Marketing for Fruto Natural Drink - Case Study Example

Marketing Plan: Fruto Natural Drink ClaraFoods has been a food manufacturer for over thirty years now and has enjoyed a huge success in the market. But just like any other food manufacturer, the ClaraFoods has to continue reinventing the wheel and come up with new product to meet changing customer needs. To achieve this, ClaraFoods has come up with a health drink to be marketed to the general public. The health drink will be called Fruto Natural Drink. Fruto Natural Drink will be an organic juice that that will meet the increase demand for health drinks in the market. The product will be an opportunity for ClaraFoods to reassert itself in the market as well as a way to give the consumers what they want. The product will be a success because, as Maxwell (2008) says, the market is turning from synthetic juices and turning to more organic foods and drinks due to health needs. Analysis According to Evanson (2012), market data indicates that an increasing number for people are willing to pay more for a drink as long as they can be sure that it is an organic drink. This, as Stevenson (2011) asserts, is very important in the marketing of natural organic drink because the production of such drinks is more expensive as opposed to the synthetic juices and this is an important factor because the prices for the product have to meet the production costs and the profit margin. The main challenge in marketing Fruto Natural Drink will be overcome market barriers caused by customer loyalty to the existing products. According to consumer insights, a great number of Americans are loyal to specific brands and find it hard to change from one brand to another (Wilson, 2009). However Fruto Natural Drink will be able to overcome this problem because it will be targeted to the younger people who are more willing to explore more possibilities. This will however not be a complete advantage in itself because once these customers have switched to Fruto Natural Drink; the challenge will be to make them loyal customers as the product grows. Marketing and Promotion Budget for Fruto Natural Drink Jun- Jul 2012 Aug- Sep 2012 Oct - Nov 2012 Dec -Jan 2012 Feb- Mar 2013 Apr- May 2013 Totals TV Ads QAR 100,000.00 QAR 20,000.00 QAR 0.00 QAR 0.00 QAR 20,000.00 QAR 70,000.00 QAR 210,000.00 Promotions QAR 40,000.00 QAR 20,000.00 QAR 30,000.00 QAR 30,000.00 QAR 10,000.00 QAR 10,000.00 QAR 140,000.00 Bill Boards QAR 40,000.00 QAR 20,000.00 QAR 30,000.00 QAR 30,000.00 QAR 10,000.00 QAR 20,000.00 QAR 150,000.00 Total QAR 180,000.00 QAR 60,000.00 QAR 60,000.00 QAR 60,000.00 QAR 40,000.00 QAR 100,000.00 QAR 500,000.00 SWOT Analysis Strengths Fruto Natural Drink will benefit from the previous success of ClaraFoods and the wealth of management and marketing skills of ClaraFoods management. Fruto Natural Drink will also benefit from the strong brand of ClaraFoods and this will give it an opportunity to have a strong start in the market. The increasing concerns by the public on the kind of food they eat will also be another positive point in marketing Fruto Natural Drink because it is a natural and organic drink. Fruto Natural Drink will therefore take advantage of the fact that more and more people are changing to organic food. Because ClaraFoods already has a well established distribution chain and good relationship with retailers, the marketing of the drink will be much easier. This will go a long way in making sure that the product will have a good market visibility. The good distribution channel will also be useful considering the perishable nature of the drink. Weaknesses The main weakness that Fruto Natural Drink will have is the pricing. The production of natural and organic food or drinks is very expensive and the cost has to be reflected in the prices of the end product. This will be a challenge especially considering the current economic problems that are forcing more people to be more careful with their spending. The other challenge will be to convince the consumers that the drink is actually natural and organic (Wenstein, 2009). This is because, as Jonathan (2011) and Wenslus (2011) asserts, there are a lot of products in the market that claim to be natural and organic but are not and the consumers are finding it hard to trust any of these so called organic or natural. The solution to this will be spending more in promotion to increase consumer awareness and increase consumer trust for the products. Opportunities Changing market trends- the market is realizing the importance of taking natural and organic foods as opposed to the traditional synthetic foods. This, as William (2010) says, has been caused by the increasing health issues and the increasing campaigns by the health organisation asking the public to be more considerate of the kind of foods they eat, especially manufactured foods. This presents a good market for organic foods and the public will only need to trust the product and be guaranteed that it is organic as it is claimed to be. Threats The existence of so many synthetic drinks in the market that claim to be organic drinks is a challenge because it mean the consumers will be unable to differentiate between the truly organic and those drinks that are not organic as they claim to be. Product life cycle Research and development The research and development of the product has been completed. The drink that will be produced will be an organic drink. The drink will be packed in three different packet sizes, that is, half a litre 1 litre and 2liters. The product will be delivered in three different flavours such as straw berry, banana and passion. The development team found the drink could be produced at a cost of one and a half dollars a litre. This will enable the product to be sold at about two dollars a litre, which is an acceptable price for this kind of drink. Market introduction stage This will be the next stage in the delivery of this product. At the introduction stage, the product will have to undergo a number of challenges. These challenges are expected to be such as low sales which could lead to a lot of the products ending up going bad before they are sold. To handle, this, production will be limited to a few units in the beginning and the number will be increased slowly to match the sales. The marketing department will have to fiercely market the product to give it a market visibility and increase the sales. At this point, the product will have zero demand in the market and it will need aggressive marketing to create demand for Fruto Natural Drink. Growth stage At this stage, the costs will have started to decrease and the sales will have started to grow. The fierce marketing in the interaction stage will make it possible for increased demand and market visibility for Fruto Natural Drink. This will reduce costs because the product will now need less marketing and advertisements. As demand goes up and pushes sales up, the production will have to increase thus bringing about the economies of scales in the production of Fruto Natural Drink. The profits will have increased and Fruto Natural Drink will be able to finance its own costs. At this time though, completion from other products (both existing and new ones) will have increased. Fruto Natural Drink will also be approaching maturity point where the product may need to be reinvented. Recommendations The market research shows that Fruto Natural Drink will have a harder time at the beginning. ClaraFoods should invest more in marketing at the introduction stage of the product to make sure that the product will have a better market visibility. Investing properly in marketing and promotion of the Fruto Natural Drink will lead to better sales in the growth stage. The production of the product (Fruto Natural Drink) should be done in such a s way that it matches with the market growth curve. In the first three months, the production of Fruto Natural Drink should only be limited to few units that will acts as prototypes in the market. This will help in making sure that there is no much losses caused by products going bad after staying in the market for too long (Francis, 2009). The market analysis also shows that Fruto Natural Drink may have a market decline by the time it is reaching its optimal market potential. Being a food product, Fruto Natural Drink will have reached its end of life by the time it achieves maximum market potential. For this reason, ClaraFoods should be able to start a new market research to reinvent Fruto Natural Drink by either rebranding it or completing overhauling it. Limitations The accuracy of the market expectation for the Fruto Natural Drink faces the following challenges. Market condition – the market analysis banked on the assumption that the market is ready for natural organic drinks. How true this is cannot be truly established. The assumption on how the growth curve of the drink will develop is also due to the assumption that the heavy marketing and promotion in the first two months will give the product a clear visibility in the market and thus increase sales. This as Friedrick (2009) says, may not be exactly like this and the management will need to have a plan B for the marketing of the drink in case the fierce marketing in the first two months will not lead to the desired results. Conclusion Taking Fruto Natural Drink to the next level will be a great opportunity for ClaraFoods in giving it a fresh leap in the market. The product will be a way to meet a need that the customers have for so long wanted. The introduction of Fruto Natural Drink to the market will help ClaraFoods to increase its profitability and increase its revenues. While the introduction stage will be costly for the firm, by the third month of Fruto Natural Drink being in the market, ClaraFoods will be able to increase its sales and profitability from the sale of Fruto Natural Drink. Fruto Natural Drink will not only be a way for ClaraFoods to reassert itself in the market but also will be an opportunity for the firm to expand its market by reaching further markets that have not been reached by the firm yet. Works Cited Evanson, M.S. "Understanding Health Issues in Marketting Food: Price Versus Health." Journal of Health and Food (2012): 39-41. Francis, J.G. Overcoming Challenges in Marketing New Products. Hoboken, NJ: Guille Books, 2009. Friedrick, G.M. "Marketing Plns for New Products: Understanding hte Chasllenges and Planning for Them." Journal of Modern Marketing (2009): 29-31. Jonathan, J.D. "The Increasing Market needs in The Organic Food Industry." Journal of Applied Marketing (2011): 39-43. Maxwell, N.D. "New Trends in the Food Market." Journal of Marketing (2009): 12-18. Stevenson, N.D. "understading Marketting and The Paradigms in the Market: The Food Industry." Food and Beverge Research Journal (2011): 13-21. Wenslus, K.D. "Marketing Challenges for the Food Market." Jopurnal of Proffessional Marketing (2011): 37-42. Wenstein, J.D. Organic Food: Challenges in Marketing. New York, NY: Pearson Education Books , 2009. William, N.D. "The Development of New markets: Health Issues and Organic Foods." Journal of Marketing (2010): 19-25. Wilson, J.D. Marketingin the new market Environemnt . New York, NY: Pearson Education Books, 2009. Read More