Marketing Objectives of Arnotts Company - Case Study Example

Marketing Objectives and Situation Analysis Name: Course: Tutor: Date: Executive summary Arnott’s Company is one of the largest biscuit producers in Australia and the second largest distributor of snack foods. Diversification of the products it offers have upgraded by the quality services produced and ingredients used in the production process. Currently, potential competitors of the Arnott’s company include Associated British Foods PLC, Yamazaki Baking Limited, Morinaga Milk Industry Company Limited, Nabisco Biscuit Company, the United Biscuits in the United Kingdom and Fielder Propriety Limited. It is evident from the list of competitors that Arnott’s company faces grave competition from across the globe including direct competition from its parent company in the United States, Campbell Soup Company (http://www.arnotts.com.au/). Major strengths of the Arnott’s company are innovative services it employs in the production of its services, global standardization and market share. It enjoys the largest market share in Australia regarding production of and distribution of biscuits, chocolates and snack foods. Key weaknesses of the company are high operational costs in marketing and advertisement strategies and frequent changes in the management system. Arnott’s company will benefit significantly from turning the weaknesses into strengths. However, pressure from domestic and international competitors and product differentiation form substantial threats of the company. Proper inventory management and innovative strategies coming up now and then are its prime opportunities that drive the company’s business (Grimwade, 2000). Marketing objectives of the Arnott’s company implemented in accordance to the supportive analyses aimed at enhancing benefits from paramount importance to the company. They include, Aim to harness a greater market share of over 65 percent in the next two years and recreate the market structure within one year. Increase quality assurance standards and product quality in the next six months Improve online marketing services and advertising strategies by a 50 percent margin and a further 75 percent in the next one year (Shaikh, 2006) Table of contents Table of Contents 3 Table of contents 4 Table of Contents 4 Introduction 5 Situational analysis 6 Current marketing situation 6 Internal environment 6 The Customer Environment 7 External environment 8 SWOT analysis 10 Set Marketing Objectives 11 Marketing goal A 11 Marketing objectives (I) in compliance with SMART criteria 11 Marketing objective II 12 References 13 Introduction Arnott’s Biscuits Company begins from 1865 when a Scottish immigrant William Arnott began a bakery on Hunter Street, South Wales offering biscuits and pies to the town people. It has a colorful parrot as its logo, which is believed to have been drawn by the founder’s daughter, Leslie Arnott. Online services came into force in 1999 when the company fully adopted a strategic online marketing program that fully became operational in early 2000. This paper will describe in detail the marketing plan of Arnott’s Company, which is part of the company’s strategy to upgrade the overall service delivery and product improvement. The first part of the paper will outline the current marketing situation of the company followed by a SWOT analysis and competitive advantages it has over other competitors (Bradley, 1995). In order to provide SMART objective for the company, it is important to study some of the factors that play a key role in influencing its performance. This is possible by looking at the current market situation of the company, which comprises of parameters like the internal environment, the external environment, and competition from other companies doing somewhat the same business. When this was achieved, it became necessary to look and the company itself by carrying out the SWOT analysis. This would therefore form the basis of developing the SMART objectives that should be adopted by the company in order to remain competitive while carrying out its business. If Arnott’s Company adopts the objectives, it would be sure of commanding a sizeable share of the biscuit market and be in a position of competing with other firms (Lehman & Dufrene, 2007). With the stated mission of improving market strategy and reduction of prices in its products, the flexibility of the matter at hand to cut prices of the products form a base to develop strategic decisions for marketing. Online services will support price strategy procedures within the next twelve months, and the low-price sensitivity guarantees few substitutes and improves product differentiation and higher market value. The company would use rational appeal and brand appeal in advertising strategies to achieve informative, persuasive and competitive objectives. Online marketing would boost to greater extents the advancements in online marketing, direct marketing and personal selling strategies. Strategic growth initiatives will focus on targeting domestic market by developing the company’s product offerings and implementing integrated marketing strategies (Mühlbacher, 2006). Situational analysis Current marketing situation This section provides of a summary of the company’s current internal and external assessment and a SWOT analysis therein. Internal environment Review of current marketing objectives Current marketing strategies of the company as revealed in the mission statement require full participation by the staff, and management to participate fully on marketing strategies. Satisfying the demand of customers and improving the quality of biscuits, snacks and chocolates produced. Another current strategy is becoming Australia’s best company in the provision of food products like biscuits and snacks and improving the supply chain of food products through easy access by consumers. Improving online marketing and development of technology based advertisement and marketing is top on the current strategies. Promotion strategies have worked for Arnott Company with regard to enhancing its marketing strategy. Enticing consumers through promotions and offers on snacks and biscuits has gone in line with the company’s marketing objective as well as the company’s mission (Mühlbacher, 2006). Review of current marketing strategy and performance Online shopping has hit the target mark and services offered by Arnott Company cater for the demands of the changing market as well as new customers. Statistics reveal that approximately 90 percent tend to purchase biscuits, snacks and chocolates from traditional, local outlets like supermarkets and shops nearby. Furthermore, consumers that purchase the most of the products range between age 2 and 30. Those aged between 15 and 30 like to purchase biscuits and other products online (Goyal & Goyal, 2008). Review of current and anticipated organizational resources The resources available at the disposal of the company that make it unique include regular capital flow and financial highlights that increase revenue. Good relationship with leading suppliers and customers including customer demands for fresh and quality products form a basis for the resource available at the disposal. The Customer Environment Current and potential customers Consumer analysis reveals that Arnott’s company mostly serves young and female consumers. Arnott Company controls more than 70 percent of the market share in Australia and controls a greater percentage of online marketing too. What they do with the products Consumer’s needs are constantly changing and demanding effective ways of purchasing their products. Products from Arnott are used as food for young children and even adults who wish to consume chocolate and others. Where do customers purchase the firm's products? Customers purchase products from the local shops, in super markets and appointed dealers countrywide External environment Many external circumstances affect Arnott Company and its operations. They include tax regulations, external competitors from the international market, demographic trends and government policies. Competition There are many choices for how people decide to purchase their products and from whom. They have choices, from which company to purchase what there want, which form a basis of competition. The overall domestic and global market faces challenges of competition and Arnott Company has Associated British Foods PLC and Yamazaki Baking Limited as chief direct competitors. Indirect competitors include Nabisco Biscuit Company, the United Biscuits in the United Kingdom and Fielder Propriety Limited. Their key marketing strategies as summarized in a SWOT analysis are as follows. Associated British Foods PLC and Yamazaki Baking Limited have similar strengths of speed of delivery, ease of service and innovativeness. Weaknesses include high operational costs and poor management. Indirect competitors have strong growing market share as their greatest strengths in foods and snacks market. They, however, have poor online marketing services as their key weaknesses (Bradley, 1995). The nature of the global market and the overall domestic market on food products is competitive in nature, and biscuits, chocolates and snacks supply are the key players in the issue. Just as other industries undergo competition, the food industry in Australia that includes Arnott Company faces the challenges of a global and domestic competitive market. Trends in economic environment The key trends in the economic environment present competence as a major challenge of market structures. Fair practices demand industries to practice competitive advantage over others. Economies of scale develop strategies for fair economic practices in the market and prevent monopoly practices and barriers to entry. Technological environment The technological environment has improved to accommodate online services and use of technologically advanced equipment in production of biscuits, snacks and chocolates (Grimwade, 2000). Legal and Regulatory environment The regulatory environment presents that government and other international regulating bodies as key players of the regulatory environment. The Trade Practices Act (TPA) of Australia came into force in 1974. The provisions of the Act have regulated trade practices in Australia regarding the illegal acquisition of assets and monopolizing the market. Other government policies regulate unfair competitive practices both domestically and internationally. Socio cultural trends in Australia attached to purchase and consumption of biscuits are profoundly determined by the marketing strategies applied by the various players in the market including Arnott Company, and others. Today, there is about 50 percent of Australians with experience in online marketing developed by Arnott’s Company (Jain, 2007). Political trends The Australian political scenario presents trends in the tax concessions circle through regulating tax measures and trends in the economic market. Income offsetting is also available while grants for business development and research are offered to manufacturers. SWOT analysis Strengths Development and implementation of innovative strategies that improve product quality; this innovates new products to that meet demand of customers Large market share both domestically and globally that account for its profits and revenues Market standardization that ensure stable market demand and supply of their products to guarantee differentiation from its competitors (Meissner, 1990) Weaknesses Resistance to online shopping by supermarkets and local shops, which are not ready to face stiff competition from Arnott Company; this reduces customer satisfaction due to limited access to retailers Frequent changes in management that leave the company vulnerable to different strategies by different managers, hence vulnerable to competitors strengths (Goyal & Goyal, 2008) High operational costs brought about by ingredients needed to manufacture chocolate, biscuits and snacks Opportunities Proper inventory management that ensures maximum utility of raw materials that increases production quantity hence meet demand from customers Increasing demand from the Australian market by the growing population of young and middle aged population Threats Pressures from competitors in the domestic and global market that is responsible for decreasing sales and revenues Government policies and regulations that prevent illegal trade practices Set Marketing Objectives Marketing goal A Marketing objectives (I) in compliance with SMART criteria The focus of the SWOT analysis aims at determining specific opportunities to be exploited by the Arnott Company and threats to be avoided to guarantee competitive advantage and prosperity of the company. From the SWOT analysis, the following are marketing objectives aimed at supporting Arnotts overall strategic business objectives in compliance with the SMART criteria (Daft, 2008). Increase gross revenue by at least 45% from their current level and improve incomes from the supermarkets and shops that sell biscuits, snacks and chocolates to 80% in 12 months Increase in market share by harnessing 70% of the local market and 25% of the global market through online marketing system in the next one year. Reduce fraud transactions through the Internet preformed by customers to less than 5% in 6 months. Marketing objective II Aim to attain customer awareness on biscuits, chocolates and snacks by a 70% margin in 6 months (Plotnicov, 1990). Increase website traffic flow regarding online purchasing orders made by customers by a 50% in six months Improve product quality and service delivery by over 70% in a six months period Increase market share by attracting new customers by 75% in 12 months These strategies established through a period of two years because the implementation of marketing strategies is at final stages at this time (Cealster, 1998). References Bradley, F. (1995. International marketing strategy. London, Prentice Hall. Cealster, F. (1998). International Business: Text and cases. Sydney, Prentice hall. Daft, L. R. (2008). Business and Economics. Cengage Learning: New York. Goyal, A. & Goyal, M. (2008). Business Environment. London, K Publications. Grimwade, N 2000. International Trade: New Patterns of Trade, Productions and Investment. London: Routledge. Jain, T. R. (2007). Business Environment. London, FK publications Lehman, L. C. & Dufrene, D. D. (2007). Business Communication. New York: Cengage learning. Meissner, H. G. (1990). Strategic International Marketing. London: Springer-Verlag. Mühlbacher, H. (2006) International marketing: a global perspective (3rd edition). New York: Cengage Learning EMEA. Plotnicov, L. (1990). American Culture: Essays on the familiar and the unfamiliar. University of Pitsburg Press. Shaikh, A. (2006). Business Environment. New York, Pearson Education http://www.arnotts.com.au/about-us/corporate-profile.aspx http://www.arnotts.com.au/ Read More