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EXECUTIVE SUMMARY:In brief the purpose is to market a new innovative hot chocolate product in a food-beverage industry for RLL. The product is a hot chocolate drink with extensive flavour collection. RLL Company is one of the largest market share holders in the tea industry in UK. It is best known for its tea and coffee sector exploits, RLL, is certainly one of the giants in the hot drinks industry of United Kingdom. Today, RLL has an excellent reputation in the hot drinks industry and has ambitious plans to further grow the brand. In the recent years the hot drinks industry has seen constant growth with an 8.1% increase in the years 2005-2009. Moreover, the forecasted future sales indicate a 10.8% increase in the industry for the next five years. Silk, a hot chocolate drink is the first food-beverage industry trial by RLL with a view to expand the brand in all genres of the hot drinks industry, following their exceptional exploits in the tea and coffee market.
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INTERVIEWEE REACTIONS:-
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2 Interviewee 3, Male, 66 yrs. Old Yes Im a tea drinker cant get enough of it
6 Interviewee 6, Male,48 yrs. Old Yes I drink tea in the main but I do like those chocolate drinks now and again
I like a nice chocolate drink now and again as a bit of an indulgence you know to pamper myself.
Oh yes I love a Yes I drink a lot cup of tea when of tea I get up in the morning sort of gets the old body going. By the way I also love a nice chocolate drink before I go to bed you know the sort, the one you make with milk. Sort of relaxes you I just said I find tea refreshing and milky chocolate relaxing Dont know just always have but Im changing the type of tea to a herbal variety no caffeine in it
As I said I like a nice chocolate drink as a real indulgence when Im not on a diet though
I drink coffee because it gives you a lift during the day it must be the caffeine
I dont know just love the taste Ive always drunk since I was a nipper in the war
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Ive always drunk tea ever since I was a nipper, but I like to indulge myself now and again with a nice milky chocolate drink
INTERVIEWEE AUDIT:-
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2 Female, 46 yrs. old Coffee (Work and Home) Male, 66 yrs. old Tea
4 Female, 66 yrs. old Tea & Chocolate (mornings and evenings) Tea Refreshing, Chocolate Relaxing Corner shop
Self-indulgence
Stimulant
Taste, Habitual
Habitual, Milky flavour - before bed, indulgence. Supermarket, secondary buyer Wife (Ros) Price - Anything on offer, Try anything new
3 Shopping Areas?
Supermarket/Wee kly
Secondary buyer Gillian at the Co-op Strong taste, Brand loyal (red-label) and Gillian No
4 Influential Aspects?
Brand Twinnings and Cadbury; AddMilk type of chocolate No- Tea, Yes Chocolate
No
Yes
Table 1: Spread-sheet analysis showing the interviewees responses to the Silk Marketing Research:UB NO: 10024767
INTERVIEWEE AUDIT:Table 1.1: Spread-sheet showing the (Agree/Disagree/Interesting)bifurcations to the Silk Marketing Research:-
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Interviewee(s) /Question(s) 1 Hot Beverages? Agree Congeniality Factor of Hot Beverages in all the cases. Disagree Interesting
Discrepancies in the Choice of Motivational Interests Beverages (Tea, Coffee & Hot ( Indulgence, Self Pampering, Chocolate) Relaxation), Locations (Work & Home), Health Consciousness ( Rejuvenation & Diet Factor), Heavy/Light Drinkers Dissimilarities in selection of beverages (Tea, Coffee & Hot Chocolate). Consumers and Buyers differ, Alteration from tea to herbal variety, Childhood Habit, Diet Factor Location (Supermarket, Coffee Shop, Local Health Shop, Co-op & Corner Shop) & Situation (Secondary buyer) based modifications. Motivational Differences (Offers, Anything New in the market) Silk, Name influences the consumers to buy or reject the product
Personal Welfares (Real Indulgence, Lift during a day, Relaxation and Refreshing) Supermarket, Coffee Shop, Local Health Shop, Co-op & Corner Shop
3 Shopping Areas?
4 Influential Aspects?
Texture, Taste, Flavour, Aroma and Brand Image Yes, if chocolate drink
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1:-
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Non Hot Chocolate drinkers Stimulant, taste, habitual 1 Why Hot Beverages?
Female
Male
Self-indulgence, relaxant, Milky flavour Supermarket, corner shop, secondary buyer Flavour, texture, diet version, price, taste Yes
Self-indulgence, relaxant,
2 Shopping Areas?
secondary buyer, coffee shop, health shop, co-op Aroma, Strong taste, brand,
2 Shopping Areas?
3 Influential Aspects?
3 Influential Aspects?
No
Yes
Yes
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MALE Agree Affirmative on the consumption of hot beverages Disagree Different Preferences of hot beverages Interesting Heavy hot beverage drinkers
FEMALE Agree Unanimous Agreement Disagree Variations in Choice of Beverages (Tea, Coffee, Chocolate) Choice Criterions (Indulgence & Taste) Interesting Heavy/Light Drinkers
Mental Upliftment
3 Shopping Areas?
Primary Buyers
Dissimilar Locations (Supermarket, Coffee Shop, Corner Shop) Choice Criterion (Brand Image, Aroma, Taste) Circumstantial differences in
Weekly Purchase, Shop timing preferentialism Health Consciousness and Locations (Work & Place) Silk, as a name
4 Influential Aspects?
Choice Criteria (Taste, Brand image, Price) Purchase (Preferences) Choice Criteria of Self Image,
5 Would you Not a suitable consider buying UB NO: for tea name 10024767
Table 3.1: Demographics of Hot Chocolate Drinkers:Gender (Agree/ Disagree/ Interesting) Tabular Representation:INTERVIEWEE AUDIT: - SEGMENTATION 3:Table 4: Demographics of Hot Chocolate Drinkers:Age Distribution:Young (15-24) Middle-aged (45-54) Old (65+)
Self-indulgence
Milky flavour
Relaxing
2 Shopping Areas?
Supermarket
Corner shop
3 Influential Aspects?
Brand
Yes
Yes
Yes
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Young (15-28) Agree Drinkers of Hot Beverages Disagree No Informati on Interesting SelfPampering & Indulgenc e Diet Factor
Middle Aged (45-54) Agree Analogous Likability for Hot Beverages Rejuvenatio n (Lift during a day), Indulgence, Milky Flavour Buying from various outlets Disagree Choice of Beverages (Tea, Coffee, Hot Chocolate) Circumstan ces (Childhood Habit, Nipper at War) Locations (Supermark et, Corner Shop, Health Shop) Various Beliefs (Aroma, Offers, Taste) Interesting Heavy Drinker, Locations (Work & Home) Change from Herbal to tea
Old (65+) Agree Affirmativ e on drinking, primarily tea Taste, Refreshing Disagree Interesti ng
One Heavy preference drinkers for chocolate drink Choice of beverage Drinking Since Nipper at war
Indulgence
No Informati on
3 Shopping Areas?
Supermark et
No Informati on
Various Outlets
Shop Timings
4 Influential Aspects?
Flavour, Texture
No Informati on
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Personal Beliefs
Influence d by wife
Table 4.1: Demographics of Hot Chocolate Drinkers:Age Distribution (Agree/ Disagree/ Interesting) Tabular Representation:INTERVIEWEE AUDIT: - SEGMENTATION 4:Table 4: Demographics of Hot Chocolate Drinkers:Behavioural Segmentation:-
Interviewee (Young Female) Self-indulgence, smooth texture, rich flavour, diet version Self-buy, weekly at the supermarket
Interviewee (Old Female) Relaxing, convenience, quality, brand, milky flavour Self-buy, corner shop
Interviewee (Middle Aged Male) Milky flavour, price promotions Secondary buy Ros, wife, supermarket
Purchase occasion
Purchase behaviour
No information given
Solos buyer
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Usage
Light drinker
Heavy drinker
Light drinker
MARKETING MIX:-
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Gender Female Male Young (15-28) Product The profound female sectionsought features like smooth texture, rich flavour, milky and diet variety of HC that did not differ in taste and quality with the nondietary HC. And sought HC to help relax. Silk is a good brand name and is acceptable by all female segments. No information was given The male segment are seek for a drink that makes them relax and also sought a milky flavour variety A smooth texture, rich in flavour, diet versions of HC that did not differ in taste with the other versions of HC
Age Middleaged (4554) A milky flavour Old (65+) Is driven by brands and liked an addmilk version of HC Benefits sought rich in flavour, relaxing, smooth texture, diet versions, indulgence
The Young Female and the Middle aged man are relatively light drinkers. In comparison, Old female section consumes more hot chocolate and are heavy drinkers.
Price
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This segment
No information
Price discounts
No informatio
Price discounts
No information
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CUSTOMER AUDIT:-
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i) Who is important?
For the purchase of Silk, the buying decision may be individualistic or could be based on collective decisions made by a family and it can be described in 5 ways as the i) Initiator ii) Influencer iii) Decider iv) Buyer v) User. The Female group seems to possess all the attributes and therefore their buying decisions are individualistic. In the case of the Male group, the wife is the main influencer and buyer and the middle aged man could be the initiator and decider and the couple are the users of the product.
This is known as the decision making process starting from Identifying the problem to information search evaluation then purchase. The consumers were more influenced by the flavour and self-indulgence. Male Segment is more interested in what was on offer but all the segments are interested in the flavour and texture since hot chocolate is a low involvement commodity and purchase can easily be influenced by emotions. Quality is essential. The consumers choice criteria can be classified into the 4 types: - Technical, economic, social and personal. Technical Taste - e.g. Female who loved Hot Chocolate for the smooth texture and rich flavour.
Social Price - e.g. Male who would buy when there are promotion and affordability Value for money
Ethics Emotions
INTERNAL AUDIT:-
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Men
Human Resources have always been a point of reckoning for RLL. In the past, as well as today it holds firm with skilled operational departments such as the R&D, NPD and Sales. RLL also possesses an eminent management and proprietary team with the existence of Managing Director, Sales Director, Group Finance Director, Production Director and Marketing Director.
Money
RLL possesses an undisputedly resilient financial background. It is an existing market leader in the tea industry with average sales revenue of 170.3 M pounds and 26% market share mentioned in the pre-budget report. Its tea brand GP Tops also has an inevitable 98% awareness in all genres of customers signifying its strong brand image. Moreover, the marketing director has also confirmed the company to be equipped with skills and resources for the launch of their new product, Silk.
Machine
The production director affirmed the units ability to incorporate an additional line for Silk and the cost amounts to approximately 1M pounds which will cover the cost of production, packaging and design.
Marketing 4ps
Product RLL possesses an intriguing product range of market leading brands such as GP Tops (Tea Bags) and Instant Tea. Blue Mountain gives positive signs with a 54.68% increase in last 3 years in the coffee sector. It is a renowned high quality brand with only the food beverage sector to be ventured. Silk, thereby will be a great addition
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Entry Barriers: -Penetration in a new market always has barriers to entry. FoodBeverage market comparatively also possesses barriers but on a low count. It has threats from huge companies who can venture in the food-beverage market possessing all the resources justifying it. The brand also has an easy distribution channel access.
Supplier power: Suppliers are believed to be highly reliant on retailers which clearly state the presence of numerous suppliers in the market. Any other specific information is not mentioned in the case.
Rivalry within industry: Silk as a product has to counter entry barriers as it is a new entrant in a competitive market. Brands like Nestle, Wander and KJS who possess majority of the market share will be an obvious barrier. Silk is an undifferentiated product backed by the brand image of RLL but still has to contend with occurrences such as Price Wars, Retaliation from existing brands.
Buyer power:Buyer power is medium in the present scenario. On one hand, buyers have the edge by knowing that the distribution is heavily reliant on the
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retail sector and also the threats of retailers integration into the industry. But, the impact of our brand on the market leaves them with no choice but to showcase our brand especially with limited food beverage producers in the market.
Substitutes:The threat of substitutes always surrounds the marketing existence of a new product. There is a direct impact of any price variation on the other genre of beverage. Moreover, the switching cost possessed is also low and in such a susceptible market the customer willingness is very vibrant. Price also is a very decisive factor in the longevity of the product as low involvement products are always price affected.
MACRO AUDIT:PEST:Political/Legal Forces: Political Forces No specific information provided in the case study
Economic Forces: Economic growth The economic breakdown in the recent years has caused major issues in the market stability. The GDP has considerably fallen leaving all the markets in a state of turmoil. Government should initiate proper measures against this negative notion and help companies to revive themselves out of the situation. Unemployment also stays a deciding factor in the purchase of the product. Government incentives can create new ways to combat this problem and thus enable consumers to still buy our products.
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Ecological/Physical/Environmental Forces: Environmental Regulations Environmental issues also affect the existing marketing decisions. The foremost issue is of the carbon emission which causes trouble and the people agree there purchasing activities to be affected by the green factor. It also has a positive impact on companies as the less energy consumed the less money to be paid. New pest management legislation in Europe could result in crop production shifting to other countries and prices for commodities shooting up. This may affect the cost of production of beverages in RLL.
Socio-Economic Factors:Health consciousness Staying healthy and fit is the notion at full flow these days. People are much more aware to avoid problems such as obesity etc. and stay fit. It is also a fashion fad to be slim and thereby there is an increase in the demand for diet versions. RLL can leverage on this opportunity and create a healthier Hot Chocolate that will appeal to the market.
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The age group of 25- 54 is the one to be targeted with an average concentration of 62.75% usage.The age distribution is concentrated towards the age band of 25- 54. And our target market 15-24 12%, 45- 54 13% and 65+ - 4.4% totalling about 29.4% of UK population. Focusing on these target markets will help grow out market share and the product sales
Technological Factors:Marketing RLL needs to look at the various technological options available in the market for boosting the existence of the product. Moreover, they can also use efacilities for an expansion and customer database maintenance RLL should needs to keep researching on new technologies and products and any new innovation discovered can lead to having a competitive edge over rivals and vice versa
BUSINESS MISSION:RLL is an esteemed organization and a market leader in the tea industry. It acquires about 31% of the hot drinks market share. The plan is to launch a new product named Silk in the food-beverage industry and to gain a substantial brand share of 0-8% through advertising, sales and NPD in a span of 3-5 years. It is also a
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multinational food company aimed at continually providing improved premium products to its esteemed customers globally. MARKETING AUDIT:RLL is currently a major player in the tea sector in Hot drinks Industry and has achieved it through high marketing orientation, high quality brand etc. INTERNAL MARKETING AUDIT EXTERNAL MARKETING AUDIT: - It includes two subsections namely
1) MACROENVIRONMENT: - PEST (Already discussed above) 2) MICROENVIRONMENT:-
Market Size:-
In the year 2009, RLL occupied 31% of the hot drinks market share in U.K, dominantly so the tea industry comprises with a market size of 26%. It acquires a meagre 5% market share in the coffee industry in 2009, but its coffee brand Blue Mountain has shown a staggering growth of 54.68% The food beverage industry currently sections 8-10% of the hot drinks industry with a steady growth.
Growth rate:-
There has been slow but constant growth in the foodbeverage industry. The involvement of comparatively less number of competitors in this market has not made it outstandingly visible but it acquires a significant 810% of the hot drinks industry and is on constant increment year after year.
Market trends:-
Market trends keep changing according to the number of competitor increment/decrements. Price fluctuations also cause numerous market changes. Social trends are also of special mention in the case being held responsible for frequently changing market trends.
SITUATIONAL ANALYSIS:
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SWOT Analysis:-
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Strengths:1. Well established brand name 2. High quality brand of products 3. Price leaders 4. Strong relationship with retailers 5. Financially strong 6. Highly marketing oriented 7. Sustainable growth rate 8. Resourcefully Equipped 9. Customer Knowledge 10.Low Marketing cost compared to competitors
analysis is in the area of New Product Development. 4. Lack of Involvement in the food beverage industry
Opportunities:1. Untapped emerging market 2. Increasing sales growth in the food beverage industry 3. Weakening demand for substitutes 4. Undeveloped products and brands. 5. Low level of competition in this sector 6. Lack of interest of the competitors in product development 7. Increasing trend of Instant drinks
8. Positive response of people on the
Threats:1. Strong competitors e.g. Nestle, KJS 2. Own Label products 3. The health consciousness 4. Prolonging economic recession 5. Potential increment in the number of competitors
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ANSOFF MATRIX:-
Existing Markets
New Markets
Existin Market Penetration g Produc ts 1 - Utilising our high marketing orientation to the maximum 2- Relationship with retailers to be exploited to gain customer attraction. 3- Well established brand image to be used 4- High quality brand of products 5- Price leader status 6- Less Product innovation in hot beverage industry 7- Sustainable growth rate 8- Financially Strong New Product Development Produc 1- Usage of Brand Image and ts recognition 2- Increasing sales growth in the food-beverage industry 3- Usage of the resourceful relationship with the retailers 4- Low level of competition 5- Financial capability
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Market development
1- Financially strong 2- Positive relationship with retailers in the market 3- Resourcefully equipped 4- Customer Knowledge 5- Increasing trend of instant products
Diversification
1- Creating a malted drink and exploring other markets outside the UK 2- Trying out new products in a new market 3- Introducing silk other parts of Europe, target the children
RLL, a company possessing tremendous reputation, brand image and exquisite resources to undertake any operation should employ its semantics on promoting their new product Silk in the existing market. The company is fully equipped and ready to venture in the new market of food-beverage industry. RLL has the skill and resources to become a majorly reckoned force in this sector also, as it has already done in the tea industry. ATR MODEL:-
AWARENESS AWARENESS
TRIAL TRIAL
REINFORCEMENT REINFORCEMENT
Low Involvement of our product reassures the amendments required to successfully conduct the remunerations needed to make the product a triumph. Advertising strategies need to be at the top notch to attract customers. Best possible shelves in the supermarkets should be occupied with the product at the time of launch using the positive retailer relations. The launch should be complemented with promotional offers & contests.
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MARKETING OBJECTIVES:-
Specific target audience for the product would be all aged females.
All the people who are hot chocolate drinkers would be the
measurable objective.
Growth Rate for the upcoming years would be 0%-8 % would be an
achievable segment.
Realistically, 60% of the brand consumers should be within the age
range of 15-24 and 40% within the age 65 years and above.
The estimated time to gain the above mentioned objectives is 3-5
years. To launch our hot chocolate drink, Silk, amongst the young and old females with a brand share of 60% within the ages 15-24 and 40% within 65+ and above and growing our brand share from 0% 8% in 3 5 years. Strategic thrust - Strategic objectives
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IMPLEMENTATION:-
Product
The product Silk can be categorised into 3 portions according to the target market: The Core benefit a hot drink to relax or to indulge in. The Expected product Product variety Various versions of hot chocolate can be introduced in the market comprising of a mixture of Milk, Malted and diet versions of the product. Silk, thereby can be explicitly having a differentiated launch with all versions installed. The quality is an expected part of the product should be a key factor of the product to promote a re-enforcement. Target market (the females) stressed on it. The design and packaging is essential to lure our target market especially the young females. The healthy aspect of Silk is an augmented feature that gives leverage over competitors. Silk, as a brand name appealed to all the hot chocolate drinkers and will be a splendid contributor as the products representative in the market in terms of the customer attraction and sales outcome.
Quality
Design
Features
Brand name
Price
RLLs high quality of products and lack of competition shown in the food industry as shown in the SWOT analysis. High price will most likely be an option but price discounts can be used initially to gain market share.
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target market the distribution channels would be through the retailers as they have a large number of outlets. E.g. Benefits of switching units incentives could be offered to such as free gifts, free tickets etc. Coverage The Supermarkets should be concentrated the most with majority of the sales happening there. Other outlets such as the Corner Shops and Coffee Shops can also be considered. Promotion Sales promotion: - Samples for taste for attaining shortterm incentives to encourage the purchase or sale of our product Silk, E.g. Price Deals, Brand Loyalty rewards, Coupons, Sweepstakes & Contests. Advertising: - Extensive usage of various advertising tools. E.g. Billboards, Newspapers, TV Adverts, Magazines & Online Advertising. Personal Selling: -Personal presentation by the firms sales force for the purpose of making sales and building customer relationships. Public relations: -Building good relationships with the companys various publics by obtaining favourable publicity, building up a good "corporate image", and handling or heading off unfavourable rumours, stories, and events. E.g. Press Release Direct marketing:- Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships
1)
Product: Product alterations are always an asset for the company when launching a product. If the launched product doesnt live up to the expectations then it can be integrated with numerous flavors for attracting the people of all ages. Price: In a market comprising of less number of customers a product like Silk, would face various atrocities like price wars and retaliation of competitors. To combat such a situation, promotional offers, Scratch and win schemes can be ventured out with to attain customer attraction and non-hampering of price. Place: Supermarkets being the main target areas can be a dodgy in response. Silk can be made available in other alternative locations such as renowned coffee shops, theatres, work places, schools, colleges and various other public populated places according to preference. Promotion: Advertising is always the best option to go about setting the peoples minds according to our will. Strategic advertising tools such as billboards, TV Adverts, Magazines, Newspapers, and Hoardings can be used for pertaining various walks of people to get attracted to the product.
2)
3)
4)
Macro:1) Political Factors should be considered and the daily happenings have to be taken into account for time to time adjustment to pricing strategies. 2) Technological forces can be used to expand the variant product ranges all over the national and international markets in the future. 3) Customer database should be maintained from the surveys and used for improving product features yearly. 4) Customer Feedback should be conducted through surveys should be conducted on a quarterly basis to get the feedback of the performance issues and all issues should subsequently be handled. Summary of the Marketing Plan RLL, the tea industry market leader makes its first launch in the food-beverage industry. It plans to penetrate the new market industry successfully and gain a substantial brand market share of 0-8% in due estimated time of its launch.
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Food-Beverage industry is a comparatively small but solid industry with its market concentrations already reaching a significant 8-10%. Silk, is the first food-beverage industry product for RLL. A company of RLLs stature is flatteringly equipped with all types of resources to launch the product and sustain it in the new market. The company should immensely advertise their product using the print and visual media interventions. It should use it brand image and virtuous relations with the retailers to attract more customers subsequently increasing their market sales. Pricing strategies should also be employed with the extensive usage of promotional offers, discounts, prize winning contests inclusions. The product can be made superlatively popular and a huge success exploiting the already esteemed image of RLL.
Contingency plan An unconventional plan can always be convenient to a company for a product being launched in a new market. If the conventional methods for Silk, dont work out as well as they were planned too, there is a methodology to survive the wreck. Silk, can be integrated with 3 or 4 designated flavours based on the taste and preference of people of all ages in the market. The image of the product can be then altered with hostile marketing with a view to target a certain section of people and relate the drink to them in a pleasant manner to attract them to the product. Plenty of offers can be introduced along with reward based strategies on the purchase of every beverage to encourage more people to buy the product. Moreover, the marketing plan is strong and should not require the secondary assistance. But, with the ever changing priorities of people these days may be this plan can resurrect the unlikely downfall of the primary marketing plan.
References: Jobber, D. (2010), Principles and Practice of Marketing, 6th edition. McGraw-
Hill Education.
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