Last Chance's Brand Plan for Soft Drinks - Case Study Example

Last Chance’s Brand Plan for Soft Drinks Executive Summary The soft drinks industry presents numerous opportunities for interested companies to introduce brands into the market. The increased use of soft drinks among the youth presents Last Chance with an opportunity to target its brand on the youth. The positioning strategy includes identifying the target market and analysis of key competitors in the soft drink beverage industry. This paper proposes the appropriate target market to be people aged between 8 and 30 years in Australia. The youth are active and easily reachable via the media. The main competitors in this industry include Coca Cola, Pepsi and Cadbury Schweppes. In order to compete with these companies, Last Chance must observe its market size, profitability and the growth rate of its competitors. The use of sufficient POPs and PODs will ensure that the company provides similar, but unique brand compared to the products of its competitors. In order to build brand equity, the company ought to consider brand awareness and image as key factors for effective brand equity building. The appropriate communication strategy requires the company to use a media mix, which includes all visual, audio and print media. However, visual media are the best because of the capacity to appeal to consumers. The appropriate measures of brand equity include customer perception of brand equity in terms of loyalty, associations, perceived quality and awareness, and the market behavior. Introduction The usage of soft drinks is gradually increasing and overtaking other beverage sectors in Australia and the entire world. The increase in the consumption of soft drink beverages presents an opportunity for Last Chance to venture into the soft drinks industry and take advantage of the increasing number of consumers. In order for Last Chance to succeed in the soft drink beverage industry, it is vital for the company to have an effective positioning strategy. The positioning strategy should comprise of the target market, competitor analysis, Points of Parity (POP) and Points of Difference (POD). The company also needs to build brand equity by developing brand awareness and brand image. The company also needs to develop an effective communication strategy in order to access the target market for the brand. The communication strategy should involve a creative strategy for delivering the message in an effective manner in order to appeal to consumers in the country. The communication strategy should outline the media that the company should employ in order to reach target consumers. The brand plan should consider the best ways to measure the strength and value of the brand, or way to measure brand equity. This paper presents a brand plan that the company needs to employ for the next 12 months. It will help the company to capture the appropriate market and sell its brand to consumers in Australia. This plan includes the positioning strategy, building brand equity, creating a communication strategy, measuring brand equity and recommendations, as well as the assumptions. Assumptions There are several assumptions that this brand plan considers for it to thrive. In devising an effective positioning strategy, this plan assumes that the organization has the capacity to provide soft drinks required by the target market. It also assumes that the company will produce distinctive and sustainable products that can appeal to the target market. For the success of the positioning strategy, this plan also assumes that the company has the capacity to provide required resources in order to support and sustain the required positioning. It also assumes that the main competitors in the soft drink industry are Coca Cola, Pepsi and Cadbury Schweppes. In addition, this plan assumes that the company has adequate access to the communication media proposed in the communication strategy. Positioning strategy In the first quarter, Last Chance needs to device an effective positioning strategy. A positioning strategy refers to how the company wants to be perceived by its prospects versus its competition (Core Marketing Strategies, 2012). This strategy creates a clear distinction between Last Chance and its competitors in the soft drink beverage industry. The proposed strategy in this paper bases on value prospects in the target market and uniqueness compared to competitors in the same market. The foremost step in developing a successful positioning strategy is developing a deep understanding of target customers and competitors (Core Marketing Strategies, 2012). Target Market Since Last Chance is an international corporation, main geographic target for the company will be consumers that have an interest on the global market. The target population will consist of people from Australia. However, more focus will be on urban areas with large populations. The corporation will also target consumers living in geographic areas with hot and dry climates. In terms of psychographics, the company should consider both the social class and lifestyle of the target market. The brand should appeal to populations in the low class, middle class and upper class. The corporation should also focus on people with different lifestyles such as strivers, believers, strugglers, achievers and survivors. In terms of behavior, the corporation ought to consider occasions (Birthdays, parties and sports), benefits (taste and quality), user status (such as first time users), and loyalty status of the target market. In terms of demographics, the corporation ought to consider the age, gender, education, occupation, family size, education, religion and income. Age is a key factor that this brand plan uses to determine the target market for soft drinks. This plan approves people in the age bracket of 8-30 years as the main target market. According to Adams (2005), children influence a substantial portion of total sales of soft drinks and soft drink companies name children in the age bracket of 8-12 as marketing targets. This plan proposes the main target market as 8-30 year-olds because this group consists of children, teenagers and young adults. People in the age bracket between 8 and 30 are more active and have busy lifestyles. They usually need soft drinks to keep the energy and refresh their bodies after actively participating in strenuous activities, unlike old people. In addition, young people want to try anything new in the market and; therefore, they are the best target market for the company. Moreover, most people between 8 and 30 years are in institutions such as schools, universities and colleges. Most of these institutions are in urban areas and, therefore, the company can easily reach a large group without incurring unnecessary expenses. Competitor Analysis Competitors create a strain that might prevent the company from reaching the target market. It is vital to conduct a competitor analysis in order to know the strengths, weaknesses and threats that face top competitors in the soft drink beverage industry. According to Report Linker (2012), Coca-cola, Pepsi and Cadbury Schweppes are the top competitors in this industry. The market size, profitability and the growth rate of these companies are key factors that Last Chance needs to consider in order to compete with these companies. The pressures that face competitors in the soft drink industry include new entrants, substitute products, buyers, suppliers and rival sellers within the industry (Deichert et al., 2006). Last Chance should expect to face competitive pressure from globally established companies such as Coca Cola, and Pepsi. Brand name loyalty is also another significant competitive pressure in the soft drink industry. For Last Chance to win and maintain customer loyalty, the company needs to be effective in creating new varieties of soft drinks. This will help the company to increase its sales, entice its customers and compete with other global competitors. Dominant companies such as Coca Cola and Pepsi have strong brand names and distribution channels. Therefore, these companies do not face competitive pressure from new entrants. This implies that Last Chance needs to have strong brand names and effective distribution channels in order to compete at the global level with its competitors. Companies in the soft drink industry also face competition from companies that produce substitute products. Different varieties of drinks appeal to the different tastes of different consumers and the health of these consumers. The threat of substitute products can have adverse effects because it can cause consumers to switch to cheap drinks. Therefore, Last Chance and its competitors face the same problem in terns of the threats caused by substitute products. The company needs to take advantage of this common weakness and create a brand that appeals to all customers. Globally established soft drink companies have a distinctive way to capture the bargaining power of suppliers (Deichert et al., 2006). This gives the companies a competitive advantage because they can switch suppliers. An imitative positioning strategy can help Last Chance to have the freedom to choose and control suppliers. The buyers of global soft drink companies include restaurants, discount stores and large groceries. This implies that Last Chance must choose the appropriate channels to deliver its products to the targeted consumers. POPS and PODs According to the Market Segmentation Study Guide (2012), when deciding upon brand positioning, the company must ensure that the end positioning has adequate POP and POD. The company will ensure that the customers consider the company’s products as equal or similar with key offerings in the same category. POP is necessary for the company to present a credible offering in a certain category (McLoughlin & Aaker, 2010). Sufficient POP will ensure that Last Chance does not deviate from the common brand attributes preferred by soft drink users. The company should embark on products that meet the needs met by substitute products. This will ensure that the consumers of the company’s products will perceive a similarity between the products of the company and its competitors. On the other hand, Last Chance will ensure that the brand has several unique attributes. From the competitor analysis, brand name is a key attribute that creates stiff competition in the soft drink industry. Last Chance needs use brand elements that are dissimilar to those of other companies. This approach will ensure that the company produces products that have different, but attractive attributes that appeal to the target market, unlike the competitors in the same industry. Having sufficient POP will help Last Chance to negate the competitors’ points of distinction in branding. The company should seek to create parity concerning taste and, therefore, negate the taste POD of its competitors. The PODs that the company ought to consider in the brand planning include quality, prestige, and health safety. Therefore, the proposed brand should have a similarity with brands from competitors and show some uniqueness for easy differentiation with other brands from competitors. This will enable existing customers to change their purchasing behavior and start purchasing soft drinks from the company. Building Brand Equity In the second quarter of the year, the brand plan will focus on brand equity. Brand equity refers to the strength and value of a brand to decide the brand’s worth. The company ought to link its brand assets and liabilities to the brand in order to achieve brand equity. Branch equity consists of the differential effects that the knowledge of brands has on the response of customers to the brand. According to Campbell (2002), there are two sources of brand equity, customer awareness and customer knowledge about the brand. In order to achieve brand equity, the company will consider two key factors, brand awareness and brand image. Brand Awareness Brand awareness is the customer’s ability to recall and recognize a brand (Hoeffler & Keller, 2002). Last Chance should consider that brand awareness involves more than just customer’s knowledge about the brand. In fostering brand awareness, the company will seek to link the brand elements to memorable associations. According to MC PRTK (2012), the main brand elements include names, logos, symbols, URLs, characters, slogans, jingles, packaging and spokespeople. The company will focus on the ease of customers to recall or identify the brand, the purchase range and consumption circumstances in which the brand occupies the customers’ minds. The brand elements used by the company should ensure that customers think about the brand when need arises. Therefore, these elements should be memorable, meaningful, likable, transferable, adaptable and protectable. They should provide adequate information concerning the nature and benefits of the brand. In addition, the elements chosen by the company should ensure that consumers perceive the brand across several settings such as having a soft drink in the morning, on the road or a hospital bed. Brand image Creating brand awareness is not sufficient without creating a brand image. Most consumers consider other issues such as the significance of the brand image (Hoeffler & Keller, 2002). Therefore, the company will seek to enhance the image of the brand in order to attract customers who seek the meaning or brand image. The company will engage in creating brand meaning and the characteristics of the brand. This appropriate approach will help the company to stand for the customers’ minds. The company will also ensure that the brand has strong, favorable and unique associations with other brands. Lat Chance will consider a core brand promise, the brand mantra. The essence of the mantra is to communicate and inspire customers about the meaning and relevance of the brand. Communication Strategy In the third quarter of the year, the company will focus on the appropriate communication strategy in order to connect the company’s positioning across every stakeholder. Steering a creative strategy and delivering the right message will improve marketing and business effectiveness. A communication strategy gives the brand a differentiated positioning, and it should fit with the brand plan and marketing strategy (Koekemoer & Bird, 2004). The company ought to obtain insights from its key target market (people aged between 8 and 30 years) and other age groups such as the elderly consumers of soft drinks. A creative strategy should involve communication objectives outlined by the company. The company must set communication objectives in order to increase awareness, change perceptions, build brand image and reposition the brand in the mentality of the target audience. The communication strategy used will define clear, concise and motivational promises to the target market in order to appeal to potential consumers of soft drinks. The message that the company will pass to the target market includes the best brand attributes that distinguish the brand from the company’s competitors. In addition, the message will include the benefits of using the brand compared to brands from competitors such as Coca Cola and Pepsi. The message should be most impactful for increasing sales. A creative communication strategy should include a media mix consisting of magazines, Televisions, Radio, Product placement and the internet. Modern media are remarkably effective in generating interests and provision of required information in branding. Modern media fall under visual media, audio media and print media (Mefalopulos & Kamlongera, 2004). The company will use visual media as the main media because these media have the advantage of clarity, interest and retention. This will be appropriate for Televisions, videos and product placements in movies as these media are appealing to most youths. The company will integrate print media such as leaflets and magazines to communicate with stakeholders about the brand. The internet will play a key role in communicating because of its increased use among the young generation, who are the key target for the company’s brand. Measuring Brand equity Finally, the company will focus on measuring brand equity. Measures should reflect the asset value of the brand constructs that drive the market, sensitivity to changes and should be applicable to the brand. The appropriate measures will consider customer perception of brand equity in terms of loyalty, associations, perceived quality and awareness. The company will incorporate market behavior measures that represent information gathered from the market. Loyalty is a sufficient measure because the company can use this measure to evaluate other measures basing on their ability to influence loyalty (Aaker, 1996). Perceived quality is a core construct in measuring brand equity (Aaker, 1996). Using this construct will enable the company to measure the association of perceived quality with other constraints. Measuring associations will enable the company to construct brand equity around value, brand personality and organizational associations. Brand awareness can have significant effects people’s perceptions and attitudes towards brand. The company ought to measure the consumers’ levels of recognizing and recalling the company’s brand. Finally, the organization must track and analyze figures collected from the market. This will help to measure market behavior and, therefore, measure brand equity. Recommendations This plan assumes that the company has the capacity to provide appropriate resource to enforce an effective positioning strategy. Therefore, I recommend that the Last Chance should ensure that the required resources are available for an effective positioning strategy. This plan also assumes that the company will produce distinctive and sustainable products that will appeal to the customers, otherwise the plan would be unnecessary. Therefore, the company should ensure that its product elements appeal to the market. Though this plan assumes that there are three main competitors, that is, Coca Cola, Pepsi and Cadbury Schweppes, I recommend that the company should be alert of other emerging global soft drink companies. In addition, Last Chance should ensure that the media outlined in the communication strategy are available for this plan to succeed. Conclusion The increase in the usage of soft drinks among the youth presents Last Chance with an opportunity to market its brand to the young generation. Since the company is a global company, it ought to focus on consumers who have interests on global issues, specifically the youth. Geographic, demographic, psychographic and behavioral segments are the key segments for the company to identify a target market. The market size, profitability and the growth rate of competitor companies are key factors that Last Chance needs to consider in order to compete internationally. In order to build brand equity, the company ought to focus on brand awareness and image in the market. The use of the proposed communication strategy will connect the company with its key stakeholders, especially the consumers of soft drinks. The appropriate measures for measuring brand equity include loyalty, associations, perceived quality, awareness and market behavior. References Aaker, D. (1996) Measuring Brand Equity Across Products and Markets. California Management Review. 38 (3). Pp. 102-120. Retrieved 31 October 2012 from http://ebiz.bm.nsysu.edu.tw/2011/vanessa/%E6%96%87%E7%8D%BB%E8%B3%87%E6%96%99-Brand%20Equity.../Measuring%20Brand%20Equity%20Across%20Products%20and%20Markets.pdf Adams, M. (2005) Soft Drink Company Marketing tactics: the Experts sound off. Natural News.com. Retrieved 31 October 2012 from http://www.naturalnews.com/003914_soft_drinks_food_politics.html Campbell, M., C. (2002) Building Brand Equity. International Journal of Medical Marketing. 2 (3). Pp. 208-218. Core Marketing Strategies (2012) Market Positioning. Retrieved 31 October 2012 from http://www.coremarketingstrategies.com/marketing-fundamentals/26-marketing-fundamentals/34-market-positioning Deichert, M., Ellenbecker, M., Klehr, E., Pesarchick, L. & Ziegler, K. (2006) Industry Analysis: Soft Drinks. Srategic Management in a Global Context. Retrieved 31 October 2012 from http://www.csbsju.edu/documents/libraries/zeigler_paper.pdf Hoeffler, S. & Keller, K. L. (2002) Building Brand Equity Through Corporate Societal Marketing. Journal of Public Policy and Marketing. 21 (1). Pp.78-89. Koekemoer, L., & Bird, S. (2004). Marketing communications. Lansdowne, South Africa: Juta Academic. Market Segmentation Study Guide (2012) Points of Difference and Points of Parity. Retrieved 31 October 2012 from http://www.segmentationstudyguide.com/understanding-perceptual-maps/points-of-difference-pod/ MC PRTK (2010) Brand Elements. Choosing Brand elements to build brand equity. Slideshare.net. Retrieved 31 October 2012 from http://www.slideshare.net/mcprtk/brand-elements McLoughlin, D., & Aaker, D. A. (2010). Strategic market management: Global perspectives. Hoboken, N.J: Wiley. Mefalopulos, P., Kamlongera, C., Southern African Development Community., & Food and Agriculture Organization of the United Nations. (2004). Participatory communication strategy design: A handbook. Rome: Food and Agriculture Organization of the United Nations. Report Linker (2012) Soft Drink Industry: Market Research Reports, Statistics and Analysis. ReportLinker.com. Retrieved 31 October 2012 from http://www.reportlinker.com/ci02018/Soft-Drink.html Read More