Marketing Plan for the Next Year for Atlantic Quench - Essay Example

Marketing Plan for the next year for Atlantic Quench Executive summary The following report in general deals with the market analysis of Atlantic Quench. The market analysis of the juice market, in terms of the current market share of different categories of fruit juices and their expected future growth trend is analyzed. The main competitors and their product mix are also analyzed. This is followed by an in depth analysis of the company in terms of the 4ps, SWOT, PESTEL of external environment of the company. This is followed by a strategic analysis of the company and designing objectives of the company derived from SWOT. After performing these, future marketing strategy of the company is designed. Contents Contents 3 Chapter 1 Introduction 6 Chapter 2 External analysis 6 2.1 Macro Environment Analysis (PEST Analysis) 6 2.1.1 Political 6 2.1.2 Economic 7 2.1.3 Social 9 2.1.4 Technological 9 2.2 Market analysis 9 2.3 Customer analysis 13 2.4 Competitor analysis 14 Chapter 3: Internal Analysis 15 3.1 Overall performance 15 3.1.1Financial results 15 3.1.2 Operation 15 3.1.3 Sales 16 3.1.4 Strategy 16 3.1.5 Competitive Advantage 16 3.2 Marketing mix 16 3.2.1 Product 16 3.2.2 Price 17 3.2.3 Place 17 3.2.4 Promotion 17 Chapter 4 SWOT analysis 17 4.1 Strengths 17 4.2 Weaknesses 18 4.3 Opportunities 18 4.4 Threats 18 Chapter 5 Objectives 19 5.1 Mission statement 19 5.2 SMART Objectives 19 Marketing strategy 20 6.1 Strategic theories 20 6.1.1 Ansoff Matrix 20 6.1.2 Bowman’s strategy clock 22 6.2 Core target segments (Critical) 23 6.3 Positioning 23 Chapter 7 Marketing programs 23 7.1 Product strategy 23 7.2 Pricing strategy 23 7.3 Place 24 7.4 Promotion 24 7.5 Marketing Communication strategy 24 Chapter 8 Marketing implementation and control 25 7.1 Schedule (Calendars) 25 7.2 Who is responsible 25 7.3 Budget 26 7.4 Control 26 References 27 Chapter 1 Introduction With the changing demography, the level of health consciousness has paved the way for new flavoured beverages. The beverage industry has kept on increasing in respect to the number of players and the target market. The demographic change has led the beverage industry to introduce new products. The aging population in US and other economies have forced companies to continuously innovate their marketing activities vis-a-vis product, price, place, promotion and communication. Atlantic Quench Cranberries Inc is US based company that produces juice and non juice products for more than 80 years. It is an agricultural supportive, which is owned by 46 grapefruit and 630 cranberry farmers. It has the largest market share in the fruit juice industry in US. It not only sells juice and non juice products in the US market, but it has also extended its operations in UK. Under juice product, it mainly sells under the brand name juice max, grab n go, cranberry original juice, etc and under non juice products it sells as new conserve, cranberry sauces, etc. Chapter 2 External analysis 2.1 Macro Environment Analysis (PEST Analysis) 2.1.1 Political The political situation of Europe is a very stable one. It follows a democratically elected system of government (Market Line., 2013). The political system of UK is embedded in its deep system of political stability that is given by the democratically elected government. After the world wars the UK has grown considerably over the years followed by a stable political system. For Atlantic quench this is a good sign as it provides a favourable investment climate for the company. 2.1.2 Economic Per capita GDP of the UK is high and the investment climate of UK is favourable. However in the recent years the country is suffering from high debt and fiscal deficit. There was negative GDP growth in the year 2009 that would result in the not-purchasing of any this that the consumers did not consider essential (West, Ford and Ibrahim, 2015). UK has also witnessed high rates of unemployment in recent years which means that the consumers will be opting not to buy fruit juices. Figure 1 Economic trends in UK (Hucker, 2014) 2.1.3 Social UK’s citizens enjoys high standard of living that has been made possible by decades of strong economic growth. This provides a good scope for Atlantic quench and they can push their products that are targeted towards high end customers in UK. 2.1.4 Technological The UK customers are becoming more and more heath conscious and the demand of fruit juices with low sugar content is increasing (Perreault and MaCarthy, 2003). Also there is an increased demand for flavours other than cranberries. The company thus has to quickly start incorporating these varieties in their product list. 2.2 Market analysis The total market for fruit juices, energy drinks and juice drinks in UK was estimated to be about £5.53 billion in 2003. There has been a growth of 2.8% in volume over the past year. A recent trend that has occurred in the UK market is that there has been a growing demand of premium quality products at higher prices for night in parties rather than consuming cheaper versions at dine out. Figure 2 the fruit juice sector in UK by value (Source: Hucker, 2014) Figure 3 the UK fruit juice sector by value (Source: Hucker, 2014) Figure 4 the UK fruit juice market by volume (Source: Hucker, 2014) Figure 5 the fruit juice market sector in UK by value (Source: Hucker, 2014) The combined value of the three sectors that is fruit juices, energy drinks, and juice drinks is expected to grow at about 18% from 2014 to 2018. The value is expected to grow from £5.63 billion in 2014 to £6.64 billion in 2018. As compared to the other segments in this category however the fruit juice segment is slated to experience less growth due to the heal consciousness of customers. Figure 6 forecast of UK fruit juice and energy drinks market in UK by value (Source: Hucker, 2014) Figure 7 Growth in the fruit juice, energy and juice drinks markets in UK by value (Source: Hucker, 2014) Figure 8 Fruit juice, energy and juice drinks market growth in UK by value (Source: Hucker, 2014) 2.3 Customer analysis Figure 9 Distribution of consumer by cluster (On research, 2012) Young healthy juicers are the segment that is the smallest and are likely to have fruit juices at home. They comprise the youngest segment amongst the customers. They buy because it is healthy, it tastes good and liked by them and their family. They consume weekly. The armchair homeopaths are least likely to work outside home and have a child under 18 at their home. They shop for fruits and vegetables based on test and associate fruits with health benefits as their main reason of purchase. The senior fruit lovers are the oldest and least likely to have a child under 18 at their home. Most of them find that the fruits are appetizing and find that it is not time consuming to purchase fruits. The stingy moms are the customer segments who have high income and most educated. They are most likely to have children under 18 at their home and most likely to work outside. The guilty food junkies are the least educated, of lowest income levels, and likely to be white or Caucasian. They are least likely to have fruit juices at home. 2.4 Competitor analysis Figure 10 Global soft drinks market share (Market Line, 2014) Figure 11 Shares in the UK’S off-trade Fruit Juice (Lanschützer, 2013) The analysis of market share on the basis of company shows that Coca-Cola is the clear leader with the largest market share under its command. In terms of advertising however Pepsi has become the leading company in terms of money spent in advertising. Pepsi is the second biggest company in the market after coca cola. The company had a growth of 4% in the year 2012/13. In terms of new product development Tropicana was the leader (Lanschützer, 2013). Chapter 3: Internal Analysis 3.1 Overall performance 3.1.1Financial results The profitability of the company has been good and has improved over the years especially after Berrie became the CEO of the company in 2003. The company has been accepted well in the markets of UK and the sales growth of the company has been good. 3.1.2 Operation The company follows a cooperative based model with the farmers forming a major part of the cooperative. Although individual contribution of the farmers in quite less their total production makes up the 2/5 of the cranberries produced in the world. The farmers have their quotas fixed which determines the amount of cranberries that they must produce every year and sell to the company and failing to do so can result the company buying back their shares depending on their shortfall at the original price at which they were issued. There has been a fourfold increase in the manufacturing capacity for Crantanas. 3.1.3 Sales The company has experienced sales growth of more than 7% over the past 4 years. The rise in sales has been contributed by the expansion of the company in UK and good reception of the company in UK. The advertisements by the company have also been received well by the customers and have contributed to the rising sales of the company. There has been also an increase of 26% in the consumption of Crantanas. In 2007 the sales figure was at $ 1.5 billion of which the sale figure of Crantanas accounted for £150 million. 3.1.4 Strategy The strategy of the company has been to increase market share through new product development and advertisements. 3.1.5 Competitive Advantage The competitive advantage of the company lies in the fact that it enjoys good brand name and good brand value. The name of the company is synonymous with Cranberry juices. The company has also actively engaged in new product development. The products of the company have been received well by the customers and so too are its advertisements. 3.2 Marketing mix 3.2.1 Product The company is best known for fruit juices. However the company also retails dried cranberries under the product name of Crantanas. The product range of the company is classified as either juice or non-juice drinks. The packaging of the products have also been innovative and contributed towards the appeal of the juices manufactured by the company. 3.2.2 Price The company sales a variety of juices and non-juice food items and prices them according to the target customers for whom the product has been designed. The prices of the products are competitive and cater well to the customer segment. 3.2.3 Place In the UK market the company has signed a licensed agreement with Gerber to manufacture, distribute to market juice and juice drinks of the company under the brand name of Atlantic Quench. Additionally the company has signed contracts with the three largest super markets to sell all of its fruit juices. In the US market too, the company sells its juices through supermarkets. 3.2.4 Promotion The advertisement campaigns by the company have focussed on the use of humour, health benefits and American heritage of cranberry. The company advertises through televisions and magazines and aims to inform the customers of the benefits of Cranberry juices. The advertisements have been received well by the consumers and have contributed to the increase in sales. Chapter 4 SWOT analysis 4.1 Strengths The company is the leading producer of canned and bottled juices in North America. The company has the best selling brand name in the canned and bottled juice category since 1981. Pioneer and developer of the cranberry segment. Have been received well in UK. 4.2 Weaknesses Conflict between the farmers and management of the company Disadvantage of being in a cooperative Brand loyalty towards blended cranberry juice products have reduced 4.3 Opportunities Entering into new markets Engaging in new product development Decrease sugar content and promote as a heath supplement. 4.4 Threats Increased competition resulting from the entry of other fruit juices in the market The consumers have increased their interest and attention to super fruit juices The company has been late to respond to change and is threatened to lose market share Chapter 5 Objectives 5.1 Mission statement The company’s mission is to be the leader in the health drinks market. The company already has an established brand name in the US and has a good acceptability as a brand in the UK. However in recent years the company has been losing market presence to competitors in the juice market to other competitors. Previously the company enjoyed monopoly in the niche market of Cranberry products after the company was considered as the leader in the segment and introducer of the product to the US. However in recent years the niche market position of the company is being threatened with other companies entering in the market area the market has become fiercely competitive and this has resulted in the slight decrease in the market share of the company and decrease in the brand value of the company. The company’s mission is to increase its current market share and to expand into newer geographical areas. 5.2 SMART Objectives The SMART objectives of the company are To increase the market share and sales volume of the company by 10% over the coming two years. To expand its geographical presence into other markets such as Asia, Africa, Australia etc in the coming 5 years. To expand its product line and introduce more healthy categories in the product line to cater to health conscious consumers in the coming 2 years. To introduce new products in the product line in order to cater to health conscious and fitness conscious consumers in coming 2 years. Introduce juices in other tastes in the target markets, especially drinks of other super fruits so as to cater to the consumers who are interested in consuming flavours other than Cranberries in coming 5 years. Increase promotional activities to promote the company as the manufacturer of health drinks and health based products so as to increase the market share and cater to a wide class of consumers. To appoint a country marketing head for each of the countries in which the company will expand so as to design the perfect entry strategy and product development strategy for the country that will cater to the taste and preferences of the customers in the target country and thereby be responsible for the revenue in the company. Marketing strategy 6.1 Strategic theories 6.1.1 Ansoff Matrix Figure 12 Ansoff matrix (Source: Fill, 2006) Ansoff matrix is a useful tool that is used by the companies in crafting their future strategies or course of action (Stone, 2001). Ansoff matrix guides the company into how can they guide their product strategy, product management and product marketing to drive next level of growth (Thomson and Baden-Fuller, 2010). The matrix is divided into 4 segments and gives the organizations four specific alternatives that the organizations may use to increase their market share (Meldrum and McDonald, 2007). The products of the company are divided into present and new product and similarly the market is divided into present and new markets. The market is divided into present and new market (Cheverton, Foss, Hughes and Stone, 2004). The segment in which the present product intersects with the present market the company follows market penetration strategy (Pringle, 2008). Similarly the segment where new product and present market intersects the company follows product development strategy (Hiriyappa, 2013). The point of intersection of present product and new market is market development and the point of intersection of new product and new market is diversification (Moynihan and Titley, 2001). For the company Atlantic Quench the new products that will be developing for the US market it can follow the product development strategy and for the UK market or any other market that it wishes to expand to in future it can follow the diversification strategy (Bennett, Wood and Previte, 2013). In case it wants to develop the market for its current products, in the current market it has to go for market penetration strategy and for the new market it has to go for market development. 6.1.2 Bowman’s strategy clock (Source: Wintzer, 2007). The bowman’s strategy clock is an expansion of the strategic guidelines that were given by Michael porter in his pioneering work on this topic (McDonald and Wilson, 2011). Porter in his work reduced competition and deduced three great strategies to fight competition that are cost leadership, product differentiation and market segmentation (Donald, Waters and Waters, 2006). Bowman further segmented the generic strategies of porter in a graph with two axes. The two axes represented price and value (Kazmi, 2008). Each strategy was placed on a wheel in the appropriate position in the graph based on the cost and value provided by each strategy (Bowhill, 2008). The company can design the strategy of its new product after careful considerations of all the segments provided by the bowman’s strategic clock. It will be based for the company to follow different strategies for different product lines and segments in order to cater to the individual requirements of the segments (Kotler and Keller, 2012). 6.2 Core target segments (Critical) The target segments of the company are those individuals who are calorie conscious and like the taste of cranberries as well (McIvor, 2005). The company has to target mainly the health conscious segments and working mothers who are educated and belong to the age group of 30-45. These women are likely to continue purchasing the product even in the midst of economic downturn if they associate the health of their kids with the product. The other target may be health conscious individuals who are into their teens (Porter, 2008). 6.3 Positioning The products that the company manufactures are positioned as health supplement. The target market varies according the product price range and is mainly catered to the educated woman in their middle ages. This category of women belongs to the age group of 30-45. Chapter 7 Marketing programs 7.1 Product strategy Atlantic Quench should introduce new products in the juice and non juice category with more nutritional ingredients (Lasserre, 2012). Owing to its high sugar content as believed by 34% of juice drinkers, it should try an introduce juices and smoothies with a blend of vegetables and fruits. There is a growing demand in the US and other emerging markets of low calorie juices which serve as an opportunity for Atlantic Quench to develop new health drink juices in new markets (Daft, 2008). 7.2 Pricing strategy Though it is the leading manufacturer of canned and bottled juices, still it should not be overconfident in respect to its market position. There is huge growth potential for Atlantic Quench to venture in emerging markets which are becoming health conscious. It should adopt market penetration pricing to foray in the new markets to gain competitive advantage over the local producers. The new product which has a mix of fruit and vegetable should be targeted at not only the under 35 segment, but should also include the upper 35 range and perhaps the upper 50 also (Ferrell and Hartline, 2012). 7.3 Place Clinics, hospitals, stadiums, sport complexes, mobile vans, etc should be introduced in its distribution strategy. Cost per customer would be reduced if its juice and no juice products can be distributed through channels that account for huge footfalls at a time. Sports like football, soccer, basketball, etc should be targeted for successful distribution apart from the traditional channels like retail stores and shopping malls. Installing vending machines at such places would also allow Atlantic Quench to reach a larger segment at lowest possible cost (Grieves, 2006). 7.4 Promotion It can popularise its new low calorie product through sports marketing. With an upsurge in sports viewership and fan base, it can partner with various football clubs to promote its brand. Moreover the health benefits of the drink would be highlighted if it is endorsed by a football icon. It can offer it as complimentary in clinics and hospitals to increase the awareness of its new low calorie fruit juice brand (Hutt and Speh, 2012). 7.5 Marketing Communication strategy Celebrity endorsement would be a unique way to communicate with the target segment. It can advertise through sports and music channels, hoardings, Google apps, etc. Mobile app marketing is the new and cost effective way to promote its juice and non juice brands (Jayachandran, 2004). Chapter 8 Marketing implementation and control 7.1 Schedule (Calendars) Figure 13: Gantt chart for Atlantic Quenchs marketing programme The above is the timeline of activities, for a period of 6 months that Atlantic Quench can adopt to launch its product and market it accordingly. It shows that marketing communication should start a month before the actual launch of the product. Product launch, promotion and distribution will be initiated in the first month but promotion will continue till the third month and distribution will continue till the 6th month. Customer feedback will be taken from the 4th month. Marketing communication is first in the line of activities as it is to be done to stimulate its target segment, following which the time of product launch will be decided (Proctor, 2000). 7.2 Who is responsible There is no single entity which is accountable for the marketing programme, but comprises various departments that will cumulatively be accountable for the success and failure of the programme. The departments are sales, marketing, public relations and media, finance, human resource, IT, production, research and development, etc. All these departments work together to form a synergy that will prove beneficial for long term sustainability of Atlantic Quench’s brands (Stark, 2007) 7.3 Budget Prior to any marketing activities, the management needs to sanction a budget for the entire program. Resources are limited and it is in the best interest of the company that it should allocate funds to each of the marketing activities that will result in successful planning of the programme. There should be separate budget for research and development, manufacturing, promotion, advertisement, sales, customer feedback, etc (Olson and Lopez, 2009). 7.4 Control Customer satisfaction and delight is the two main qualitative indicator of brand success. Apart from these, market data regarding the beverage market, player composition, market share, etc are the external measures that are incumbent on the company’s performance that can be quantified by the revenue of Atlantic Quench i.e. sales revenue in dollars and units (Doole and Lowe, 2008). Level of inventory is another measure that indicates the rate of turnover. If the inventory turnover is high, it is significant of a fast moving inventory i.e. indicative of good demand for the brand (Hill and Jones, 2009). References Bennett, R. R., Wood, M. and Previte, J. 2013. Fresh ideas: services thinking for social marketing. Journal of Social Marketing, 3(3), pp. 223-238. Bowhill, B., 2008. Business Planning and Control: Integrating Accounting, Strategy, and People. London: John Wiley and Sons. Cheverton, P., Foss, B., Hughes, T. and Stone, M., 2004. Key Account Management in Financial Services: Tools and Techniques for Building Strong Relationships with Major Clients. 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