IntroductionPepsiCoisaleaderintheworldbeveragemarketandfoodmarketsunderwellknownbrandssuchasPepsi,SevenUp,Gatorade,DoritosandLays.PepsiCohasdiversifieditsproductmixbuthasnotventuredintothelargeflavouredmilkmarketinAustralia.(PepsiCo,2009)

Flavouredmilkenjoysahigherproportionof thebeveragemarket inAustralia thanmostothercountries inthe world and this market grew by 7% in 2009. (Westwick Farrow, 2008) Coca Cola has recognised thepotential of thismarket by launching itsGoulburnValley flavouredmilk range (Booth, 2008) and PepsiCowouldbenefitfromanearlyentryintocompetitionwithCocaColaandensureitmaintainsitsmarketshareintheAustralianbeveragemarket.ThisplandetailsPepsiCos launchof anew anddistinctive flavouredmilkproductunderthebrandTropicana.

Competitivebackground/environment

The beveragemarket has a large number of competitive productsand has been subjected to many startups. The flavoured milkmarket has not been subjected to the same level of competitiveentrantsduetothenatureoftheproductduetoitslowshelflifeandcomplicated production processes. This requires very largeinvestmentsinplantandmachinery;itwouldbeinPepsiCosinterestto partnerwith a processor, most ofwhom already have existingalignments.Initiallyoutsourcingtoaprocessorwillbearrangedandwithcontinueddevelopmentandbrandandsalesgrowth,corporatestrategywill demand autonomywith capital investment to enableinternalproduction.

Currentlythemarket isdominatedbyNationalFoodswhichpromotesflavouredmilkviatraditionalfarmerscooperativebrandsalreadyestablishedinthiscountry.(Lee,2004)Theyhavealsotargetedindividualbrandsat different demographics, such asMoove for adolescents andDare for young adultmen. (the inspirationroom, 2008) (Dairy Farmers) Other competitors include Parmalat with their Pauls and Breaka brands(Parmalat,2010)andFonterrawhoownSupershake,ChillandBrowns,(Fonterra)amongstothers.CocaColaAmatilhasnowenteredthemarketusingtheGoulburnValleybrand.(Booth,2008)ItshouldbenotedthattheicedcoffeeflavouristhestrongestsellerintheadultmarketthroughoutAustralia.(Convenienceandimpulseretailing,2006)

With the exception of Coca Cola, PepsiCos competitive brands benefit greatly from their traditionalcommunitybackgroundandhistoricallydirectrelationshipwiththeproducersoftherawproduct.CocaColaAmatil has entered the market by purchasing an established brand name associated with freshness andnaturalproducts,whichtheyareattemptingtoexploitwiththeirglobalmarketingstrengths.(Booth,2008)

Inenteringanewmarket, itwouldbewiseforPepsiCotoavoiddirectconfrontationwiththebiggestplayer(NationalFoods(WestwickFarrow,2008)),whilecompetingdirectlywithCocaColaAmatil,whohasalreadydestabilised the market for flavoured milk products. Fonterra and Parmalat are also possible targetedcompetitors due to their smallermarket positions. Coca Colawill see thismove as part of the traditionalcorporatewarbetweenthetwocolabrands.

PepsiCoholdsstrengthinitswelldevelopeddistributionnetwork,verystrongrelationshipswithretailersandan exclusive arrangement with fast food outlets, previously owned by their former subsidiary Yum! (theeconomist,2005).These restaurants includedmarket leaders suchasKFCandPizzaHut,providingamajoropportunityforeasyproductplacementanddistribution.However,becauseoftheseexclusivityagreementswhichoftenexistbetween retailersandproducers,PepsiCowill faceamajor challenge indistribution toawiderretailnetwork. Inordertocompetewiththeold farmerscooperativebrands (whicharesopositivelyingrainedintheAustralianPsyche),PepsiCowillneedtoemulatethebrandqualitiesoftheseproductswhilecreatingacleardifferentiation.Thiswillrequireasubstantialinvestmentinmarketing.

In 2007, Australia and Asia accountedfor35%of the globalmilkmarket andflavouredmilk accounted for5%of allmilkproducts.(WestwickFarrow,2008)The flavouredmilkmarket inAustraliais currently worth over 450 milliondollars and the average Australiandrinks10 litresperyear,withpotentialfor furthergrowth. (Booth,2008)Withthe current emphasis in themedia forhealthy eating, milk is a naturalalternativetothesoftdrinkmarket.

Marketsegmentation/targetmarket

Flavouredmilkappeals toa verywideaudienceand segmentationthereforehastobedrivenbybrandingratherthanbytheproductitself.PreviousproductssuchasMooveandOak,dividedthemarketbyage.PepsiCowilltargettheyouthmarket,peopleagedbetweensixteenandthirtyfivewhoconsiderthemselvestrendsettersandwhousually identifywithfashionablebrands.PepsiCowillapproachthemarketwithseparateproduct launchesstatebystate.Thiswillresult inthecreationofstrongfoundationsforthebrand.Asecondarymarketwillbecreated inyoungerconsumerswhowillbeinfluencedbytheirparentsuptakeoftheproductsandthedragthrougheffectoftheiroldersiblings.

Newtown, a prime target for this niche audience.

Marketingmix

Product:

The product will be launched using the PepsiCoowned Tropicana brand. This will limit capitalexpenditure on a new name while projecting ayouthful fresh image for the young adult market.Key flavours will include chocolate for its wideappeal and close association with milk flavours,strawberry and banana for healthy fruityalternatives and iced coffee for its adult orientedappeal and existing strength in the market. (Lee,2004) A particularly strong marketing strategy willbethatallfourflavourswillbeinfusedwithGuaranato exploit the popularity of this additive in thatdemographic.

Additionally,innovativeprocessingandpreservingmethodschosenwillenhancethefreshandlightmilktasteoftheproductcounteredtothetraditionalcompetitorsprocessingmethodssuchasultraheattreating(UHT)whichdeliverperceivedheavyaftertastes.(marshall,2003)

It has been identified that the chosen target marketprefers resealable packaging. For this reason 600mlrecyclablePETbottleswillbeused rather thandrinkingcartons (the recyclable nature of which will beemphasised to target the environmental awareness ofthe targetmarket). The 600ml size direct sales for thesingleusemarket.

Position:

The product will be positioned to appeal to thefashionable alternative and environmentally awarelifestylesofgenerationY,whilenotalienating themoreconservative market place. The positioning of thisproductwillsitwellwiththetraditionalPepsimarketingstylewhichhasnotbeenexploitedbyanyotherbrands.ThisstrategyisknownasaNichingStrategy.Price:

In the long termapricewhich reflectsanacceptableprofitabove the costofproduction,distributionandmarketing,while keeping in linewith competitorspriceswillbeused,presentlyaround threedollars.Theproductbrandwillbethekeypromotionalpointandnottheprice.An initialpromotionalpricingstrategy intheshorttermwillhelpbuildbrandawarenessandmoveproduct.

Place:

Analysisshowsthat inSouthAustraliamilkconsumption ishigherthansoftdrinkconsumptionbutWesternAustralia has a higher per capita consumption of flavoured milk than any other state. (Booth, 2008) Tominimise launch costs and maximise brand identification and uptake, the launch will begin in WesternAustralia. Following a good launch inWesternAustralia, thenextmarket attackwouldbe SouthAustralia,giventhepreferenceforthatpopulationformilkproductstosoftdrinks.ThiswillbefollowedbyafulllaunchacrosstheEasternseaboardtoaddressthemajoritypopulationofAustralia.

Initialproductplacementwillbeinfashionablenichestoreswherethetargetconsumerpreferstoshop.Oncebrandrecognitionisachieved,distributionwillextendtocornerstores,milkbars,conveniencestores,bakeriesandfastfoodoutlets.Thefinalmovewillbeintosupermarkets.

Promotion:Heavy focusonour integratedmarketingplanwillbeonbelow the linemarketing strategiesas the youthdemographicisknowledgeableandcynicalaboutabovethelinemarketing.Thistypeofmarketingwillincludesponsorships,endorsementsandtheheavyuseofsocialmedia.Althoughthisdemographictendstobecynicaltoabovethelinemarketing,theyarestillsensitivetomassappeal.Thismentalitymakesthemreceptivetoinstoredisplaysandpersonalsellingintheformofsampletasting.

Ata laterstage,betweenmaturityandpostmaturity,moremassappealadvertisingmaybeusedbasedonconsumerreactionandresearch intothemarket.Thiswould includeTVadvertisements,billboardsandprintmediaads.Thiswillbelinkedtothemassdistributionstagesaftertheinitialbrandinginnichestoreshasbeenachieved.

Facebook, now a more conventional social media marketing tool.

ProductTimeline

EstablishmentIn the initial stage of launchscheduled for six months, theemphasis is on branddevelopment and recognition.This will be made easier withthe use of the staggered stateby state distribution plan andpromotional pricing/standardpricing strategy we haveemployed.Within the six monthestablishmentphase,staggered launcheswillhelpwithdistributionandproductiondevelopment,whichwillinitiallybeoutsourced.Post launchmarketresearchwillbetakentoevaluatebranddevelopment.Basedontheresultsofthisresearch,arestructuredstrategymaybeneeded.

GrowthOnce the sixmonthestablishmentperiod isover, a strategy for growthwillbeput intoplace.During thisgrowthphasewewillacceleratethepromotionalmiximplementedintheestablishmentphase.Overthenexttwelvetotwentyfourmonths,continuedbranddevelopmentwilltakeplaceastheproductspositioninthemarket matures. This will be paired with a shift from outsourced processing to internal processing anddistributionchannels,andfulldistributionthroughoutAustralia.MaturityIt isexpected that thebrandandsalesofanyproductwill reachaplateau,atwhichpoint reevaluationofsalesanddistributiontechniqueswilltakeplace.Furthermassdistributionthroughasmanyretailchannelsaspossible isexecutedatthisstage,withaclearlyidentifieddriveintosupermarkets.TheMassmarketingplanwill be implemented,with an emphasis on the development of the secondary targetmarket. Thiswill beaccompaniedwith diversification of product flavours. These flavours, should retain the niching stylewithflavoursnotoftenseenonthemassmarket.Thelongtermpricingstrategywillthenbeused.PostmaturityPostmaturity isastagewhenyoueitherselloutoforredevelopaproduct.PepsiCosnormalstrategy istoretainandrelauncheffectivebrands.Thisstageisforecastedfor45yearspostlaunch.Brandredevelopmentandproductrelaunchwilloccur.Bynowthebrandhasaclearposition inthemarketplaceandthispositionwillactasthefoundationoftherelaunch.Withmassdistributionnewpricingconsiderationsmayneedtobemade.SuccessmeasuresSuccesswillbemeasuredbysurveyingbrandrecognitionwithinthechosendemographicsatallstagesandbythecontinuedmeasurementofsalesandsalegrowth.

Conclusion

ThroughthismarketingandpromotionalmixthelaunchofanewflavouredmilkproductbyPepsiCowillbeanoutstanding success. The entry of new competitors into the flavouredmilkmarket had given PepsiCo theopportunity to capitalise on destabilisation in themarket. This product launchwill exploit a demographicwhichhasbeen ignoredby itscompetitorsbutwhichalreadyhasastrongestablishedallegiancetoPepsiCobrands. This product plan uses the experience, expertise, infrastructure and financial resources of aninternational leading beverage company to succeed. This plan directs the use of innovative productiontechniques,theadditionofanadditivewhichthedemographichas identifiedasdesirable,aclearlydirectedandplannedstagedmarketingstrategyandprovisionsforcontinuedgrowth.

Packaging Concept

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