1 .Executive
summary
In the process of
developing this marketing plan a comprehensive analysis of the environment that
affecting to Dairycova was done. With respect to the micro environment of the company,
affect of the customers and the competitors has analyzed. And also analyzing
the macro environment, we have identified affect of the PEST factors.
Thereafter SWOT analysis was done identifying the favorable and unfavorable f
actors in the internal & external environment. Company has clearly set
objectives what is planned to achieve in the future. As well as we could
identify several issues that will affect our attainment.
As to identify the target
market several groups of customer segments have been taken into consideration.
By analyzing consumer characteristics and behavior the most appropriate
segments have been selected.
Several marketing tools
used by the firms to pursue its marketing objectives. Company has selected
relevant pricing strategies, innovative distribution strategies and attractive
communication techniques. We allocate sufficient funds to market our products
and achieve our future objectives.
2. Current
market situation
2.1 Market
analysis
Generally
in Sri Lanka chocolate is consumed as a snack, given as a present and used
during festival season and some variants as an ingredient in cooking as well.
Sri Lankan chocolate market is very competitive and it consists with complex
customer base. It means consumers have knowledge about categories of chocolates,
ingredients of chocolates and companies which produced chocolates.
2.1.1Major
market segments
Marketing segmentation is very important
and necessary task. Because people in this society has various needs and wants,
as first step a group of people who has similar needs and wants should be
identified to develop a marketing mix.
There are few bases for segmentation
·
Geographic segmentation
·
Demographic segmentation
·
Psychographic segmentation
·
Behavioral segmentation
|
·
Demographic segmentation
Age
Gender
Family size
Family life cycle
Income
Occupation
Education
|
|
·
Behavioral segmentation
Occasions
Benefits
User Status
Usage rate
Loyalty
Status
Readiness
Stge
Attitude
|
Since chocolate is the product I decided
to segment market by using combination of Demographic and Behavioral
segmentation variables. Under Demographic segmentation, I use Age and Income.
Age can segment kids, teenagers, young, middle age and elder. Income can
segment lower income range, middle income range and upper income range. In the
behavioral segment, different types of occasions which people facing day to day
life and the benefits of the product which are expected by customers.
2.1.2. Customer
needs
Needs of chocolate customers are varying
on different aspects. They are
v Good
taste
Most
customers expect out of a chocolate product is good taste. That means our
product should bring natural cocoa taste consistently.
v Nutritious
In
modern society most of customers concern about nutritious level of product when
they purchasing or consuming product. So that our product should provides
essential nutritious requirements of a chocolate to the consumers. Not only
that but also it should not be harm to the consumers health.
v Fulfillments
of required standards
Most
of consumers expect fulfillment of international and local standards such as
Sri Lanka standards (SLS), ISO, HACCP.
v Attractive
design
Design is an
essential part of a chocolate. Because some people use chocolate as a gift as
well as kids are major target consumer group of chocolate so it should be attractiveness.
2.1.3. Factors
in the marketing environment that may affect customer purchasing
The market environment is factors and forces that affect a firm’s
ability to build and maintain successful relationships with customers. To success
in business, it is essential to study its environment. Marketing environment
consist micro environment and macro environment.
Micro
environment
The micro environment refers to the forces
that are close to the company and affect its ability to serve its customers. It
includes the company itself, its suppliers, marketing intermediaries, customer
markets and publics.
Ø Customers
Customers are people who consume chocolate.
Among those kids and teenagers are special. So it should clearly understand
needs and wants of those and satisfy them in excellent way.
Ø Suppliers
Suppliers those who supply
materials such as cocoa, sugar, milk, chemical flavored and etc, to the company
to produce chocolate. Company’s production process depends on supplier’s
efficiency so that company should manage properly supply chain.
Ø Competitors
Organization should pay its
attention about their competitors while doing a business. Competitors are most
power full party, because they can drag the customers by using better marketing
and customer satisfaction. Since we are producing chocolate, there are several
powerful competitors such as EDNA, Kandos, Ritzburry, Revello and etc. If the
company faces to the competition properly, it can take competitive advantages.
Ø Distributors
Distribution is the process of making a product or service available for use or consumption by a consumer. Company should select proper distribution channels which can deliver chocolates to the company’s target customers. As well as company should select number of intermediaries and types of intermediaries which can deliver quickly and safely to the market and cost effective way.
Distribution is the process of making a product or service available for use or consumption by a consumer. Company should select proper distribution channels which can deliver chocolates to the company’s target customers. As well as company should select number of intermediaries and types of intermediaries which can deliver quickly and safely to the market and cost effective way.
Macro
environment
The
major external and uncontrollable factors that are influence an organization's
decision making, and affect its performance and strategies. We can classify
them as
I.
Demographic forces
II.
Economic forces
III.
Natural forces
IV.
Technological forces
V.
Political forces
VI.
Cultural forces
Demographic
environment
The demographic factors of the market
which an organization operates and which are used to segment the target
population for effective marketing. Population growth and size affect to the chocolate
market. By analyzing age structure and income Distribution Company can produce
most suitable chocolates production in appropriate way to each person who is in
different level of demographic segments.
Economic
environment
The totality of economic factors, such
as employment, income, inflation, interest rates, productivity, and wealth,
that influences the buying behavior of consumers and institutions. If there is
a low inflation rate customer’s real income is high so that will lead to do
purchase more.
Technological
environment
External factors in technology those
impact business operations. Changes in technology affect how a company will do
business. Company can provide products low price by using new technological
theories which affect to the chocolate manufacture.
2.2. Competitors’
analysis
Competitor analysis in marketing and
strategic management is an assessment of the strengths and weaknesses of
current and potential competitors.
2.2.1. Major
competitors
According to our company, we have
several powerful competitors. They are Kandos, Edna, Ritzburry, Cadbury India,
Ferrero Rocher Company in Sri Lanka and etc.
Ritz
burry
Ritzburry positioning with “specially chocolates”.
They have exquisite chocolates, made out of their own recipes, and come in
various ranges and flavors to suit every ones needs and palates, such as liquor
chocolates, assorted chocolates, chocolates for kids and many more ranges of chocolates.
While maintaining are their constant standard of quality special orders would
be undertaken mainly on wedding orders, corporate functions, birthday parties
and many more events where you would cherished to have chocolates molded for
your ultimate satisfaction.
Kandos
Kandos is positioning with “The original
chocolates”. Ceylon chocolates is a subsidiary of the prestigious Upali Group
and is the leading chocolate Manufacture and Marketer in Sri Lanka under the
Brand name "Kandos" and "Delta" confectionery which is one
of the most popular brands in the sugar confectionery category. Ceylon Chocolates
Ltd. has recently modernized their Chocolate manufacturing process using state
of the art Technology and Machinery. "Kandos" Chocolates are produced
using 100% cocoa Butter, which comes from scientifically processed high quality
cocoa beans retaining the natural cocoa flavor and nutritional value.
"Kandos" Chocolates are now exported to many countries under the
brand name "Kanba". Upali Foods & Beverages (Pvt) Ltd.
Kandos chocolate distribute by through
the retailer then to the customer. They also use value base pricing method for
their products. Kandos chocolate promote through the TV advertisement and
newspaper advertisement.
Edna
The positioning of Edna is “The brand
you have come to love and trust”. Edna Group had its beginning way back in 1952
when it commenced business as manufacturer of Chocolates and confectionery.
Today, Edna Group is one of the largest diverse conglomerates in the Sri Lanka
committed to give customers an enriching experience through a winning
combination of innovative offerings, high quality service and excellent value
for money. Edna chocolate distribute by through the retailer then to the
customer. They use competitor pricing method and customer value base pricing
methods. Edna chocolate promotes through TV advertisement, newspaper
advertisement and Edna chocolates in collaboration with Disney International will be launching a new sticker campaign. This
campaign will initially consist of characters from 7 popular Disney Cartoons;
Disney princess, The Lion King, Pixar Cars, Hannah Montana and micky.
Cadbury
"A glass and a half of milk in
every half pound bar of chocolate". Cadbury Dairy Milk chocolate was launched
in 1905 and became an instant success. Made with fresh milk from the British
Isles, and Fair-trade cocoa beans, Cadbury Dairy Milk remains one of the UK's
top chocolate brands, and it also huge share of Sri Lanka chocolate market.
Cadbury chocolate comes through the
agent then to the whole seller then to the retailer and finally to the
customer. Cadbury chocolate mostly sell from the super markets in Sri Lanka.
Cadbury chocolates have high price for emerging their product quality. Cadbury
use TV commercial and News paper advertisements to promote chocolates.
2.2.2. Competitor positions
Figure 1.1:
Competitor positions
3. Threats and
opportunities analysis
3.1. Assess
major threats and opportunities that the product might face
Threats
Due to Competition
Ø There
are lots of competitors who are using new technology in the fields of
production, distribution, research & development and promotions.
Ø Competitors
have high financial strength for their every activity, so that they can use
their funds for any activity to perform in excellent way.
Ø They
allocate funds for research and development to improve quality and reduce cost
to deliver a high quality product to customers.
Ø They
have consisted with experienced, well establish, formal channels which is distribution,
communication and service as well.
Ø They
have an effective supply chain which supply quality raw materials and other
components to the company in right time.
Ø They
have experienced, developed staff which know new techniques of Chocolates
production.
Due to customer
Ø Chocolate consumption reducing due to the
negative impact of opinion leaders such as doctors and dentists.
Ø Trend
where people are becoming more health conscious could have an adverse impact on
Chocolate consumption.
Ø Chocolate
customers are high loyal in existing brands and it is difficult to get away
from those brands.
Due to government
Ø Government
taxes on import raw materials and value added tax (VAT) may cause on the cost
of the product and final price of the product.
Ø Government
imposes regulations to protect customers, so company has to perform according
to those regulations.
Opportunities
Ø Better
chance of expanding due to the Sri Lankan Chocolate market potentially
expanding in the future.
Ø Using
the fact that we are using a better cocoa in our promotion in order to capture
market share.
Ø There
is a good market opportunity for nutritious Chocolate which is not in Sri
Lankan Chocolate market.
Ø Chocolate
is good for people’s health. So we can promote that and expand market share.
Ø We
can arrange our product line in eco friendly way and promote it to the purpose
of maximizing market share.
Ø Expanding
of occasional opportunities, such as birthdays, valentines, anniversaries and
etc celebrations.
3.2. Potential environmental/ social/ cultural impacts of the
new product concept
Impact to environment
·
Company deals with green concept so that
company use recyclable materials to less harm to environment
·
Maintaining good waste management to
keep environment clean
·
Container and packaging of the chocolate
cause land pollution
Impact to social
·
Reducing the unemployment in country
because company wish to recruit about 300 labors.
·
Company’s healthy product doesn’t create
harm to health of people.
·
Company wish to give sponsorship to school
sports to improve the ability of student by this new product concept.
Impact to culture
·
May be discouraging natural foods like
fruits
·
Changes in food pattern of people
4. Objectives and issues
4.1. Marketing objectives
·
Capture market share
We
hope to capture 10% market share out of DairyCova market in introducing stage.
·
Achieving profit
We
don’t expect much profit at our introduction period. But after advertising and
sales promotion the profit will increase.
·
Increase the quality
We
use high quality raw materials, adding nutritious ingredients, new technology
and experienced employees to the purpose of increase our product quality.
·
Improve the quality of employees through
training and development
·
To create a service-based company whose
primary goal is to exceed customer's expectations
4.2. Issues that
will affect their attainment
·
Company has to face huge competition
with several strong brands when the introducing stage, there are strong
international brands such as Cadburry, Mars, Snickers and local brands like
Ritzburry, Kandos, Edna.
·
Lack of the skilled labor
·
Government rules and regulation
·
Difficult to find natural flavors such
as natural cocoa
.
5. Marketing
strategy
5.1. Target
market/s
Based
on demographic segmentation our target market includes people who willingly buy
DairyCova due to various reasons.
Age
group
-
Children who are below age 5
-
Children who are below age 5-14
-
Young generation
-
Elder generation
We
selected these categories because there is a high tendency for them to buy Chocolates.
Income level
We
have design wide variety of DairyCovas that are affordable to the all level of
income. We have planned to manufacture & sell high quality Chocolates at
high price as well as lower expensive Chocolates to the lower price.
Occasion
We
have design verity of Chocolates suite for different occasions such as birth
day, valentine, anniversary, etc.
5.2. Positioning
5.2.1. Customer
value
Our
company main focus is to achieve success through customer satisfaction.
Therefore always we trying to provide value added products to our customers.
Company’s
entire production process carryout towards the high quality products. Because
as a marketing department we hope consumers are the “KING” of the company &
Success of the company depends on those consumers. We have designed our recipes after analyzing
the customer requirements and our department planned to create slide modifications
to the chocolate recipes over the time to give additional taste to the
customers.
5.2.2. Competitive
advantage
Through
different perspective company tries to achieve benefits against competitors.
One of them is low price charge for the chocolates. Our company has to compete
with local as well as multinational competitors also. Therefore until getting customer
loyalty, we should have to chare relatively lower price and get the competitive
advantage.
And
also through high quality of the product company trying to achieve competitive
advantage. Argument is when we trying to achieve high quality, automatically
cost per unit could be increase. So certain necessary strategies & actions
have been taken to reduce the cost as much as possible, and hence reduce the price.
And also high quality products give advantage of creating customer loyalty. The
loyal customers are assets to the company.
In
addition to we have to plan to distribute our products using innovative
distribution channels. For that company has planned to get in to agreement with
cinema theaters, schools, hospitals to place the small vending machines. Until
now any competitive organizations not implement this strategy in Sri Lanka.
Therefore we hope this can be great strategy to the take competitive advantage.
According
to the market research shows that current competitors charge relatively higher
price & their quality is relatively lower than what we plan to operate.
Therefore I can clearly after launching our products, it will easy to take
competitive advantage using above mention strategies.
5.2.3. Positioning statement/ slogan
According
to our slogan “The taste that never forget” our product gives to customer
maximum taste and high nutritious of natural cocoa that use to produced our
Chocolate and consumers can feel the taste of our Chocolates only from our
company, not others
5.3. Product
strategy
5.3.1. Product attributes
5.3.1.1. Quality
Due to high level of competition,
company focus towards the high quality. Therefore company planned to take all
possible tactics to achieve required quality. And also we have planned to maintain
our manufacturing process under the requirement of ISO & SLS.
5.3.1.2. Features
In order to attain to objectives of DairyCova,
we have come up different strategies & there main focus on product
development, innovation. We are mainly focus on innovative products &
packaging.
Customization- Our Company is customized due
to different product offerings for different age group
Reliability- Our Company has reliable
products range.
5.3.1.3. Style, Designs
We
have well established designing team within the company. They have design the
products in interesting manner to attract all level of customers.
5.3.2. Branding
I
am planning to use fresh milk and pure cocoa powder as main ingredients. According
to those product attributes I select “Dairycova” as our brand name. “Dairy”
emphasizes milk and “cova” emphasizes cocoa. The importance of this brand is
easy to translate any language. The colors I have designed Blue as friendship
and affection, Red as love, White as fresh and cleanness, Brown hint as color
of chocolate. My slogan is “The taste
that never forgets”. Using this slogan we are trying to indicate our taste
of Dairycova and customers can select what they are further preferences from
chocolate.
5.3.3. Packaging
We decided to improve packaging design by
adding graphics or caricatures to the original label & making a re-sealable
pack and reducing the cost of packaging by using cheaper resources as well as
materials that safe for the environment. We have design the package to protect Chocolate
from deteriorating effect more importantly attract the customers.
Our
company plan to use 3 types of packages for DairyCova. They are,
-
Primary package for protect the content
from the humility, infestation, bacterial infections etc:
-
Secondary package contain 24 Chocolates
& this will include brand name and logo of the company.
-
Shipping package contain 30 secondary
packs of DairyCova. We plan to use these packages when we export or distribute
our products to gain advantage of store & product security.
5.3.4. Labeling
Label
is describing our product. By packing including the natural value we give
awareness to customer. We are use label as a part of package. This will include
following information’s.
-
Brand name
-
Logo
-
Price
-
Batch no
-
Manufacturing date
-
Expiry date
-
Ingredients
-
Contact number
5.4. Pricing
strategy
5.4.1. Pricing
objective
·
Survival in the market
Our
company plan to earn sufficient revenue to run the business. Therefore company
should price the products even covering the variable cost & some of the
fixed cost. If company cannot recover variable cost it is difficult to survive
in the market.
· Maximize
the market share
This
is where company tries to maximize market share subject to a minimum profit
constraints. We expect when we offer our products at a lower price, we can
attract large no of customers. The maximization of the market share is the main
objective of the company rather than the maximizing the current profitability.
We are launching existing products category that are manufacturing by the
competitors. Therefore our main vision is take the competitor market share
& increase our market share.
5.4.2. Pricing
methods
Our company launching existing product
category, making some slide differentiation. But our DairyCova has to face
large competition from the multinational competitors who are manufacturing Chocolates.
·
Value pricing
This is where introduction period we
have plan to charge lower price. Otherwise we cannot face the competition. In
this situation price competition is the best way to capture the customers.
·
Ongoing pricing
And
also when preparing the price of the products, we observe competitors pricing
strategies also. Based on competitor’s price, we set relatively lower prices to
our products.
5.4.3. Pricing
strategies
·
Penetration strategy
Our company use market penetration
strategy as the pricing strategy. We are planned to use both technical
strategies of the penetration short term as well as long term. Where company
decided to charge relatively lower price in introduction stage & after getting
customer loyalty we can increase price of the Chocolates. In this method we
cannot increase the price of the Chocolate without getting customer loyalty. If
we increase price without loyalty, customer immediately shift to another
competitor.
As well as at the same time we can
reduce the cost of the Chocolates also. Through economic of Scale Company
planned to reduce the unit cost of Chocolates. Therefore introduction period
company makes losses & after certain period we can make lot of profits.
Figure
1.2: Penetration Strategy
·
Price discrimination
The
focus of the company is not restricted to local market, but it also planned to
enhance it to international market. We are planning to implement price
discrimination strategy with regard to the pricing of the product
internationally. Average income level of
the selected countries is considered as the basis for this segmentation. In
that the product is priced at a relatively higher price for the high-end
countries where as lower price charge from low-end countries. T he planned
pricing strategy will help to company to offset the revenue reduction from
low-end countries & ensure stable profitability.
5.5. Distribution
Strategy
5.5.1. Distribution
strategy & plan
My
company has decided to make available our DairyCova products to the customers
through whole sellers & retailers. Therefore we have planned to sell
directly to the whole sellers and retailers. At the movement company gets in to
contract with 150 large whole sellers and around 1000 retailers too. Company
has planned to use the following distribution channels.
-Retail
outlets (Super markets & convenience stores)
-Points
of sales display (Racks & stands).
-
Also our company has recommended the use of small vending machines exclusively DairyCova products. That will be
placed in different public areas such as school canteens, airports, hospitals,
shopping complex, film halls, etc.
5.6. Communication
Strategy
5.6.1. Communication
Objectives
To
promote brand name of company products & Create brand loyalty to our
products.
-To encourage repeated and multiple
purchase of company products.
-To promote sales of the products
& increase the market share.
-Give some information about the
company, as well as the company products.
5.6.2. Used
promotion mix elements
·
Advertising
Our
company plan to use both television advertisements & print advertisements.
Using different television advertisements company try to communicate the
massage to the different market segments of the market. Where company has
design advertisement focusing younger generation, elder generation &
children’s.
On the other hand company plan to
used printed advertisement also. For this purpose company planned to place DairyCova
advertisements in magazines & newspapers.
·
Sales promotions
We
have planned to carry out variety of short term incentives to encourage trial
purchase of our products. Through sales promotion we expect to position DairyCova
as an increasingly visible brand name within the market. As well as we expect
to gain trust & familiarity from the target market contests & free
sample to the customer.
·
Event & experience
For
the purposes of ginning the brand loyalty we plan to carry out company maintain
games, events & give pack of DairyCovas, who winning the games (This is
specially for the Children).
5.6.2.1.
Communication massage, Media
We
should provide a clear message to target audience that brings our products
value to the customer. Company need to provide a message to customers that
company use real natural cocoa that cultivate Sri Lanka itself and company’s
special edition of Chocolate like sugar free Chocolate and energetic Chocolate.
Medias
Broadcast-
Television, Radio, Internet
|
WHAT?
|
WHEN?
|
WHO?
|
HOW
MUCH?
|
|
Advertising
|
1st
of January - 31st of March
|
Advertising
Department
|
1
Million
|
|
Sales
promotion
|
2nd
of February - 2nd of March
|
Marketing
Department
|
0.2
Million
|
|
Events
and experience
|
14th
February (valentine’s day)
14th
April (new year day)
|
Public relationship
Department
|
0.1
Million
|
Print- Newspapers, Magazines
Packaging-
Add graphics
In
store- Posters,
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