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Impact of Related Elements in the Marketing Mix

Question:

Discuss about the External Relationships Enhance Innovation In SMES.

Marketing Mix Variation

Impact of Related Elements in the Marketing Mix

Promotion – The company should focus on their digital promotion for this particular product. Digital advertising will incorporate the social media marketing using social networks. Online, SMS and email marketing in digital marketing process will be beneficial in the technologically advanced target market. Public relation on the other hand will be maintained using review and feedback system enabled in their social networking and company web pages as well as through email and SMS platforms (Tiago & Veríssimo, 2014). Sales promotions on the other hand will be provided to the customers making bulk purchases, which will increase the sales of the company. Lastly, content marketing is also recommended for updating the customers about the product being delivered. Traditional marketing on the other hand will include banners and posters for making customers aware of their presence.

Increased promotion cost of the product will require the company to select premium pricing for the products to increase generated revenue. Moreover, the promotion will address the greater section of society, which will require them to make the product available around the nation. Premium pricing, will again require the company to produce and deliver best quality products to the customers for gaining customer loyalty and value proposition (Khan, 2014). Sales promotion on bulk purchase will again requires the company provide high-level production for meeting the sales and demand of the customers.

Pricing – Pricing strategy required on the other hand is premium pricing. Companies using this strategy, price their product higher compared to their competitors in the market to attract the customers’ attention and position themselves as high quality product distributors (Pantelous & Passalidou, 2015).

Premium pricing strategy selected for the product will help the company positioning themselves as high quality product distributor. This will help attracting the upper and middle class population towards their brand. Moreover, this will help them distributing the product through supermarket chains that are prevalent around the nation (Leonidou, Katsikeas & Morgan, 2013). However, premium pricing requires the company to develop high quality products to satisfy the perceived value of the same.

Environmental Factor

Impact on Marketing Mix Promotion

Impact on Marketing Mix Pricing

Social – this includes the lifestyle, buying behavior, health consciousness, family structure etc., which alters the attitude, opinion, and interest of the target population towards the product offered.

The existence of large number of energy drinks available in the market communicates the high consumption of products. However, the health issues caused by the product restricts the full flow of the product. It requires the company promoting health benefits of the product using digital marketing, which will attract greater number of customers. This is due to excessive use of social networking and internet that will help reaching greater section of the target population.

Social factors such as lifestyle of the target population encourages them to consume energy drinks. However, contemporary harmful energy drinks available restricts them from using the products. However, premium pricing along with high quality will enable the company to enjoy sales in the market.

Economic – Economic factor on the other hand is economic stability of the nation as well as the average income of the population that regulates the purchasing power of the population. Businesses have greater chance of attaining growth in a stable economy with greater purchasing power as the population then will be able to afford the products and services offered.

Economic stability in the country enabled the population to enjoy technological advancement (archive.stats.govt.nz, 2018). Moreover, a number of social media and networking channels are made available to the population that will potentially benefit the company in promoting through digital media.

Median income of $959 is moderate, which reflects moderate purchasing power of the customers (Stats.govt.nz, 2018). Hence, premium pricing for energy drinks for the population can attain success in attracting customers towards their products.

Demographic – This factor studies the age, sex, education level etc., and its impact on the business. Demographic factors such as age and sex largely alters the external environment for the products and services significantly modifying the market demand for the products.

Energy drink is consumable for every age group. However, high caffeine content prescribes restriction for the children. However, the New Zealand government has no such restriction until date, which enables the company to promote for all age groups (archive.stats.govt.nz, 2018).

Premium pricing of the products will make it affordable to the middle to high economic group of the population. Moreover, the affordability according to the pricing strategy will restrict tot the earning population of the country.

Cultural – This communicates the culture of the target population and its acceptance of the product or service offered. This also helps understanding cultural need for the product in the target market.

Energy drink entered in the nation decades ago and is incorporated by the population. This makes it easy for the company to promote their products in the market.

New Zealand culture neither promotes nor restricts the population from consuming energy drink. However, it gained popularity in recent decades. The premium pricing considering the popularity is justified according to the market demand.

Ethnic – This factor is closely related to the cultural factor. This communicates the originality of the population. In other words, ethnic factor in this sense are the indigenous customs and norms that restricts or encourage use of the product or even the indigenous substitute of the product available to the population.

There is no ethnic substitute products available in the market. Moreover, the product is already been introduced in the target population. Hence, promotion of the product is unlikely to face ethnic threat.

There is no indigenous substitute of the products available in the market for cheaper price, which enables the company to enjoy premium pricing in the market.

Natural – The environmental or natural factors encourages or discourages business operation in the particular target market. This refers to the natural barriers that may discourage distribution of the products in the market.

The population of New Zealand is largely distributed in the urban area, which makes it easy for implementing identified promotional strategy to address larger section of the population (Archive.stats.govt.nz, 2018).

Target population being distributed in the urban areas provides opportunity for the company deploy premium pricing considering the affordability of the customers (Archive.stats.govt.nz, 2018).

Political – This is the factors such as tax regulations, political stability etc. that alters the external environment of the business in particular country. This factor is largely overlapping with the legal and regulatory factors as shift in political factors might bring change in the legal and regulatory factors of the country as well.

Political stability allows the companies to conduct free promotion and advertisement around the nation.

Political stability allows the business to enjoy business growth. However, the pricing is to be in accordance with the guideline laid in fair trade and consumer guarantee act (Legislation.govt.nz, 2018).

Legal – Legal factors are the law enforced by the government of the target market for regulating the business operation. This is to ensure the value received by the customers on purchasing the products and services.

Privacy law restricts organizations to access customer information without their consent (consumer.org.nz, 2018). This means it will increase the promotional expenses, as they have to approach individual customers in the market for gaining their concerns related to the product.

Consumer guarantee act 1993 holds the customers interest and forces the companies to price their products according to the standards being delivered, which makes it necessary to deliver quality product matching premium priced products (Legislation.govt.nz, 2018).

Regulatory – Regulatory factors in external environment analysis are the legislative factors that regulates the business operations in the particular market. This communicates the regulations need to be followed on product or service deliverance. This also communicates the expected standard for the products and services offered by the companies.

Fair trading act of the country makes it necessary for the company to promote authentic information without misleading customers with exaggerated information related to the product benefits (Legislation.govt.nz, 2018).

Fair trading act in the country forces the companies to deliver standard products and price them accordingly for increasing competition in the market. It makes it necessary for Frucor Beverages to produce products matching market standard and price them accordingly (Legislation.govt.nz, 2018).

Technology – This is the study of technological advancement attained by the target population. This further helps in determining the technological incorporation required by the company to deliver value to their customers.

Promotion of the product emphasizes on digital advertisement, which requires the nation to be technologically advanced to receive the benefits. New Zealand is categorized as developed country and has attained technological advancement. Use of internet, social media, and networking is dominant in the nation, which makes it useful for the company in developing their promotion strategy basing on digital promotion (Cameron, Barrett, & Stewardson, 2016).

Pricing has no as such relation with the technological advancement of the country.

Competitive – This factor helps understanding the competition the product or service is facing in the target market. This helps analyzing position of the major competitors in the market and their approach in addressing the target population.

The competitors in the market are also availing digital media promotion, which requires the company to produce high quality content for their promotion to distinguish them from similar brands (Baltes, 2015).

Large number of competitors in the contemporary New Zealand market makes it hard for new brands to enter the market, which makes them to reduce their price for increasing sales. However, the premium pricing will help the company in positioning themselves as high quality producers that will help creating brand value and distinguishing them from the rest. Fair trade act also encourages competition in the market (Legislation.govt.nz, 2018).

Marketing Objective

Customer’s response to the marketing mix in terms of their impact on Frucor Beverages Ltd’s marketing objectives

Sales – Increase 15% sales every year in the target market for first five years

Sales promotion for bulk purchase will drag customer towards the product, which is likely to supplement towards the sales goal of the company.

Revenue – Increase revenue by 10% by July 2018 using extensive advertisement and digital media promotion campaign

The target customer segment of the market are largely involved in social media network and internet, which will help communicating the energy drink to the customers. As mentioned earlier, the company promotes healthy energy drinks for the customers. Focusing on the health of the customers will help gaining positive response in the customer segment due to increase demand of healthy energy drinks that minimize health hazards. Hence, this will help the company stepping towards the objective of increased revenue.

Awareness – Create 100% awareness among the target customers

The digital promotional strategy, supported with banner and poster advertisement proposed can successfully address the target population and can gain 100% attention by the end of five year. The banner advertisement will draw the attention of the customer while they are out for work (Karunanithy & Sivesan, 2013). The digital promotion on the other hand is likely to gain attention due to high use of social networking, which will be primary promotion platform.

Retail – Attain 100% availability in the supermarkets around the country

Distribution strategy in the marketing mix focuses on the supermarket, which reduces the pressure of distribution in the small retail stores (Qiang et al, 2013). Moreover, the target customers reflects trends of supermarket purchasing that will help increasing the sales.

Attitude – Provide healthy energy drinks to their customers reducing the health damages

Energy drinks in contemporary market threatening the health of the consumers. Promotion strategy of the company will help grabbing the attention of the target market due to the increased demand of energy drinks.

Organizational Goal – Become one of the dominant brand in the market in five years

Plan of delivering high quality healthy product to the target customers in the market will help proposing value and earn customer loyalty to the brand, which in turn will help in dominating the target market (Akdeniz, Calantone & Voorhees, 2013).

Marketing Objectives

Competitor’s response to the marketing mix in terms of their impact on Frucor Beverages Ltd’s marketing objectives

Sales – Increase 15% sales every year in the target market for first five years

Combination of the pricing strategy and product quality proposed will help the company to shift customers’ attention to the quality product for avoiding health issues, which will cause into fall of market share for the contemporary market leaders (Anselmsson, Vestman Bondesson & Johansson, 2014; Pomeranz, Munsell & Harris, 2013).

Revenue – Increase revenue by 10% by July 2018 using extensive advertisement and digital media promotion campaign

Distribution strategy proposed for the company will considerably reduce supply cost compared to the competitors, as their products are made available in the small retail stores along with the supermarkets, which increases the cost while reducing the profit margin (Qiang et al, 2013).

Awareness – Create 100% awareness among the target customers

Combination of digital and banner advertisement strategy incorporated by the company is likely to shift and gain attention of the customers in the target market. The marketing campaign structured for the company enables the customers to share their opinion in the social networking sites that will work as word of mouth promotion, which in turn will rise the brand vale and spread awareness of the brand (Karunanithy & Sivesan, 2013).

Retail – Attain 100% availability in the supermarkets around the country

Focusing solely on the supermarket chains in the country reduces the pressure of distributing products in the small retail market that will help them in attaining the goal. Competitors on the other hand focuses on distribution in both the sectors, which helps them in addressing the overall target market and puts them in competitive advantage. However, shift of trend towards shopping market will gain long term advantage to Frucor Beverages Ltd (Qiang et al, 2013).

Attitude – Provide healthy energy drinks to their customers reducing the health damages

High quality healthy energy drinks proposed for the target market is likely to dominate over the competitors as the current market condition of energy drinks in under threat due to the health issues caused by the products (Akdeniz, Calantone & Voorhees, 2013).

Organizational Goal – Become one of the dominant brand in the market in five years

Marketing mix strategies selected for the company is likely to put the band in dominating position within first five years. The competitors have to alter their product quality to gain competitive advantage in the market, which is likely to occur and create challenge for the company in the future market.

Specific market segment

Ability to satisfy marketing objectives

Recommended marketing mix

Males aged between 18 to 45.This market segment consists of young adults including the college students and the individuals involved in organizations.

Frucor Beverages Ltd is one of the most popular and established beverages and drinks company in New Zealand that has managed to provide good quality products with great value. The energy drinks products by the company have enhanced the energy level and have enjoyable tastes as well to cater the needs and requirements of the consumers (frucorsuntory.com, 2018).

The college students and other individuals of these ages are active in sports activities, education and a part time job, because of which energy is necessary to make it all throughout the day. The new energy drink product offered by Frucor Beverages Ltd. boosts of high content of vitamins and minerals that can provide energy to them (Mintz & Currim, 2013). Thus, the energy drink could be an effective solution to the young adults who experience hectic lifestyles and spend long day in classes, or are involved with working in small companies as part timers.

Product element is one of the major element of marketing mix tool that has been used by the company to accomplish the business objective, i.e., to fulfill the needs and requirements of the customers.

The new features of the energy product are high nutritional value, available in different flavors and an extremely good taste (Huang & Sarigöllü, 2014).

Consumers who are health conscious, though aware of the prices of products. There are sportsmen as well whom the company has targeted as primary consumer segments (Leonidou, Katsikeas & Morgan, 2013).

The sports enthusiasts and health conscious customers will also be purchasing the new energy drink product offered by Frucor Beverages Ltd. in both Australia and New Zealand. Promotions should be done through sports events and health campaigns where the benefits of the energy drinks have been put into limelight, thereby creating awareness among them (Tapp & Spotswood, 2013). These market segments comprising of the customers could be influenced to make purchases because they should gain a positive mindset with the benefits provided by the energy drink such as speed, instant thrill, energy and feel refreshed too. Few of the other energy brand products include Fresh Up, Ovi Hydration, Just juice, etc. and the company has been passionate about satisfying the needs of customers through delivery of new quality delicious energy drinks that are high of energy and boost high nutritional value as well (Valipour, Birjandi & Honarbakhsh, 2012). Sales promotions could be done as well for achieving long term sales and influence the customers’ buying behaviors.

Promotion marketing mix element has helped in achieving the business objective through creation of awareness among customers. The promotions could be done through health campaigns, sports concerts, music concerts and even should be promoted in social media platforms to enhance brand name and reputation (Armstrong et al., 2015).

Product differentiation strategy

The product differentiation would be possible by adding some unique features to the products and even making those available at the right places for easy access to the customers. The new energy drink would contain very less amount of caffeine, which would set it apart from the other products in the market. This is one differentiable feature whereas the product would also consist of vitamin B, ginseng, glucuronolactone and taurine that could provide long term energy benefits as well as make people understand that these would be safe for consumption.

The products would be sold in various stores and supermarket chains all over Canada so that the customers could easily access those. Setting up new stores would also be beneficial where other energy drinks would be available and this would give an edge over its customers. It would attract sports enthusiasts, young adults and health conscious consumers in large numbers, which would result in generating more revenue in business.

The performance of the organization in the market is quite good and it has successfully made quite a good number of customers from different market segments including the young adults, sports enthusiasts and health conscious adults (Liu & Zhang, 2013). With the launch of the new energy drink, it would be easy for the organisation to enter the foreign markets as well and increase the profit level for the company. Introducing the new energy drink would be easy to differentiate with other products and thus achieve the objectives and goals through gaining the attention of customers (Barin Cruz, Boehe&Ogasavara, 2015). Patents, trademarks, would protect the new product and the new product’s uniqueness would tend to create more customer satisfaction and better sales revenue.

The financial analysis could be done for monitoring the internal environment of Frucor Beverages Ltd and ensure making successful business consisting of most appropriate and accurate data and information (Prasad, Venkatesh & Mahajan, 2015).

The actions undertaken by the Government could help the company to understand the various price control techniques ad maintain the product safety rules and regulations. This would not only assist in monitoring the marketing mix process but would also allow for making sure that the quality standards for the products are maintained by Frucor Beverages Ltd.

Cost leadership strategy

PROMOTION, PRICE

Pricing is an important concept that not only influences the buying behaviours of consumers but also improves the business performance. Frucor Beverages Ltd has lowered its products’ prices at certain stages to attract new customers and retain existing customers. By providing products with new features available at lower prices than the competitors, it would be convenient for the company to enhance supply chain activities and even source products from the cheap domestic suppliers and from the low wages foreign markets.

The sales promotion have developed competitive advantage for the organisation and even provided strategic direction to guide in targeting the right market segments and making decisions. By promoting the new product, the company could also sustain competitive advantage and support differentiation through non-price based promotions. This would though need proper management support.

Cost leadership could be useful for achieving the market objective, i.e., to manage availability of the new product at lower price when compared to its competitors. Frucor Beverages Ltd. could market the new product at a lower cost with better process engineering, labour costs management in a proper way and use of good quality ingredients that would enhance the taste of the energy drink (Lasagni, 2012).

To monitor the effectiveness of the marketing mix strategies, situational analysis could be done and consider factors like Government actions undertaken.

Situational analysis could assist in the development of proper marketing strategy by analysing the overall environment within which Frucor Beverages Ltd had been operating.

Recall

To make the new energy drink available in the market properly, it is important for Frucor Beverages Ltd. to conduct a situational analysis.

These could be Occupational health and safety, tax policies, rates of interest, price control and product safety rules that would be required while launching a new energy drink product in the market. The marketing mix strategies should assess the demographic changes and how more customers could be attracted from different market segments for the new product launched. Changes in cultural factors and conditions could be considered and the company should deliver environment friendly products and recyclable plastic bottles to package the drinks (frucorsuntory.com, 2018).

Attitudes

To introduce a new product in the market, a company must maintain a positive attitude or behavior and enable proper marketing tactics to put focus on the marketing mix activities and ensure customer satisfaction. The new marketing tactics should be aligned with the consumers’ attitudes and behaviors for understanding their demand and preferences and then develop a useful marketing plan. Research and development activities should be undertaken by Frucor Beverages Ltd. for developing new ideas and covert the new flavors into brands so that the new products launched could become a major part of the company as well as its customers. According to the marketing mix strategy, the products should be placed in proper locations so that the customers could easily access those and this could also influence their buying attitudes and behaviors (Huang & Sarigöllü, 2014). Fostering the development of relationships with them by constantly obtaining their feedbacks and responses regarding the new products would result in making changes and improvements accordingly.

Organizational goals

The organizational goals and objectives are to satisfy the thirst of people in different market segments at present and tomorrow through offering of delicious and tasty energy drinks. To cater the needs of sports enthusiasts, health conscious customers and young adults, Frucor Beverages Ltd. has introduced a new energy drink that is delicious, high on nutritional value and energy. The company also aims to promote the product in the market through involvement of soil media platforms and by setting the right price (Tapp & Spotswood, 2013). CSR objectives of the company should be to provide lifelong educational facilities, reduce sugar intake as least as possible and allow the customers to make informed dietary choices.

Marketing mix decisions

Measurement and evaluation implementation strategy

Time frame

One of the major decisions could be the price skimming.

Frucor Beverages Ltd. added some extensive features to the new energy drink, because of which, the products are made available at higher prices. The new features and attributes of the new energy drink could grab the attention of customers and create higher profit for the company initially (Armstrong et al., 2015). After a certain time, the products’ price would be lowered to lure other general market segments and increase the profit level.

15th February – 20th February

5 Days

As a manager of Frucore Beverages Ltd, I would like to form external relationships with different companies (frucorsuntory.com, 2018).

Forming eternal relationships with other companies could improve the packaging and supply of products and achieve the objectives of managing international export. It would also be beneficial for Frucor to move the entire database in the cloud networking to operate globally and ensure that the new energy drink reaches customers worldwide (Prasad, Venkatesh & Mahajan, 2015).

21 February – 28th February

7 days

Reference

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Anselmsson, J., Vestman Bondesson, N., & Johansson, U. (2014). Brand image and customers' willingness to pay a price premium for food brands. Journal of Product & Brand Management, 23(2), 90-102.

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