Company Back Ground
The Golden Circle Company (GCC) is one of Australian fine fruits and vegetables manufacturer, which produces more than fifteen varieties and one of the largest pineapple processor. Located in Northgate a northern suburb of Brisbane the company has started operated since 1947. The company has more than seven hundred growers all over Australia who supply premium fruit and vegetables to the GCC1. Apart from pineapple, GCC processes huge range of fruit such as mango, apple, and small amount of bananas, strawberries, peaches, passion fruit, apricot, papaws, and plums, peach, others type of vegetables as the main ingredient of their juice product. The company’s Tetra Brik modern plant is one of the largest producers in Australia where almost forty two million litres of fruit juice drink packaged in to four types of size by using recyclable materials.
Golden circle offers more than four hundred products of processes and chilled food including vegetables, cordials, soft drink, jams, and fruit juice, which wrapped exclusively in cans or glass and plastic tubs. Although all the products are processed but Golden Circle is committed to have a reliable manufacturing and processing quality food for all their consumers’ worldwide.
The product range has serve different type of market segment in Australia and other countries as the product is offering the enjoyment of consuming fresh fruit in more easy and practical way. GCC has exported for more than 30 countries around the world the array package products that would export juice and nectars, jams, canned fruits, fresh citrus, and baby food.
Focusing on high quality juice product and emphasizing the trustworthiness of Australian Brand golden circle has proving their credibility by accredited with Australian quality assurance program under the safe quality food 2000 and international food safety and quality standards which is mandatory for international trade.
Golden circle international mission is to be a world completive market driven company by always trying to compelling customer needs with high values product and services. Customer service and new product development is has been the company culture in achieving their outstanding performances. Using only premium ingredients Golden Circle products provide the finest quality in every package. Golden Circle business has categorized as a food and beverages product where the product has distributed by wholesaler and retailers across Australia and other part of the world.
Golden circle vision view is to be the proactive marketer in healthy food product in selected International market focusing in their competitive strength in high quality juice as an Australia brand and building strategic relationship trough out the world market. Targeting health conscious customer and youth market by offering their finest product is the golden circle marketing strategy to maintain current customers and regain new customers by word of mouth marketing, event sponsorship, and media advertising.
In effort of being responsible in conserving the environment golden circle strategy is to Nurturing the staff in Golden Circle Company to obtain a well skilled and dedicated staff for the companies by creating conducive working environment and conducting management training program. Trough employee education and monitoring their operation will help the company in aiming to reduce their water usage, and recycling their waste product. Even donating to local community of any damaged stock product or sell it trough out their employees.
Australia as the company principal market has been a huge successes for Golden circle where the company gain 20.8 percent increase of market share In chilled fruit juice drink during 2007 period result. The company has also exported their product to several counties in South East Asia and the pacific island and New Zealand. Australian food product is renowned for being produced from a clean and green substance with low level of wasted residue boost their product popularity all over the market place in exported country.
Having the same success in 30 exported countries Golden Circle plans to expand their product in the United Kingdom market. The product line such as the fruit juice beverages products would be introduce in United Kingdom market. All well known nutritious juices consist of one hundred percent of pure natural juice, so it would be able to capture new market in U.K. By catering health conscious, GCC hope that people from different occupation, which in their middle age between twenty-five years to thirty-four years old will be their target market to enter United Kingdom.
The decision to choose Golden circle juice product to enter United Kingdom is to capturing new trend of instant drinking, as the performances of soft drink market are decline in recent year. People are now starting to prefer healthy juice drink instead of soft drink. Research by business insight shows that in 2008 overall juice market reach 20.1bn litres. United Kingdom is the second largest juice market after Germany among six other European countries when the juice market outlook indicates 64 per-cent strong growth of fresh juice industry in leaders of top five-country juice market. GCC believe that is the right time to develop their market to the United Kingdom despite several juice manufacturer that has been selling their product in the United Kingdom market that offer their own product development. Golden circle will maintain their high quality natural juice product to compete with others competitors.
The determination to penetrate the United Kingdom market based on the research result shown above. The company preserved a high credibility and brand equity in their worldwide distribution channel. Manage by their international business division since 2002 golden circle has been exporting their product more than 30 countries and growing around the world. This achievement is their benchmark in serving the best juice quality product and building business network.
Golden Circle has feasible financial conditions, which will show by comparing two financial years of transactions of financial highlights:
The financial performances will fully check, but there are some problems regarding operation of raw material costs, lower expected sales volume, lower margin, poor production level of organisation etc (Golden circle 2006). In more, capital investments are not realised as costs saving in financial performances. On positive side, shares will convert according to amortised amount to top up return for the shareholders and subscribers. Therefore, with the operation in Australia and other areas of market of GCC, financial performances are stable and feasible to continue and spread its business all over the world, including UK market (Golden circle 2007).
In every international marketing plan, there must be organising, implementing and controlling marketing provisions of organisation. In global business, many possible pitfalls can occur depending on decisions of organisation according to global operations, products or services, effective marketing plan, and controlling marketing methods. Some methods should be controlled like, budgets, audits on environmental effects, distance of national to global market, and size of international organisation (FAO 2009).
In this study, global marketing plan of GCC is creating flexible framework to enable to remove differences in markets of operations according to time, budgets, and relationship of organisations and personnel of this company. An appropriate marketing plan can give solutions to GCC according to organisational structure, planning and manufacturing control over international market, like UK. An effective marketing plan will design to maintain fair, clear, and agreeable framework in international markets. Modern marketing plan is not gone through in a formal manner, there are also some informal structures should develop for having proper marketing plan of GCC. Not only structure development is not enough for marketing plan, but also strategy fitness according to UK market is also important. International marketing planning of GCC in UK should involves goal settings and strategy developing with various activities, like situation analysis, objectives of international market, and strategy & tactics of further planning in UK market (Golden Circle, 2009). There are also other factors should be analysed to influence international marketing plan, which are:
- Domestic practices and values of GCC in Australia;
- Availability of communications systems;
- Physical and psychological differences;
- Implementing standards of fruit juices in international market.
- Responsibilities of limited process according to environmental differences;
- Measuring performance in terms of environmental stability;
- Differences of subsidiary performances;
- Extensive control over size of international operators and logistics.
Strategic Focus and Environmental Analysis
Mission, Vision, & Values
For drawing framework of strategic focus, the mission of GCC can be stated that, it is a competitive market driven company by serving their customers according to their needs of high quality valued products, also regarding interest and satisfaction of shareholders’ by appropriate financial performances. It is top 15 most popular brands in Australia’s supermarkets by competing with other popular Australian ownership based companies. The company is also affecting the contribution of social and economic conditions of Australia. Therefore, for marketing plan, this is going to structure for UK market, also providing high quality and value for money products. On the other hand, this marketing plan is considering support lifestyles of UK in context of innovation in their beverages and juices.
Sanewski & Scott (2009) stated that the vision of GCC would establish as a strategic plan of international marketing context for the development of market plan. GCC is always following its vision to recognise it as innovative and unique organisation by improvement of current and new products, like juices, and exciting products to delight customers for meeting the demand and sustaining growth of wealth of organisation. Strategic focus of market plan in global market has to address long and short-term opportunities and problems for emphasising on product quality and innovation. For starting fresh market in UK as juices, it has pressing problems to control emerging issues. So, for making vision in context of international marketing plan, the brand has to be presented as packed full of goodness of environment, which is measuring freshness of products, or juices, and also creating good feeling among all ages people to have its juices (Golden circle, 2001).
For analysing value of GCC, there are reasonable assumptions between top-level management and clients of this organisation, like shareholders etc. Connor (2009) said that reasonable analytical framework would develop for international marketing planning for GCC to recognise long-term values and brand presences with the name of Australian brand values to UK market. On the other hand, corporate values of GCC has to be maintained as an active and responsible community in international market for making UK as great place to work (Golden Circle, 2008).
Thus, for making further analysis of marketing plan, the business has to generate outcomes in context of UK market plan. From mission, vision, and values of international marketing plan of GCC, some changes must occur and these are:
- Enhancing accuracy of business tracking and planning systems;
- Operating business needs to address and resolve;
- Identifying and addressing systematic problems regarding business and nature of international market.
- Transforming business successfully for delivering priorities to the international market;
- Improving costs reduction and pricing for business prospects of growth.
As an objective of Golden Circle Company Limited, the organisation is trying to implement rationalisation by reducing costs among all areas of business including new areas by over heading structure, changing pricing strategies, and focusing on effectiveness and efficiencies of manufacturing processes of juices in UK market (Anon, 2007). The objectives of marketing planning of GCC also improving performances with key drivers, like:
- Improving gross profits by reducing input costs and incremental of prices.
- Controlling marketing, administrating, and distributing costs;
- Gaining market shares with UK market segments.
For placing these key drivers, all staffs and members of GCC should obtain appropriate professional learning reviewing and considering all information in context of UK market and evaluating its business positions, financial stability and performances, and operational efficiency of juices. The organisation should also considering provisions regarding international market for presenting products with contain of all information required for evaluating relevant factors related to any customer’s personal objectives, needs or situation to have the products of GCC. Therefore, every customer should assess and analyse with all relevant information.
This international marketing planning is providing framework to establish and identify obligations and targets for better achievements of organisational objectives. The objectives should also consider their operations according to applicable laws of UK to maintain environmental issues in new market. The objectives must measure in terms of commitments to target markets. So, the objectives of GCC in international marketing planning with covering juice markets, it should maintain continuous improvements, effectiveness of performances, and measuring innovation comparing with other successful brands. It should also focus on policy changes, objectives and other elements changes according to different circumstances for growing towards improvements.
External Environmental Analysis
Morrison (2009) mentioned that PESTLE analysis is an appropriate tool to understand and analysis big picture of external environment, in which the organisation has to operate its business, and for understanding risks related with market growth, position, potential, and direction of GCC. There are six factors related in PESTLE analysis, which has shown in the following figure:
The political decisions and governmental factors, which are interrelated to GCC in internal marketing in UK, will consider as political factors.
- Trading Policies: Witthoeft (2008) stated that GCC has favourable policies of trade with UK government regarding continues its business in this market. Some context should maintain, like environmental issues and other factors to being favoured regional business of fruit juices companies.
- Pressure Groups: Within competitive market, GCC has competitors and other substitute products as its pressure groups. However, from government, it has lower level of pressure groups.
- Governmental Policies: GCC should maintain UK governmental laws and provisions to continue its juice business in UK market.
- Political Trends: UK government is following kingdom for maintaining its governmental rules and regulations So, GCC has to obey this system.
- Shareholders’ Demand: For all organisations, it is true that, shareholders want to maximise wealth of organisation. It is also important for GCC, whenever it continues its business in UK or Australia.
- Modernisation: UK government encourages every organisation to move forward with innovativeness. Therefore, it is also important for GCC to maintain modernisation in UK juice market.
The factors related with interest rates, taxation changes, economic growth, inflation, and exchange rates will consider as economic factors of GCC in international marketing of juices. Some of these factors are:
- Growth of Economy: Domestic demand of economic growth of UK is very high comparing with consumptions to wage growth in UK market. Therefore, the domestic growth of economy will be remaining strong.
- Taxation: The tariff rates of government will separately calculate for juices and foreign companies. So, overall combination of tax rates will add to the value of juices of GCC.
- Market Size: Considering juice market, with many direct and indirect competitors, market size is large in UK for GCC.
- Economic Recession: As US is falling in deep recession, which has a major impact on UK market.
- Level of Production: The production level should also consider as economic factor, because the production level is contributing on GDP of any region.
Social and cultural trends can affect every organisation for external environment, some of these are:
- Senior Staff: In UK, staffs are living longer, so it is important to maintain older employees than paying pension schemes to reduce costs of GCC.
- Demography: UK’s population growth rate is small in context of other countries. Age distribution is characterised by small youth group to older people.
- Seasonality: Consumption of juices is high during holidays and average consumption is high in summer seasons.
- Health Awareness: UK’s people are concerned about the health awareness of themselves, so GCC should also maintain this in its production of juices.
- Advertising and Publicity: High advertisements and promotional activities need to aware people of UK about juices of GCC in highly competitive market.
- Living Standards: Living standards of UK’s people are higher considering Australian people. However, after recession, the standard is being downward. Therefore, GCC should maintain the standard in its production.
Technological improvements are creating new products and new processes with various advancements. Some of technological factors related to GCC in UK market would briefly discuss below:
- Distribution: Chain supermarkets and retail chain shops are providing and distributing juices to different restaurants, bars and other parties.
- Internet Facilities: Availability of websites on internet is controlling market of promotion according to policies of UK government.
- Media: Effective brand communication can uses symbols and targets local and other population of UK.
- Other Improvements: Online shopping, bar coding and computer design can improve better technologies to benefit customers. GCC can also develop these technologies to create technological advancements (Oxford University Press, 2007).
When factors are interrelated with legal environment of organisation, are termed as legal factors, which are:
- Age Discrimination and Disability Discrimination Legislation: In UK, every organisation has affected by this legislation, which is requiring maximise wages and reducing costs of operations.
- Consumer Laws: These laws are protecting small firms to practice unfair treatments, which may effect on GCC.
- Competition Laws: These laws are protecting small firms to compete with larger firms for disfavouring them in power of monopoly.
- Employment Laws: These laws are interrelated to redundancy, dismissal, working power and minimum wages of staffs, which should be maintain by GCC.
- Health and Safety Legislation: These laws are ensuring GCC to cover important issues like, training, safety equipments, maintenance of provisions etc.
- Labelling: The production system of GCC should be pre-approval by legal authority of UK is mandatory.
Environmental/ Ecological Factors
Ecological factors have related with weather or climate changes, some of these factors are:
- Consumption Level: According to juice market, UK’s people are consuming less juices rather than other liquor.
- Recycling: UK government is maintaining recycling programs to national and social progress, which is important of GCC to maintain pet bottles.
- Controls: UK is sensitive to pollution issues to maintain regional issues and controls organisational systems.
Internal Environmental Analysis
Stepheny (2009) argued that SWOT analysis is perfect measurement tool for evaluating internal environment analysis of GCC to capture UK market of juices. There are four forces determining SWOT analysis, which has driven by internal and external factors:
Strengths are internal factors of GCC, which can be helpful for capturing UK market of juices easily, some of these are:
- Knowledge Management: Main competition is occurring in UK within retailers in juice market. Therefore, GCC has sufficient knowledge of managing systems, networks, connectivity, and programming of data in context of managerial decisions (Golden Circle, 2007).
- Relationship: In direct marketing, GCC has tremendous opportunities to sell directly to customers that can be maintaining with a relationship.
- Successful History: GCC juices are successful in Australian market with a good reputation as a local brand. Therefore, it can spread its success story to UK market also.
- Quality of Products: GCC is maintaining quality of juices in previous areas of businesses, so in UK market; it can be easily popular by the reputation of quality products.
- Longer Sustainability: GCC is capturing market of juices since 1974 around the world, so it can be sustain in UK market for longer period.
- Various Types of Packaging: GCC juices have various types of packaging, which can capture more market segment in UK.
The internal factors of GCC, which can be threaten for organisation, which are:
- Captured by Other Soft Drinks Brands: There are number of successful soft drinks brands are available, which are capturing UK market mainly.
- Costs: The costs of distributing and manufacturing in UK are much higher than local market, which is one major disadvantage of GCC.
- Price and Volume: As component, costs and manufacturing costs are high in UK, so price would be higher than local market, which will cause less volume of sales in UK juice market.
- Power of Brand: As there are many successful local brands in UK juices, so brand power of GCC is less according to other national brands and promotions.
Opportunities are creating scope of marketing in external environment, which would discuss below:
- Networking: GCC is maintaining very good networking in local market with suppliers, retailers, and customers. Therefore, it can also build networking in UK market also.
- Provide Healthy Juices: GCC is providing healthy juices with no added sugar, added with Vitamins and nutrients, which can attract more health conscious customers.
- Internet: With the help of spreading internet, GCC can offer more customers in more and new areas about juices in UK market, which can give it better position in customers’ minds.
- Training of Staffs: To attain more target markets, GCC always maintain proper training systems for their staffs. Therefore, to capture UK markets, training is more important as because of international market for company.
When the external factors are being threats for GCC, then it is considering as threats, for example:
- Favour More in Local Brands: Most of UK customers are being more loyal to the local brands, which is harmful for GCC juices to UK market.
- Changes in Attitudes: Customers’ attitudes towards juices are changing in UK customers comparing with other areas’ people.
- Huge Costs of Promotion: To attain more customers, more costs of advertisements would need, which will incur more expenses in financial performances.
- Availability of Cheaper Brands: There are various cheaper brands are available in UK market comparing with juices of GCC, like Virgin etc.
Market and Product Focus
Marketing objectives are set to achieve any specific things effectively within a specific period (Small Business Notes, 2009). For developing international marketing plan for Golden Circle Company in UK, marketing objectives are other important factors to consider and achieve. Marketing objectives of GCC should be clear, measurable, and achieved within a limited period. As, UK is a large market area to cover, so there can be multiple objectives to being consistent and holding components of marketing plan, like strategy, budget, action plan, controls and measures for supporting objectives of GCC juices. Some marketing objectives of GCC juices according to UK market are:
- It should increase juice awareness program with high promotional activities among target markets by 30% in every year.
- Informing target customers about quality of juices and its benefits in context of competitive advantages, which would increase 10 percent sales in first year of marketing in UK.
- It will try to remove other brand presences from customers’ minds with the incremental of sales of 20 percent in UK market.
To build single objectives would be more specific for GCC in spreading business in UK, which can be:
- To capture UK market of juices, it should require high promotions and distributions for increase sales 10 percent in every year. This single objective is stated strategies and tactics of customer stages and business models, both are focusing in together for having effective marketing objective for GCC in juices market internationally.
A successful and well-achieved marketing objective can set up GCC in terms of traffic of other competitors in international and local market. By his, GCC can also focuses on products awareness to customers and understands business models according to customers’ needs.
GCC is getting acceptance in the Australian continent for its wide range of product offerings. However, the packaging of the products is attractive to get the satisfactory consumers, but targeting a specific market segment is also important for GCC. Target marketing in case of GCC means to select the appropriate market segments, which will bring the highest profit for the company. From this, it is clear that, market segmentation is the first step for defining the target market. Kotler & Keller (2006, P. 240) stated that market segment is a group of customers, who has the similar kinds of needs and wants. If the targeted market segment will not follow the need and want based segmentation, the consumer will not buy the product and as a result, the product will fail.
The juice offered by the GCC has two criteria to attract the segments: firstly, the health consciousness of the consumers and secondly, the preference of quality rather the price aspects.. Austin, (2009) argued that it should target the people who are health conscious, who are ready to drink less sugared juice, which contain low level of harmful ingredient. The ongoing harmful aspects of sugar for the diabetic patients, many other consumers are now trying to avoid the sugar containing foods. Therefore, these kinds of consumers can be available. Beside, the overgrowing health consciousness in the society drives many consumers to think only about the quality of the product and lower level consideration about the price. The present financial crisis has created the threat to the consumers to have less extra money, but the consumers are still showing strong desire for to be quality considered rather to be price oriented. The number of juice loving people is increasing as the harmful effects of the foods like Pizza, Burger, Hot dog and sandwiches have positive consciousness within the society.
To segment the consumers the GCC have to follow some variables. These variables are- geographic, demographic, psychographic, and behavioural.
Geographic segmentation: In England, the juice loving consumers have no geographic boundary. People in everywhere are now largely depending on juice as a substitute of soft and hard drink as those have some harmful effect over the human body so they can drink fruit juices. For instance, in the northwestern side of England, people drink an average of nine alcoholic drinks everyday in summer. To reduce this, many social well fare organizations suggested drinking pineapple juices (Kotler & Keller 2006, P. 247-256).
Demographic segmentation: People of all ages, genders, profession, living patterns, and educational background are drinking juices now. However, GCC must target the most attractive segment. Here the people with the age range of 25-34 can consider as the target segment. The reason behind this segmentation is the people within this age limit are more health conscious. Beside, this consists of almost 14% of the total population of England (Golden Circle, 2008).
Psychographic segmentation: People with almost the same demographic attributes may have differences based on the psychological profiles. People who are considering juices as a substitute of the alcohol and soft drinks are the target market segment based on the psychographic segmentation. It should notice that drinking alcohol is no longer treating as bad habit but drinking too much is dangerous. As a result, it should target the people who have the psychology to lessen the dependence on alcoholic beverages Anon (2009).
Behavioural segmentation: it should target the people who do not drink juice occasionally. That is the consumers who take juices as one of their major food for everyday consumption are the target segment.
Marketing communication in case of GCC is to use the direct and indirect ways through which the company tries to inform, persuade, and remind its target consumers about the juices and the brands of the juices. Marketing communication thus play a role of the voice of GCC where it is trying to say to its target segments about the attributes of the juices such as its ingredients, quality and product differentiation (Kotler & Keller 2006, P. 536-537). The roles performed by the marketing communication for the GCC are:
- Telling the consumers why the juices should be consumed
- Informing the consumers how to use or drink the juices
- Identifying who can and who can not drink the juices or which level of juice should be drink by different age level
- Communicating the producer, distributor, retailer and whole-seller of the juices
- Expressing the image of the company and the brands it is selling
- Delivering proper news about the different product promotions, sponsorship by the brand and many other events.
As GCC is going to enter in the juice market of England, brand equity building is essential factor. All of these should use primarily to build the brand equity of the Juices produced by GCC. If it considers the marketing communication mix, there will be six major modes of communication and these are:
- Advertising: GCC can use many identified sponsor who organises different non-personal presentation and promotes the ideas related with the juice brands of GCC. In case of television and radio advertising, GCC should use this form of communication. There is a high cost associated with this sort of communication program but the these advertisements attain the highest response through building highest brand awareness as TV and radio are now the most usable media by the consumers in the mean of entertainment and information sharing. Beside, the targeted segment with the age limit of 25-34 can be communicated easily trough TV and other print media as they use these means of media heavily.
- Sales promotion: GCC can offer some short-term incentives to encourage the trial and purchase of juices. This sales promotion can be offers such as buy 1 get 1 free, discount pricing, giving free materials with juices and many more. These offerings must be for short time. After attaining of certain amount of consumers, the promotional activities must abandon. There are many forms of other sales promotion tools such as contests, games, sweepstakes, sampling, fairs, trade shows, exhibitions, coupons, and trade in allowances and it can use these methods.
- Events and experiences: GCC can sponsor various events, programs, and activities. This will be helpful in the way of creating everyday interaction with the brand and other types of brand interactions. For example, GCC can sponsor seminars related with the health consciousness where the people attending the seminar can grow brand awareness about the juice offered by GCC. It can arrange or sponsor other events such as sports, festivals, arts, tours and street activities.
- Public relation and publicity: GCC must take some initiative to promote and protect its international brand image and its juice brands. For this, it can organise seminars, press releases, speeches, publishes annual reports, do charitable donations and publish corporate magazine.
- Direct marketing: GCC can use various sort of direct marketing tools such as mail, telephoning, e-mail, and internet to provide the product features, attributes, and offerings to the consumers directly. Through these types of communication, it can get simultaneous response from the consumers. The overgrowing use of internet can help a lot to do direct marketing for GCC and its juices.
- Personal selling: GCC can send sales representatives to communicate face-to-face to the consumers describing the key attributes and features of the juices. This sort of communication will be helpful to increase the simultaneous buying and consumption behaviour of the consumers.
Product Positioning and Strategy of GCC
Kotler & Keller (2006, p. 310-317) stated that the effective marketing strategy must have three bases and these are Segmentation, targeting and positioning. Thus positioning of the product is a very important task for the marketers. Positioning the juices of GCC consists of the act of designing the company’s offering and image to get a distinctive place among the minds of the target market segment. Here the objective is to locate the juice brand in the minds of the target customers and through this maximising the potential benefits of GCC. Beside, the results of these positioning activities are the creation of customer based value proposition. The positioning of GCC is depended on the determination of competitive frame of reference, the points of parity, and the points of difference of the juice brands. The GCC juice brands will position as a lifestyle brand offering utmost satisfaction to the health conscious consumers that could consume without adding water or sugar. The positioning strategies should select based on this statement.
The competitive frame of references means the category of the product within which the brand will compete. Here the product category is the juice and GCC has two major competitors in the market the Coca-cola and PEPSICO. These two competitors have their well-established juice brands, which will create some barriers for GCC to position its juices. The promotion, packaging, and service offered by the competitors may pursue GCC to invest heavily in these sectors, which will increase the expense.
The point of parity means the non-unique features of a brand and those attributes, which are common and share by the competitors. In case of GCC juices, the POPs are coming from two basic forms of association. These are the category and the competitive. The category POP for GCC juices are the fruit flavour, the favourable can, and suitable size of the container. The packaging is the competitive points of parity for GCC
The point of difference is the unique features of the product. In this case, the PODs are the less sweetening feature and the variety of flavour available for GCC juices. In case of the competitors, the product differentiation is less where the GCC juice has more juice flavours. This brings some competitive advantage in the market.
GCC has to ensure its category membership. GCC has three ways to establish its category membership. Firstly, GCC has to ensure the consumers that the juice flavours are fruit juices with less sweet. It will be attract and ensure the consumers that these juices have no alcohol or other harmful ingredients. Secondly, as Coca-cola and PEPSICO is the established brand in the product category, GCC can use their brand as exemplars. Finally, GCC can use the product descriptors widely.
If GCC wants to avoid the commodity trap, it must take differentiation strategies to differentiate the juices from its competitors. There are many variables based on which GCC can differentiate its products. These are:
- Product differentiation: It can offer some juices of other fruits, which are not available now in England. Again, GCC can introduce a diet free juice, which has low fat. Again, it can offer a different packaging, which the competitors are not using. It can change the shape of the container or the labels it is using on the container.
- Personnel differentiation: GCC can have a competitive advantage by employing skilled, knowledgeable, and efficient personnel who will work hard for the market success of the company. GCC must take effective training program to train the labours, sales personnel, managers, and executives. The effectiveness of the employees will help to smooth the production process, which brings the market advantage.
- Channel differentiation: Designing and selecting the appropriate distribution channel can also give some competitive advantage to GCC. The delivery of the juices are largely depends on the expertise, coverage and performance of the distributors. The effective dealers, retailers, and wholesalers can be an asset for GCC. It must ensure that the retailers and the distributors can cover a wide range of area covering almost all possible parts of England.
- Image differentiation: Consumers response differs based on the product and brand image. Therefore, GCC also make differentiation in case of the image. The logo, symbol, signs, and texts can design in a different way, which will be more attractive and catchy. This will also give the GCC some sort of competitive advantages.
An appropriate pricing strategy can be helpful to catch those consumers who are price sensitive. Though the GCC has targeted the consumers who have less price sensitivity, it has to follow the proper steps of pricing strategy to price its juices. There are six steps in the pricing strategy. The steps would describe with appropriate recommendations for GCC bellow.
Step 1- Selecting the objective of the price: GCC has the objective here to gain the maximum market share in case of juice market. GCC can increase its sales volume through which it can increase the market share. Increasing the market share will leads to increase the profit. Another objective of GCC can be to become the market leader in future through the help of product quality. Again, GCC as a new entrants have to survive in the market first. Therefore, it must take some survival strategies. As a health conscious product provider in the society GCC has to become corporate social responsibility oriented which means to become customer and environment friendly.
Step 2- Determining the market demand: To set the price of the juices, GCC must define the market in the terms of demand. It should analyse the market to know that whether the market is price sensitive or not. As the report mentioned earlier, the market is not price sensitive rather considering the quality. GCC must obtain their demand curves based on the statistical analysis, price experiments, surveys and many more.
Step 3- Estimating the probable cost of the entire operation: Defining the demand curve will lead to a ceiling, which the company can charge for its products. In addition, the total costs of the company associated with all operations of the company will set the floor. Here GCC must consider it’s all fixed cost and all variable cost and the summation of these two costs will lead to the total cost. At first, the accumulated cost will increase for some years. However, when GCC will adopt the appropriate operation techniques and the employees will gain expertise, the accumulated production price will decrease. GCC must use the activity-based cost accounting instead of standard accounting as to determine the real profitability. This is a technique where GCC will try to get the actual figure of costs associated with serving each consumer’s with each container of juices.
Step-4: Analysing the competitors costs, prices and offers: As a new entrant, GCC in juice market have to consider the price charged by the competitors. The price of the GCC juices must be within the ceiling, the roof set by the market demand and cost, and the price of the competitor’s product gives a specific cost in between these.
Step 5- selecting a pricing method: GCC should use the combination of Mark up pricing and the going rate pricing. In the mark up pricing at first the unit, sales, and the mark up, which GCC wants to attain to estimate. After this, the unit cost will have to be determining by using the formula bellow:
- Fixed cost
- Unit cost = ————————– + Variable cost
- Expected unit sales
- By using this unit cost, the mark up price will be determined by using the formula:
- Unit cost
- Mark up price = ——————————————–
- (1-Desired return on sales)
After determining this mark up price, GCC will have to consider the prices of the competitors and notice the dispersion within the prices. According to the observation, GCC will determine a price, which is more than the mark up price and less or same than the competitor’s price.
Step-6: Selecting the final price: After all the steps, GCC can be able to determine a price, which is cost effective, competitive with the competitor’s price and reflect the demand of the consumers. Here GCC also have to consider some additional factors like impact of the other marketing objectives, company pricing policy, gain, and risk sharing pricing and the impact of the pricing on the related parties.
There are some creative promotional strategies, which GCC must have to implement. To do so, GCC has to do some tasks, for example, it has to select the most output gaining communication media, which can be Television advertising, sales promotion and direct marketing (Belch & Belch 2004, p. 266-270). In case of television and other mass media advertisements, the message content is to be attractive and have some appeals. There are two types of appeals, such as rational appeals and emotional appeal (Belch & Belch 2004, p. 275-282). The message content of the advertisement must be a mixture of these two appeals. In the message, GCC can convey the message of its product attributes through factual message, technical evidence, Demonstration, comparison, testimonials, slice of life, animation, personality symbol, fantasy, dramatization, humour, or the combination of any of these variables. Along with the mass media advertisement in electronic media, GCC will have to give advertisements on print media also. In the daily, weekly or monthly newspapers and also in the magazines it must give advertisements with appropriate message content including attractive headline, subheads, body copy, visual elements and layout. As a sales promotion strategy, it can adopt samples, coupons, premiums, and prize techniques. It can offer some free juices as a new market entrant to the target customers. This campaign would run in the universities and colleges. Besides, many contests can be arranged where the prize will be the juices (Kotler & Keller 2006, p. 588).
As the English people are becoming more health conscious, the juice market in England is becoming competitive day by day. Many established international Brands keep pressure on the competition and creates barriers to the new entrants. Thus to enter in the market, survive in the competitive environment and to overcome the threats through creating opportunities and gaining strength, GCC must apply the appropriate marketing techniques. Its health friendly juices will be successful if the market segmentation, promotion activities, and pricing strategies follow some strict application of International marketing management theories. It has to design its marketing activities according to the key success factors of the company, which will give the GCC competitive advantages.
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1 The Golden Circle Company