Research the industry and construct a basic marketing plan
Research the industry and construct a basic marketing plan
You are to choose one product from the list below, research the industry and construct a basic marketing plan for how you would LAUNCH OR INCREASE SALES of this product and reach your stated marketing goal. See Figure 9.1 (page 272) in your text – The ANSOFF MATRIX for a suggestion about how to enhance this product and your marketing plan. You may consider; Market Penetration, Product Development and Market Development. This is an individual assignment, and therefore you should neither collaborate nor collude with other students – past, present or future.
PRODUCT LIST Choose one product from this list as the subject of your marketing plan. Assume the role of marketing manager and your job is to construct a basic marketing plan.
Australian Working Dog Rescue
As a marketing manager how would you increase donations for this organisation? It already operates in Australia but as a not for profit organisation they rely on donations from consumers for their operation. What could be a good/feasible approach to increase awareness of this cause and get more consumers to donate to ensure long term profitability of the organisation?
- Devondale Chilled Milk
There is ongoing tension in the milk wars between the supermarkets and the farmers/milk processors (http://www.smh.com.au/business/milk-wars-likely-to-claim-more-victims-yet- 20150122-12wirn.html). As a marketing manager for Devondale Chilled Milk how would you ensure you increase sales for your organisation under these conditions?
- Tesla Model S Car
With the first fatality through a self-drive car in the US there has been a lot of discussion around the safety of these cars (https://www.theguardian.com/technology/2016/jul/01/tesla-driver-killed- autopilot-self-driving-car-harry-potter). As the marketing manager for Tesla Model S cars here in Australia how would you ensure growth and development of the market here in Australia given this negative publicity internationally?
- SITUATION ANALYSIS
Devondale Chilled Milk is an Australian based company providing chilled milk and related products to customers from 1950. The corporation has more than 2500 farmers. Devondale is striving to sustain itself by focusing on product quality and customer awareness. Relationship development is another area that can be strengthened through word of mouth.
1.2 Macroeconomic Analysis
The macroeconomicanalysis includes external factors that affect the milk sellers industry.
1.2.1 Porter’s Five Force Model
As per Michael Porter, five factors help to develop and refine the new instruments (Conway &Huffcutt, 2003) (Figure 1).
· Threat of New Entrants
New entries are easy and brands can have their place but profits are not guaranteed. New entrants need to spend on marketing and cannot easily gain market share (Hoffmann, 2013).
· Bargaining Power of Buyers
Milk products cost less and buyers can reduce prices by demanding high quality that can have negative effect on the company (Androits, 2004).
· Bargaining Power of Suppliers
Suppliers’ bargaining power does not matter as milk prices are too less. There are too many suppliers damaging leaders’ profits too.
· Competitive Rivalry
Devondale is positioned as a follower (Schweinbenz, 2000). Fonterra group, Lion pty and Murray are the leaders with maximum market share.
· Threat of Substitutes
Milk is available in different forms in market and brands are working for newly reformed milk products. Technology is another factor leading to substitute threat (Comanor, 2000).
- MARKETING GOAL
2.1. Focus: Devondale should strive for more market share (Sai, 2015). For this, it should concentrate on:
- Enhancing brand value through market expansion
- Enhancing loyalty programs through consumer engagement
2.2 Benchmarks: For setting up benchmarks, the brand should concentrate on the following:
- Increasing advertising by 25% in 2016
- Enhancing first time users by 25%, and increasing repeat customers by 35% in 2016
- MARKETING STRATEGY
Different marketing strategies are being adopted the world over. The brand should seek professional assistance from the research and development (R&D) department.
Market segmentation can be done through these four segmentation techniques.
3.1.1 Demographic Segmentation
Demographic segmentation is to target the customers by keeping in mind their age, religious beliefs, family, gender, income levels, and education (Wells, et al, 2010). Devondale can see these trends all over the world. It can use these parameters for increasing the brand value and ultimately, to help maximize the profits. The R&D Department can work on these trends in the markets of target countries.
3.1.2 Psychographic Segmentation
Different personality traits like values, interest and lifestyles can be observed by the Devondale brand. The brand can focus on the customer lifestyles and can develop the products accordingly. This is very helpful segmentation for the increased profits.
3.1 Geographic Segmentation
Different areas of the world have customers having different tastes towards the dairy products (Pritchard, 1996). Devondale has the opportunity to gain its brand value by making geographic segmentation. It helps to reach the brand all over the world. Target audiences all over the world can see the brand products when these will be marketed online.
- Behavioral Segmentation
Market intelligence is a big tool to see the behavioral segmentation for the food products (Hollywood, et al, 2007). Devondale can target the youth by making awareness programs and increasing the awareness towards the health. Old customers can be targeted by making milk for diabetics as the diabetes is increasing all over the world.
3.3 Value Proposition
For Devondale, the first value proposition is health benefits. Apparently, in todays’ time, merely being a good calcium & protein source is not enough. Consumers expect milk brand to resolve their health issues besides providing them good taste. Devondale can focus on its fat-free variant for health-conscious people. It not only provides milk benefits, but also helps in lowering cholesterol, a health benefit that will attract customers.
In terms of packaging, Devondale Chilled Milk can boast of having different packaging for different customers, such as tetrapack, layered packaging, etc. It can claim that no competitor offers such variants.
In line with the above chart, Devondale Chilled Milk offers all the benefits to its traget customers, as discussed above.
- MARKETING TACTICS
The marketing tactics are necessary to develop and sustain a brand in the modern world. Companies do focus on the marketing trends and these trends are helpful to make customers aware about products and its values. Innovative firms use 4P’s as a marketing tactic.
Products by the brands are a way to attract the customers. Devondale Chilled Milk has many products that are long life milk, chilled milk, cheese, butterblends, cream, breakfast drinks, and milkshakes. These products can be utilized by using the psychographic and behavioral segmentation. More focus can be laid on developing new products. New products can be added on the lines of low-fat milk variants and probiotic curd. Integration strategy in the products is helpful to increase business growth where the backward and forward integration can be focused upon.
The brand can also opt for a name change to allow better positioning. From Devondale, it can shift to a name that may lead to increased customer recognition.
As discussed in Value Proposition, Packaging is a vital tool of the product. Devondale should serve the purpose of cost-effective packaging. It can do so by highlighting the usage of biodegradable materials and recyclable material to cut cost and be in sync with customer preferences. Devondale can combine its nutrition and health benefits for a changed brand image. It can opt for some new tag line such as, ‘Health With Milk’, or ‘Drink Milk, Drink Health’. In terms of product innovation, the brand should strive to maintain high quality of products.
Pricing is one of the most important goals for a milk brand. As per Kurtz and Boone (2012), price strategy involves procedures that set profitable & reasonable prices for consumers. Culture, customer, and competitors are also helpful to settle the price. The entire products’ prices can be revised for the attraction of new customers. Deals and discounts can also help to increase the product sales.
Devondale can use volume objective to set its pricing objective. Devondale can apply cost-plus pricing that set the price to attain the objective of higher profits.
Market’s Demand and supply determines the market price for a brand. The environmental factors also need to be taken into consideration. Devondale should also understand its competitors’ actions and the legal constraints that come along with that. Three pricing strategies are there which can be used, including skimming pricing strategy, competitive strategy and penetration pricing strategy. Devondale should largely focus on penetration strategy. It can set relatively lower price in the market to gain market acceptance. It can also attract more customers to pave way for more “penetration” into the market quickly.
Devondale can also use psychological pricing such as odd pricing. This policy relies on the belief that odd number under round numbers makes the product more appealing to customers. Devondale can also use promotional price strategy to sell the products, wherein the products can be sold below normal prices temporarily. This will maximize sales in a shorter time and position the product strongly.. Discount strategy can also be applied wherein discounts can be provided to wholesalers and retailers.
Placement is also called as the Distribution Strategy. It elaborates on how effective distribution channels can help the product reach final consumers. Devondale is a staples goods brand, which means the products are necessary for humans. Devondale can sell the products through intensive distribution, which is product distribution using all present channels.
Retailing entails all those activities that are a part of selling products directly to consumers, either for personal use or non business purpose. In Product Line, Devondale can distribute products through hypermarkets, supermarkets, and convenience stores. The retailing channel generates higher profit. So it is crucial to understand the needs of the target market.
Wholesaling entails all those channels that include activities involved in selling products for business use or for resale. The milk brand may not be able to provide warehousing services and creating utility.
Promotion is the key to boost up product image and create demand in the market. Promotion entails manufacturing a qualitative product along with a right pricing mix. Devondale can use different promotion strategies for attracting customers.
Supposing the brand has AUD 50,000 budget for promtional activities, it can divide the money to be utilized in the following promotional channels.
Advertising: This is a non-personal mode of communication that is paid for by a sponsor. Devondale can set out on a new advertsing campaign, both online & offline. It can rephrase the slogans it uses in advertising to gather strong brand positioning. This promotional strategy will need the maximum funds.
Sales promotion: It is another strategy that can be used by the brand. Herein, it can have a set of various promotional activities that may force customers into the product. The most common is selling the product at promotion prices.
Public Relations: This is not commonly used but is a very effective method. Devondale can distribute newsletters, can donate for charitable purposes, can print annual reports, etc. The brand can sponsor athletes playing in Olympics, as sportsperson perfectly score as milk and its products’ ambassadors.
Free Sampling and Trials: Through this, the brand can allow customers to experience the product in small measures, without the boundation of actually buying the product. Devondale can distribute samples at hypermarkets, etc.
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