HealthyJuz by Zenith Bottling Company - Essay Example

PLAN FOR THE PRESENTATION OF HEALTHYJUZ, A NATURAL JUICE PRODUCT FOR ZENITH BOTTLING COMPANY Contents Introduction 4 TASK 5 Analysis of the Existing Market 5 Consumer Profile 6 Consumer Preference 6 Attitude and Buying Behaviour 6 Data Collection Methods Used 8 Market Segmentation & Sampling 8 Fieldwork Design 9 Data Collection Process 10 Data Analysis 10 TASK 2 11 Summary of Findings from Fieldwork 11 Price Sensitivity and Responsiveness 11 Sugar Levels Among Health-Conscious Consumers 12 Distribution Data 13 TASK 3 15 Market Analysis 15 Competitor Analysis 16 TASK 4 19 Product and Marketing Strategy 19 Financial Plan 19 Bibliography 21 Appendix 1: Price Sensitivity Analysis 22 Appendix 2: Sugar Levels and Consumption 23 Appendix 3: Proximity to a Sales Point 24 Appendix 4: Results of Appendix 1 25 Appendix 5: Raw Data from Appendix 2 27 Introduction This paper is about HealthyJuz, a new product that is being presented by Zenith Bottling Company, which is a medium-sized juice bottling company located in Greater London. The report is about a new product development plan that is meant to launch and present HealthyJuz onto the UK markets, with an emphasis on the London markets. HealthyJuz is a new fresh-fruit based drink and it targets health conscious customers who might want to consume something that meets health needs of consumers. This report is written for the senior management of Zenith Bottling Company to identify the potential market size and also provide credible and reliable market potential analysis for HealthJuz. In order to attain this aim, the paper will seek to attain the following objectives: 1. An estimation of the potential market for HealthJuz; 2. An analysis of emerging market trends relating to the healthy drink markets; 3. An assessment of the financial viability of HealthJuz; 4. Utilisation of marketing experience for the past 5 years to draw reasonable conclusions in to the pointers above. TASK 1 LO1: A Plan and carry out a research to determine the consumer profile, preference, attitude and buying behaviour related to the consumer drinks using primary research. You need to explain the data collection methods used, including sampling techniques as well as the pros and cons. LO1: B Plan and carryout a secondary research to collect market related data such as the size of the market for consumer drinks, competitors, market structure, and market shares of key players. Analysis of the Existing Market HealthJuz is a naturally formulated juice drink that will be made in four different flavours including orange, guava, apple and pear. These different fruits will be blended naturally, extracted and made available to consumers in different parts of the UK. A fifth version will contain some important elements of extracts from plants that promote weight loss. This will be extracted naturally from products that will be gathered on organic farms in the UK and in nearby lands in Europe and transported to the UK within not more than 7 days. The products will be bottled on the fruit farms and they will exclude additives and preservatives. The products will be distributed to different outlets that will include small shops and supermarkets within 24 hours to 48 hours after extraction and bottling. This will aim at health-conscious consumers in the UK who want to avoid chemicals and other products that might be toxic and harmful to the human body. Consumer Profile The targeted consumers will include the consumers of Greater London and some commercial hubs in South England. The geographic scope will include London and surrounding areas and communities. This will seek to target important persons particularly people who are health-conscious and people who might be concerned with their health and their livelihoods. Consumer Preference Consumers are to be classified amongst those who are health conscious who form the existing market whilst there is an active and growing market for healthy products and health foods, there is a number of people who can be literally converted to consumers of healthy products. Hence, there is the need to identify two market segments: 1. The Healthy Foods Market; 2. The Potential Healthy Food Consumers. This implies that there is the need for Zenith Bottling to engage in some kind of conflict with the entities that control the existing market of healthy food consumers. The second part will involve two main processes which will include either working with other stakeholders in the industry to convert people into health food and drink consumers or doing it as an individual by way of capturing new market entrants and making them into consumers. Attitude and Buying Behaviour There are two classes of consumers that we expect to encounter, firstly, we have the health conscious consumers. Health conscious consumers are conscious of the nutritional and calorical value of products that they consume, hence, they are interested in the components and contents of products that are sold on the markets (Shamsollahi, Chong, & Nahid, 2013). This includes sensitivity to various matters and situations like: 1. Knowledge and education 2. Government and social support policy 3. Environmental concerns 4. Perceived values, attitudes and habits (Self, 2012; Terry & Blogg, 2010) Thus, these persons seek to find new products that enhance their body capabilities any time they by products (Sumarjan, Mohd, & Salleh, 2012). These are therefore persons who are critical in their evaluation of the nutritional worth of each product and adjust to meet the needs and expectations that they have in their process of consuming various products. ‘ Most persons not concerned with healthy eating are alright with trying out any kind of food that fills out their stomachs. Such persons will consume virtually anything as long as it enables them to fulfil their hunger. Some of these non-health conscious consumers might prefer a healthier product if it tastes good or fulfils certain habits and expectations (Naft, 2006). This is because they might have certain factors and matters that induce them to tilt their demands and expectations for certain products rather than others. Non-health conscious consumers are often induced by the taste, effect and complementariness of various products with other products (Ashley, 2010). These standards vary from person to person and could be a tool employed by various health food manufacturers and producers. On the other hand, there is the possibility of various non-health conscious consumers to be converted to persons who want to control their weights or seek to improve the quality of their lives (Gittleman, 2011). Thus, when a person realises the possibility of bettering his or her life, there is the trend towards better products and foods. This helps consumers to become persons who consume better products and better services as a means of becoming better people in the society. Another argument put forward for this trend has to do with the fact that some consumers seek to improve their eating habits with the increase in their purchasing power and wealth. From the section above, it has been deduced that there are two main classes of consumers in the potential market that HealthJuz might want to target: Health Conscious Consumers (Primary Consumers) Non-Health Conscious Consumers (Secondary Consumers) Directly interested in healthy products Might be induced by various factors in order to choose healthy products Form a small market of beverage consumers Involves everyone else who is opened to different possibilities Have specialised knowledge of products and their nutritional values Do not know about specific products Consumers look out for important health factors and are sensitive to minor issues Consumers are moved by things like taste and attractiveness of products Table 1: Demands and Expectations of the Two Classes of Consumers Data Collection Methods Used In order to deploy resources and conduct a meaningful study and research, there is the need for an empirical study and empirical analysis to be conducted to find out about the market in order to find out what they might want and what they might expect from our natural fruit juice, HealthyJuz. This will involve the study of various segments of the market and this will form the basis for proper planning and strategising. Market Segmentation & Sampling As identified above, there will be the need for the segmentation of the market into two broad classes, the healthy-conscious consumers and the non-health conscious consumers. This will give room for two more classifications: 1. Sub-classification of the two classes; 2. Geographical segmentation to cover the South of England Segment Health Consumers Non-Health Consumers Geographical Segmentation 1 Weight-conscious consumers Taste-conscious consumers Central London 2 Consumers on medication/special diet Packaging oriented consumers London Suburbs 3 Religious and socially oriented consumers Diversity seekers Outside London These fundamental pointers will be used for the examination and evaluation of the market size and the analysis of the consumer expectations and desires. This will help to segment and segregate the markets and try to find the best approaches that can be used to target the various classes of consumers and also penetrate the different geographical segments of the London market. Random samples will be taken from each of these two classes of consumers as well as people from the three groups and the three geographical categories. Fieldwork Design The field work will involve a critical review of the segments of the existing and potential market. This will enable an inquest to be made into the best approaches and strategies that can be put in place to find the best marketing plan for the attainment of financial results. The central aspect of the research is to draw practical samples for the different classes and segments of the market and study them to identify what they expect form a natural fruit juice like HealthyJuz. The approach to doing this is presented in Appendix 1 where a questionnaire is presented to take data. However, in order to do this research, there is the need to study the general trends and processes of the markets as well as the main processes and the main systems that influence the demand for fruit drinks in general and for natural products in particular. This will involve the critique of secondary sources to estimate the market size, the competitors and the market shares amongst other things. Data Collection Process The data will be collected in the field work through the presentation of a series of pointers to ascertain what people might want to do in relation to changes in: 1. Price 2. Sugar Levels 3. Proximity These important pointers will provide the basis for the presentation of important findings that can be used to guide the decision making process and its related circumstances and factors in order to help in positioning the products. Data Analysis The data analysis will be based on the fact that for each of the categories, the respondents will be given questions about what will be the ideal processes and the ideal levels that will be best for consumers. This will be presented in various statistical forms and they will be used as the basis for the drawing of conclusions and the presentation of answers that will be utilised in formulating a marketing policy for the firm. TASK 2 LO2: Using appropriate techniques analyse and summarise the data collected from primary and secondary researches. This requires you to use such techniques as dispersion, correlation coefficient analysis, and quartiles and percentiles. Summary of Findings from Fieldwork The fieldwork culminated in a number of results and responses from different consumers and different persons who took part in the survey. The different parts of the survey provided various categories and sets of information that came to bear and form the basis for taking various decisions in this strategy. Price Sensitivity and Responsiveness The first study involved the participation of 66 respondents who took part in the interview. The findings and results are presented in Appendix 4. The totals of the finding indicate that the total score for Preferred Quantity was 207 and the total for the Preferred Price summed up at 200. This means that the average quantity is (207/66) which is 3.163. On the other hand, the average for the preferred prices was (200/66) which translates to 3.03. In linking this to the realities, it can be said that from the mass information and the responses, it can be said that preferred volume per bottle is about 600 ml. In terms of prices, it is identified that the average of about 3.03 will translate to £1.5 as the most popular price that consumers will be willing to pay for the juice drink that will be made available to consumers. In interpreting these findings, it can be said that the proper and most appropriate bottling level that will be provided for consumers will be about 600ml. This will be ideal and the average price per bottle should be fixed around £1.5. Sugar Levels Among Health-Conscious Consumers In this second section of the research and the study, there were important responses taken from the submissions of persons who are conscious of their health. In doing this, the preferred sugar additions and the addition of sweetening agents to food were identified. The levels and the bases for the analysis and evaluation was steeped in the preferred levels of additions and the volume of the juice they will want to consume if the quantity was set at the various sugar levels. The findings were put together and presented in Appendix 5 below. This includes the findings of the different players and the various stakeholders. In doing this, the findings were put together in a correlation analysis and correlation review. This is presented in the diagram below: Figure 1: Correlation analysis between Sugar Level and Consumption Volume The diagram above identifies that there in a situation where the sugar level increases, most consumers are willing to consume less of the juice on a daily basis. On the other hand, in cases where the sugar level reduces, consumers are more willing and desirous to consume more of the product on a daily basis. The sample of the study included the examination of health-conscious consumers and health-conscious persons. This shows a negative relationship between sugar level and consumption volume. This includes the fact that in cases where consumers realize that some sugar is added to the natural juice, these consumers are going to be less excited about the product and they are not going to consume more. It can be inferred from this that there is the need for the sugar levels to be kept close to the natural level of these juices because consumers do not really want to consume sugar. Hence, there is the need to tilt towards a natural drink or product. Distribution Data The data collection in Appendix 3 indicates that the different persons in different parts of Southern England might have different attitudes towards the distribution of these products. In this process, an online survey was conducted and 309 respondents responded to the survey. In the survey, the distribution was as follows: Central London: 139 Respondents London Suburbs: 72 Respondents Outside London: 98 Respondents. The average of the decision for persons in Central London was at 3.8. This indicates that respondents in London identify that they do not want to walk over long distances to purchase goods from natural juice. This seems to indicate that the consumers do not want travel over long distances to buy natural juice as there is a lot of options in London. The response in the London Suburbs averaged 1.96 and this showed that most of the consumers were willing to buy natural juice even if they have to walk over long distances. On the other hand, consumers outside London identified that they were going to buy even if the distance is over 2 kilometres. This is shown by their average of 1.21. TASK 3 LO3: Prepare a report in appropriate format using the information derived from the above analysis in order to present to the senior management. Your report should include tables, graphs charts and other appropriate methods such as trend lines along with good interpretations. Market Analysis London has a population of about 10 million and this comes with a population of people in surrounding towns and suburbs have high concentrations. Areas in Southern England add up to approximately 20 million consumers who have various drinking needs and requirements as individuals and households. Consumers in the market for drinks are divided amongst: 1. Energy drink consumers; 2. Carbonated drink consumers; 3. Natural Juice markets (Mintel Store, 2013). However, in the UK, it is identified that fruit drinks and juice drinks are really popular and they account for 83% of the total preferences of consumers (Mintel Store, 2013). However, in most cases and in most situations, these natural fruit juices are made of concentrates that enable transportation and movement from the farms to the shops. This include various processes and various systems that gives room for adulteration and modifications which makes these natural juices prone to additives and chemicals that render them less trustworthy to consumers. The market for fruit juices grew by 3% in the UK in 2013 and this means that more and more consumers are interested in trying new fruit juices and products and this is often directed towards the improvement of the health of consumers (Euromoniter International, 2014). The key players in the UK juices industry include important and significant entities like supermarkets that provide these products and present them to consumers through their major outlets. Most supermarkets however source from a variety of producers and this include large to small-scale producers and they make it available to consumers in the various shops and the various supermarkets that serve and provide the products to consumers in the UK (De Mooij, 2012). Medium sized producers seek to cooperate with other less known and small to medium shops. On the other hand, there are some specialised producers of fruit juices that are specialised and localised in their outlook. These producers make the fruit juices available to consumers through various restaurants and small shops including corner shops (Cova, 2013). Competitor Analysis In order to conduct this analysis, there is the need to conduct the Porter’s Five Force Analysis. The Porter’s Five Force analysis shows the boundaries and balances of a given industry. This includes the power dynamics and the factors that promote various levels of interactions in the industry and this include five main pointers: 1. Threat of new entrants; 2. Threat of substitute products; 3. Bargaining Power of Buyers; 4. Bargaining Power of Producers; 5. Competitive Rivalry in the Industry (Colley, 2007; Hill, 2012) The fundamental report identifies that the most powerful and the most significant competitors in the industry include the largest conglomerates of brands and entities in the UK. According to Euromonitor, the current leaders and the current market leaders are ranked as follows: 1. Tesco 2. Tropicana UK Ltd 3. Asda These companies hold over 50% of the market share alone. Asda and Tesco are mainly entities that produce their in-house brands which are sold to the consumers via their supermarkets. On the other hand, Tropicana is such that they manufacture various specialised fruit products which are sold through various channels and processes. They are more flexible and more prone to selling their products through different markets and different outlets such as small and medium sized shops and other centres in Southern England. The threat of new entrants in the fruit juice industry is somewhat low because it takes minor commercialisation and branding to commence bottling and providing fruit juices to consumers around the UK. This comes with a very low level of capital requirements that are used as the basis for commercialising products. This is a major threat and could pose a major challenge to a firm like Zenith Bottling in entering the fruit juice market. The threat of using substitutes is perhaps extremely high, particularly amongst consumers who are not health-conscious. This is because there is a major tendency for persons to be connected to brands like Coca Cola and the like since these brands are fairly popular in the UK. Therefore, there is a major challenge for Zenith Bottling and they ought to work hard in order to meet the competition and its requirements. The bargaining power of buyers involve the possibility of buyers like major supermarkets and other medium sized social spots and joints to also manufacture their own fruit juices and sell. This poses a major threat to the niches that Zenith Bottling can target in order to attain results. The bargaining power of producers include the possibility of farmers and other agricultural service providers that give raw fruits coming together to set up a bottling company that can target the same market as we are targeting. This will create the chance and a possibility of these entities becoming competitors in the industry. TASK 4 LO4: Develop and present a project plan for the development of the new product based on the above information to the senior management. The plan should include resource allocations, including project costing, business analysis based on the projected revenue and cash-flow, and other supporting evidences regarding financial viability of the project. Product and Marketing Strategy From the findings it is identified that there is the need for the following marketing strategy to be put in place: 1. A presentation of natural juices that are differentiated from the offerings of competitors; 2. The presentation of lower volumes of the juice but with a relatively higher price than other competitors; 3. To provide a brand that targets health-conscious consumers with a low level of sugar 4. There must be two other brands that will be skewed towards cost leadership and another tilted towards product innovation; 5. To distribute and sell the product through numerous outlets including corner shops in London and use other supermarkets in the suburbs and outside London. Financial Plan The costing of the project must be include the following highlights which will be put together to attain the financial end of the firm: Item Price (£’000) Product Development 500 Product Branding 120 Marketing 2,000 Production/Operations Infrastructure 7,000 Contracts with Farmers 2,000 Variable Production Cost Per Annum (X5) 50,000 Distribution and Sales 5,000 TOTAL 66,620 The estimation for the earning and sales is presented below: Sales Money (£’000) Brand 1 (Health-Conscious Consumers) 20,000 Brand 2 (Cost Leadership Brand) 45,000 Brand 3 (Product Innovation Brand) 35,000 TOTAL 100,000 This will lead to a potential profitability of £33,380,000 for Zenith Bottling. Bibliography Ashley, B. (2010). Food and Cultural Studies. New York: Psychology Press. Colley, J. L. (2007). Principles of General Managemetn. Cambridge, MA: Yale University Press. Cova, B. (2013). Consumer Tribes. London: Routledge. De Mooij, M. (2012). Consumer Behaviour and Culture. London: SAGE. Euromoniter International. (2014, May 14). Juices in the United Kingdom. Retrieved June 10, 2014, from Euromoniter International: http://www.euromonitor.com/juice-in-the-united-kingdom/report Gittleman, A. S. (2011). Beyond Pritikin: A Total Nutritional Program for Weight Loss and Longetivity. New York: Random House Publishing. Hill, A. V. (2012). The Encyclopedia of Operations Management. New York: FT Pres. Mintel Store. (2013, December 31). Fruit Juice, Juice Drinks and Smoothies, UK - November 2013. Retrieved June 10, 2014, from Mintel Store: http://store.mintel.com/fruit-juice-juice-drinks-and-smoothies-uk-november-2013 Naft, J. (2006). The Sacred Art of Soul Making. Indianapolis: JN Publishing. Self, D. (2012). Public Mental Health Marketing. London: Routledge. Shamsollahi, A., Chong, C. W., & Nahid, N. (2013). Factors Influencing the Purchasing Behaviour of Organic Foods. Journal of Human and Social Science Research , 93-014. Sumarjan, N., Mohd, N. S., & Salleh, R. (2012). Hospitality and Tourism: Synergizing Creativity and Innovation Research. New York: CRC Press. Terry, D. J., & Blogg, M. (2010). Attitudes, Behavior, and Social Context. New York: Psychology Press. Appendix 1: Price Sensitivity Analysis Dear Sir/Madam, As part of the research for the presentation of a new product onto the South England markets, we are conducting a survey. The survey is meant to test the markets prior to the presentation of a natural fruit juice to consumers like you. In line with this, we will like to take submission from you relating to what you will consider the fair price and fair volume for a product. In line with this, please give me information about what you will consider a convenient quantity for a single sitting (say drinking it to quench your thirst or drinking it as part of a meal). Just tick one number on the left of Convenient Quantity of what you think will be a good and proper serving. And tick the corresponding price that you think will be fair for the drink. Thanks Convenient Quantity Appropriate Price 1 250 ML 1 75p 2 330 ML 2 £1 3 570 ML (A Pint) 3 £1.5 4 750 ML 4 £1.75 5 1 Litre 5 £2 6 1.5 Litres 6 £2.25 7 2 Litres 7 £2.5 Appendix 2: Sugar Levels and Consumption Dear Sir/Madam In relation to a study relating to the presentation of a new product, Zenith Bottling will like to inquire about your attitudes and preference for various sugar levels and how this will affect your level of consumption. In line with this, we will like to find out the level of consumptions you will adapt to when the natural sugar level is varied from the natural level to 10%. What will be the most appropriate for you and what is the maximum quantity you can consume with the stated level. Ideal Sugar Level Average Consumption Per Day 0%-10% 100 ML – 2 L Appendix 3: Proximity to a Sales Point As part of our effort to distribute our new fruit drink product to consumers in southern England, we want to find out what your reaction will be when we come up with a policy of ensuring that our consumers will not travel more than 2 kilometers to get these products by distributing to various local outlets without targeting corner shops. What is your reaction to be on whether to buy or not. Please provide us with two sets of information: 1. What will be your reaction towards buying our natural fruit juice if it is within a 2 kilometre radius: 1 – Not Likely To Buy 2 – May Consider Buying 3 – No Comment 4 – I will not buy it 5 – I will never buy it 2. Which part of England do you live in? Central London (A) London Suburbs (B) Not in London (C) Appendix 4: Results of Appendix 1 Respondent Number Preferred Quantity Preferred Price 1 3 3 2 3 2 3 6 1 4 4 2 5 3 3 6 2 4 7 2 2 8 1 3 9 5 1 10 4 2 11 2 2 12 3 3 13 2 4 14 2 3 15 2 4 16 4 3 17 2 2 18 3 4 19 1 5 20 6 3 21 5 2 22 3 4 23 3 5 24 3 2 25 4 3 26 2 4 27 6 5 28 1 3 29 1 4 30 1 5 31 2 2 32 3 3 33 5 4 34 4 5 35 2 2 36 3 3 37 2 5 38 4 4 39 4 3 40 4 2 41 4 4 42 2 3 43 1 4 44 2 3 45 5 3 46 6 3 47 4 2 48 3 1 49 2 3 50 5 4 51 4 2 52 5 3 53 4 4 54 5 3 55 4 2 56 1 1 57 2 2 58 3 3 59 1 4 60 3 2 61 4 3 62 2 4 63 5 3 64 2 2 65 3 2 66 3 4 Total 207 200 Appendix 5: Raw Data from Appendix 2 Respondent Number Sugar Level Consumption Volume 1 5 750 2 2 400 3 3 600 4 10 250 5 3 1000 6 2 750 7 5 400 8 2 750 9 4 600 10 8 400 11 7 350 12 3 850 13 2 550 14 4 700 15 5 600 16 9 300 17 1 600 18 2 1500 19 3 2000 20 6 450 21 10 300 22 7 400 23 2 1750 24 6 500 25 7 500 25 2 1000 27 1 1250 28 8 250 29 9 250 30 7 400 Read More