Essentials of Marketing - Case Study Example

Running head: MARKETING Marketing [Writer’s name] [Institution’s name] Executive Summary This report focuses on the marketing of the UHT treated flavoured milk, which is a product recently developed by Quinncom International Pty Ltd. This new product aims to promote drinking of milk. For this report, a marketing plan has been developed which focuses on launching the UHT flavoured milk. A marketing plan provides businesses with direction and focuses on attracting and retaining customers. Based on the objectives, the marketing strategy includes segmentation of the market, selection of the target market and analysis of the marketing mix. A situational analysis was undertaken of both the internal and external environment. From the situational analysis a number of opportunities and threats were identified. There is an opportunity for Quinncom International Pty Ltd to grow in the market, as the warm climate helps keeps the milk fresh. On the other hand current threats include that there is diverse ethic population, thus satisfying every one is a difficult task. A target approach was used as the combined strategy is beneficial because of the sheer diversity of the Australian market. As it comprises of a plethora of nations and unique cultures. The variation resulted from varying levels of competition, and independent pricing mechanisms. Their target market consists of important customer of age groups from 3 to 45. The extended marketing mix was used to construct the marketing strategy that is the 7p’s, product, price, place, promotion, people, positioning and packaging. However, it was found out that in order to carryout such a marketing plan a huge marketing budget will be required. In order for the plan to reach objectives, the most sensible approach to budgeting promotion expenditures was the task method in which the budget is based on the job to be done. Marketing The Australian company selected for the report is Quinncom International Pty Ltd , and the selected product is UHT milk. With the help of Austrade, they were able to establish a suitable position in the market. This, will give them a greater opportunity to adopt the marketing strategies to the Australian dairy market. Quinncom International Pty Ltd is already an established entity in the dairy market, being one of the top sellers of milk and dairy products. The company has a very strong financial background and has enough marketing expertise to capture the entire market. They will be providing Australian milk, as it's highly regarded for it’s quality. The company will have to develop a planned model which will help them to compete the Australian dairy market. Model - After extensive research they discovered that introducing the product in their home market was their best option, as Quinncom International Pty Ltd. Is already a known name in Australia. In the following six months they aim to extensively research the Australian market and evaluate their best opportunities as well as develop marketing plans accordingly. it is their objective to be standing strong in the market by the end of 2011. Quinncom International Pty Ltd will be using only Australian milk. Whereby they will develop UHT flavoured milk and other milk products. This entire process will help them in acquiring big profits and returns from equity as they are entering in market where milk is considered as a basic necessity . This increase in profits will allow them to venture into other markets, develop new products, spend more time in research and development and perhaps even increase their market share. It will also allow them to obtain better market feedback and maintain control over their production and marketing. Business Operations Due to the upward trend in Australian economy, the company decided to introduce their product in it’s domestic market. This increased their chances of Australian investments. There are many aspects of the organization that need to be discussed in terms of how it will operate in Australia (Barnes report 2011). Company Overview Vernon Quinn was the founder of Quinncom International Pty Ltd , he started his company operations in September, 2004 and has effectively helped customers fulfill all their required needs related to dairy and food products as they are of the top quality. The company knows exactly their customer’s requirement and thus supplies them their desired quality at a very competitive rate. They have always managed to portray themselves as a new and energetic Australian company whose main aim is to provide best quality dairy products. Their main strength lies in the fact that they maintain the same quality for both domestic as well as international customers. They have enough resources to deliver the products any where in the world especially their Milk Powder and other Milk Substitutes. Their most valued brand is Australian star. Strengths Quinncom International Pty Ltd currently produces Ultra High Temperature processed milk in 1 litre, 200 ml and 250 ml tetra packs. The target market will be people of all ages, as the Australian government promotes the consumption of milk. This milk has to be processed through modern technology which can mostly be found in Australia. By purchasing the fresh milk required for the processing, it will reduce the time taken in the procedure and may lead to opportunities to manufacture and sell fresh milk in Australia. . Weakness They cannot use the import quality milk; they use fresh milk only from Australia. They have to use Australian technology only for their processing. The fact that the is a country with diverse ethnicity, during production it makes the flavours in milk difficult to choose. Opportunities The fact that they are an Australian based company makes it more reliable product as consumers consider them to be a good producer of milk. The huge population results in high sale of milk Australian government promotes milk consumption. The warm climate helps keeps the milk fresh and cool. Threats Problems of success Australia is developing at an extremely fast rate and thus at times it cannot fulfil the needs of the market. Therefore companies have to careful when they enter the Australian market, they should have proper and huge investments before entering the market. Population The population of Australia is increasing at a fast pace. Thus, the government is paying more attention to that issue then the issue regarding business development. Apart from this, it becomes extremely difficult to fulfil the needs of the domestic consumption. Thus, the production of the flavoured milk will have to be in bulk quantities. Jammed Infrastructure Due to Australia’s fast economic growth, the infrastructure can not keep up with it. Every now and then companies require a new infrastructure. This becomes quite costly. Trade and Investment Problems Australia has numerous trade and investment issues which are still unresolved; issues like these usually affect the economic system. However, like mentioned above if the flavoured milk is introduced in the market at a competitive price then the sales volume may accelerate. Rural discontent Australia is a country which is segregated according to socioeconomic status. This causes a huge gap on the life styles of their citizens (The World Book Encyclopaedia 1991). Some can afford expensive and lavish luxuries while others cannot even afford food. Selling flavoured milk in such a country may be difficult. However, if different sizes of the flavoured milk are introduced it may help, as each size will vary in price. Ethic differences Many different ethnic groups exist in Australia. Each group have there own preferences. They have their own life style and even choices of food. To satisfy the needs of so many different groups when it comes to flavoured milk may be tough. But, it can be made possible by using marketing research to evaluate which ethic group prefers which flavour the most. The production and marketing of the milk can be done accordingly. 7 P’s Product Quinncom International Pty Ltd currently produces Ultra High Temperature processed milk in 1 litre, 200 ml and 250 ml tetra packs. This milk has to go through state of the art technology which is easily available in Australia. The Production of the Ultra High Temperature processed milk will definitely have a strong positive effect on the sale of the product. Price A key determinant in any market is the pricing, which must be competitive with other imported products. The price range is a primary factor as the product currently sits in the development stage of the product life cycle (Brooks & Weatherston 1997). There are numerous competitors, so the ability to charge higher prices is quite less. Being a fairly new product, many people may not be willing to pay high prices for an unfamiliar product (Hooley etal 2008). The retail price for the milk must cover all the costs incurred for production of the product. Apart from this the price has to be competitive so that the customers can comfortably make it a part of the monthly grocery list. People The target market will be people of all ages, as the government promotes the consumption of milk. However, the main target group is consumers between age of 3 and 45 years, this group of consumers is specially chosen because it is the active age bracket. Many people in this age group are engaged in sporting activities. For example, college students or upcoming athletics, this category of consumers is selected as it is a group which is sensitive to market changes in many occasions, it is the group that changes market trends, by preferring certain products more then others (Aaker and Joachimsthaler 2000). So, in capturing this target market the company will be able to achieve more sales. Place The fourth P in the marketing mix is the place. It is the location where the product will be sold. Quinncom International Pty Ltd will have to review and reflect on the sale locations. The company must also acknowledge the fact that they may need to change their sale location in order to increase their sales (Davidson & Harry 2001). Quinncom International Pty Ltd can sell their product in a lot of different places. The company can also cover a lot of different places at one time by implementing the method of direct selling. For this they will have to send their salespeople for door to door sales activity, in which the customer will get first hand information about the product directly from the sales person. Apart from this Quinncom International Pty Ltd can supply their products to different grocery stores and supermarkets across Australia. The product may also be promoted by opening retail outlets where the product will be treated as a star product of Quinncom International Pty Ltd. Packaging The next element which Quinncom International Pty Ltd will have to consider is packaging. The company will have to consider the visual element in the packaging of their product i.e. their UHT flavoured milk. They will have to use a critical eye to make sure that the packaging is attractive in terms of material and presentation. The company must remember that people form their first impression about a product within the first 30 seconds of seeing it or some element of your company (Booms & Bitner 1981). Small improvements in the packaging or external appearance of the product or service can often lead to completely different reactions from the customers (Chisnall 1997). As per the packaging Quinncom International Pty Ltd should present the product in a manner , which reflects a positive appeal to the customer from the very first time the customer see the product on the shelves . For appealing Packaging, the company may use their sales person and retail outlets also. Thus, here packing may refer to the dressing and grooming of their sales staff .(Hoyer & MacInnis 2001). As for the retail outlets where the product will be sold also have to be extremely well decorated, as this too comes under the packaging of the product. From the colour of the container to the place where it will be sold all are apart of the product. As it is milk they will have to use a packaging which reflect health and also must be an attractive colour so that it can catch the eye of customers of every age. Quinncom International Pty Ltd must realize that packing is the most important element of any marketing plan. As when a consumer buys a product he first gets attracted towards the new product and then checks the price and other elements of the product. Positioning Quinncom International Pty Ltd will also have to be careful regarding the positioning of the product. The company will have to start constantly considering the fact how they can be positioned in the hearts and minds of their customers (Baker 2000). They will have to find answers to what to people think about Quinncom International Pty Ltd. do they consider them reliable? . Apart from this they will also have to analyze what positioning do they have in Australia, in regard to particular words the customers utilize while describing Quinncom International Pty Ltd and their products. Promotion Quinncom International Pty Ltd realizes that every person is different. It had to change it’s positioning strategy in order to win against it’s competitors. The company had to establish it’s image as only being a diary product company which fulfils the needs of the segment. Keeping this in mind it based it’s positioning on an image which appreciates the different qualities that build consumer’s personality. Their exclusive points of view, their own personal chic and their extraordinary talents along with accomplishments (Davies 1998). Quinncom International Pty Ltd appreciates this individuality, their authenticity as well as the nerve to do the impossible. Whilst some might call them foolish or odd, Quinncom International Pty Ltd considers them as being imaginative and unique. For this reason it has introduced many different flavours in their UHT milk segment. It is good that they prefer to use a multiple-brand strategy for attaining good growth in a lot of different market segments (Blythe 2001). Every ten years or so, consumers get bored with the status quo. People change, tastes change, trends change. Without much warning, a fundamental market shift occurs (Brassington & Pettitt 2000). Quinncom International Pty Ltd has built a diversified portfolio of dairy products that we think will allow them to capitalize on the opportunity. Marketing and communication plan This strategy is to create another brand with similar product core but for different segmentation and positioning. Multibrand strategy will let Quinncom International Pty Ltd remain in the finest niche market with pricing strategy and also get some market share from the lower price products that have been dominated by other local competitors. The above mentioned strategy does have its set backs as it will need a huge investment when it comes to research and development. Apart from this the marketing mix is also very costly , as mainly Quinncom International Pty Ltd is focusing on a brand new product with a special zest and unusual packaging. The principal can repeat its market entry strategy that was conducted before entering the market, which was conducting comprehensive and careful marketing research before launching a new product and brand (Ellwood 2002). The challenges in this strategy are to make a product that will not cannibalize the other products. This factor is the most important for the product and is going to be thoroughly covered. The profile of the product will already be slightly established due to the familiarity projected by the other brands amongst Australian people. Furthermore, the entire health concept of Quinncom International Pty Ltd needs to also be acknowledged during the promotion campaign. This is an advantage as consumers consider Australia to be a trustworthy and highly regarded supplier of fresh 'clean and green' products". Promotions will be conducted at the National Day Celebrations, and by participating in different events. It is appropriate for the launch of the product to be around this date, with weekly luncheons being held on Saturdays for executive chefs. The organization also intends to become in alliance with the Must Drink More Milk campaign. Sponsorship or co-promotion will help to increase awareness (Terpstra & Sarathy 2001). Campaigns will be targeted at all Australian people, but in particular, parents and school children. In market promotions, TV and print advertising will be utilised as well as advertising on buses to ensure an extensive reach. The milk products will be sold to retail shopping centres, grocery stores and markets. Budget In the light of Quinncom International Pty Ltd continuing focus on planning marketing strategies to reach objectives, the most sensible approach to budgeting promotion expenditures is the task method - basing the budget on the job to be done (Perreault & McCarthy, 2006). Since, Quinncom International Pty Ltd is a fairly well known company that is expanding ,they can base on their advertising/marketing budget on their future results instead of their past performance. Activity Cost ($) % of Total Cost Target advertising          1,500,000 30% Campaign 750,000 15% Sponsorship 500,000 10% Retail outlets 500,000 10% TV advertisements 1,500,000 30% Advertising on buses 250,000 5% TOTAL          5,000,000 100% Control Phase The Marketing Control Phase is an important aspect of the marketing process . It is a method of evaluating the marketing plan. It allows adjustments to be made in the plan so that success can be achieved. Skipping the Control Phase would be neglecting the entire marketing plan that had been developed for the new service. (Kerin et al, 2006). The goal is to have the quantified goals and measured quantified results match. It is extremely rare for this to occur since there are so many factors that can influence the outcome of a marketing plan (Lamb etal, 2000). This is why the comparison of the quantified goals and the measured quantified results is so important. Using the comparison will allow for the identification of any deviations from the established goals as well as the assisting in the determination of the deviations cause. After identifying the deviation(s) and the cause(s), a course of action can be developed to correct the deviations. The quantified goal serves as the benchmark to measure the level of success or lack thereof. The measured results consist of the data collected through various means and were analyzed to produce the actual performance of the marketing plan. This data can come from sales, customer satisfaction, and Return on Investment (ROI), to name just a few (Stanton etal, 2000). The data that will be used by Quinncom International Pty Ltd for determining the success of the marketing plan. It will come from a sales analysis, a customer satisfaction analysis, and a profitability analysis. Using the data from the three data points will allow Quinncom International Pty Ltd to determine if they have met the established quantified goals. The sales analysis date will determine if the services being offered are wanted by the consumer. There is an option in this analysis to analyze consumer demographics to determine if the product should be offered in all locations or if the services should be offered in specific locations (Summer, 2003). The frequency of the individual consumer's use of the product will also be measured to establish the level of repeat customers. The customer satisfaction analysis will be less quantitative as it will be dependent on the customers' willingness to respond to a satisfaction survey. Comparing the number of responses to the number of individual customers will allow for a more realistic data set. It will be important to collect specific data on why the customer was satisfied or dissatisfied with the services (McColl &Keil, 1999). The profitability analysis will allow Quinncom International Pty Ltd to determine if they were accurate in their estimate of sales compared to the cost of the service. The data will show the comparison of the advertising costs of reaching the consumer with the service with the number of services being purchased. Once the data has been collected and analyzed, Quinncom International Pty Ltd can then make any necessary adjustments to the marketing plan to reach the established goals. The adjustments can range anywhere from increased advertisement to removing additional services. The determination on what course of action to take cannot be made until there is data to compare. Recommendations Quinncom International Pty Ltd should use maintain their quality for long term sustainability in the market. To capture the major market share the company may introduce different promotions at different occasions. To increase the sales volume, the company has to focus on door to door sales activity in which the sales person can approach the end consumer for providing them awareness reading the salient features of the product through flyers. Quinncom International Pty Ltd is supposed to position their brand so that they can directly target customers who give importance to something unique, by a goal of expanding the market ahead of the urban young target market and re-emphasizing Quinncom International Pty Ltd images as being a company that offers more then just ordinary tasting milk. 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