Marketing Plan for New Product by F and N

The following Marketing plan is about to introduce the new innovative product by F&N which is named as 100+Masala. This will be a convenient product which will be readily available to quench the thirst of our customers and will also give the high electrolytes energy drinks. The product will be introduced to capture the 20+% market share in the category of isotonic drink market. The market is still unserved for this segment and company will be going to introduce a new a market trend as well as going to challenge its competitors. This product will lead the company in functional drink market and will carry the company on the top spot. The target market for the product will be the health conscious and energetic customers. In the first year of operation the 100 Plus will be introduced in Tamil Nadu and Kerala because there are more potential and enthusiastic customers and we can get result more fast about the success of product.

The Company will increase its market share through targeted advertising to increase the number customers who want convenience and are looking to have a drink of unique nature which will give them taste, energy and the nutritional benefits of energy drink.

INTRODUCTION

Marketing Plan Overview:

F&N constantly innovates and expands its product portfolio. In Singapore F&N foods brands that enjoy strong consumer loyalty and have a very strong international business unit, which has been enjoying great success in the export market through their wide products range includes F&N gold coin, F&N blue cow, F&N daisy, F&N sparkling drinks and 100 plus isotonic drinks.

The purpose of this marketing proposal is to introduce 100 plus drinks into Tamilnadu India. Also this proposal introduce new product called 100 plus Masala (100+Masala). Since Tamilnadu is famous for outdoor games such as Cricket, Kabadi, Bull taming sport. So we strongly believe that our new product 100+Masala and other 100plus products will capture the Tamilnadu Market.

Company Description:

Fraser and Neava Limited traces its origin back to more than a century ago. Founders of Fraser and Neave limited was John Fraser and David Neave, who diversified their business from printing to aerated water business in southeast Asia in 1883. F&N starts brewage business in 1931, dairies in 1959 and glass bottle manufacturing in 1972, property development in 1990.

“Now F&N is a leading pan Asian consumer group with core expertise and dominant standing in the food and beverage, property and publishing & printing industries”.

Fraser & Neave foods (S) Pte Ltd was known as Asia Dairies Pte Ltd from the late 80’s till 1999. From then it earned the reputation of leading dairy company in Singapore and a broad range of fruit juices, canned milk and quality ice cream products. F&N foods have well known brands under its prides brand names includes F&N magnolia, F&N daisy, F&N farm house, F&N nutrisoy, F&N nutritea, F&N fruit tree fresh, F&N , 100 plus and F&N meadow gold. The company also distributes Sunkist juices, pura fresh milk, Yoplait yogurt and snow margarine.

F&N foods constantly innovates and expands its product portfolio. In Singapore F&N foods brands that enjoy strong consumer loyalty and have a very strong international business unit, which has been enjoying great success in the export market through their wide products range includes F&N gold coin, F&N blue cow, F&N daisy, F&N sparkling drinks and 100 plus isotonic drinks.

F&N exports its brands and products in Singapore and to Malaysia, Brunei, Papua New Guinea, Hong Kong, Taiwan, the Maldives, Africa and recently in Indonesia.

(Source: Wiki)

PRODUCT OFFERING

Products Currently Offered by F&N:

New Product:

(100 PLUS isotonic drinks)

100 plus is an isotonic thirst quenching drink which restore the energy loss during the physical exercise and help to regain energy.

Name: 100 plus

Ingredients: in isotonic drinks are sodium, potassium, calcium, magnesium, chloride, phosphate and water. And these are electrolytes which are basically electrical transmitters in our body.

Bottle: 500 ml bottle in plastic, 1.2 liter bottle in plastic and 300 ml in glass bottle.

Price: ~ 30 rupees for 500ml (1 SGD)

(100+Masala isotonic drink)

Name: 100 + Masala

Ingredients: in isotonic drinks are sodium, potassium, calcium, magnesium, chloride, phosphate, water and Energy Masala. And these are electrolytes which are basically electrical transmitters in our body with full of masala taste.

Bottle: 500 ml bottle in plastic, 1.2 liter bottle in plastic and 300 ml in glass bottle.

Price: ~ 30 rupees for 500ml (1 SGD)

ENVIRONMENTAL SCANNING

Tamil Nadu & Kerala lifestyle and work habits have made convenience a necessity. As employers demand for productivity from their employees, consumers are more pressed for time. In addition, the shaky economy has made South Indians fear for their jobs; thus, any product that can fill the consumers’ need for convenience and speed are almost automatically embraced into the Indian life style. 100 Plus offers a unique drinking experience to its consumers.

Market Summary

Industry Analysis In 2007, the tea industry reached the $1.7 billion category and it is expected to continue growing indefinitely (Mintel2007). Market analysts believe the Cool drinks industry will continue to boom and is not expected to reach saturation level in the near future. The favorable movement in the cool drinks industry can be attributed to two major factors: a) consumers need for convenience and time-saving services; and b) the positive press given to cool drinks.

Profitability & future growth potential

In 1994, Concentrate Producers earned 30% pretax profits on their sales, while bottlers earned 9.5% profits on their turnover, for a total industry profitability of 15%. While the functional drinks sector only accounts for 3.7% of the total soft drinks turnover in 2004, estimates are forecasting a growth of 7.3% in turnover and 11.0% in volume consumption by 2009.

(Source: Wiki)

SWOT Analysis

STRENGTHS

WEAKNESSES

F&N has a broader product line and outstanding reputation.

Record revenues and increasing market share.

Lack of capital constraints (availability of large free cash flow).

Great brands, strong distribution, innovative capabilities

Number one cool drinks in Singapore, Malaysia

F&N sells their products through the same distribution channel.

F&N hard to inspire vision and direction for large global company.

Not all F&N products bear the company name

F&N is far away from leader Pepsi, Coca-cola in the international market – demand is highly elastic.

OPPORTUNITIES

THREATS

Cool drinks & Food division should expand internationally

Noncarbonated drinks are the fastest-growing part of the industry in India.

There are increasing trend toward healthy drinks & foods

Focus on most important customer trend – “Convenience”.

It is new product a to India market

Over 50 percent of the company’s sales come from Frito-Lay; this is a threat if the market takes a downturn

Size of company will demand a varied marketing program; Social, cultural, economic, political and governmental constrains.

Competitor Analysis

100 plus top competitors for the soft drinks industry are coca cola (43.6%) and Parle (14.3%), which combined, represent about 58% of the total market. 100 Plus share is 42.7% of the total soft drinks market. isotonic will launch into a currently un served subset of that market (RTD “Ready-To-Drink”), which is until now un existing. It is anticipated that the following brands could potentially compete with functional drinks market: Brisk, Lipton Iced Tea, Sobe (owned by PepsiCo), as well as Pepsi. isotonic also creates a potential situation for cannibalism with F&N very own brands of isotonic 100+Masala and other drinks.

Consumers firstly decide that they are going to have a soft drink. Then they compete brands with each other. Like they compete Coke, Pepsi with 100+ and Sprite with 7up and team .So the major competitor of 100+ is Coke and Pepsi. When they motivate to any other brand or on 100+ it’s in instinct basically that based on messages derive certain feelings.

But F&N thinks in a different way, they believe that RC Cola, new coming AMRAT Cola, and all juices, even they take water as their competitors.

Direct Competitor

COCA COLA & PEPSI is the direct competitor of F&N and all other soft drinks in the market. The Coca-Cola Company’s core undertaking is to benefit and refresh everyone it reaches. Founded in 1886, we are the world’s leading manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups, which are used to produce nearly 450 beverage brands that make up for our wide portfolio. Our corporate headquarters are established in Atlanta, and holding local operations in over 200 countries around the world. Our activities cover all sectors of the beverage industry. We are the second leading player in functional and Asian specialty drinks, while ranking no. 1 in value for the ready-to-drink tea sector. (Source: Coca Cola & PEPSI)

Indirect Competitor

All the Cool drinks brands and water is in indirect competition with F&N.

MARKETING OBJECTIVES

Mission

The mission of 100 Plus isotonic drink is to market an alternative to high electrolytes energy drinks. Rather than getting energy from normal sugar and carbohydrates, it’s packed sodium, potassium, calcium, magnesium, chloride, phosphate and water that are healthier and still give you the boost you need. Currently 100 plus drinks are sold independently in cases at Singapore and Malaysia, but the ultimate objective to our marketing plan is to reach a younger demographic by supplying to college campuses, Sports teams and offices, while 100 plus still maintaining private status.

Segmentation

Segmentation variables for consumer market of Isotonic Drink

TYPE

VARIABLES

PARTICULARS

Geographic

segmentation

World region or country

Nationwide (all provinces and territories) with emphasis on urban / metropolitan areas, and adapted strategies for all geographical groups

City or Metro size

5000-20,000,upto 400,000 and over

Density

Urban, suburban

Climate

Western

Demographic

segmentation

Age

12-19,20-34,35-49,50-64,65+

Gender

Male , Female

Family size

1-2,3-4,5+

Family Life Cycle

Young ,single married under 18 older

Income

Under 10,000 and over 100,000

Occupation

Professionals ,proprietors and clerical sales persons

Education

Grade school or less high school ,graduate and above

Race

All (Asian ,Hispanic, black ,white)

Generation

Generation y

Psychographic

segmentation

Social class

Working class, middle class, upper middle class, lower uppers ,upper uppers

Life style

Achievers and strivers

Personality

Compulsive ,authoritarian gregarious and ambitious

Occasions

Regular occasion and Special occasion

Benefits

Quality, convenience, nutritional

Behavioural

segmentationUser Status

Non-user, regular user, first time user

Usage rate

Light user , medium user , heavy user

Loyalty status

None , medium , strong

Readiness stage

Un aware , aware ,interested , intended to buy

Attitude towards product

Positive, enthusiastic , indifferent

Marketing Objectives

Company is centered on these objectives: With the expected growth of the billion dollar ready-to-drink isotonic drinks drink market, isotonic drinks poised to capture a bigger share of the market with an aggressive marketing strategy: from packaging to advertising.

Short Term Goals: Improve market presence by 20%

Short-Term Objectives: Aggressive Marketing Strategy F&N can take advantage of the positive press on the health benefits of isotonic to boost the sales of its isotonic drinks product line. The company can use recent studies on the health benefits of isotonic as the basis of its press releases and advertising campaigns.

Improve Packaging: The isotonic drinks will be introduced in two sizes: the 250ml bottle and 1/2 liter bottle. F&N can come up with other packaging sizes to ensure that consumers will have other choices and that isotonic drinks will be easily and readily available to consumers.

Improve Shelf Presence: F&N can make a deal with retailers ensure retail shelf space and prominent positioning for isotonic drinks. “Although an average shopper may not notice what brands are positioned in prominent places on shelves or how much room is allotted to each manufacturer, shelf space and positioning as make or break factors in introducing new products”

Long-Term Goals: World Number One ready-to-drink isotonic drinks.

Long-Term Objectives: F&N must continue its innovative research and development strategy to come up with new flavors and products. F&N has extensive research facilities on product improvement. The company can use its resources and professional expertise to come up with new flavors that will suit the continuous demand for healthy ready-to-drink isotonic drinks. With aggressive marketing strategy and product positioning, isotonic drinks is ready to take the global lead in ready-to-drink industry.

Financial objectives

The estimated cost that will incurred while marketing of isotonic drink is about 10 crores or 10 billion Indian rupees for one year.

The details are as follows:

Media

Explanation of estimated cost that will incurred for 1 year

T.V

Adds on TV with different celebrities for one year will cost approx. 7 crores

NEWS PAPER

Add in leading news papers will cost approx. 2 million

RADIO

For 30 second add for 2 months will cost approx. 380,400

MAGAZINE

For 1 month advertising in Top Magazine will cost approx. 200,000

BILL BOARDS

For 3 bill boards on main locations acquiring will cost approx. 10.5 million

FREE SAMPLING TO RETAILORS

Free sampling to main retailers will cost approx. 300,000

CONTESTS

After 6 month of operation if there will be a need to give a 2nd push to our sales and a contest has to be arranged that will approx. cost about 5million

Target Market

There are two major target markets for ready-to-drink isotonic drink.

One group is the consumers on the go. These are the employees, students, and other consumers who lead a busy lifestyle. The hectic South India lifestyle demands for optimize productivity with lesser time-consumption. Thus, there is a need for products that are accessible and readily available. Convenience has dominated the market, particularly the food and beverage industry.

The other group is made up of health conscious consumers, specifically the younger who demand anything healthy. The positive reviews as well as the studies on the benefits of drinking have stirred an interest in nutrition drinking.

Segment identification: RTD (Ready-to-drink) bottled Isotonic Drink, to be established within the Functional Drinks sector.

Segment needs: The product will have both physiological need (hydrating and nutritional value) and social needs (perception of a social, fun drink with a sense of belonging within peer consumer groups)

Segment trends: The current trends include a shift away from junk foods and carbonated drinks, a growing interest for healthier / beneficial products for the “mind and body” the trend towards the availability of on-the-go products for those with an active lifestyle, as well as the trend for personalization through customization (or for beverages, through variety-seeking in a wide introduction of flavours. (www.oppapers.com)

Segment growth potential: Statistical reports anticipate a segment growth of 1.72% over the next 9 years (2015) for the 10-29 years old subsets. (www.oppapers.com)

MARKETING RECOMMENDATION

Product Distribution

The current market for cool drinks is fragmented, since the distribution is restricted to local outlets and selling points such as counters and small shops in scattered locations. However, direct competition from these local players is not anticipated, since the marketing roll-out will initially emphasize on product awareness and both sales channels do not reach or serve the same market (retailing vs. counter/restoration). So the distribution will on Retailing and Wholesaling.

Advertising

Informative Advertising

There will be Informative Advertising during market of isotonic drink and that will help company:

Informing the market of a price:

Describing available services

Correcting the false impression

Building a brand and company image

communicating customer value

Telling market about a new product

Explaining hoe the product works

Suggesting new uses for a product

Persuasive Advertising:

It will help marketers to:

Building brand preferences

Encouraging switching to your brand

Changing customer’s perception of product attribute

Persuading customers to purchase now

Convincing customers to tell others about product

Price Strategy

The price strategy that will be undertaken should consider the following aspects:

Consumer demand

The product lifecycle

Potential substitutes

Customer demand: Customer demand is a crucial factor which is driven by tastes, income and availability of others similar products at a different price. For a lot of consumers, value and price are highly related: ”the higher the price, the higher the value”. Consequently, F&N’s intention to position Isotonic drink as a unique, innovative and attractive product gives it a certain control over Isotonic Drink price. To be able to implement higher pricing though, the minimization of the non-monetary costs to customers should also be include along with awareness of the product (notably by advertising) and value (benefits).

The product lifecycle: The company should take advantage also to the fact that the newer the product and the earlier in its lifecycle the higher the price can usually be. It ensures a high profit margin as the early adopters buy the product and the firm seeks to recoup development costs quickly and it also brings a certain prestige to the product. (Source netmba.com)

Product development: It begins when the company finds and develops a new product idea. During product development, sales are zero and the company’s investment costs mount.

Introduction: Is the period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.

Growth: Is a period of rapid market acceptance and increasing profits .

Maturity: Is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.

Decline: Is the period when sales fall off and profits drop. (Ref. from book)

The point here is that F&N can not set a price that is too high because competitors will be attracted by potential profits and will follow by a lower price. After having taken all the important factors into consideration, there are five price-level fixing approaches seem appropriate.

Cost Based Pricing: One of the central objectives of this project being to become the market leader in functional drinks, F&N is willing to stay among the top competitors, if not becoming the greater, by achieving a certain target profit. This could be obtained by establish a price that will largely cover variable and fixed costs while bringing tremendous profits.

Value Added Pricing: Competitors and potential substitute’s prices can also be part of the strategy. Having a higher price could make customers aware of the additional benefits and the higher quality of Isotonic drink.

Value based Pricing: The company sets its target price based on customer perceptions of the product value. The targeted value and price then drive decisions about product design and what cost can be incurred. As a result pricing begins with analyzing consumer needs and value perceptions, and price is set to match consumer’s perceived value.

Market Penetration Pricing: The company can set a low price for a new product in order to attract a large number of buyers and a large market share.

Break-even pricing: The company has to make some strategies for break-even prices, setting prices to break even on the costs of making and marketing a product; or setting prices to make a target profit.

Potential substitutes: F&N constrained by the monopolistic market in which it competes. The main characteristic however is product differentiation.

Promotion Strategy

Objectives:

To initiate strong awareness about the launch of Isotonic Drink throughout Generation Y (10-29 years old) consumers as well as their parents.

To win market shares over our top functional drinks competitor, F&N.

The promotional activities will convey the clear message that “Isotonic Drink is a healthy drink for sporty and young people who simply enjoy taking care of their body and life.”

Concepts:

“Think outside the bubble”: Be Bold, Be Original, Be Different, Be Yourself.

“A good spirit in a good body.”

“For the out-of-the-ordinary individuals who like to challenge themselves.

Media selection:

Before choosing the appropriate Medias, it is important to note that Generation Y consumers only give partial attention to media. However, they can be reached through integrated programs. They are typically using more than one communication media at a time; a behaviour that is often called “multitasking”. This group of consumers doesn’t give its full attention to one single message, but rather uses continuous partial attention to scan the media. Marketers can still communicate with Generation Y by using a variety of targeted promotional tools. Another important tactic to reach our target market is through “Isotonic Drink” marketing, which F&N will heavily use in this campaign (campus, contests).

Advertising:

Output

Examples

Television

GEO TV. ARYONE DIGITAL.AAG TV

Radio

FM100,FM103,FM106

Magazines

TIME MAGAZINE , family

Internet

Banners on selected websites (gaming, sports, Google, yahoo etc.)

Outdoors

Billboards and prints in select areas including:

Campuses, transportation (bus, metro, stations)

Tourist areas in high seasonal periods

Personal selling

Direct contact with retailers, sales kit strategies to be explained later in the text.

Public relations

Stands or special displays and events in schools, malls, sports events (i.e. IPL SEASON 2), sponsorship activities

Publicity

Conferences, press releases (print and online), marketing through TV coverage

Justifications for advertising selections:

TV: Most viewed channel for now a days are geo ,Ary one world and Aag tv and specially etc and MTV are the most viewed channels by teen age groups. And in Tamilnadu, Kerla most viewed channel like Vijay TV, Sun TV should be targeted. TV communicates with sight, sound and motion, which is needed for HOT ICE TEA. It is the only media that can reach 99% of the homes at once. PEPSI has the budget to cover the high costs of this media.

Radio: FM 100 ,FM 103 ,FM 106.2 AND FM 101 are the most popular fm radio stations which are equally listened by every age group.

Radio is an already segmented medium. There are many radio stations in Tamilnadu. The average University or college student is a surprisingly heavy radio listener and spends more time during the day listening to radio than watching network television we could also use of “Interactive radio”.

Magazines: We should take advantage of the fact that magazines have become a very specialized medium. There are many consumers’ magazines in Tamilnadu and Kerala. Good color production is also an advantage that creates strong images which is the purpose of F&N with its Isotonic Drink brand. Each magazine’s readers often represent a unique profile. Such as Family Magazine, Defence Journal, Young World, She Magazine, Spot Magazine, Computer Magazine.

Internet: Online advertising is similar to print advertising in that it offers a visual message. It also has additional advantages; it can also use the audio and video capabilities. As we are targeting our ads to young outgoing people, sound and movement may attract more attention from viewers and has the unique feature of being interactive. Interactive media would offer F&N the opportunity to reach younger consumers who have developed a preference for online communication.

Outdoor: Billboards in specific geographical area would allow us get a good reach and frequency. It is a low cost and flexible alternative. (Campus, malls, Bus and metro stations)

Distribution Strategy

Isotonic Drink will be distributed through these channels: supermarkets, convenience stores, independent food stores, discount stores, multiple grocers, direct sales.

Action plan:

Step

Output

Period of time

Arguments

1

Personal selling

1st month to 2nd month

To make Tamilnadu retailers aware of Isotonic Drink so they can order it in time

2

Radio spots

2nd month to mid of 3rd month

Radio is the most listened media by students and peoples on the go

3

Magazines ads

Mid of 3rd month to 4th month

The target market will then match an image with the name of the product more easily. The recognition of Isotonic Drink will be faster.

4

Television spots

Mid of 3rd month to 4th month

To send a wide message over Tamilnadu that Isotonic Drink is now available.

5

Point of purchase

5th month to 6th month

Making a special section for the Isotonic Drink in Grocery store will help the new potential buyers to find our product faster and more easily.

6

Outdoors

Mid of 3rd month to 4th month

Putting adds in specific places where Generation Y hangs out will create an increased awareness of Isotonic Drink

7

Public Relations

6th month to 7th month

We will use special events (sports and others) to promote Isotonic Drink and also to get in touch with our potential market. It will allow F&N to interact with our Generation Y Consumers.

8

Contest

7th month to 8th month

We will use contest to give a second “push” to the sales of the Isotonic Drink.

9

Publicity

All the time

Use of TV ads and news to make the general public aware of the existence of Isotonic Drink.

Marketing Department Hierarchy Chart:

Control: In the first month of operation Management will over view that whether the Marketing goals and objectives are going in right direction or not if not than what went wrong and what are differences between actual and expected performance. This may require changing the action programs or even changing the goals.

Operating control: It involves checking ongoing performance against the annual plan and taking corrective action when necessary. It will ensure us that the com-any achieves the sales, profits and other goals set out in annual plan. It also involves determining the profitability of product.

Strategic Control: It involves looking at whether the company’s basic strategies are well matched to its opportunities. Marketing strategies and programs can quickly become out-dated and there will be need of periodically reassess its over all approach to the market-place. A major tool is marketing audit.

Marketing Audit:

There will be a need of monthly marketing audit regarding current activities and sales volume. It will cover all the marketing areas of business. It will include audit of:

Marketing Environment

Marketing Strategy

Marketing Organization

Marketing Systems

Marketing Mix

Marketing productivity

Profitability

Measuring and Managing return on Marketing Investments: After six months of operation we have to measure that whether our investment is being spent well or not? Are we getting targeted Return on Investment or not?

Return on Investment: The net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities. (Source: Principles of Marketing)

Positioning

“Isotonic Drink” will be a bottled beverage and will be positioned as the only ready-to-drink Masala Drink product available on the market. The beverage will have a differential advantage that it can be drink as normal Temp drink and can be taken as cold drink. It will bring an entirely unique drinking experience to its consumers. It will present itself as a funky and unusual alternative to traditional drink while providing the great taste of authentic fruit juice in an attractive and convenient packaging.

Positioning strategy:

The only RTD bottled Isotonic Drink available. Funky & eye-catching bottle, functional packaging, premium-priced, cool, new and unusual, unique drinking experience, aspects of play variety of flavors, sweet, refreshing, for hip & young people, healthier alternative to heavy-sugar drinks.

Positioning Statement:

To young active soft drink customers who have little time for sleep, isotonic drink gives you the nutritional benefits of tea and keep you awaken. You can take it while on the go, now it’s your choice that you can chill it and room temp. There is no boundary of season now because isotonic drink can be taken from both aspects normal drink and cold drink.

MARKET IMPLEMENTATION

Market Specific and Value Creation

State Name: Tamilnadu and Kerala

Geographic Location: Located in southern tip of India. Both these market have produced mor