Blue Shark Company’s Marketing Plan

Executive summary

The marketing plan relates to Blue Cap Limited which operates within the UAE beverage industry. In an effort to effectively penetrate the market, the firm intends to launch a new energy drink branded Blue Shark. The report entails a number of sections. The first section entails a situational analysis to evaluate both the internal and external business environment. Situation analysis is conducted through incorporation of a number of models which include the Porters five forces, SWOT analysis and the PESTLE model and competitive profile matrix.

In addition, the report also includes a macroeconomic analysis. To ensure that the energy drink is effectively launched, the report includes the marketing strategy adapted by the firm. The four components of the marketing mix which include price, product, promotion and place are considered in developing the marketing strategy. The firm’s management team has also realized that for the product to be effectively launched a high degree of organization is necessary. In addition, the report also includes the control and implementation strategies. Finally, a conclusion and a set of recommendations are also given.

Situational analysis

Blue Cap Company is a private limited company which operates within the United Arabs Emirates (UAE) energy drink industry. The firm was established in 2000 and has had an effective performance over the years it has been in operation. In its operation, Blue Cap specializes in production of a variety of energy drink. In an effort to increase its market share, the firm’s management team has made a decision to introduce a new product. The new product will be branded ‘Blue Shark’.

The energy drink market in UAE has witnessed a rampant growth over the past few years. This has resulted from an increment in demand. The industry consists of a large number of smaller and segmented players. The large number of market players has resulted from the lucrative nature of the industry. A large number of investors have been attracted into the industry due to its profit potential. Some of the major firms in the industry include Coca-Cola, PepsiCo, The Gatorade Company, and Redbull GmbH.

Market analysis using Porter’s five forces

The high level of revenue within the industry is culminating into an increase in the degree of rivalry amongst firms within the industry. Rivalry is also increased by existence of other large players such as, Coca-Cola, Red Bull GmbH and PepsiCo Incorporation. This makes competition between firms to be intense in an effort to attain a high market share. Increased rivalry within the market has culminated into price war between firms so as to maintain their profitability level.

The industry is also characterized by a large number of substitutes. This results from emergence of other types of beverages such as coffee and tea beverages. However, there is a high probability of growth in this market segment. This will result from the fact that consumers are becoming more conscious with consumption of healthy products.

Supplier power within the industry is relatively low. This is due to the fact that there are a larger number of suppliers for equipments necessary for the production of beverage drinks. This makes it possible for firms in this industry to easily switch from one supplier to another which means that supplier power is low. On the other hand, buyer power is high. For example, institutional consumers purchase beverage drinks products in large volumes. This makes them to be able to purchase the products at a lower price (Meghan 6). Buyer power is also enhanced by the facts that there are a large number of substitute products in the industry. This makes the customers switching cost to be relatively low since they have a wide range of beverage products to choose from.

Meghan et al (5) asserts that there are a number of barriers that prohibit potential investors from venturing the industry. One of these barriers relates to competition. Venturing the industry requires a huge financial investment and the establishment of efficient distribution networks. In addition, there is difficulty in the ease of exit for firms in the industry. The effect is that there is an increment in the number of firm’s venturing the industry.

Macro-economic analysis

In its operation, Blue Cap Limited has appreciated the fact that firm’s operations are affected by various issues arising from the macro-environment. These issues relate to the political, economic, social, technological and legal environments. In order to gain a comprehensive analysis of the external environment, the firm has incorporated the PESTLE model.

Political environment

UAE has witnessed political stability over the past few years. This arises from the government’s recognition of the fact that political stability is vital for a country’s economic growth. As a result, the government has established strong local and federal systems. There is a high level of synergy between the two systems of governments which results effectiveness in policy formulation and implementation. Considering the fact that the external environment is very dynamic, the government has undertaken constitutional reforms both at the local and federal levels. The reforms are aimed at making the country’s political system a factor enhancing social economic changes. The resultant effect is creation of an environment effective for investment in different sectors (UAE Interact para. 1).

Economic environment

Oil contributes a significant amount to the country’s Gross Domestic Product (GDP). Considering the increasing demand of oil, the country has undergone a tremendous growth. For example, in 2008, the country’s GDP grew with a margin of 23%. The growth arose from both the oil and non-oil sectors. Despite the global decline in oil prices as a result of the economic downturn, the country’s economy was not adversely affected. For example, in 2009 the country’s GDP grew with a margin of 7.4 %( UAE Interact para. 1).

The growth arose from the strong oil prices during the last half of 2008. As a result of economic growth, the country has experienced a rise in the level of consumer spending. This arises from the fact that the consumer’s level of disposable income has been increased. It is estimated that the trend in the country’s economic growth will continue with a margin of 6-7% until 2012(UAE Interact para. 1).

Social environment

The largest proportion of UAE population is Arabic. In Arabs countries, consumption of alcohol is prohibited. This creates an environment conducive to introduce non-alcoholic drinks such as energy drinks. In order to understand the social environment, a primary market research conducted by the firm. The research entailed a survey of 20 respondents on the social environment in UAE. A questionnaire was developed regarding the society’s perception of soft drinks. The primary research considered respondents of diverse age. This enabled the researcher to gain a comprehensive understanding of the society’s perception of soft drink across diverse ages. The findings of the research revealed that different consumers are incorporating energy drinks in their consumption pattern and culture (Goldie 3).

A survey carried out by Blue Cap Company in June 2009 to determine the consumers’ preferred soft drink.

Respondents’ Preference
A survey carried out by Blue Cap Company in June 2009 to determine the consumers’ preference for energy soft drinks.In order to determine the factors contributing to the trend, the firm conducted a consumer market research. Most of the respondents cited that the country is relatively hot and hence there is need to hydrate their bodies. Most of the consumers who were interviewed said that they need something which would quench their thirst.

Reasons cited by Respondents
Technological environmentAs a result, there has been a general increase in demand for energy drinks in UAE. According to Badih (1), UAE consumes approximately 12 million liters of energy drinks annually.

The technological environment has witnessed a rampant growth. This has stimulated the performance of firms in different economic sectors. For example, the emergence of electronic commerce has improved the marketing effectiveness of firms. This arises from the fact that firms are increasingly incorporating electronic marketing practices such as internet selling.

Legal environment

The government has endeavored to ensure that the energy drinks offered to the consumers remain safe. In this regard, the ESMA (Emirates Authority for Standardization and Metrology) is mandated with the task of ensuring that those firms that manufacture energy drinks have their production processes installed with technical regulations. In addition, the government issued handling regulation of the energy drinks to ensure product safety. All the firms dealing with production and supplying energy drinks were given a time frame of six months from June 2010 to October 2010 (Khalej Times 1).

With regard to quality, the regulation also stipulates the standard amount of ingredients. The caffeine content in the energy drink should not be more than 32 milligrams, while anistol and gloconolacotine should not exceed 400 milligrams and 240 milligrams respectively. Moreover, it is also a requirement of the regulation that firms warn the customers of against the consumption of energy drink incase they are pregnant, have allergic reactions to caffeine, have heart problems, or have an allergic reaction to caffeine (UAE regulation for energy drinks issued 1).

SWOT Analysis of the firm

There is a high probability of the firm succeeding in the market despite the increase in competition. Below is a table on the SWOT analysis of the firm in question.

Strengths
  • Strong management team which enables the firm to effectively formulate and implement various operational strategies.
  • The firm has been involved in sponsoring various events such as sports. This has enabled the firm to penetrate the market effectively.
  • The firm has a well established distributional channel which ensures that its products are easily accessible in the entire market.
  • Product diversification strategy which has enabled the firm to effectively address customer requirements.
  • The firm has integrated the concept of corporate social responsibility. For example, the firm ensures that all its operation do not result into environmental pollution.
  • The firm has developed a strong brand recognition and market reputation.
Weaknesses
  • The drink has not penetrated the entire global market.
  • The firm’s financial stability is relatively low compared to large firms in the industry such as Coca-Cola.
Opportunities
  • Increased demand for non alcoholic products.
  • High probability of success through value addition. This will result into increased customer loyalty.
  • Increased market potential through incorporation of electronic commerce. This will result into an increment in the size of the drink’s market share.
  • The management of the firm can retain its market share through product-line extension.
Threats
  • Increase in competition from large firms and the new entrants.
  • Increased competition from other beverages such as coffee and tea.
  • Change in tastes and preferences amongst the consumers
  • Decline in consumer purchasing power due to financial crisis.

Marketing objectives

In introducing the new product into the market, the firm’s management team intends to achieve a number of objectives as outlined below.

  • The firm intends to attain a market share of 25% within a period of one year.
  • By marketing the Blue Shark, the firm intends to increase its revenue level with a margin of 30% within a period of one year after launching the new energy drink.
  • The firm is also committed at ensuring that customers attain a high level of satisfaction. In order to achieve this, the firm’s management team has integrated the concept of customer focus..

Target markets

In marketing the energy drink, Blue Shark management team has targeted individual customers aged between 18 to 40 years. Targeting these customers arose from realization of the fact that these individuals require a substantial amount of energy as a result of their active nature. In addition, by targeting this group the firm intends to achieve a high market share. This arises from the fact that the demographic characteristic of UAE. A large proportion of UAE citizens are youths.

Reasons cited by Respondents

Extracted from the National Statistics Center for the Government of Dubai, page 4.

Marketing Mix

In an effort to ensure that the new product succeeds upon being launched, the firm’s management team has developed a comprehensive marketing strategy. This is attained through incorporation of the marketing mix.

Product

The firm’s management team has realized that in order to achieve an effective market share, the consumers’ must develop a positive attitude towards the energy drink. In order to achieve this, the firm has formulated a comprehensive positioning statement. By producing the energy drink, the firm will be able to provide this to the customers.

A survey carried out by Blue Cap Company in June 2009 to determine the consumers’ preference for energy soft drinks blended with diet drinks.

Respondents’ preference
In addition, quality control will appeal the customers considering the increase in health consciousness. The energy drink will be packed in small cans which will be well sealed to ensure product safety. The packaging will contain product information such as the ingredients used in producing the energy drink printed on the side of the can. This will ensure that the customers are aware of the energy drink content. Various flavors will be used in producing the energy drink. This will contribute towards the energy drink meeting the market demands.Through a consumer market research, the management of the firm realized that consumers expect to receive value for their money in their purchasing pattern. As a result, the management of the firm will ensure that expertise is implemented in the process of producing the energy drink. Quality control will be conducted in the entire energy drink production process. This will ensure that the energy drink is of high quality.

Changes in consumer consumption pattern can result into a firm losing its market share. To safeguard against this, the management of the firm has integrated the concept of value addition. This will be achieved through continuous research and development in relation to the energy drink. This will enable the management to conduct effective innovation to the energy drink. In addition, product innovation will safeguard Blue Shark energy drink from losing is market share due to changes in tastes and preferences.

Pricing strategy

The management of the firm conducted a consumer and competitor market research before setting the price of the energy drink. The competitor analysis was aimed at identifying the pricing strategy of its competitors. With this market information, the management of the firm will be able to set the price more effectively.Findings of the market research revealed that consumers are price sensitive. As a result, the management team of Blue Cap Limited will incorporate penetration pricing strategy. The strategy will involve setting the price of the energy drink at a relatively low price compared to that of the competitors.

The low price will act as an incentive to potential customers to purchase the energy drink. In addition, the management of the company will integrate psychological pricing concept in setting the price point of the energy drink. This will involve setting the price of Blue Shark energy drink can at AED1.99.Psychological pricing strategy will ensure that the set price appeals the emotions of the consumers in their purchasing patterns. In addition the management of the firm has considered the cost of producing the energy drink by incorporating the concept of cost plus. The cost involved will be integrated in the

Promotion strategy

Market communication plays a significant role in the success of a product in the market. Considering the competitive nature of the industry; the management of Blue Shark has formulated a comprehensive promotion strategy. The strategy is aimed at ensuring that there is effective market awareness.

Market awareness will be conducted by integrating both the traditional and emerging market communication techniques. The management team has considered using various mediums in conducting advertisement. The traditional mediums of market communication considered by the management include use of television, radio and print media such as newspapers and magazines. The management team has also considered integrating emerging information communication technologies. To achieve this, the management of the firm has considered integrating the concept of electronic commerce. This will be achieved by using the internet to conduct its electronic marketing. The firm will market its product through its website. This will be attained through posting information related to the firm on the website.

In addition, the management of the firm has considered integrating emerging social networking tools such as wikis, blogs, MySpace, Twitter, YouTube and Face Book. Use of wikis and blogs will enable the firm to conduct effective market awareness. This is due to the fact that the wikis and blogs will act as interactive and informative tool. Wikis and blogs will enable the customers to communicate their views about the energy drink by posting their comments on these tools. By using YouTube, the management of the firm will be able to create market awareness to a wide number of customers. This is due to the fact these tools are accessed by a large number of individuals daily.

The management will also enter into a contract with major search engines such as Yahoo. The contract will entail posting product information on the sites of these search engines.

In creating product awareness to institutional customers such as sports clubs and schools the management of the firm will use personal selling. This will entail oral communication with the management of these institutions. Through personal selling, the management will be able to understand the purchasing behavior of the institutional customers. This will serve as the initial stage in the process of closing a sale with the firms.

Before the launch of the energy drink, the firm will conduct outdoor campaigns so as to inform people of the presence of the energy drink in the market. During the campaign, the firm will offer free samples to the customers.

Distribution strategy

The management team of the firm is committed at ensuring that the energy drink is accessible in the entire energy drink market in UAE. To attain this, the management team of the firm has formulated a comprehensive distribution strategy. The strategy will integrate both direct and indirect forms of distribution. Direct distribution methods will be used within the local market. This will be attained by incorporating vertical distribution system in its supply chain. The energy drink will be supplied to wholesalers and retailers in the entire domestic market. In addition, the management of the firm will open distribution outlets in all the regions of its domestic market.

Organization, Implementation and control

According to Wilson and Gillingan (670), a marketing plan must be well implemented and control to ensure that the product being introduced is successful upon being launched. Wilson and Gillingan (670) assert that the implementation defines the day to day activities which will contribute towards the plan’s success. The implementation process is significant in marketing since it turns the plans into actions. In addition, implementation is paramount in contributing to the success of a firm’s marketing plan. This is due to the fact that the probability of market failure is high during the operation phase compared to planning phase.

To ensure that the plan is well implemented, the firm’s management team has developed an implementation plan which will ensure effective execution of the developed strategies in relation to marketing Blue Shark Energy Drink. The Implementation plan entails a schedule which defines the activities to be undertaken. This results from the realization of the fact that assumption of that the entire marketing personnel will contribute towards the successful implementation of the firm could result to its failure. The table below illustrates the activities which will be undertaken and the time in which they are expected to commence.

Activity Time period
Selection of the sales team By 19th December 2010
Training the sales team on the marketing activities By 20th December 2010
Formulating an incentive plan for the marketing department By 23 December 2010
Availing the sales team with a program describing the entire marketing project By 28thDecember 2010
Official launching of the energy drink January 4, 2011
Launch of promotion through television, radio, newspaper and outdoor advertising, sales promotion January 4, 2011
Advertising through social networking tools By 27thDecember , 2010
Designing and launching the firm’s website By 28thDecember 2010

In and effort to that Blue Shark is successful upon being launched, the firm’s management team has allocated a substantial amount in its marketing budget as illustrated below. An additional amount has also been set aside to cater for possible deviations in the expected cost.

Cost item Amount in AED
Cost of consumer market research 150, 000
Cost of competitor market research 140,000
Internet marketing (use of Google and
Yahoo)
450,000
Social networks (YouTube,Facebook, Wikis, Blogs, Twitter, MySpace) 1,000,000
Sales promotion and personal selling 100,000
Advertising
  • Print media (Newspaper, Magazines, Bill boards)
  • Promotional campaign (free samples)
 

500,000
50,000

Total estimated cost 2,390,000

Upon implementation of the marketing plan, the firm’s management team must undertake a comprehensive control. As a result, the firm’s management team has integrated the concept of marketing control in marketing Blue Shark energy drink. Through marketing control, a firm’s management team is able to monitor the entire implementation process. As a result, the management team will be able to mitigate the probability of deviations from the set plan. The ultimate result is that firm will be able to attain the set goals. To ensure effectiveness in the control process, the firm’s management team will undertake a number of activities which entail measurement, evaluation and monitoring. Some of the control activities to be undertaken are illustrated below.

Control element Performed by Frequency
Market share analysis Marketing manager Monthly
Sales analysis Marketing manager Quarterly
Customer satisfaction Marketing manager Quarterly

The firm’s marketing department will conduct an analysis of Blue Shark market share compared to those of the competitors from time to time. This will enable the management team to assess the progress of the new energy drink in the market. Through market analysis, it will be possible for the firm’s management team to determine whether Blue Shark has successfully penetrated the market. The percentage of market share attained by the new energy drink will serve as an indicator with regard to the degree of market acceptability. The table below illustrates the intended control processes.

The firm has also integrated the concept of brand management in its control process. This will be achieved through consideration of brand identity, Brand identity refers to the promise given the management to its customers in relation to its products. Blue Cap Limited will ensure that it delivers these promises to its customer.

This arises from ensuring that the quality of Blue Shark is high and that that it meets the customers’ requirements. This has also been achieved through development of a catchy slogan. The firm will also ensure that it creates a positive image amongst the consumers through constant advertising and adoption of a consistent product theme. In producing Blue Shark, the management of Blue Shark energy drink will ensure that it develops a strong brand culture through integration of market research.

Conclusion

From the analysis, there is a high probability of Blue Cap succeeding upon launching the new energy drink in UAE. This arises from the fact that there is a change of trend amongst the consumers especially with regard to energy drink. A large number of individuals are increasingly incorporating energy drinks in their consumption patterns. In addition, the country’s culture supports consumption of non-alcoholic drinks. By launching Blue Shark, there is a high probability that a large number of individual and institutional consumers will be appealed.

However, the success of the product in the market will depend on the effectiveness with which the firm’s management team will conduct a market analysis. This will ensure that it identifies market trends effectively. As a result, the firm will be able to adjust its marketing strategies appropriately. To ensure success of the product, the firm should implement an effective implementation and control strategy. The strategy should be evaluated from time to time to determine its effectiveness.

Works Cited

Badih, Samia. UAE consumes 12 million liters of energy drink every year. Web.

Goldie, Luan. Energizing the UAE: the consumption of alcohol is a haram, forbidden for Muslims. In the UAE high energy drinks have soared in popularity to become a fashionable part of the Emirates culture. 2005. Web.

Government of Dubai. Population: Emirates of Dubai 2008. Dubai: National Statistics Center. 2008. Web.

Khalej Times. UAE regulation for energy drinks issued. 2010. Web.

Meghan, Danson, Emily, King, Leslie, Peter and Kelly, Zech. Industry analysis: soft drink. 2006. Web.

UAE Interact. Abu Dhabi is planning to achieve growth by 6-7% in real GDP over the period 2008 -2012. 2010. Web.

Wilson, Richard and Gilligan, Colin. Strategic marketing management: planning, implementation and control. Massachusetts: Butterworth Heinemann, 2005. Print.