Analyse basically the chosen marketing mix. (normally you use the actual marketing-mix, but since that does not automatically exist now in the Netherlands, you need to assess the (known and/or expected) strengths and weaknesses. Elements to analyse actual strategy of the company (abroad) and strong /weak points influencing you mkt-mix (e.g. investment budget can be too low)
Use your own survey results concerning the product or substitute products where relevant, in order to know if this influences (strong point/weak point) your “actual”performance.
Elements you must include are therefore:
* product (benefits, attributes, core, actual, augmented -branding strategy)
* price (pricing strategy -price setting), including costs you will have, break-even, etc
* distribution (chosen partners, online, direct ): strategy and costs
* communication : strategy and costs, can be internal and external, is “promotion wise” related to distribution and product/branding
Also, but less extensive, since this goes beyond IP-1â€¦
* personel/employees: HRM -strategy and costs
* purchase function / supply chain: costs for managing the value chain, etc
* finance ! (investment =? Do you have the money ? Do not ignore, you need it for your budgetting, so at least name it and explain how much is involved, keep the costs as low as possible )(finance=communication costs, personnel costs, starting up costs,
The total must be coherent, realistic and financially feasible
CHAPTER 2 – INTERNAL ANALYSIS -STONG AND WEAK POINTS
The internal analysis of the company can be also associated with SWOT analysis. This is an analysis of the strenghts, weaknesses, opportunities and threats of the company. Internal analysis is essential for the company because it can measure the company’s current situation and it can help to further the development of the company. By analysing these four sides of the company we can better understand what is needed to further the growth of the company. It is necessary to analyse our situation in its’ current position in order to make better planning for the future. Since our goal is to introduce the product and the company to the Dutch market successfully we need to internally analyse our strenghts, weakneses, opportunuties and possible threats in the new market. By the internal analysis we can also make improvements in our overall marketing strategy. By internal analysis of the company we can easily identify marketing opportunities, problems and evaluate performence. The main purpose of the internal analysis is to gain a better picture of the company’s overall performance and to help us with making better marketing decisions for the future growth.
Structure of the internal analysis
This analysis is going to show the strenghts and weaknesses of our marketing strategy. We will analyse each part of the marketing mix in order to estimate its’ efficiency. Elements to analyse:
Actual strategy of the company and strong/weak points influencing our marketing mix
Less extensive analysis:
Personnel/Employees – HRM strategy and costs
Purchase function/Supply chain
At the end of the analysis we will provide a relevant conclusion.
Actual strategy of the company and strong/weak points influencing its marketing mix
Our market offering is a soft, multivimatin drink. What is special about our product is the concept of the product. It stands out from other multivitamin drinks in the same product group. In this part of the analysis we are going to analyse the benefits, attributes, the core of the product, the actual product, the augmented product. The analysis will include the strong and weak points of the product which will affect our “actual performance”.
As a main benefit of our product can be considered the fact that it is healthy and it includes a lot of vitamins.Another benefit is the innovative packaging. It is attractive and offers to the customers a special way of drinking. It is also interesting and more fun than other products in the same product group. The cap consists vitamin powder which falls into the water in the bottle immediately after opening the cap.
Product Quality: For the quality we don’t have to change anything, because our product GO! Now has a very good quality, and it’s a very popular drink because of quality in Eastern Europe. So we hope that Dutch consumers will have the same opinion about our product.
Product Features: Based on our survey, we don’t have to add any additional features for our product.
Product Style and Design: Our product has an eye-catching style, so we don’t have to change it. For design, it’s a bit a problem for now. We think that in future we will change it for the Dutch market, because design it is a deep understanding of customers needs. But for now we will leave it the same.
Branding: Brand is very important for the product, and our product brand is still unknown for the Dutch market. For Dutch market we have change already the name of our brand, so we made it much easier for local consumers.
Packaging: We have quite a good packaging, especially for the Dutch market, because our main product GO! orange flavor is in orange color, and, based on survey, people like especially this feature of our product. The only thing that we have to change is that we have to translate the product information from creation to Dutch and English languages.
Labeling: We will not change the label, we don’t need this, because based on the survey we made, we found out that consumers are fully satisfied with the product we offer.
Product Support Services: We will conduct a survey among our customers periodically to assess the value of our future service, and that will also help us for obtaining new ideas.
Core customer value of our product:
Our product offers to the customers healthy and refreshing drink. It improves their lifestyle. It is also a new way of drinking which is a lot of fun.
GO! is a a refreshing multi-vitamin drink in innovative package, adapted to everyone who lives on the go and actively enjoys their free time.
The product itself is in an orange packaging. It is a new way of drinking. You open the cap. Add GO! water to suit your taste. Then you close the cap and shake the bottle. Your GO! is ready. In the end you enjoy the unforgettable taste of your favorite multivitamin drink. The slogan of this product is “Open and GO!”
The service the company provides is that if you are not satisfied with the product they will do everything they can to help you with your problem.
They have also a delivery service, you order it on the internet and deliver the next day. Delivery takes too long so this is a weakness but if there is big interesnt in buying the product online we can make changes and fasten the delivery of the product.
Even though the brand is very popular in some East European countries it is still unknown in the Netherlands. We will make some changes in the brand name because it is too difficult to remember and it doesn’t make any sense for the Dutch consumers.
Of course, it is still possible to keep the brand name of the product but it will not be the best choice because it’s too long and it’s also hard to remember and pronounce. We need something simpler in order to make our product popular. Our product’s original brand name was Cedevita GO! and we have decided to shorten it and change it only to GO!. The new name is easier to pronounce and to remember it’s also with big letters so it draws the customers’ attention. Also the word Go have a meaning in English and it means “proceed” which associates with sport and physical activities that are important for the health.
We suggest for the client to put the price at â‚¬ 2,00
The price Atlantic Grupa puts is â‚¬1,40, the retailer price is â‚¬1,70, so the best price for our client would be â‚¬2,00 since the customers in Holland have a little bit more money to spend. And since the nature of the product is to be “on the go“, it would be a normal price since the other products are quite expensive as well(tank stations, AH to go etc.). And with â‚¬2,00 you would have a nice price. And combined with a psychological setting it would result in the final of â‚¬1,99
Another part of our pricing analysis is that the price of our product is quite high to reflect a certain amount of exclusiveness. So in that sense, we would like to pick “premium pricing“ from the options Kotlers mentions to us.
Abroad the BEA is 15,849 since this amount of euro is the constant costs. That means Atlantic Grupa has to sell exactly 11.321 bottles of cedevita GO!. With a sale of 1.684.295 and a net income of 99.292 in 2010 it is fairly easy to get out of the BEA in Holland. In Holland however, we have to include promotion costs in our constant costs and that will result in slightly higher BEA. We still believe that this BEA can be seen as a threat if our promotion program fails, normally companies always expect losses in the first few years. The promotion costs will be around 20700 and this will increase the BEA to 11.321+8280=19.621
Distribution channels for our product:
It is an indirect marketing channel, because we will sell our product in supermarkets. That means that we have to use one or more levels of intermediaries to help us to bring the product to final buyers.
It is crucial to use this marketing channel for our product, because intermediaries could create greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operation, intermediaries usually offer the firm more that it can achieve on its own.
Our distribution channel will look like this:
Information: with information we could know more about actors and forces in the in the marketing environment, that affect our product.
Promotion: with promotion we could tell more about our product to our target consumer market.
Matching: this will help us to bring the product, which is matched to Dutch consumers needs.
Physical distribution: the main function of physical distribution is to: transport and store the goods.
Financing: with financing we can cover the cost for the product chain.
Risk taking: we need to take risk of carrying out the channel work.
Distribution objective and strategy:
Main objective is to minimize the total channel cost of meeting customer-service requirements. That means that we have to focus on our target market group, to satisfy needs and wants of our customers, and minimize the channel cost.
We will use intensive distribution strategy for our products, we will stock our products in as many outlets as possible. Our products have to be available where and when consumers want them, to provide maximum brand exposure and consumer convenience.
Use of logistics:
Logistics involves getting the right product to the right customers in the right place at the right time. So it is very important to organize in the right way.
First of all we need a warehouse in the Netherlands, to store our products, while they wait to be sold. We will use the distribution centres, because they are design to move goods rather than store them. This will help us to take orders, fill them efficiently, and deliver goods to consumers as quickly as possible.
Then as the inventory management also affects customer satisfaction, we have to decide how much inventory to order. We have to maintain balance between carrying to little inventory and carrying too much.
After that we need to choose transportation for our product. The best way to transport our goods is by trucks. Mainly, because truck is highly flexible in their routing and time schedules, and they can usually offer faster service than railroads.
The last step is a logistic information management. We will use the internet-based electronic data interchange (EDI). EDI will provide us with a simple, fast, and accurate process for capturing, processing, and sharing channel information.
EDI costs exists of:
Communication target groups:
Our target groups will be:
Physically active people
People who travel very often
Our main objective is to make the consumers buy our product. But this is not a very easy task since in order to fulfill it we need to understand the consumer and his needs and wants. We also need to know on which buyer-readiness stage the target audience now stands and where should it be. The buyer-readiness stages are the stages which the consumer normally passes through on their way to purchase. It includes awareness, knowledge, liking, preference, conviction, and purchase. Since our product is new to the Dutch market we already know that our target group is not aware of the product. So our first task will be to make consumers familiar with the new product. After that we need to use the promotion mix tools in order to create positive feeling and conviction about .It is possible that we will offer special promotional prices in order to attract customers. Still, the most important thing is to convince the consumers that our product provides superior value for them and to get them to the purchase stage of the buyer-readiness stage.
We will use nonpersonal communication channel for our product, this means that we will use media that will carry messages without personal contact or feedback. Basically, we will use online media (e-mail, company web site, and online social and sharing networks), print media (newspapers, magazines), display media (flyers, posters).
For our product Go! we will use advertising and sales promotion.
For advertising we will mainly use online advertising, which includes:
Contextual ads that appear on a search engine results pages
Company’s web site
Social network advertising
We will also use In-store advertising, which includes:
Placement of product in visible location in store
Advertisements on shopping carts
Advertisements on in-store video displays
For sales promotion we will use special cents-of deals to attract consumers ` attention by offering strong incentives to purchase our product Go!
We will advice our client to use sales promotions. The best is to use consumer sales promotion. That means that we will target our promotion on a consumers. Good examples of the consumer sales promotion are:
Cents-off deal: Offers a brand at a lower price. Price reduction may be a percentage marked on the package.
Price-pack deal: The packaging offers a consumer a certain percentage more of the product for the same price (for example, 25 percent extra).
The non-stop retailing can be used to promote the client’s product to the customer. Each of our competitors has a web-site and the products can be purchased online. The sites also include a lot of promotions. Non-stop retailing allows customers to research the product online first and then decide rather to buy it or not. The web-sites do more than selling products to the customers; they also make them go to the supermarket and shop there.
We will use objective-and-task method, because we think that it is the best method for our promotion campaign. With this method we will:
Define specific objectives
Determine the task that must be performed to achieve these objectives
Estimate the cost to of performing these tasks (the sum of these cost is the proposed promotion budget)
We surf the Internet and found out that our communication budget will vary from 18100 to 20700 euros for a month, depend on quantity and quality we will need to promote our product. It consists of:
Magazines advertisement-from 13000 to 15000 euros
Advertisement on the most popular Dutch social web site “Hyves” – 700 euros
Advertisement on various Internet search engines (Yahoo, Google) – from 900 to 1500 euros
To create and maintain our Go! Web site – 1500 euros
Flyers and posters – 300 euros
Employee salary for posting flyers and posters – 2000 euros
Since the product is completely unknown on the Dutch market we need to do a lot of promotions and advertisements in order to make it popular. This is of course a weak point because we need to build an image of the product from the zero. We will spend big amount of money on promotions and this can also affect the product price because it can make the product too expensive.
Personnel/Employees – HRM strategy and costs
The HRM-strategy is in terms of originality as innovative and interesting, as the product itself. First of all I want to mention that there is a majority of women on the work floor and based on the financial reports they are doing quite well with their current settings. There are 62% females and 38% in the company with 1800 employees in total. We would recommend decreasing the “brand managers“ since there are more then 200 of them in the company. Instead of focusing on the amount of brand managers we think that their salary would be better spent on mass-marketing, of course it would be less effective but you have a much greater public you can reach. The median age is around 30 but we believe that this can be lowered if younger people can be hired instead of the older ones, this is a price-cutter and also brings fresh wind/talent to the company.
If we estimate the total calculation of our financial analysis we have to take account with the following factors:
Personnel costs/research costs
Distribution costs( EDI system)
We believe that there is no personnel extensive use in our project( or at least in the early steps of it), with a research department of around 50 people divided into finance, marketing and laws should be sufficient enough for a non-superficial answer to the obstacles Atlantic Grupa will face. So if I calculate the total personnel costs with an average salary of 1800 euro(the centre is located in Eastern-Europe, lower salaries) it should be 1800×50= 90.000 Gross salary costs every month for the personnel/research ( I believe these 2 factors can be merged into 1since research is always done by the personnel.) Furthermore, promotion costs will be around 20.000 euro`s a month.
The distribution costs is very tricky since setting up a logistic information system(EDI) is quite expensive which is mainly used by the bigger companies. The costs start from 40.000 euros and can reach 900.000 euros depending on mapping size, it is also important to note that maintaining an EDI costs around 18% of the price you paid for the system every year. A price of 200.000 for the system is enough to guarantee a high quality distribution system.
Transportation costs are around 7 cents for every bottle sent, so 70.000x 0.07= 4900 euros
So if i calculate everything together it would result in:
200.000+90.000+20.000+4900=314.900 euros starting up costs with 36.000+90.000+20.000 extra every month and 0.07cents x every bottle sold (variable cost)=146.000 extra per month
314.900 Euros+ 146.000 every month(and perhaps some credits ;-)), we believe that this fits in the “SMART“ approach
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