Executive summary
The paper is a marketing plan of Triwa Incorporation. The plan entails introduction of a new soft drink in the market. The company description is illustrated by identifying the firm’s past financial performance, human resource base and mission statement. A comprehensive description of the product is illustrated by identifying the ways in which the product is differentiated from those of the competitors such as the quality of the product and packaging. A situational analysis is also conducted by through a SWOT analysis in which the firm’s strengths, weaknesses, opportunities and threats are identified.
The target market is also identified which include individual and institutional customers. Various variables have been used in segmenting and targeting the market. These include demographic and psychographic variables. The demographic variables considered include age, level of income and occupation. The psychographic variables considered include the benefit sought by the consumers. The plan also considers the competitive environment by identifying the major competitors and the substitute’s products. The competitors considered include Coca Cola and Cadbury Schweppes. These competitors are analysed by considering their strengths and weaknesses.
Company description
Triwa Incorporation is a private limited company that is was established in 2006 within the non alcoholic drink industry. The firm’s headquarters are located at New York; US. The firm’s operation involves production and supplying soft drinks within the domestic market. It has employed one hundred employees who conduct the various operational activities. Over the past three years, the firm’s performance has been on an upward trend. This is associated with the vibrant nature of the industry. In 2007, the firm’s level of profit increased with a margin of 25% compared to the previous year. Its profit level further increased in 2008 to settle at 37%.
Mission statement
The company’s primary mission is to become the leading firm in relation to production and supplying soft drinks within the domestic and foreign market. All the operations of the firm are focused at developing customer loyalty. This is by ensuring that the consumers are satisfied through production and supplying high quality soft drink products.
Product description
To tap the benefits from this industry, Triwa Incorporation is in the process of reorganising itself to minimise the impact of the risk of market saturation that is looming within the industry. The strategy that that has been considered is introducing new soft drinks in the market. The soft drink will be produced from fresh fruits to ensure that is of high value to the consumers. The drink will be produced by blending a variety of fruits to ensure that it has a high nutritional value. In addition, there will be no chemical additives to the drink.
Most of the soft drinks that are in the market have got chemical additives which have side effects to the consumers. The management of the firm has also been established that the consumers are more sensitive to the quality of the products they consume. This is due to the fact that consumers are becoming more health conscious. By producing the drink using fresh fruits, it will be possible for the drink to be consumed by diverse consumer categories. The soft drink will be produced from a variety of fresh fruits to ensure that there is a variety of flavours. The effect is that the drink will be able to meet the diverse consumers’ tastes and preferences resulting into increased customer satisfaction (Lenskold, 2003, p.23).
The soft drink will serve dual purpose, that is, as a refreshment drink and an energy drink. As refreshment drink, the drink will serve psychological and social needs. In its production process, the management will ensure that the drink’s rate of absorption is high. This will ensure that there is quick rejuvenation of the consumers lost energy. This will make the product to be of unique value to the consumers. The soft drink will be distributed in bottles, packets and cans which will be well sealed to ensure safety of the drink. The packaging materials such as cans, packets and bottles will be of different sizes. This will enable the management team to differentiate the product in terms of price. These materials will also be branded with different colours so as to appeal to different consumers.
Situational analysis
The non alcoholic drink industry has witnessed a rampant growth over the past few years. It is estimated that soft drink accounts for 46.8% of the total market within this industry. According to a survey by data monitor, the market value for soft drinks in 2006 was $307.2 billion. The survey forecasted that the market value for soft drinks would increase in 2009 to $ 367.1 billion. This indicates that the industry is very lucrative (Meghan, Ellenbecker, Klehr, Pesarchick, & Kelly, 2006, p.1). Currently, the management of firms within the non alcoholic drinks sector are increasingly emphasising on product innovation. This trend has emerged from the attempt of firms in this industry to satisfy the health conscious nature of the consumers. In the future, products that meet the consumers health needs are likely to witness increased demand.
Firm’s SWOT analysis
Strengths
- The company has superior soft drink manufacturing capabilities. This means that it will be efficient in the process of producing the soft drink.
- The firm has a well established distributional channel within the domestic market. This will ensure that the new drink penetrates the entire domestic market.
- Strong financial base. The firm has adequate financial resources in the form of retained earnings.
- An efficient research and development team to ensure effective product innovation.
Weaknesses
- The company’s brands are not well recognised in the foreign market.
- High cost of promotion, and research and development means that the management of the firm will have to source for finances from external sources.
- The firm does not have all the expertise that is required for a firm to attain a high competitive advantage in the industry.
Opportunities
- High probability of the firm increasing its market size. The firm can expand the size of its market by expanding into the foreign market.
- High chances of adding value to the soft drink. This will ensure that there is an increase in the customers’ level of satisfaction.
- Increase in the consumption rate of functional drinks. Consumers are increasingly consuming functional drink as opposed to carbonated soft drinks.
Threats
- Increased competition from leading companies within the industry such as Coca Cola, Cadbury Schweppes and PepsiCo.
- Increase in the number of substitute products such as bottled water, speciality coffee and sports drinks (Meghan et al, 2006, 8).
- Changes in consumers’ tastes and preferences in relation to soft drinks resulting in a decline in product demand.
- Threat of new entrant into the sector. This would increase the degree of rivalry culminating into reduction in the level of profit.
- Decline in consumer purchasing power as a result of the current economic recession.
Target market
In developing the new soft drink product, the management of the firm conducted a market research within New York estate to identify the target market. In developing and supplying the soft drink to the market, the firm’s major target markets include individual and institutional consumers located within New York. This will enable the firm to produce a soft drink that meets the regions soft drink market demand. This is due to the fact that New York is a metropolitan state consisting of individuals of diverse ethnic groups. There is a high probability of a large volume of soft drink being sold in New York considering the fact the state has an approximate population of 19,490,297 (‘State and country quick facts’, 2008, p.1).
In addition, the average income for households in New York is $ 53,448 with an individual per capita income of $ 23,389.The institutional consumers include the various sports clubs such as athletic and football clubs. These institutions demand high quality energy drinks that do not have side effects for their teams due to chemical additives. In addition, they also demand a soft drink that would result into instant energy rejuvenation.
The management has also segmented the individual consumers in relation to various demographic and psychographic variables. The demographic variables that the management team considered include age, occupation and the level of income. On the other hand, the psychographic variable considered includes the benefit sought by the consumers (Kotler &Kevin, 2009, p. 34). In relation to age, the soft drink will benefit consumers of different generations. The generations that the firm has considered include baby boomers, generation X and generation Y (Shiri, 2009, p.64).
The management considered age as a segmentation variable since various generations have different soft drink demands. The soft drink will be able to satisfy these customer demands since it will act as an energy giver and will also have high nutritional value. This will make the drink to be of value to both the elderly and the youth. For examples, the drink will be of benefit to the children during their formative years since it will enable them to be healthy. On the other hand, the elderly consumers demand soft drinks that will be of nutritional value upon consumption.
The management has also considered the occupation of consumers and their energy demands. From a market research, the management team found out that students and employees in white collar jobs demand a lot of energy. To improve on their level of concentration and alertness they require an energy drink that would boost their energy and at the same time have nutritional value. By elimination of chemical additives in the process of producing the drink, the management is able to completely eliminate health risks. Currently, the various drink categories are increasingly becoming blurred due to change in consumer preferences. For instance, in US, consumers are paying more attention to the health value attained from consumption of soft drinks. The production process also entails a comprehensive quality control to ensure that the drink meets the specified standards.
The management of the firm will also consider consumer’s level of income in setting the price and packaging the soft drink. This will enable a large number of individuals of diverse income levels to be able to purchase the drink.
By targeting the institutional consumers, there is a high probability that the firm will increase the volume of sales in relation to the new soft drink. This is due to the fact that these consumers make purchases in large quantities for their clubs. During major sporting event, the firm can make a high profit if it is contracted to supply the soft drink to the clubs. Sports clubs exist for a long duration of time (Klaus, 1999. p.77).
This means that there is a high probability of the firm to sustain its level of revenue by selling to these clubs. Currently, sports clubs are undergoing rampant growth from local to international scale. In addition, the percentage of female participation in sports is limited. For instance, in UK only 19% of women are in active participation of sports compare to male which is 24% (Mairi, 2007, ¶2). This shows that there is a high potential of growth in the target market. There is also a high potential of the individual consumers increasing since they are currently more inclined to consuming healthy products.
According to Meghan et al (2006, p.8), it is expected that there will be a global growth in the size of soft drink market. The industry’s Compound Annual Growth Rate is expected to increase to 3.6% in 2009.
Competitor and substitutes
The firm faces intense competition from large competitors within the soft drink industry such as Coca Cola, Cadbury Schweppes and PepsiCo. These firms operate on a global scale which makes the intensity of competition to be high (Meghan et al, 2006, p. 12). Coca Cola’s market share is 43.7% while that of Cadbury Schweppes and PepsiCo is 48%. In addition, these firms produce numerous substitute products such as energy drinks, bottled water and other soft drinks. For instance, Coca Cola Company has 400 different brands of soft drinks.
Their brands names are globally recognised which makes their sales volume to be high due to well established brand image and loyalty. In addition, well established brand loyalty has culminated into increased customer loyalty in these firms. Coca Cola Company is weak in that it does not have the equipments to produce organic juices and venturing into this sector would cost the firm a significant amount of money. However, the firm’s operations are threatened by the fact that Coca Cola is venturing into the fresh soft drink sector through acquisition of Odwalla Incorporation at a cost of $ 181 million. Odwalla Incorporation specialises in the production of different varieties of fresh fruit juices (Mark, 2009, ¶2). On the other hand, Cadbury Schweppes has formulated a strategy to expand its products by introducing a beverage produced from milk.
The target market for this product includes the youths. The drink will be sold to customers in institutions such as colleges and also in campuses. The management of Cadbury Schweppes has also formulated a strategy to sell the drink through the internet (‘Company profile’, 2003, ¶12). In addition, Cadbury Schweppes has incorporated a cooperative strategy in penetrating into new markets. This has enabled the firm to be successful in marketing its products. However, Cadbury Schweppes does not have a well established distribution network in US.
These firms have strong financial base which enables them to penetrate the foreign market effectively. For instance, Coca Cola Company has formulated as strategy that enables it to penetrate the foreign market effectively. In this strategy, Coca Cola Company only supplies the concentrates used in production of the soft drink while the bottling process is undertaken by the local firm. This has enabled the firm to attain a competitive advantage within the foreign market (Meghan et al, 2006, p.7). Their financial strength also enables them to conduct their product promotion effectively in the entire market.
To counter the increase in competition within the industry, these firms have invested heavily in research and development. This enables them to conduct an effective market research and identify the changes in consumer’s demand in relation to soft drinks. The result is that they are able to incorporate these changes through innovation of new products that result into increased customer satisfaction.
Reference list
Cardbury Schweppes. (2003). Company profile. Web.
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Kottler, P. & Kevin, L. (2009). Marketing Management. New York: Pearson Education.
Lenskold, J.D. (2003). Marketing ROI: the path to campaign, customer and corporate profitability. New York: McGraw-Hill Professional.
Mairi, I. (2007). Women still under represented in sporting roles. UK sports. Web.
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Shiri, S. (2009). An analysis of the conditions and methods of market segmentation. International journal of business management. Vol.4, issue, 2. Shandong, China: Ludong University. Web.
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