Australia Fruit Cooperative Ltd - Marketing Plan to Launch Organically Produced Fruit Juices - Case Study Example

Marketing Plan to Launch Organically produced Fruit Juices Introduction of the company and report: The Australia Fruit Cooperative Ltd which is an established player in the food processing industry in Australia for over three decades, has recently ventured into New Zealand in keeping with its expansion plans of further entering and exploiting the vast potential offered by the market in organically produced fruit juices in the region. The market for this variety of fruit juice is fast expanding worldwide with the maximum present demand from North America and European countries. However its popularity is fast increasing due to the fact that more and more people are becoming health conscious in the developing countries also. Hence there is immense growth potential in this market segment. The company has its corporate office in the prime business district of Wellington and has its production facilities in a large ten acres plot of industrial land on the outskirts of the city. The company understands that building customer relationships are a necessary condition to succeed in this area, and believes in protecting the interests of the general public as also of the environment and nature. The company believes in strategic planning to achieve its longterm objectives. Its main objective is to frame a plan of action so as to suitably identify the target market and to develop a marketing plan to meet the requirements of that market. It has framed for itself the mission that within 5 years New Zealand will have the best quality of indigenously produced organic fruit juices with the widest range of flavors available at the most competitive prices. The company is very clear about the sales figures to be achieved through its marketing activities, and the entire process is well ingrained in every member of the sales team who well understand their objectives and are all set to achieve their predetermined sales targets. An ambitious target has been set by the company to achieve a turn over of $ 50 million by the end of the third year of its presence in New Zealand. Not to mention that this strategy is formulated only after thorough research and in depth study has been carried out regarding the basic fundamentals to conclude about the capabilities of the company and its people. Situation Analysis The size of the organic fruit juice market in new Zealand is presently not very large as compared to North American and European markets, but the future has great store for this segment to grow at a very fast pace in view of the growing preferences of people to opt for organic food. More and more people are now conscious to the fact that modern techniques of food production and its conservation make use of substances and chemicals that are harmful to humans and had till now been tolerated as a way of life in modern times. This trend is now changing towards leading a better quality of life that is more close to nature and to natural products, which is precisely what organic foods and liquids offer in terms of their ingredients and production and processing techniques. The speed in such change is catching on fast, thereby implying that the market for organic fruit juice is going to increase in size by leaps and bounds. The New Zealand per capita income is fairly high as compared to the rest of the world, and its people are health conscious and have a knack of doing things which bring them closer to nature. Sure,The Australia Fruit Cooperative Ltd has a great time ahead in terms of the potential for high sales figures for this product. It’s a good sign for the company, as it is the only well established company in this segment in New Zealand, which too has recently entered the fruit juice segment. This company has a good presence in Australia too and in other Asia Pacific countries. We can see that the organic fruit juice market in New Zealand is raw, and there are only two contenders to swipe the entire market and to create the market size that presently has very large limits. There is no doubt that the company is very well placed in terms of the positive circumstances that are in its favor to enable it to set up base and consolidate its position. Its more or less a pioneer in its field, and for a product like organic fruit juice there will always be takers in the bureaucracy to facilitate the setting up all facilities and grant of all approvals and licenses. With constant innovation in technology there is availability of the best techniques to enable the productivity of the best qualities of juices and hence provide the consumer with value for his money. The economy of New Zealand is fairly well developed and very well poised to cater to the need of its people in terms of healthy products and their affordability. The literacy levels are high amongst the citizens and the political system is very transparent to take the country towards more prosperity and wealth creation. Therefore we can see very positive signs for the company to succeed in its venture of introducing its own organic juice brands in this country. SWOT Analysis SWOT analysis implies the study of the strengths, weaknesses, opportunities and weaknesses that characterize a company at any given time. The strengths and weaknesses of any organizations are an integral part of its existence at the given time and it is within the means of the organization to influence and change them for their benefit in the coming times. A company’s strengths stem from the advantages that it enjoys as compared to other companies, for example, by way of its techniques or the caliber of its people, and which can be further consolidated to its advantage, while the weaknesses can be taken care of by adopting remedial measures. Opportunities and threats are external factors affecting the performance of a company, which occur due to prevailing external circumstances. Opportunities may arise for a company due to several factors such as a new invention, change in government policy, change in preferences and fashion trends etc. Similarly threats too arise due to external factors such as changed tax structure, launch of a new product by one’s competitor etc. Examining the viewpoint in the context of The Australia Fruit Cooperative Ltd , its strengths lie in its strong financial credentials, the credibility that it enjoys amongst its customers, its wide array of well established food products, and the long history of its profit showing balance sheet. The only weakness I can think of is its inability to have launched the organic fruit juice much before so as to prevent its competitors from dominating the international fruit juice market. The opportunities before the company are massive in terms of the huge market waiting to be tapped in the entire Southern Hemisphere where it is already very well established and enjoys enviable credibility. There are numerous threats facing the company that need to be taken care of in right earnest. The fruit juice market is very competitive and the new products have to click straight away for which lot of research and planning is required and fool proof decisions need to be taken to avoid goof ups. Hence proper marketing strategies need to be implemented backed by research into consumer aspirations to meet their expectations and to motivate them to go for the company’s products. Target Market Analysis Just as it is essential for any business to start its marketing strategy with market segmentation, the company too must evolve a system whereby the right market segments are identified to focus on in meeting the targets of sales and growth. The market has to be studied and segmented on the basis of variables or characteristics of individuals and groups on the basis of age, lifestyles, religion, education, social status etc, so as to have different parameters for the company to act upon in furtherance of its business objectives. This is essential to avoid unproductive efforts of targeting the wrong audience. Essentially the market must be segmented in a way that it helps in building and managing relationships with targeted customers. Choosing the right segmentation variables is imperative to establish the right marketing strategy. It is proper for the company to research on the segments that are prone to go for organic fruit juice in the presence of varied choice of other drinks such as aerated colas, milk shakes and beverages of different flavors, qualities and blends. The typical connoisseur of fruit juice is one who is health conscious, knowledgeable enough to understand its advantages and to judge the harmful effects of other drinks that mostly use preservatives and other chemicals which are unsuitable for humans in the long run. Now there are frequent innovations in every sector of the market to attract the customer who is king. Organic juice can be termed as, a fast moving consumer good (FMCG) for which there is a massive market in every location. So the segmentation variables are just too many and the right marketing strategy implemented with right earnest and backed by a good product will certainly achieve targeted goals. The segmented variables could be the younger school going kids, who although prefer fizzy colas, but can be targeted with the appropriate campaigns so that they too patronize fruit juices instead of colas and milk shakes. The elderly are certainly to be targeted as an important segment and source as they are heavy users and command potential to influence the sale of a big chunk of the entire market share for fruit juices. They are health conscious and command the resources, experience, and respect to influence the decisions of other segment variables. They can understand the benefits the product brings in terms of good health and have no other significant basis of judging the value of a product. Other variable segments could be institutional markets, government, hospitals and export markets and different strategies need to be adopted to tap these different market segments. There are lots of individuals who are segmented on the basis of their beliefs such as those who have a major requirement of juice in their daily intake due to health reasons or there could be females who prefer to take lot of juice in their diet to control weight and to have a good figure. Appropriate strategies need to be formulated for this segment to further tap the market for sales and growth of the company. Having identified and ascertained the possible market segments for organic fruit juice the company has to engage in market targeting so as to appropriately satisfy expectations and aspirations. Theoretically there are three strategies used which are undifferentiated, concentrated and differentiated. To assess the choice of relevant market segments several factors such as sales estimates, competitive assessment and cost estimates related to each segment needs to be thoroughly analyzed. Before finalizing on the market segments to be targeted, the management ought to ensure through investigation and research that adequate financial resources, managerial and employee skills and facilities are available to compete effectively in the selected segments. This company in view of the resources and competence levels available at its disposal, and due to the fact that the product is fast moving and of utility to the majority of the population, ought to target the local population by bifurcating them into different groups, on the basis of age, education, social status, and geographical location. A different set of strategies need to be adopted to tap the customer for the product based on the most effective and tested marketing jargon for different strategies for different segments as they have different priorities. Once it is decided which segments to target, the company has to decide how it will position its offer to each segment. Lot depends on how the product is perceived by the customer in relation to similar products from other companies. Company positioning, brand positioning and competitive positioning are techniques widely used by companies to make such actions most effective and rewarding. Positioning is of much relevance as it determines how target customers look at the products of this company as also of others in relation to their aspirations and expectations out of the product. Proper positioning helps a customer in making a decision in ascertaining whether the product meets his aspirations and expectations. In this case, using the market positioning technique, the company will place the organic fruit juice in a way that the customer will perceive the product as having all the qualities as per his expectations, thus giving him better value for his money as compared to the competing company’s product. Using company positioning techniques, campaigns will be unleashed in the media so as to create a positive image of the company to attract customers towards its product. Through competitive positioning the company will create circumstances through various campaigns in media and print, which will prove to the customers why buying this product is a more sensible and satisfying choice to give better value for their money. Consumer behavior After having identified the appropriate market segments for us to target we need to analyze consumer behavior to ascertain as to what influences their buying and purchase decisions so that the marketing strategy can be further consolidated to achieve desired results. The consumer buying decision process if examined in detail indeed reveals that there are a whole lot of factors that determine the mindset of a person while making purchases, and which can be influenced by the marketing professional by using techniques of marketing. A consumer’s level of interest in the product introduces a thought process in his mind and he looks at this as a problem in ascertaining the product to purchase in view of the vast number of choices available to him. There is limited and extended problem solving that takes place in his mind by way of deciding for the product or postponing the purchase pending his own research on the utility to him of the different choices before him. There may also be impulsive buying whereby he buys a product at the spur of the moment based on his preferences at that moment. Essentially a consumer buying decision process comprises problem recognition, information on the product, evaluation of different alternatives, purchase and post purchase evaluation. There are also influences of situational circumstances that affect the consumer buying decision process. Coming to professional service, a great deal of influence can be exerted on the consumer to tilt his decision to purchase the company’s product by making a reputation over time of delivering high quality customer service and after sales service. Time however plays a major role in this regard. There are factors such as the way a product is perceived by the consumer at a particular time, which may influence the purchase decision of that product. Research has proved that too many buying decisions are still the result of perception of individuals, which is very well made clear if we understand Maslow’s Hierarchy of Needs which very truly explains that human decisions for any thing depends in sequence upon physiological, safety, social, esteem and finally on self actualization needs. Hence marketing efforts can be safely directed on segments by studying and ascertaining the level that a particular segment has reached as per Maslow’s Hierarchy of Needs, and sure the results will be positive. Education and learning influences a consumer’s thought process, which can make a difference in segment purchase decisions. The attitudes of people, which determine behavioral tendencies, matter a lot to marketing efforts and are usually directed keeping in view the prevailing attitude for the service the product offers and the way it is perceived by a set of people. If marketers find that there is negative attitude for the product, efforts and campaigns are directed towards favorably changing such attitudes. Personality and perception of self are traits of the consumer that matter a great deal to the marketing departments of companies and lot of efforts are made to influence them. By studying and researching on life styles and social circumstances companies are able to frame the appropriate campaigns to succeed in different segments. Group dynamics have a strong bearing sometimes on consumer behavior and it pays for companies to be wary of such dynamics and to keep them in their sphere of consideration while making marketing decisions. Product Strategy A product has to provide value to the customer whether it is tangible or intangible, and it is bought so as to fulfill his expectations from the same. Products being of two general categories are either consumer products to satisfy personal or family needs, or business products for reselling and for making further products from them to satisfy organizational goals. Consumer products can be classified into convenience products, shopping products, specialty products and unsought products. Unsought products are bought to sort out a sudden problem. Business products can be classified into installations, accessory equipment, raw material, component parts, process materials, MRO supplies, and business services. Hence while engaging in our marketing strategy we need to classify our product which in our case is organic fruit juice and a consumer product that needs to be handled using the techniques of market segmentation and thorough studies of the segment consumer behavior. A product item is a specific product and product line is a group of closely related product items. A product mix is the total group of products that a company makes available to the customer. Width of product mix is the total number of products that the company makes available and depth of product mix is the average number of different products offered in each product line. In the case of our organically produced fruit juice there will be a small product mix as the possibility of variation in the product is limited only to the number of flavors which can at most be about six. Hence the company will have to concentrate on the few flavors that it will introduce and later some bifurcation may be done by way of coming out with related products like organic fruits and desserts. Marketing strategy also has to deal with the branding of the product, which involves choices about brands, brand names, brand marks, trademarks and trade names. A brand name is the product’s distinguishing characteristic. The element of brand, which includes a symbol, is the brand mark, which also distinguishes the product and is identified accordingly. Our organic fruit juice will have to be branded in a way that it represents the aspirations of all classes of consumers so that they are able to relate with it in a way that they are always in high esteem while associating with the brand thus resulting in brand loyalty. Packaging is an issue that must be addressed with equal priority in the marketing strategy. The packaging of our fruit juice should be such that it preserves and protects as also prevent damage and tampering and to offer convenience to customers. There should also be consistency in packaging design of all varieties of fruit juices to maintain the company’s identity in the market and to promote the company’s overall image. Pricing Strategy Every organization has a goal to achieve in terms of what is to be achieved by setting particular prices for its product mix, which is the pricing objective of the company. This primarily includes issues relating to its survival, profit, return on investment, market share, cash flows, status quo and product quality. There are various basis for fixing prices which could be cost based, cost plus, mark up, demand based and competition based pricing. Having determined the pricing strategy, it has to be further refined to make it consistent with the prevailing practices in the industry and markets. Accordingly specific price for each product is fixed in keeping with the overall goals and expectations. The prices are always arrived at after using the information, data and research that have been compiled and accordingly specific prices for all products are fixed. Promotional Strategy The objective of promotion activities is to create awareness, stimulate demand, encourage trial of the product, identify prospects, retain loyal customers, facilitate reseller support, combat competitive promotional efforts and reduce sales fluctuations. There are innumerable ways to communicate with individuals, groups, and organizations by using the various promotional methods. However a combination of promotional methods used for the same product by the company is called the promotion mix that has a very strong bearing on the results that a company achieves in terms of success of the product launch. Four basic elements of product mix are advertising, personal selling, public relations, and sales promotion. To boost advertising the media used are television, radio, internet, newspapers, magazines, outdoor displays and signs on buses and taxis. Advertising communicates to the target audience through the mass media by focusing on any segment and offers several benefits. It is very cost efficient in that it can reach a massive audience at low cost per person with huge potential of excellent returns. Advertisements can be repeated several times until the desired results are achieved or can be withdrawn when not responding to expectations. Personal selling is done with the help of sales representatives and telemarketing and has its own advantages and disadvantages when compared with advertising. Here the cost of reaching targets are more per person and the entire process is very slow. But personal selling efforts have greater impact on the individual and the results can be measured straight away. A lot depends on the communication strategy in personal selling. Public relations measures use publicity, news releases and press conferences to maintain a favorable relationship between the organization and all those matter to it. Ways of sales promotion are samples, contests, displays etc. to act as a direct inducement to clients by adding more value to the product. A significant matter to be discussed in this regard is that the cost of promotions is an addition cost to the product and that such promotions act towards creating needs that were till then not existing. Distribution Strategy Distribution is a component of the marketing mix that focuses on making products available to customers and end users at the place where they want to purchase or receive them which sets in motion the marketing channels and the supply channel management. Marketing channel is the group of individuals and organizations directing goods and services from the producers to the customers. Supply chain management is the partnership amongst marketing channel members who bring efficiency and develop innovative practices to satisfy customers. Although goods can move directly from the producers to the consumer, it is essential that a marketing channel use appropriate means to effect the delivery to the end user, which is indeed a highly specialized managerial task involving several intermediaries in the chain that ultimately reaches the consumer. Consumer product channels comprise of wholesalers and retailers. For business products direct distribution channels are used such as industrial distributors, direct selling agents, Most producers employ a mix of multiple or dual channels so as to adapt well to the various target markets. For our organic juice also a similar strategy has to be adopted since the distribution strategy has to be a mix of the various channels available keeping in view the circumstances and location of target markets Marketing Research Proposals My study and research into this matter has been concentrated on the study of the need for organically produced fruit juice keeping in view the harmful effects of consuming the other variety of processed fruit juices which use lot of preservatives and chemicals and eventually in the long run are very harmful to the human body. Hence there is a legitimate need to come out with innovations for which an ever increasing percentage of people are ready and too willing to engage in its production specially in view the business potential of such a commodity. At the other end consumers too will welcome the product if they get value for their money coupled with good health proposals for them and their families. Subsequently the viability of the production process of inorganic fruit juice was considered which though found to be expensive to produce in comparison to the process of inorganic juice, but over time with more production and with economies of scale in place, the viability will be better. Hence it is an excellent proposal for the proactive and farsighted businessperson to go for this proposal. It was also researched that although the organic fruit juice market in the northern hemisphere is matured enough, it has to make its place in countries like Australia and New Zealand where my research showed that there is immense scope for its success, for people here are fairly well off, the countries are amongst the well developed ones and they have the technology at their disposal to pursue this goal. Study was also done on the possibilities of other well established organic juice manufacturers from other countries entering the competition in New Zealand and making it difficult for our company to succeed in the new venture. But this apprehension was over once the New Zealand government rules for foreign entrants in manufacturing was studied. The government will initially protect this company by way of tax concessions and subsidies thus giving it an edge over outside contenders. It was also found that market research has been done on the acceptability of organic juice and sure the people were found to be very responsive to the idea. They are health conscious and favor a diet that leads to longevity of life for them and their family. 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