsf/mf/3201.0 Australian Bureau of Statistics, (2010). Australian Demographic Statistics, Dec 2010. December Key Figures. Retrieved Online on July 21, 2011 from http://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0 Australian Bureau of Statistics, (2010). Topics @ a Glance – States. Australian Capital Territory. Retrieved Online on July 21, 2011 from http://www.abs.gov.au/websitedbs/c311215.nsf/20564c23f3183fdaca25672100813ef1/d13eac963fc136adca256ca300049949!OpenDocument Australian Bureau of Statistics, (2011). SA Stats, Jun 2011. Incomes. Retrieved Online on July 21, 2011 from http://www.abs.gov.au/ausstats/abs@.nsf/Products/1345.4~Jun+2011~Main+Features~Incomes?OpenDocument Australian Bureau of Statistics, (2011). Consumption. SA Stats, Jun 2011. Retrieved Online on July 21, 2011 from http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/1345.4Main%20Features8Jun%202011?opendocument&tabname=Summary&prodno=1345.4&issue=Jun%202011&num=&view= Borden, N. H., (1984). The Concept of the Marketing Mix. Journal of Advertising Research, Vol: II. Cleanthous, X. & Thuraisingam, S., (2010). Whole Milk vs. Fat-Modified Milk in the Current Australian Market: A Comparison of Nutritional Content and Market Share. Food Australia, Vol: 62, pp. 304-306. Food Regulation Standing Committee, (2008). Australia And New Zealand Food Regulation Ministerial Council. Principles & Protocols document Version 4. Kwok, S. & Uncles, M., (2002). Sales Promotion Effectiveness: The Impact of Culture at an Ethnic-Group Level. School of Marketing Working Paper. NARGA, (2010). Australian Food Sustainability at the Crossroads. The Challenge to Feed a Growing Nation. South Australian Council of Social Service, (2011). At the Crossroads—Financial Counselling in South Australia. SACOSS Information Paper. Southern Sydney Retailers Association Ltd, (2008). What about the Increasing Price of Breakfast Cereals? Public Submission to ACCC Grocery Inquiry. Williamson, B., (2011). SA Report June 2011: The Economy. ABC Adelaide. Retrieved Online on July 21, 2011 from http://www.abc.net.au/local/stories/2011/06/29/3256794.htm Read More