BHO6505 Marketing Management

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24-06-2022

Course Code: BHO6505
University: Victoria University

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Country: Australia

Answer:

1. Introduction

Co-creation of value can be defined as a business strategy that helps to promote and encourage the active engagement of the consumers to make on-demand products. Co-creation helps the consumers to get what they exactly want and customers have a role to make it happen (Yi and Gong 2013). An organization uses the co-creation to involve the customers in an interactive experience and it can also help to reshape the manufacturing and production efficiencies. Co-creation also helps to increase the customer demand and it can increase the customer satisfaction. The aim of this study is to co-create the value in the Australian market for carbonated soft drink Irn-Bru. In the first part of the study, target market, customer persona and customer journey will be discussed. In the latter part of the study, value proposition in the market and SMART goals of the organisation in entering Australian market will be justified. Moreover, the market entry plan of Irn-Bru will be given with assessing the 7ps' of the marketing mix.

Overview of Irn-Bru

Irn-Bru is a Scotland based carbonated drink and manufacturer of the soft drink is A.G. Barr. This soft drink came into existence in the year 1901 and it is considered as ‘other national drink’ of Scottish people after whiskey. This soft drink is so popular that it overshadows the multinational brand Coca-Cola in the Scotland market (Agbarr.co.uk 2017). The colour of the product is orange and sunset-yellow colour. Irn-Bru is ranked third in the UK after Pepsi and Coca-Cola, this soft drink is produced in Scotland and it has five other manufacturing units apart from Scotland. Irn-Bru contains iron and rust colour reflects this and it is sold in the bottle as well as can.

Overview of the Australian Market

Irn-Bru is intended to expand the business in South Asian countries and in Australia. In addition, in Scotland, the organisation uses innovative marketing and controversial campaigns that help Irn-Bru to keep in the top position. The target market of the organisation in Scotland is large and the people who leave the country miss in other places. In the Australian market, the carbonated soft drink companies are varied and recently, the companies have been facing the issues of low growth. Coca-Cola Amatil has faced the decline of the market by 5% in 2016 and people in the market are opting mineral water instead of soft drink (Lafus and Schwens 2014). Bottled water takes the market and ready-to-drink market has been declining for the anti-sugar campaign in Australia. According to investment Bank Citi Group, they explain that the soft drink market will grow by 14% in next five years. People in Australia try to drink a healthier soft drink with natural sweetener and smaller serving sizes. Current revenue in soft drink industry in Australia is AU$4 billion and annual growth is observing 0.8% (Moodie et al. 2013). This industry provides more than 6500 employment opportunity and there are more than 240 businesses in Australia.

2. Target market, Persona and Customer Journey

Target Market

In Australia, Irn-Bru will be a new brand; however, it is already available in Woolworth's supermarket in small quantities. Very few customers know about Irn-Bru in the Australian market, hence it is required to segregate the market (Magennis and Begley, 2015).

Irn-Bru can target the customers in the Australian market in demography segment. The primary target market of Irn-Bru can be young generations aged between 16 and 30. The occupation of the target market could be students and corporate services as they have to go outside for their work purposes. In Australia, at first, Irn-Bru has a target each of the customers as a target, however, the most potential target group will be youth. In Australia, there are many soft drink companies present with diverse offerings, like 28 Black, Blue, Afri-Cola, Kirk and Solo. The benefit of targeting the youth will be having large customer preferences and they drink with a group. Moreover, youths are easy to reach as they always surround the new information (Groenewegen and McFarlane 2014). The young generation communicates more with others and word-of-mouth communication will be higher through various media.

Customer Persona

Irn-Bru has to make a customer persona as this will act as a semi-fictional archetype that will represent the audience with the key trait of the customers (Learner and Storper 2014). In the Australian market, the new trend of drinking less sugar-laden drinking with flavour can impact the preferences of the young customers. Young generation prefers the healthier drinks and they can prefer the alternatives with a carbonated soft drink with fruit juices. Irn-Bru needs to make customer persona and they can keep them in their database as it would be helpful to understand the customers' preferences and their justification of choices. As suggested by Hollensen (2015), customer persona is significant as it can develop the deeper understanding of needs of the customers and the process of solving these issues. In addition, customer persona can be a guide to product development by using the features that assist the organisation in achieving the desired outcomes. In this regard, the flavoured drinks with sugar contain make the customers repulsive, hence, Irn-Bru can focus more on less added sugar and diet soft drink for the customers. The management of Irn-Bru needs to make a ‘customer persona’ and the employees of Irn-Bru have to fill this with information. The employees have to prioritise the projects with campaigns and they need to take the initiative to invest resources and time. The customer persona must be aligned with the organisational values and customer-centric vision.

Figure 1: Proposed Customer Persona of Irn-Bru in Australia

Customer Journey

Irn-Bru reduces the thirst and consumption of carbonated soft drink can satisfy the needs of the customers. The choice of drink for the customers comes from the past experiences and Irn-Bru will be new in the market, hence, the customers can choose the product as an alternative. However, it is to ensure that the choices of the customers must be repetitive and young customers must suggest this to others. In the Australian market, there are other carbonated soft drinks, Coca-Cola Amatil will be the largest competitor, however,' cultural condition of Australian people is not as strong as Scottish people (Sheth and Sisodia 2015). Therefore, the people can shift their choices if the customers’ need can be fulfilled by Irn-Bru. The first useful need of Irn-Bru is satisfying the thirst and the second choice will be the fantastic taste that can beat other competitors in the market. Irn-Bru provides refreshment to the customers and some British expatriates can love the Irn-Bru as they miss in Australia. In addition, consumers' motivation in drinking the Irn-Bru will be a habit of drinking soft drink in outside and in the party. Buyers’ decision starts with need recognition as the customers must feel thirsty and they must have another need to buy a soft drink as the customers must have internal and external stimuli. Then, the customer starts searching the information about which soft drinks are present in the Australian market and they start to evaluate the alternatives. If something new arrives in the market, merchandising the new products in retail help the products to get noticed. The customers can take the decision to purchase the new products as it would give them a chance to taste something new (Keller and Kotler 2016). Therefore, Irn-Bru must have appositive feedback in the market that would initiate the customers to purchase the products. Irn-Bru has to meet the customers’ expectation and it can lead to the post-purchase behaviour to purchase again.

Figure 2: Proposed Customer Journey map of Irn-Bru

3. Value Proposition

Value proposition determines the people’s liking for the products and if the customers like the products and service, it can boost back the huge profit for the organisation (Kim and Mouborgne 2014). Irn-Bru will be new in the Australian market and it will require value proposition. The value proposition of Irn-Bru has to solve the customers' issues and develop the situation in the Australian market. Value proposition must deliver the specific benefits through marketing to the audiences as it must show the quantified values (Kramarz and Skans 2014). Irn-Bru has to tell the customers about why the customers must buy the carbonated products of Irn-Bru, not from the competitors and USP must be showcased.

Positioning:

Irn-Bru seeks the foothold in Australian market through improving the condition of the company in the Australian market. Irn-Bru also wants to create a good relationship with customers and improve the revenue in the new market. Irn-Bru wants to create marketing opportunity in a new market through offering the best products.

Positioning Statement:

As a soft drink manufacturer, Irn-Bru cares for the customers and their health. Irn-Bru aims to bring the portfolio of a quality beverage brand that cares for the customers and it must satisfy the customers' desires and needs. Customers' satisfaction must be fulfilled and it will help to return a long-term profit for the organisation Barr. Irn-Bru will introduce the diet soft drink that will help the customers to stay healthy and quality beverage products will fill the gap in the market. Irn-Bru will provide discounted price for the products in the Australian market in the initial stage.

Figure 3: Value Proposition framework

In the Australian market, healthy soft drink and competitive price will help Irn-Bru to set a foothold. The main value of the organisation lies in the reputation in Scotland market and the discounted price will work as a booster for the organisation. The manufacturer of Irn-Bru needs to do point-of-sale marketing with perfect merchandising. The value proposition of Irn-Bru can be mentioned on the website where they must mention about Australian entry (Cavusgil et al. 2014). Online value proposition will be useful for Irn-Bru as the new experience of the customers will make a good relationship between customers and brand. However, creating a brand online value proposition will ensure the digital marketing objectives.

4. SMART Goals and Blue Ocean Strategy

SMART Objectives

Objective 1: To build brand awareness in the Australian market

Specific	Irn-Bru need to build brand awareness in the Australian market
Measurable	It could be measured by digital presence and customer base at the end of a year in Australian market
Achievable	This objective can be achieved through marketing via online, social media, print and out-of-home
Realistic	This is realistic as this would provide brand loyalty to Irn-Bru along with familiar name among Australian customers
Time-bound	Within 12 months

Objective 2: To grow market share in the Australian market

Specific	Irn-Bru needs to grow market share in the Australian market. Specifically, it sets the target of achieving 3% of market share by the end of 2019 in the Australian market
Measurable	It could be measured by specifically taking the feedback from the customers and market analysis
Achievable	This objective can be achieved by taking marketing strategy like retail or opening new stores. Irn-Bru can also be achieved by starting an online campaign and direct selling.
Realistic	This is realistic as the manufacture Barr needs to achieve the break-even point and make profit to survive in Australia market
Time-bound	Within 12 months

Objective 3: To increase sale in the Australian market

Specific	Irn-Bru should increase the sales in the Australian market through Coles, Woolworths, IGA and Lidl
Measurable	This can be measured through organisational calculation and report by the end of a year
Achievable	This can be achieved by strong marketing and brand presence. As this a new organisation, it can be achieved by making commercials and sponsors. The brand image helps the organisation to have loyal customers.
Realistic	This is realistic as the organisation needs to enter in Australian market with higher sales
Time-bound	Within 6 months

Blue Ocean Strategy

Blue ocean strategy refers to a market where the organisations do not face any pressure from the competition and there should be very fewer firms that operate in the same industry. Blue ocean strategy creates an industry where the firms do not face any pricing strategy (Mebert and Lowe 2017). In soft drink industry of Australia there are many other firms that operate in the same sector, however, this market cannot be apt for blue ocean strategy, however; Irn-Bru can make the market blue ocean by overshadowing the competition. Irn-Bru can take blue ocean strategy as they want to capture new demand and make the competition make irrelevant.

In case of Irn-Bru, the management of Barr can take the strategy of ‘economies of scale'; Irn-Bru will generate high volume of value innovation that can lead to a rapid cost advantage for Irn-Bru. Irn-Bru needs to export the products in the Australian market in high volume and high-value innovation can lessen the costing, therefore, customers of Irn-Bru can get the products in the open market at very less price. This cost-leadership strategy with a quality product can overshadow the competitors.

5. Market Entry Plan

Irn-Bru can take exporting strategy as it would be helpful for them to export the products from Russian and Scotland manufacturing sectors to Australian retail. The organisation has already set the target market with information and customer persona will be produced later. Sourcing of the products will be on retail outlets of Woolworths, Coles and IGA.

Exporting Strategy

Irn-Bru will take the exporting strategy and it is the most traditional and well-established form of operating in foreign markets. No direct manufacturing is required in Australia and significant investment in marketing is required for the management of Barr. In exporting of the products, the management does not need to obtain the marketing information; however, the distribution channel needs to be perfect. The distribution channel must be direct and the shipping products must be reached the retail outlets in no time. Once Irn-Bru will establish in the Australian market, distributors can represent them further in the market. Through exporting the products in the Australian market, making new manufacturing section in Australia will be expensive and exporting will be less risky. Irn-Bru will have an opportunity to learn overseas market before investing in marketing and manufacturing. In addition, exporting can reduce the potential risk in operating overseas (Bryson et al. 2017).

6. 7Ps Strategy, Tactics, Schedule and Measures

7Ps of marketing mix	Strategy (What)	Tactics (How)	Schedule	Measure
Products	Irn-Bru will offer carbonated soft drinks with various flavours like orange and cola. The famous sunset yellow coloured drinks will also be available.	In the Australian market, Irn-Bru offers all the products that are available in Scotland and the products are part of the Scotland's culture. The physical product is the liquid of Irn-Bru, however, phenomenal and indescribable taste give the extra value to the products.	By the end of 2018	This can be measured in the retail stores of Australia to check the availability of Irn-Bru cans and bottles
Price	The price will be low-cost as cost leadership will be the strategy.	the manufacturer Barr may export a bulk amount of products from the Scotland and sell it to different retail outlets.	By the end of 2018	By checking the price of the other products and the profit margin of the Barr
Place	The retail outlets of Australia like Woolworths, Coles, Aldi and IGA and at least 75% of the retail stores in Australia must have the Irn-Bru products	Barr will take the strategy of export and it will use single distribution channel to send the products in retail stores. Single distribution channel will help the organisation to manage it easily and reduce the cost	By the end of July 2018 Barr will make contract with the distribution channel	By checking all the retail stores in Australia if the Irn-Bru products are available or not
Promotion	Irn-Bru will use social media strategy and the print media in order to reach the Australian customers. Print media will give the boost in sales as many people read magazines and newspapers. Youngsters mainly use social media and Irn-Bru can reach the youth.	PR team of Barr will use the Scottish people’s sentiment to showcase on social media pages of Australia and Australians can relate this too. The PR team will mainly use Facebook and Twitter advertisements to reach the customers. These channels are cheap and effective. In print media, some of the best selling newspapers will be chosen for advertisements on weekends.	The advertisements will be started after July 2018 on print media and social media pages of Australia	The social media buzz will be measured by social media analytics and the feedbacks of the users. Print media feedbacks will be measured through the word-of-mouth publicity of Irn-Bru.
Process	Barr will use the export process and the distribution will be a single chain. The ships and cargoes will carry the products and intermodal transport system will be used	The employees will carry the products from the cargoes and ships to warehouses. The products will then be reached at the retail outlets. Internationalised pay system will be used as Pay-Pal.	This shipping process from Scotland and Russian manufacturing sectors will be started after November 2018	This could be measured by the presence of products in retail stores
People	Irn-Bru will use the employees based on Australian employees as they have knowledge about Australian market. They will be used for sales, marketing and distributions.	The recruitment process will be done through external recruitment and geocentric approach will be taken by the HR of Barr.	The recruitment will be started at the end of September 2018	This will be measured by the number of employees who will be recruited
Physical evidence	Buildings, legal papers, logos and names of brands	Barr will use the names and logos and they will hire the warehouses and office buildings in a few parts of Australia	The office buildings and warehouses will be selected by the July of 2018	It could be measured by the presence of warehousing and office building

7. Value Summary Map

Barr Manufacturer Company will use the customers’ preferences and they will make the customers’ profiles. The construction of identities in the Australian market will then be made by promotions and context of uses of the products Irn-Bru will be conceptualised by the management. Customers need to experience the products and service process and participation of the customers is needed. The co-creation of value will be possible when the organisation’s goals will be met. Barr needs to promote the products and free sampling can be given to the customers in events can help the management to make participate the customers.

Figure 4: Summary of co-creation of value

Reference List

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