1

MARKETTING PLANMARKETTING PLANMARKETTING PLANMARKETTING PLAN

PHOENIX®

ORGANICS

Fitness Drink Compiled By:

Shabreen Hakik Product Manager

2

1.0 SITUATION ANALYSIS

POSITIVE NEGATIVE

I

N

T

E

R

N

A

L

Strength

• 100% and range of certified organic drinks and Natural choice for all age – GE Free

• Export market in Australia and 10 other international market

• Merger with Charlie’s increased size and popularity

• Human asset – the owners with experience, knowledge & wisdom

• NZ’s most widely distributed Premium beverage

• Brand value & reputation

• Organisational culture – 100% organic, creation of a premium product, premium quality, high standard & price premium.

• Development of innovative cold storage system to keep the fruits fresh for ongoing processing through the season

Weakness

• Premium price “Phoenix organics are not cheapest”

• High productivity cost

• Promotional strategy – strong promotional strategy is required to market & promote the brand/products

• Brand awareness - need to educate the target market what is behind the brand “Organic” *

• Limited flavours

• Small packaging for kids are not available

• Not found in all the retail outlets and other low budget places

• Packaging does not stands out compared to the competitors

E

X

T

E

R

N

A

L

Opportunities

• Drop in market interest rate attracts international capital investors

• New Zealanders support environmental protection, those products which are environmental friendly

• Innovation technology, such as internet, iphone, social networking sites such as face book, bebop etc can be used for advertising

• New Zealanders tend to focus a lot on nutrition, general health & fitness

• Loyalty / smart card

• Different ethnic group communities, media and businesses.

Threats

• Current economy downturn / recession

• Inflation

• Immigrates in the country from all over the world who have no brand or organic knowledge

• Introduction to organic supplements

• New Zealanders are becoming increasingly dependent on pharmaceuticals and vitamin supplements

• New introduction of electrical appliance example, juice maker

• Internet gives customer more choices to pick from

• New and more competitors in the juice market

3

2.0 OVERALL STRATEGY

2.1 Marketing Objectives

Profitability Objectives: To increase the profitability of the business by $1.5m within a year.

Market Share Objective: To increase market share from 27% to 40% in one year.

2.2 Generic Strategy

Primary Focus

• Branding – Phoenix is committed to creating beverages that are GE (genetic engineered) free. This commitment to organic and premium quality means that Phoenix is faced with higher costs than others in the beverage markets. These values are so crucial that it is very difficult for other companies to copy “Phoenix way”. The evolutions of these attributes has over time, has given Phoenix key advantages in the marketplace that has come in the form of brand value and reputation. Even at the expense of increasing costs, Phoenix Organics major focus is the brand itself “Phoenix Organic”.

Secondary Focus – the secondary focus of Phoenix organic include:

• Innovation – Phoenix has introduced and installed fridge in café’s, which has gained advantages and given opportunities for Phoenix. After seeing a huge demand for organic goods, Phoenix made a decision to produce organic food but the organic food did not prove to be profitable and it was forced to pull its line of organic food out of the market. However, increasing choices in organic beverages is showing to be promising.

• Channel Management – The lines of beverage distribution are quite high in few supermarkets, café’s, gas station and luxury hotels and resorts. However, Phoenix lost the market share when high-end premium cafes and restaurants began rejecting due to the reason Phoenix Organic started supplying supermarkets. The perspective changed in the high-class market for Phoenix.

• Low Price – The strategy of producing a low-price or a low-cost brand was viewed as unfavourable. Since the production of phoenix is costly, it’s not feasible to produce at low cost and sell at low price.

4

2.3 Statement of the core strategy

� Market Development

Phoenix organic can use exiting products to build a new market. For example, the juices supplied in glass bottle can be packed in small juice box for children; therefore the new target markets are children. This is called Market Development but to do so, the risk level is high.

� Market Penetration

Market penetration is when you create higher-value products and services that will increase market share. For example, Phoenix changes the packaging size and design of the bottle and markets it to the same customers or the existing market.

� Product Development

This is where a new differentiated product can be marketed to the existing customers. Phoenix knows the existing customers well enough to introduce a new product in the market. However, this new product should not cannibalise existing product.

2.32 Strategic Alternative

Strategic

Alternatives

Pros ( + ) Cons ( - )

Market

Penetration

- More sales and profit volume can derive from existing and competition customers - More sales promotion and comparative advertising

- Cost of promotion and distribution increases. - High risk - can incur the wrath of a large and more formidable competitor and can call for competitive advertising

Product

Development

- Supports growth strategy to the business / growth opportunity. - Improves present product popularity

- Failure to change could result in a decline in sales and with competitors racing ahead. - Cost and requirement for R&B and production is high

Market

Development

- Competitive advantage, puts you ahead of the competitors - Differential advantage, product which is not currently matched by rival companies

- may result in negative synergies - may result in slow growth - additional management cost & financial cost

2.33 Strategic Alternative for Phoenix Organics Product Development

- Create higher value Products that will increase market share. - Increase in market share and growth. - Brand uniqueness / awareness, unique selling proposition is

“Organic” and “Premium”. - Maintain & retain existing customers and build new relationship with

new customers and competitor customers. - Improve competitive advantage and External Product life-cycles - Low risk compared to Market development because the present market

are the target market for new product.

5

2.34 Target market is the current & existing target market of Phoenix Organics and competitor market.

2.4 Positioning Strategy

- The range of our product is all-natural and strives to provide you with

the best nutritional value for your body and money, in the best

tasting drinks. - New Zealand owned Phoenix Organic is proud to offer you a great

range of healthy organic fruit drinks – all 100% organic, and

genetically modified GE-free and naturally made.

- As a producer and the manufacture we have to be assured that the farmers will grow enough products and the farmers have to be assured that the producers will use those produced to make the best as what we stand for: quality, balance, purity, nutrition and the ultimate desire

to put back into the planet what we take out.

2.5 Segmentation Criteria

Income: Low, Medium, High Family life cycle: Single; young Single; older Partners / couples / married; no independence Parents with youngest child under 12 Parents with youngest child 12 or over Extended family; all age group Lifecycle: Clean green people (environmentalist) Healthy lifestyle Active & sporty lifestyle Social lifestyle Impulsive lifestyle Retired lifestyle High-class lifestyle 2.6 Target Market is a high-income earner, parents with youngest child 12 or over who live a healthy, active and sporty lifestyle.

2.7 Competitive advantage:

Slogan of the new product:

Better Me! Better World

6

3.0 PRODUCT STRATEGY

3.1 Product Portfolio

Phoenix Organic Fitness Drink

In the current market there are various sports drinks available and are in demand. Same is with Organic market. Thus, our new product is a combination of both, sports and organic. These are some of the reasons why Organic Fitness drinks and in many flavours;

- The market has proven the success of sports drink, therefore less risk of failure

- Saves investment in research and development on sports type of drink - Gainfully transfer the special talent, that is, the ‘Organic’ from the

existing product - Advantage of having many options in the market in different colour,

the wider the options the more the customers are satisfied. - The more the flavour and size, the bigger the shelf coverage will be.

Another reason is, since Phoenix Organic is specialised in Beverages, it is preferable to introduce new product in the same line.

Flavours Bottle Size

Organic Kiwifruit

Organic Pineapple

Organic Grape

Organic Lemon Lime

Organic Raspberry

Organic Lemon Lime

Organic Mango

Organic Cherry

4 x 310 ml

725 ml

310 ml

7

3.2 Product Tactics

Product packaging – The bottle is disposable plastic and some of the important features and point of difference compared to competitor product are; Package / Bottle architectural

1. Plastic disposable bottle and design is bubble grip, oval shape in the middle for extra grip

2. Label is more towards the cap of the bottle and all the information of the label including the image in dark and bright colours on a clear label so that the liquid is always visible from outside.

3. Colour of the bottle is bright matching the colour of the fruit. For example, grape flavour, the bottle colour is bright purple. However bottle is transparent.

4. Bottle is engraved with brand name “Phoenix Organic”, around the bottom potion of the bottle.

5. Lid has a flip open cap and the drink spikes is pushed down to open the seal or unscrew the cap and remove the plastic seal. For hygiene reason, drink spike is covered with attached flip cap.

6. In the inside of the lid reads the product tag “Better me! Better world!” 7. 2 sizes are large (725ml) and small (310ml) and a bundle of 4 packs of the

310ml as per one flavour per pack. There is no combination, for example, there is a pack of kiwifruit, a pack of grapes flavour etc.

Package / Bottle promotional

1. Brand Ambassador is Daniel Carter (Famous rugby star not just in New Zealand but all over the world) and on the label is his rugby posture image together with his signature on the label.

2. A very bold headline for the brand as “Phoenix Organic” to keep the brand known and gain more publicity.

3. Very powerful words, tag line “Better me! Better world”, Greatest Organic fitness drink guarantees”, Proof, expiry date, etc.

4. Every flavour has a unique fitness feature (health tips and myth behind the organic fruits), e.g. if its grape flavour than there will be a feature how grape contributes towards your health.

5. The colour of the bottle is bright, visible from distance and attractive.

Brand Value

Launching a new product in the market using the successful brand name leads to increase brand value, brand equity, customer loyalty and trust. Some efforts made to increase the brand value:

• Additional features are added, example, health tips on the label and websites.

• Phoenix website linked to Fitness drink website featuring lots of questions and answers and competition, win sports gear or free membership in a fitness club.

• Open discussion forum

• Sponsor local or national sports, schools and every year occasions such as fun run or walk, example Run Auckland and Round the bays where brand value will increase by having banners and giving out samples to try

• Internal and external marketing – launch executive design cooperate uniforms and graphics design on company vehicles, billboards, etc.

8

3.0 PRICING STRATEGY 4.1 Pricing Objectives

Current profit maximization - Seek to maximize current profit, taking into account revenue and costs. Quality leadership - Use price to signal high quality in an attempt to position the product as the quality leader To meet these objectives, skim pricing and penetration pricing strategies often are employed.

Skim pricing attempts to “skim the cream” off the top of the market by setting a high price and selling to those customers who are less price sensitive. Skimming is a strategy used to pursue the objective of profit margin maximization and returns more of the value to the producer rather than the customer. Penetration pricing pursues the objective of quantity maximization by means of a low price. Penetration or market share pricing is employed when most of the value is given to the customers and small margin is keep. The objective of penetration pricing is to build or keep market share.

4.2 Pricing Strategy

Price skimming is most appropriate for the new Phoenix organic fitness drink. Reason:

• Phoenix organic fitness drink is an innovative product; R&D costs are likely to be high and cost of introducing the product to the market via promotion, brand ambassador, organic farming, advertising, samples, etc. In such cases, the practice of price skimming allows for some return on the set-up costs.

• By charging high prices initially in the beginning, Phoenix Organic as a brand can build a high-quality image for its product.

• Market with little competition considering Organic fitness drink

• Conspicuous or prestige buyer tends to be more prestige conscious than price conscious for which Phoenix organic has greater category advantage.

4.3 Relationship between price, cost and perceived value

For Phoenix Fitness drink the price is expected to be above the perceived value.

Price > Perceived Value > Cost

The price is kept high in order to encourage favourable perceptions among buyers, based on the price. Phoenix Organic is a premium juice in the market therefore the fitness drink is supposed to be priced at premium. However, consumer’s perceived value is derived from the price they are paying currently for sports drinks already in the market. But we want our product to outstand and give our target market a new perception about sports drink that is “Organic” and a high-class premium drink. Keeping in mind our target market, the price should be up to their expectation, as how they see and value the Phoenix Organic all these years.

9

For example:

Price for Powerade sports drink - $3.50 Price for Mizone sports drink - $3 Perceived for sports drink is between $2 - $4 We will price Phoenix Organic Fitness drink at around $4.50 We don’t want to go very high that would give consumers a reason not to consider our product and also keeping in mind the quantity of the drink is slightly less. However, the design of Phoenix Organic bottle is more innovative and can be reused as a drinking bottle.

4.4 Special Price Tactics

Price Bundling

A set of 4 small drinks, that is, the 375ml x 4 will be offered as a pack and the price will be lower than the sum of individual bottle. Once again, considering Phoenix Organic as a premium product we would not like to give discount or any other special offers which may change the perception of our target audience.

10

5.0 DISTRIBUTION STRATEGY

5.1 Distribution Strategy Decision for Phoenix Organic Fitness Drink

Directness: The distribution strategy will be more direct to the customers via online ordering and websites. It will be sold directly to the consumers and to high standard retailers, such as Foodtown and service stations. Further distributions are directly to high-class fitness clubs, gym (mostly to the 5 star hotels and resorts), swimming pools, sports clubs, other sports arenas etc.

Intensity: Keeping in mind our product is unique and premium and has a establish brand name behind it: Further aim at the retail level, there will be two distinct types of distribution: Exclusive distribution where the retailer carries only one brand, and shared distribution among many brands. For example, we will maintain a shared distribution in grocery stores, but have exclusive rights at some venues (e.g., Hotels and resorts, sports outlets, sports arenas, event centres (tenpin bowling, indoor sports) college campuses, vending machines or we can have a negotiation deal to have our fitness drink at the premium sports outlet, such as Rebel sports, Nike etc.

Pull and Push Strategy:

The “Pull” tactics are customarily based on an advertising campaign to target the end consumer. Getting the consumer to ask for the product and thus buy the product through the various distribution channels. On the other hand the “Push” tactics are not based at the end consumer but at the other members of the distribution channel. This can be done by means of special offers, trade allowance, contractual agreements and other methods. This should entice the channel members to sell more of the Phoenix Organic drinks.

5.2 Power in Channel Relationship

Power issues:

Power issues can be maintained with the retailer’s trough different channels. These are few commitments that can be managed within distribution channel;

1. Key Account Management – One person assigned to deal with Foodtown only. In a similar manner there should be few other key account managers managing other distribution channels.

2. Category Management – offer help to retailers. Give innovative ideas through experience and R&D. In return ask the retailers to take good care of Phoenix brand products.

3. Push money – push money or pay extra money to retailers so they allocate and position our product in a manner that is visible and in front of consumer’s eye level, better positioning on the shelves taking more space and leaving less room for competitor products.

4. Cooperation – helping each other. Working as a team with the retailers, offering training, information, promotion, incentives etc. Phoenix Organic can work hand in hand with hotels and resorts together with other retailers.

5. Promotion to middlemen – this form relies on personal selling where the salesperson meets face-to-face with middlemen to explain the promotion and

11

answer questions. The direct contact of the approach helps emphasizes the importance of the promotion to the company.

6. Push with a firm – this is when an internal marketing effort to heighten awareness of promotion objectives and opportunities among our own employees, particularly salespeople.

5.3 Strategic Alliances In order to put our new product out in the market these are our 3 mutual partners we;

1. Prime TV is well known for providing number one sports broadcast. They have sports show, One-hour Prime sport, they have a guest sports star. Phoenix can alliance by sponsoring the show and offering competition to win an opportunity to watch the show live or go on the show and meet the sports star.

2. Rebel sports promoting Phoenix Organic Fitness drink together with Rebel sports will derive a clear perception in the target audience mind for our new product. Since Rebel sports outlet are well known and have high quality product, this will lead to build a better image for Phoenix organic. Again, there can be an opportunity to win Rebel sports gears (this is further discussed in promotion strategy).

3. Finally Daniel Carter who is our product ambassador as well. He will promote our product and in return he gets between 2% - 5% share in the business. The name and face will uplift the brand profile since Dan Carter is a well-known and biggest brand himself. Currently he is partner with Gas Jeans, Adidas & Jockey.

12

6.0 PROMOTION STRATEGY

6.1 Promotional Objective

To increase awareness of the product in the market through advertising and sales promotions.

6.2 Promotional Mix

There are four elements of promotional mix; 1. Advertising 2. Public Relations 3. Personal Selling / relationship selling 4. Sales Promotion We will focus mostly on Advertising and sales promotion as our promotional strategy.

6.3 Advertising strategy

Since advertisement is a form of direct communication it is considered to be one of the best approach to communicate a message that includes the brand name, slogan and every other good quality information about the product. Daniel Carter’s image off a rugby match should be one of the unique selling propositions featuring organic ingredients, healthy and sporty lifestyle. Different type of media will be used to deliver these messages. Since it’s a premium product, we will use magazines, TV and billboards. Advertising will be placed by an advertising agency on behalf of the company.

5.4 Sales Promotion Some of the sales promotional tools and techniques that will be used are;

• Free sampling

• Loyalty points

• Combo deals, e.g., if you buy you buy 2 x a pack of 4’s you’ll get one pack for half price.

• Games and quiz on the label, e.g. register online and enter into a competition to win sports gear by Rebel sports

• Social network site such as facebook. Good mean of advertising in a more advanced style.

5.5 Unique Selling Proposition (USP) The desired unique selling position to outstand Phoenix organic fitness drink in the market:

THE TASTIEST AND ONLY ORGANIC FITNESS DRINK THAT WILL

KEEP YOU ACTIVE AND HEALTHY FOREVER!

13

7.0 KEY ACTION PLAN AND BUDGET

Target Audience

Age of 12 and over Health conscious Environmental friendly High class, High income earners Active and sporty Luxury lifestyle

Suggested Media

TV Magazines Billboard

Budget

Product – Phoenix Organic Fitness drink Price – The amount of money consumers will pay Distribution – where product will be produced and how it will be delivered to consumers Promotion – The advertising and publicity necessary to complete the transaction The above will be all measured in dollar value and should be no more than $3m budget

Rationality Whole of New Zealand will be distribution with Phoenix Fitness drink

Seasonality A season does not affect our product. Will be distributed all through out the year

Timing of Campaign

0 1 2 3 4 5 6 7 8 9 10 11 12

Product

Pricing

Distribution

Promotion

End of Report