Marketing Plan for Atlantic Quench Cranberries Inc - Essay Example

Marketing Plan for Atlantic Quench Cranberries Inc. Project Report Introduction This report aim to provide a marketing communication plan for Atlantic Quench Cranberries Inc. First of all the report provides an evaluation of external environment in which the company operates, followed with internal environment analysis and identification of major strengths and weaknesses. The following sections provide information on market forecast, segmentation and targeting, marketing communication objectives, and marketing communication strategy. Environmental analysis: PESTLE analysis Political factors Threat of removing 5-a-day-status of fruit juices Increased negative media coverage on sugar content in smoothies, juice drinks and fruit juices has pushed public health authorities to “reconsider” the previously given advice regarding consumption of fruit juices and smoothies. Because of high sugar content, governors may remove status of 5-a-day from fruit juice and smoothies (Mintel, 2014).There are several governmental initiatives undertaken in order to reduce the amount of sugar people consume. However, until the 5-a-day guidance in relation to fresh juices and smoothies is not removed, the companies can use it as powerful marketing tool (displaying 5-day-logo on packaging) (Keynote, 2015). Public Health issues In 2014, Public Health England published a guidance on sugar consumption and policy “Sugar Reduction: Responding to the Challenge”. This publication addressed the problems of sugar consumption between 2008 and 2012, including fruit juice, and other food and drink items. This publication outlined some actions, including: launch of national-wide digital marketing campaign addressing the problems of sugar consumption; necessity to conduct analysis and evidence reviews on different subjects, including advertising of food and drink to children. Also, the PHE informed about a necessity to consider imposition of taxes on sugar-sweetened drinks (Keynote, 2015). Economic factors GDP growth GDP in the UK has shown year-on-year growth between 2010 and 2013. Taking into consideration uncertain economic conditions across the globe, the UK’s economy demonstrates stability and continuous recovery after financial crisis (Keynote, 2015). This trend positively impact consumer’s purchasing confidence. Rise of consumers’ confidence Since 2013 consumer confidence in the UK has continued its rising. Moreover, it is forecasted that consumer confidence will continuously grow during the next five year (Mintel, 2014). It means that consumers will have greater psychological freedom to buy more, including fruit juices, juice drinks, and smoothies. Social factors Increased focus on health The purchasing behaviour of the UK population has changed towards more healthy foods and drinks. As people become more health conscious, they tend to purchase healthy food, including fruit drinks, fruit juice and health drinks. Thus, there is an opportunity for substituting the carbonated drinks by fruit juices and health drinks, unhealthy snacks and chocolates by healthy ‘on-the-go’ snacks (Mintel, 2014). High awareness of obesity problems However, there is increased awareness of obesity problems in the society. People are more concerned about calories and sugar content in their food and beverages (Mintel, 2014). These concerns facilitate demand for sugar free and low calorie alternatives and variants of soft drinks (Keynote, 2015). Strong growth of over-55s There is observed a strong growth of population over-55. It might be a challenge for the company as this group of consumers is below-average in terms of consumption of fruit juices and juice drinks. Technological factors Superfoods There is increased new product development containing ‘superfoods’ – products with Guarana, acai berries, coconut water, beetroot, Echinacea, etc. Increased consumer’s health consciousness facilitated with national media campaigns drive demand for this category of products. Environmental factors The soft drinks sustainability roadmap In 2013, the Department for Environment, Food and Rural Affairs launched an agreement aiming to reduce the environmental footprint and make the UK soft drinks industry more sustainable. The signatories of the agreement have agreed on five major improvement areas: packaging and litter; water efficiency; carbon reduction; waste reduction; and raw materials. Legal factors Nutritional standards in British schools The UK government has introduced changes to nutritional standards for school children, requiring to stop serving crisps, unhealthy snacks, chocolate and other confectionary. Also, new regulation required schools to offer fruits and vegetables at schools. From September 2014, all children of year 1 and year 2 in public schools receive free school meals. This factor significantly reduces firm’s opportunities to offer fruit juice and smoothies in school lunches (Mintel, 2014). Fruit Juice and Fruit Nectars Regulations In November 2013, there were introduced revised regulations to the Fruit Juice and Fruit Nectars (England) Regulations 2013. There were introduced many different changes, among which was a prohibition to add sugar to fruit juices. Therefore, the companies should not place “no added sugar” on the packs, as it legal requirement for all producers. For all fresh juice manufacturers it means that there is no more competitive advantage on these grounds. Also, it is required to show in product labelling the fruits used in descending order of quantity (Keynote, 2015: 63). SWOT Analysis Below are summarised major strengths, weaknesses, opportunities and threats of the company. Strengths -Well-established brand name in the canned and bottled category with long history; -Expertise in juice making -Well-established business in the UK, good distribution network (three largest supermarket groups); -Wide product assortment; -Well established supply chain and good working relationships with farmers; -Common stock equity quota as a guarantee of required amount of production -Strong and experience executive management -Strong focus on new product development and innovation - Good sales of chocolate-covered Crantanas Weaknesses -Difficulties in predicting harvest yields; -High power of farmers might have negative effect on organisational behavior Opportunities -Opportunity to do develop new product innovations across multiple trade channels; - Opportunity to capture market share of health-conscious consumers; - Opportunity to create a major healthy refreshment business; - Opportunity for strategic alliances; -Opportunity for further growth in the market for convenience drinks Threats -Volatility of farm production due to climate changes; -Increased competition in juice and healthy beverages sector Table 1. SWOT analysis Consumer Attitudes Consumers are more worried about their health. Increased negative publicity surrounding sugar content in fruit juices has directly influenced consumers’ purchasing behaviour. Because of high sugar content 1 in 5 buyers limit the number of fruit juice/juice drinks/smoothies they purchase (Mintel, 2014). Fruit juice is more popular in terms of consumption on the UK market than juice drinks and smoothies. Smoothies are the least popular category in terms of frequency of consumption. Below is presented a figure summarising the findings of research carried out by Lightspeed GMI in September 2014. This graph illustrates the frequency of consumption of fruit juice, juice drinks, and smoothies among the UK consumers in the last three months. Figure 1: Frequency of fruit juice, juice drinks and smoothies usage (Source: Lightspeed GMI/Mintel, 2014). Therefore, approximately 45% of consumers drink fruit juices once a week or more, 25% of consumers drink juice drinks once a week or more, and only 20% drink smoothies once a week. The most frequent consumers of fruit juices are the 16-24 year olds and parents. The most frequent consumers of smoothies are also 16-24 year olds (35%). In addition to younger generation, the other large categories of consumers of all three types of beverages are large families, and parents (especially with children aged 6-12) (Mintel, 2014). Future Forecast The sector in which the company operates can be divided into two major sectors: fruit juices (including smoothies) and juice drinks (including sport drinks, still flavoured water, and iced tea). Fruit juice segment in the UK also increased during a review period, however, not so significantly as the juice drinks sector (only by 2.3%). The market share of fruit juices segment accounted for 34.5% of the total segment in 2014 (decreased from 37.4 during the 2012-2013) (Keynote, 2015). Figure 2: The UK Fruit Juice Drinks Sector by Value (£ at retail selling price), 2010-2014 Juice drinks segment in the UK increased in value by 11% during the period from 2010-2014. According to the Keynote report (2015), the market share of juice drinks segment accounted for 37.6% of the total segment in 2014. Figure 3: The UK Juice Drinks Sector by Value (£ at retail selling price), 2010-2014 Forecasting According to Mintel Report (2014), the total sales of fruit juice, juice drinks and smoothies will grow by 2% during the period from 2014-2019, reaching total value sales of £4.8 billion. According to the forecast of Keynote (2015), juice drinks sector is expected to grow by 14.5%, from £2.03 billion in 2015 to £2.33 bn in 2019. The growth of demand for this segment is linked with hot summer weather and relatively low prices. Fruit juices and smoothies market is forecasted to show restrained growth over 2015-2019, with a value rise from £1.8 bn to £1.89 bn (Keynote, 2015). Below is presented the historical data on the total UK volume sales of fruit juice, juice drinks, and smoothies in litres during the past 6 years, supplemented with a forecast for the period from 2015 to 2019. Table 2: Total UK volume sales of fruit juice, juice drinks, and smoothies, by segment 2009-2019 (Source: Mintel Report, 2014). Segmentation and Targeting The products offered by Atlantic Quench Cranberries Inc. relate to mass market category as both children and adults of different ages and different sexes can purchase fruit juices, juice drinks, and smoothies. However, as the research has shown there are significant differences in consumer’s attitudes and behaviour in relation to choice of soft drinks and frequency of their consumption. These major differences are strongly predetermined by age factor. Therefore, age segmentation is the most appropriate way of market segmentation in a given context. The company will target two categories of target audiences: Primary: Youth, 16-24 year olds, who already comprise the biggest category of fruit juice and juice drinks consumers, they like to drink for style and fashion (new health trends and weight concerns also impact their behaviour) Secondary: Adults, 25-40 year olds, mainly parents and members of large households. They also are influenced by media and government propaganda, and seek for healthy solutions for themselves and their families. Differentiation and Positioning The fact that the company offers high-quality juice without sugar added is not a distinctive competitive advantage in the UK market anymore. Moreover, increased media and government discussions of the impact of excessive fruit juices’ consumption on weight and health made people more suspicious and reluctant toward purchasing this category of beverages. Therefore, the company needs to position its products as balanced nutrition, which is healthy and safe. It is a perfect healthy substitute for people who take care about their health and well-being. The human organism needs carbohydrates in order to ensure effective functioning, and while choosing natural sugar contained in juices and juice drinks or refined sugar in ‘sweetened’ drinks and foods, people who take care about their health and beauty will choose natural (The Huffington Post, 2013). BCG Matrix Below is presented BCG Matrix for major brands of the company Marketing communication objectives The objectives of this marketing campaign include the following: 1) To increase recognition/awareness of the brand by 50% in the UK fruit juice and juice drinks market 2) To increase sales of fruit juices by 10% by the end of 2016 in the UK fruit juice and juice drinks market 3) To increase sales of juice drinks by 30% by the end of 2016 in the UK fruit juice and juice drinks market 4) To educate potential consumers about benefits of consumption of cranberries drinks and juices Marketing Mix Product: The company has a wide assortment of products that are divided into two major categories: juice product range: cranberry original juice; cranberry mix juice drinks; juice max, pure juice Grab ‘n’ Go – Single serve; non-juice product range: cranberry sauces; cranberry cordial juice drinks; fresh cranberries; new dried cranberries (Crantanas). As the research shows there is increased media campaign and political participation in obesity problems. Society also is extremely concerned about weight problems and consumers tend to buy more unsweetened/low calorie drinks. Therefore, for this specific marketing campaign the company should focus on its product line of low calories unsweetened juices and light juice drinks. Taking into consideration the forecast of strong growth in juice drinks, the company should concentrate on this category of products. While the government has not yet changed the policy regarding 5-a-day status for fruit juices and smoothies, the company should use it as marketing tool and display it on packaging of all products (Keynote, 2015). Place: the products are available in three largest supermarket groups. The distribution network can be expanded in the future, making the product available in both small and large stores and supermarkets. In addition to general stores and supermarkets, it is necessary to introduce drinks in health areas, such as gyms, and sport entertainment locations. Price: The Company will pursue value-based pricing strategy, whereas the price will be based on the consumer’s perception of value. Promotion: In order to achieve the above set marketing communication objectives the company needs to develop effective promotional strategy that will help differentiate its brand from many other suppliers of fruit juices on the UK market. For promoting the juices and juice drinks in the UK market, the company needs to use celebrity endorsement strategy and choose famous and well-known personality who has a good shape and definitely good health. This can be either a well-known UK athlete or a celebrity (Kotler and Armstrong, 2012). Thus, a well-known athlete who is concerned about his/her health, energy, and overall performance will become a main spokesperson, explaining the benefits of fruit juices. Moreover, association with successful athlete or well-looking celebrity should positively impact consumer’s perception of the brand and fruit juice products, despite the overall negative propaganda. Integrated Marketing Communication Strategy In case of Atlantic Quench Cranberries Inc. it is important to use several marketing communication channels, both traditional and digital. For traditional marketing communication tools the company will use TV advertising, press, and social media channels (such as Facebook and Youtube) for online engagement and communication with consumers. TV Commercial TV advertising is one of the most effective (even though most expensive) mass media channel as it allows the company to reach mass audience in a matter of seconds (Kotler and Armstrong, 2012). The concept of advertisement should be further developed, but the idea is to choose a famous athlete or celebrity as a spokesman for brand promotion. This strategy will allow the company to reach both its primary and secondary target audiences and create overall positive image of the company’s brand. Press The company needs to place some advertisement to printed materials. The press that can be used include health press and journal for women. It is possible to combine advertisement with PR article, where will be explained major benefits and nutritional facts about cranberries and cranberry juice. Social Media and mobile marketing As the primary target audience is youth aged between 16 to 24, they are more likely to watch Youtube and use Facebook rather than watch traditional TV. Therefore, it is critical to utilise these two major social media communication platforms in order to capture target audience. The company might develop some contest and entertainment for its potential and current consumers (for example, those who purchase Atlantic Quench Cranberries juices have chance to participate in contest and win ticket for a play/concert of a spokesperson of the company). Scheduling and resources Planning of marketing communication schedule and resource is a vital element of the marketing plan as it allows marketers to produce a breakdown of major activities and to evaluate what resources and how many are required for successful implementation of the plan (Fill, 2013). Schedule for marketing plan will be developed for the whole 2016 and is subject to adjustment and changes (depends on resource availability and budget constraints). Budget Before evaluating the budget for a given marketing campaign it might be worth to note that the overall advertising spending in the UK fruit Juice, juice drinks and smoothies market was continuously declining over the period 2011-2014 (Mintel, 2014). * up to October 2014 Figure 4: Total above-the-line advertising expenditure in the UK fruit juice, juice drinks and smoothies market, 2011-14 (Source: Mintel, 2014). Innocent was the leader in advertising budget as it spent £4.3m in 2014, while Pepsi Co spent only £ 1.1m, Britvic spent £1.2, Suntory spend £2.0m, and Coca-Cola spent £ 1.4 m during the same year (Mintel, 2014). In a given context, reasonable marketing campaign budget will be £1.5 m for 2016. Scheduling plan for Jan-Dec, 2016 The scheduling plan below provides an overview of key media channels that will be used for marketing communication campaign 2016. It is possible to note that there are fluctuations in ads spend during summer and winter months. In summer, the company will promote mainly juice drinks (as cooling options during hot summer season), while in October the company will actively promote its fruit juices as the major source of vitamins (especially vitamin C which is so important for immunity during winter period (Nutritiondata, n.d.)   TV ads Print Digital ads Total Dec 100000 30000 20000 150000 January 100000 30000 20000 150000 February 100000 30000 20000 150000 March 100000 30000 20000 150000 April 100000 30000 20000 150000 May 50000 15000 20000 85000 June 50000 15000 20000 85000 July 50000 15000 20000 85000 August 50000 15000 20000 85000 September 50000 15000 20000 85000 October 50000 30000 20000 100000 November 50000 30000 20000 100000 TOTAL 850000 285000 20000 1375000 Table 3: Marketing budget breakdown by monthly period for 2016 Implementation and control Implementation and control is the final element of the marketing communication strategy. The above presented marketing communication plan aims to enable the company to achieve set objectives. However, taking into consideration tough political and regulatory environment it is impossible to guarantee that this plan will be implemented without adjustments. While implementing the strategy it is critical to monitor progress of the campaign and introduce changes if necessary (Fill, 2013). For measuring the results of the campaign, the company might need to carry out marketing research, evaluating the overall performance of the market, learning in details consumer’s behavior patterns, and evaluating its current market share and the level of brand recognition. All the set objectives as specific and measurable and thus can serve as a measurement for progress and control. References: Fill, C. (2013), ‘Marketing communications: brands, experiences, and participation’. 6th Ediiton. Pearson Education Ltd. KeyNote (2015), “Fruit Juice, Energy & Juice Drinks”, Marketing Reports, 2015 Kotler, P., and Armstrong, G. (2012), Principles of marketing, 14th ed. Boston: Pearson Prentice Hall. Mintel (2014). “Fruit Juice, Juice Drinks and Smoothies”, UK, November 2014. Retrieved from www.mintel.com Nutritiondata, (n.d.), “Nutrition Facts and Analysis for Cranberry juice, unsweetened”. Retrieved 3 July 2015, from http://nutritiondata.self.com/facts/fruits-and-fruit-juices/7678/2 The Huffington Post (2013). “Is Sugar From Fruit Better For You Than White Sugar?”. Retrieved 3 July 2015, from http://www.huffingtonpost.com/2013/06/29/fruit-sugar-versus-white-sugar_n_3497795.html Read More