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Internal Environment Analysis

Dicuss about the Strategic Marketing Plan for Background and History.

Situational analysis is referred to as the collection of methods for analysis of internal as well as external market of business environment of an organization (Drori & Honig, 2013).  The organization that is chosen for the study is Vendlink Company. It is a fully serviced vending solution to the customers of Melbourne, Australia. It provides high quality snacks, meals and drinks through vending machines (Vendlink.com.au, 2016). The study will conduct a situation analysis for final marketing plan of the organization. The study will provide the internal as well as external marketing analysis of the organization. Apart from that, a brief customer analysis of the organization will also be provided in this study. Lastly, the study will describe the SWOT analysis of the organization.

Company Background and History

Vendlink is fully serviced vending solution organization in Australia, Melbourne, which provides best quality cold drinks and snacks. The organization was established in 2008 and it is a 100% Australian owned company (Grech & Allman‐Farinelli, 2015). Starting with providing unique quality snacks food and coffees, the organization has gradually shifted to provide reliable vending Machine to the customers. As per the annual organizational report of 2014, the market share of the company was 35% (Vendlink.com.au, 2016). Moreover, it is observed that the organization provides service all over Melbourne.

Vendlink is the best snacks and cold drinks provider in Australia, when customers need it (Vendlink.com.au, 2016). All the beverage products served through their vending machines provided by the organization are healthy and nutritious (Winston et al., 2013). According to Kocken et al., (2012), the organization provides technologically advanced vending machines to its customers and employees. The vending machine is incorporated with Vend AssureTMTechnology, which eliminates issues through money refund from it in case of fail in providing products. On the other hand, Grech & Allman‐Farinelli, (2015) opined that the organization also provides free installation of this machine across all locations in Melbourne. The organization has a large product range, which makes the taste buds of the customers happy. All the local snack and cold drinks brands give the customers a traditional taste.

Mission Statement

·         Providing healthy product vending machines to health conscious people

·         Provide a wide product range including both local and popular snacks, drinks and meals

·         Regular and free installation service of the vending machines

Corporate Objectives

·         Proper maintenance of positive organizational growth

·         Increasing the sales volume of vending machine for attaining 40% distributing market share in Melbourne

·         15% increase in sales volume of overall products

Table 1: Mission Statement Corporate Objectives

(Source: Taiwo et al., 2016)

Healthy and nutritious beverage foods attract all the health conscious people towards this organization through their vending solution. The 100% Australian products easily gain the trust of the customers (Urde et al., 2013). Young and active customers easily rely on the products of this organization due to its hygienic quality. Apart from that, the free installation and regular service of vending machine has helped the organization achieve a strong brand identity. This brand identity will surely help in final marketing plan of the organization.

Product Portfolio

Service Portfolio

·         High Quality Snacks foods, meals and drinks

·         Wide range of beverage and foods.

·         Nutritious foods

·         Technologically advanced vending machine

·         Vending machine provides snacks and drinks to customers and employees in no time

·         Free installation of vending machine

·         Regular service of vending machine

Description of Vendlink Company

Table 2: Product and Service Portfolio

(Source: Parida et al., 2014)

From the above table, it can be identified that the organization has incorporated top branded snacks, beverages and meals. There is no extraordinary feature but still it has able to maintain flawless service. On the other hand, Winston et al., (2013) indicates that wide varieties of vending machines are present for various sectors. Free service & installation, free insurance and free checkups are the elements that enhance the brand image of Vendlink.

The organization is planning to sell healthy coffee and snacks to the customers in college, hospitals and offices in Melbourne. The organization will restructure the price of the snacks food machine for the market of Melbourne. The brand identity of the organization will assist the organization to sell their technologically advanced vending machine. Apart from that, the strong customer volume of the organization will also increase scope of marketing plan for the organization.

Human Resources

All the employees of Vendlink Organization are highly dedicative towards their respective job role. According to Buller & McEvoy, (2012), the organization employs specialized employees in specific areas for increasing the quality of the products and services. Apart from that, Jackson et al., (2014) opined that the employees are extremely enthusiastic regarding the corporate success of the organization. They have linked their personal growth with the growth of the organization. Apart from that, the employees get regular training from the human resource department. They provide personal touch in preparing customized vending machines for the customers. Therefore, these human resources will be extremely beneficial for the new marketing activities.

For Vendlink, the maximum amount of revenue comes from food suppliers. The machine acts as the one stop unit for delivering readymade food, hence consumers do not compromise while buying (Kramer, 2012). Moreover, it gets its monthly rentals from these service areas. On the other hand, free installation and free customer service are the areas where fund is consumed. This can understood as the weakness of Vendlink. Financial weakness may hinder the feasibility of final marketing plan of the organization.

At present, the organization has the capability to focus more on machine customization. It has already grasped the market but it lacks in technology incorporation. Sensor based payment and USI technology has to be installed.  Moreover, more number of suppliers and investors are required. The organization is financially stable and therefore it needs to stabilize its human resource, which will redesign and update the systems on a continuous basis. Increase in operational capabilities will be beneficial towards the marketing activities of the organization.

Mission Statement Corporate Objectives

 Internal resource strengths and weakness

Figure 1: Internal resource strengths and weakness

(Source: Tatikonda et al., 2013)

Product

·         Classified and advanced vending machines

·         Branded food items

·         Card acceptance and instant refund system

·         Free installation and free service

·         Service Refill each day

Price

·         Price penetration strategy

·         Use of corporate logo impacts on pricing

·         Average pricing

·         Brand identity and logo impacts on pricing

·         Considerable low price in snacks as bulk supplies is taken

Place

·         Office, malls and private sectors

·         Marketing through internet

·         Official Distribution channel (no third party)

Promotion

·         Brand identity and logo impacts promotional activities

·         Online means of promotion through social media

·         Awareness though TV and radio

·         Communication of offers while marketing through newspaper

Table 3: Marketing Mix of Vendline

(Source: Stoyanov, 2015)         

From the above table, it can be identified that the organization has marginally followed marketing mix strategy. Moreover, the promotional activities of the organization are still not much effective, despite the presence of different types of vending machines. Apart from this, use of only traditional means of promotion becomes another weakness for the organization.

Vendlink has the opportunity to expand its customer base by penetrating into the target market through innovative promotional means. Marketing campaign and trade fair activities are to be incorporated in future (Bublitz & Peracchio, 2015). On the other hand, while considering the product, it can be said that the organization has followed enhancing the service rather than product customization. Therefore, it needs to make the vending machines more advanced using sensors. Merchandising has to be made more effective through penetrative distribution strategy.

PESTLE

Factors

Explanation

Political

·         Underdeveloped economy limit organizational growth

·         Vendlink maintains all health and safety acts of Australia

·         Corruption in Government and frequent policy change effects organization

Economical

·         High inflation rate impacts the product price and seems to be a threat

·         Increasing economic condition seems to be an opportunity

Social

·         Concern of customers towards nutritious food

·         Health concern of customers

·         Lack of time in preparing food lead to purchase of vending machine

·         Increasing importance of time management leads the office employees to use vending machine

Technological

·         Technological advancement of Australia assists the organization in embracing developed technical aspect

·         Involvement of high technical features increases the attractiveness of vending machine

·         Modern technology in vending machine ensures speedy delivery of snacks, drinks and meals

Legal

·         Increasing tax rate and environmental law increase cost of capital

·         Product safety regulation

·         Consumer protection act

Environmental

·         Use of environment friendly products

·         Conduct environmental campaign

·         Possible long term effect of environment

Table 4: PESTLE Analysis of Vendlink Company

(Source: Raposo et al., 2015)

Customer Analysis (STP)

Factors

Explanation

Segmentation

Demographic

·         Age: 18 years-60 years

·         Gender: Includes both genders with wide variety of product

·         Income: A$ 360- A$ 370 (Per Month)

 

Psychographic

·         Customer are brand conscious

·         Want to live life with ease

·         Trend towards healthy food

Behavioral segmentation

·         Customers conscious about product prize

·         People seeking extra benefit from products

Targeting

·         Business employees, college students and hospital employees

·         Customers having medium income group

·         Primary target is youth generation

·         People having busy work schedule

Positioning

·         Customized option to get products

·         Taste change

·         Healthier option

·         Quick service in getting food

·         Free installation of vending machine

·         Option to save money

Table 5: Customer Analysis (STP) of Vendlink

(Source: Fernandes et al., 2016)

From the above customer analysis table, it can be identified that Vendlink has segmented people ranging between 18 to 60 years.  The organization has targeted medium income groups, who like to pay for healthy food. Psychographic segmentation of the organization suggests that people who are brand conscious  form the customer base of this organization. People working in organizations, students studying in college and employees in hospitals need quick service in getting foods (Harnanan & Zaremba, 2015). Therefore, the vending machine of this organization would be highly beneficial for them. Apart from that, the vending machine also gives the option of saving money. Customer can buy any products depending on their affordability. Therefore, purchase is related to discretionary spending for the customers. They have flexibility with respect to spending on the products. They have the option to choose their preferred products. Speedy service of vending machine and high quality food seem to be competitive advantage of the organization.

Local, Direct and Indirect Competition

While focusing on vending machine companies in Australia, it can be said that there are three companies, Vending Direct, Ventrader and Smith’s Snackvend which are the direct competitors of Vendlink (Vendlink.com.au, 2016). Vendlink however is found to be lagging behind in terms of technology, even though there is not much indirect competition. Remote service and satellite merchandising is not present in Vendlink.

Brand Identity

Competitive Market Share

Figure 2: Competitive Market Share

(Source: Kramer, 2012)

From the above diagram, it can be seen that market share of Vendlink is just 16% at present and its greatest competitor is Ventrader.

Company

Current Sales (%)

Brand Awareness (%)

Rate of Installation order (%)

Vending Direct

13

16

14

Ventrader

23

37

33

Smith’s Snackvend

16

15

14

Vendlink

21

31

28

Others

27

10

11

Table 6: Competitive Scenario of Vending Company

(Source: Grech & Allman‐Farinelli, 2015)

Competitive Percentage Scenario of Vending Companies in Australia

Figure 3: Competitive Percentage Scenario of Vending Companies in Australia

(Source: Vendlink.com.au, 2016)

From the above figure, it can be identified that Vendlink is in the suitable position for expanding its market. The organization needs to occupy the ‘others’ market share and rout Ventrader in future.

Competitor Analysis of Vendlink

Factor

Vendlink

Vending Direct (Competitor)

Ventrader (Competitor)

Smith’s Snackvend (Competitor)

Products and Services

·         Vending Machine Supply

·         Vending Machine installation

·         Service and Maintenance

·         Provision of branded snacks, drinks and chocolates

·         Free insurance

·         Periodic refill and guaranteed service

·         Best customer service satisfaction

·         Customized products

·         Accessories Cold Drink

·         Vendors Combination

·         Machines Fresh Food

·         Machines Hot Beverage

·         Machines Second Hand

·         Vendors Snack Machines

·         Cash Handling Systems

·         Satellite controlled combo machines

·         Drink machines with sensor

·         Refurbished vending equipment

·         3rd generation technology (USI, AMS and GPE)

·         Member of Australian Vending Association

·         Credit card reading sensor

·         Frozen combo machine

·         Remote Telemetry

·         Pre-pick inventory per machine

·         Provision of branded snacks, confectionary and beverages

·         Free installation

·         24 hours’ service

·         Guaranteed refill

Annual Sales percentage

21% in local market

13% in local market

23% in local market

16% in local market

Market Share Level

16% Market Share (FY 2015)

11% Market Share (FY 2015)

25% Market Share (FY 2015)

18% Market Share (FY 2015)

Opportunities

·         Increasing market demand

·         30% scope of grasping market

·         Best distributor channel

·         Financial stability will help in incorporating new technology

·         Understanding market demand

·         Cutting edge technology incorporation

·         Segregating resources in remaining 30% of the market

·         Financial stability will help in incorporating new technology

·         Understanding market demand

Threats

·         Threat from substitutes

·         Absolution of the current technology by new invention or innovations

·         Lack of supplier’s availability

·         Lack in quality of food items

·         Due to high price consumers can shift to other service providers

·         Technological failure will lead to complete stop in service

·         Service is poor and therefore human resource may get reduced

Table 7: Competitor Analysis of Vendlink

(Source: Siebenhandl et al., 2013)

Strength

Vendlink is reputed for its high quality and healthy food service. All the food, drinks and meals, it provides through vending machines are of hygienic quality. It provides a wide range of products and meets the demands of the customers as and when required. Vendlink also has strong impact on the market though its strong brand image. Customers do not necessarily have to go any specific outlet (Caruso et al., 2014). They can install the vending machines at their convenient place and get their necessary food. Latest technology adopted by the organization provides high-speed vending machine. It will assist in final marketing plan of the organization.

Weakness

The organization is to depend on the suppliers for the quality of food provide on vending machine, as the foods are not actually manufactured by the organization. High cost of installation and maintenance of vending machine increases the cost of organization. The organization has quite limited customer groups.

Opportunity

 Unexploited market opportunities of hospitals, universities and offices have positive impact on business. Increasing rate of income ultimately increases the purchasing power of customers, which enhances the sales volume of Vendlink products (Harnanan & Zaremba, 2015). Increasing number of health conscious people is also like opportunity to the organization.

Threats

Tough competition from new local competitors seems to be threats to the organization. The organization mainly faces competition from organizations like Ventrader and Smith’s Snackvend (Chiu & Hofer, 2015). New companies distributing drinks and snacks also are competitors of this organization. Absolution of current technology by innovative technology is also tough threat to Vendlink Company. It may hinder the feasibility of new marketing plan.

SWOT Analysis of Vendlink Company

Figure 4: SWOT Analysis of Vendlink Company

(Source: Chiu & Hofer, 2015)

Conclusion

While concluding study, it can be said that Vendlink is one of the popular organization is Australia, which provided fully serviced vending solution to the customers. The organization provides free installation of vending machine and provides high quality snacks, drinks and meals. The organization has huge number of dedicated employees who makes customized vending machine. The organization uses price penetration strategy for quickly grabbing the market. Growing economic condition and health consciousness of people seems to the opportunity to the organization. On the other hand, corruption in politics and increasing tax rate act as threats for the organization. The organization has targeted medium income group as their customers. Moreover, the strong brand image of the organization would have positive impact on new marketing plan.

Product and Service Portfolio

References

Bublitz, M. G., & Peracchio, L. A. (2015). Applying industry practices to promote healthy foods: An exploration of positive marketing outcomes.Journal of Business Research, 68(12), 2484-2493.

Buller, P. F., & McEvoy, G. M. (2012). Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, 22(1), 43-56.

Caruso, M. L., Klein, E. G., & Kaye, G. (2014). Campus-based snack food vending consumption. Journal of nutrition education and behavior, 46(5), 401-405.

Chiu, Y. T. H., & Hofer, K. M. (2015). Service innovation and usage intention: a cross-market analysis. Journal of Service Management, 26(3), 516-538.

Drori, I., & Honig, B. (2013). A process model of internal and external legitimacy. Organization Studies, 34(3), 345-376.

Fernandes, T. S., Silva, Â., Reis, R., & Leão, C. (2016). Gathering Information Based on Focus Groups: Consumer’s Involvement in the Use of Vending Machines. The Qualitative Report, 21(13), 19-33.

Grech, A., & Allman‐Farinelli, M. (2015). A systematic literature review of nutrition interventions in vending machines that encourage consumers to make healthier choices. Obesity Reviews, 16(12), 1030-1041.

Harnanan, K. K., & Zaremba, L. (2015). Measurement and analysis of energy-saving devices for vending machines at a university. Energy Engineering, 112(1), 7-27.

Jackson, S. E., Schuler, R. S., & Jiang, K. (2014). An aspirational framework for strategic human resource management. The Academy of Management Annals, 8(1), 1-56.

Kocken, P. L., Eeuwijk, J., Van Kesteren, N., Dusseldorp, E., Buijs, G., Bassa‐Dafesh, Z., & Snel, J. (2012). Promoting the Purchase of Low‐Calorie Foods From School Vending Machines: A Cluster‐Randomized Controlled Study. Journal of School Health, 82(3), 115-122.

Kramer, M. M. (2012). Financial advice and individual investor portfolio performance. Financial Management, 41(2), 395-428.

Parida, V., Sjödin, D. R., Wincent, J., & Kohtamäki, M. (2014). Mastering the transition to product-service provision: Insights into business models, learning activities, and capabilities. Research-Technology Management,57(3), 44-52.

Raposo, A., Carrascosa, C., Pérez, E., Saavedra, P., Sanjuán, E., & Millán, R. (2015). Vending machines: Food safety and quality assessment focused on food handlers and the variables involved in the industry. Food Control, 56, 177-185.

Siebenhandl, K., Schreder, G., Smuc, M., Mayr, E., & Nagl, M. (2013). A User-Centered Design Approach to Self-Service Ticket Vending Machines.IEEE Transactions on Professional Communication, 56(2), 138-159.

Stoyanov, D. (2015). Sustainable Marketing: A Global Benchmark Perspective on the Vending Industry. Review of Integrative Business and Economics Research, 4(2), 1.

Taiwo, A. A., Agwu, M. E., & Lawal, F. A. (2016). Vision and Mission in Organization: Myth or Heuristic Device?. The International Journal of Business & Management, 4(3), 127.

Tatikonda, M. V., Terjesen, S. A., Patel, P. C., & Parida, V. (2013). The role of operational capabilities in enhancing new venture survival: A longitudinal study. Production and Operations Management, 22(6), 1401-1415.

Urde, M., Baumgarth, C., & Merrilees, B. (2013). Brand orientation and market orientation—From alternatives to synergy. Journal of Business Research, 66(1), 13-20.

Vendlink.com.au, S. (2016). Vendlink.com.au. Retrieved 26 August 2016, from https://www.vendlink.com.au/index.php/en/products

Winston, C. P., Sallis, J. F., Swartz, M. D., Hoelscher, D. M., & Peskin, M. F. (2013). Reliability of the hospital nutrition environment scan for cafeterias, vending machines, and gift shops. Journal of the Academy of Nutrition and Dietetics, 113(8), 1069-1075.

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