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Internet Marketing: Strategy, Implementation and Practice - Essay Example

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This essay "Internet Marketing: Strategy, Implementation, and Practice" discusses Atlantic Quench being a successful cooperative organization operating in the juice and nectar industry that has the appropriate resources for expansion and transformation of their business…
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Internet Marketing: Strategy, Implementation and Practice
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AN OUTLINE MARKETING PLAN FOR THE NEXT THREE YEARS FOR ATLANTIC QUENCH Atlantic Quench being a successful co-operative organisation operating in the juice and nectar industry has the appropriate resources for expansion and transformation of their business. The contemporary scenario of the juice market revealed growing competition with increase in the number of suppliers. However, as a co-operative business, most of the members of Atlantic Quench are farmers which have reduced the cost of production and procurement of the products. On the other hand, a varied product range has enabled the company to focus on multiple segments of the juice market and develop the sustainable distributor network for their business. Moreover, alliance with brands like Coca-Cola and Gerber has also boosted the market presence of Atlantic Quench. The marketing plan for the concerned firm focuses on developing a new product for entering the mass consumer market and providing the consumers a cheaper alternative against highly priced pure juices. With an aim to sell 250000 units of 250 ml tetra packs of the new product, Atlantic Quench will begin by streamlining the functional aspects of the company to reduce their cost. The product introduction is developed with differentiation focus and the control of the marketing activities will focus on cost leadership. Based on this, the price skimming has been selected as the pricing strategy. The budget developed also reflects the estimated earnings and expenses for the new product segment of Atlantic Quench in the next 4 years. With appropriate market presence and brand development activities for creating consumer awareness, Atlantic Quench can enter the global market of juice and nectar segment. Table of Contents Table of Contents 3 1.0 Case Introduction: 5 2.0 Current marketing situation: 5 2. 1 Internal Analysis: 5 2.1.1 Market description: 5 2.1.2 Product Review: 6 2.1.3 Competitive review: 6 2.1.4 Distribution Review: 7 2.2 Macro Environment Analysis: Porter 5 forces 8 2.2.1 Competitive Rivalry: High 8 2.2.2 Threat of New Entrants: High 8 2.2.3 Threats of Alternative Products: Highest 8 2.2.4 Bargaining Power of Buyers: Moderate 9 2.2.5 Bargaining Power of Suppliers: Low 9 Chapter 3: SWOT 9 3.1 Strengths: 9 3.2 Weaknesses: 10 3.3 Opportunities: 10 3.4 Threats: 10 Chapter 4: Objectives and Issues: 11 4.1 Objectives: 11 4.2 Issues: 11 Chapter 5 Marketing strategy 12 5.1 Positioning Strategy: 12 5.2 Product Strategy: 13 5.3 Pricing Strategy: 13 5.4 Distribution Strategy: 14 5.5 Marketing communication: 14 5.6 Marketing research: 15 Chapter 6 Marketing Implementation: 17 Chapter 7 Budget: 18 Chapter 8 Control 19 Reference List: 20 Bibliography: 23 1.0 Case Introduction: Atlantic Quench operates in the fruit industry mainly in its home market i.e. US and is a co-operative business process. Established in the year 1934, the co-operative has become one of the most famous brands in agricultural product market with their extensive and highly demanded product base. Jointly owned by 630 cranberry and 46 grape fruit farmers, the production channel of the company is also steady and growing. As the co-operative saw the demand of their products growing in the market, they entered the retail sector with bottled fruit juices. However, the primary concern of the business is related to control its growth in an organised manner and also ensure a good relationship with the farmers. In order to overcome the financial crunch, Atlantic Quench CEO Chuck Berry decided to develop the brand of the company by converting into a full-fledged business houses. Atlantic Quench is also developing alliances with big multinationals such as soft drinks giant Coca-Cola and UK based juice supplier Gerber in order to enhance the brand awareness of their consumers in the international market place. Considering the growing health consciousness among the consumers of the international market place in the contemporary scenario, the steps taken by Atlantic Quench can lead them to be a successful brand in the global juice and nectar market. This report will focus on creating a marketing plan for ensuring the same. 2.0 Current marketing situation: 2. 1 Internal Analysis: 2.1.1 Market description: The global juice market is changing rapidly as the European market is falling behind in terms of sales and production. This has brought into limelight the firms of US and Asian juice segment such as the Atlantic-Quench. On the other hand, because of strict health regulations by global regulatory authorities such as WHO, European Union and national agencies such as NHS (UK), AIIMS (India) have reduced the market entry scope of many firms (Gamble and Thompson, 2014). Hucker (2014) also mentioned that as the number of suppliers entering the nectar and the juice segment is increasing, the cost of operations of the retailers is also increasing rapidly. However, there has been a constant growth in the consumer intake of fruit juices. This is a positive sign for new entrants in the market if they can match the requirements of the health authorities and also keep the taste in their products for attracting the consumers. 2.1.2 Product Review: The product range of Atlantic Quench although focused mainly on cranberry products but has introduced lots of varieties. For instance, the white cranberry juice introduced in the market as an alternative to the original red juice received huge customer appreciation. The juice product range of the company includes cranberry original, cranberry mixed, juice max (the pure form), Grab ‘n’ Go (single serve). Apart from these, Atlantic Quench has also developed non-juice products such as the cranberry sauce, cranberry cordial juice drinks, fresh cranberries, new dried cranberries and new conserve. In order to enhance the consumer intake, Atlantic Quench also introduced mixed varieties of juices such as the cranberry and mango or cranberry and raspberry variants. The product division of the business has a wide vision which can be gathered from their launch of Cranberry Select Premium Chilled Juice for targeting the growing segment of the chilled drinks sector. 2.1.3 Competitive review: As the market size of the nectar and the juice industry is growing, the expenses of operations are also increasing. The market is allowing new suppliers to make place among the retailers which is reducing the earnings of the farmers of co-operatives. Apart from this, the growth of the soft drinks and beverage market has also introduced an external competition for the fruit juice producers. According to the report of Hucker (2014), the present scenario of the all-inclusive drinks industry is mainly held by the beverage industry with 37% market share while the fruit juice segment comes in the third position with 22% after the soft drinks industry that has 31% of the market share, while the remaining 10% is shared between nectars and other energy and health drinks. However, Lanschützer (2013) mentioned that as the consumers are getting more health conscious, the market entry and sustainability is going to get tough for the business houses. In the last 3 yrs, the market of synthesised juices has experienced a fall of 1.3% in the international market (Lanschützer, 2013). These facts signal the increasing competition in the concerned industry. 2.1.4 Distribution Review: Considering the decision making process of Atlantic Quench CEO Chuck Berry, logistics was one of the weaker operational segments of the business. This also shows that the distribution channel of Atlantic Quench can be suffering from some glitches in their logistic departments. This led to the alliance with British fruit juice supplier Gerber which enhanced the scope of market response for Atlantic Quench. However, Atlantic Quench is yet to develop their foothold in the international market place. Moreover, as the product base and raw materials are not durable in nature and hence needs to be carried to the market and distributed effectively (Palmer, 2012). Most of the time, the products are distributed with the help of wholesalers and supermarkets in the international markets (Dobson, 2009). In order to ensure that the products are usable when they reach the end customers, the logistics process has to be fast for fruit juice producers and thus airline is the only option for multinational operators such as Atlantic Quench. But regular use of airline also increases the cost of operations and influences the end product price. 2.2 Macro Environment Analysis: Porter 5 forces 2.2.1 Competitive Rivalry: High The competitive rivalry in the juice and nectar segment is high. This is because of the dual competition faced from both internal operators (other juice producers) and external operators (beverage and soft drinks industry) (Jarzabkowski and Spee, 2009). However, the growing health focus of the consumers is estimated to develop the market share of the fruit juice companies in the future. But in the present scenario, the juice producing companies have to tackle the consumer decisions which are tending towards the beverage and soft drinks industry (marketsandmarkets. 2014). 2.2.2 Threat of New Entrants: High The entry barriers in the fruit juice market are low as the cost of operations and industry entry cost is also low also the brand switching cost of the consumers is low. The competition for Atlantic Quench is toughening as new alliances are being formed among the new entrants for increasing the resources and surviving the competition from the existing businesses (bevindustry. 2012). This is also reducing the market place for Atlantic Quench to operate in the market and reduce their brand awareness among the consumers. 2.2.3 Threats of Alternative Products: Highest The threat of substitute products again for Atlantic Quench is high from both internal and external operators in the drinks industry. Juice industry is already facing steep competition from the beverage and the soft drinks industry in the global market which has already involved many indirect substitutes in the market (Lanschützer, 2013). However, the direct substitute of the juice products is noticeably low in the market but is growing with the number of operators in the market. 2.2.4 Bargaining Power of Buyers: Moderate The bargaining power of the buyers in the fruit juice industry is considerably low for Atlantic Quench, as most of the juice producers are providing mixed or synthesised flavours in order to reach a larger consumer base and have a low cost of operation (bevindustry. 2012). On the other hand, as consumers are now having energy drinks and other health juices manufactured from vegetables, they have developed bargaining power to products of niche market firms such as Atlantic Quench. This has reduced the expansion of market for the concerned company in the mass consumer market. 2.2.5 Bargaining Power of Suppliers: Low Although fruit juice industry is experiencing growth in the number of suppliers and cost of business operations, the increasing number of supplier base has reduced their bargaining power (Marketline, 2014). The primary problem caused by the increased number of suppliers is unexpected traffic in the distribution channels for Atlantic Quench as these suppliers can curve up open market by supplying to the local retailers and reduce the mass consumer reach of the concerned business. Chapter 3: SWOT 3.1 Strengths: The key strength of Atlantic Quench is their co-operative business structure which brings in the contributions from the shareholders as they also act as the producers and suppliers for the business. Also as a co-operative form of business is controlled by the members and not the investors, the external influence in the decision making process is limited (Luther, 2013). In context of the juice and nectar segment, the capital investment and the cost of production of the business is also reduced which adds to the business profitability (Fifeld, 2007). Product range and product variants are strength of Atlantic Quench which has helped the business to enhance their operations in multiple sectors of the juice industry such as the non-drinks, pure juice, flavoured juice, chilled drinks etc. 3.2 Weaknesses: Atlantic Quench’ being a co-operative with a large number of consumers is involved in a long decision making process that includes consulting with all the members. On the other hand, maintaining the interests and suggestions of all the members is a critical process which can lead to internal quarrels among the members of the business (Luther, 2013). On the other hand, the increasing number of alternative products in the market and the competition from other similar industries such as beverages and soft drinks is also increasing in the international market place (Baker, Nancarrow and Tinson, 2009). 3.3 Opportunities: The growing demand for healthy and nutritious juices among the global population has created a huge scope for the business houses to develop their online considerations. The increasing number of suppliers in the industry is an evidence of the growing demand of this fact. Another opportunity for Atlantic Quench will be presented with the number of alliances being made with big firms such as Coca-Cola that can reflect the brand of Atlantic Quench in the international market place (Jarzabkowski and Spee, 2009). One of the operational opportunities for Atlantic Quench is derived from their production process. As the production wastage is mainly organic, they can sell it off to farmers by converting them into organic fertilizers (Hunter III, 2014). 3.4 Threats: The primary threat for Atlantic Quench other than the booming competition is also the increasing pressure of the health and regulatory authorities. For instance, in UK any drink that does not have 100% pure fruit ingredients is not considered as a juice (Hucker, 2014). This rule will reduce the influence of the cordial and the chilled drinks of Atlantic Quench in the UK juice market. On the other hand, the control of the business over the production is limited as climatic conditions and natural disasters can hamper the growth of the raw materials (Hunter III, 2014). The pressure from the local Government and other international environmental authorities such as UNESCO or European Union on the production process of the juice making firms is increasing in context of the environmental impact of their manufacturing wastage (Luther, 2013). Chapter 4: Objectives and Issues: 4.1 Objectives: The growth of the juice international market in the recent years has developed high expectations of the firms operating in the particular industry. According to the report of CBI (2014), the European Fruit Juice market is supposed to experience a growth of 19.2% by 2018, but in comparison to Juice Drinks (22.2%) and Energy Drinks (21.1%) the growth is slow (Hucker, 2014). Thus, the objective set for Atlantic Quench will focus on developing a sustainable growth strategy that can accumulate on the positive changes in the market. Considering the growth of juice drinks, Atlantic Quench will aim to increase their product range by designing a juice drink product that will be a cheaper alternative for the consumers. According to the present situation of Atlantic Quench, they will aim to sell 250000 units of the new juice drink product by the year 2018. 4.2 Issues: The main issues that can arise while attaining the above stated objective will be the competition in the global market place. The growing number of firms and suppliers entering the market has already increased the cost of operations whereas the new juice drink product is supposed to be a cheaper product in comparison to the original fruit juices of Atlantic Juice. Furthermore, the branding and promotional process of the new product has to be extended to new markets that will also focus on the business expansion process of Atlantic Quench (Mulhern, 2007). These factors will increase the initial cost of operations and the capital investment required will also be increased. Another threat for Atlantic Quench will be to ensure that the product meets the quality standards set by the health authorities of the operating markets. Chapter 5 Marketing strategy 5.1 Positioning Strategy: According to Bogart (2008), brand positioning of a business depends on their ability to communicate with their customer base. The existing brand position of Atlantic Quench is mostly based on their high quality cranberry juices. However, the new product of the company is different from their existing products as it is a juice drink. Atlantic Quench can cash on their existing brand position of being a quality juice provider but also have to develop a differentiation aspect so that customers can differentiate their products and services from that of the competitor. Figure 1: Brand Positioning for Atlantic Quench (Source: Bogart, 2008, p - 39) Based on the given model, the process of brand positioning for Atlantic Quench will be followed by the given process. The quadrants in the model depict the various stages that have to be followed in order to ensure formation of the desired position in the customer perception. The position of the concerned company in the consumer perception will also have to be supported by the promotional process that will create consumer brand awareness (Baker, Nancarrow and Tinson, 2009). 5.2 Product Strategy: The new product will be levelled as a juice drink and will have a composition of 80% fruit juice and 20% flavoured ingredients. The extra flavour will attract consumers from all age groups and can also be served as a chilled drink which will increase the seasonal customer intake. The product packaging will initially use tetra packs of 300 ml, 500 ml and 750 ml. The variance in the amount will attract consumer segments based on their earnings. The initial flavours will include cranberry, mango and raspberry which have already been launched by the company as a part of their fruit juice products. 5.3 Pricing Strategy: The pricing of the product will be based on the equation of elongating the product life cycle in the market and also aligning the price of the new product with the competitor prices and consumer affordability. The previous product base of Atlantic Quench is mainly marketed to the niche market but the new product is being extensively developed for the mass consumer market. Hence, the price of the product will be reduced but the company also has to ensure that the reduction of price does not create any quality influence among the consumers (Walter, Ritter and Gemunden, 2008). The initial pricing strategy of the product will be price skimming that will ensure recovering the capital investment and then gradually reduce the price in order to make a competitive position with other similar products in the market (Shove and Pantzar, 2008). 5.4 Distribution Strategy: The tetra packaging of the products will enhance the durability of their juice drinks and provide them extra time for transporting their consignments. Majority of distribution network of Atlantic Quench will be directly connected with the wholesalers and distributors who can ensure the delivery of the products to the end customers. Apart from this, Atlantic Quench can now also afford to open up their personalised stores in their target markets. The logistics process however will still be costly as overseas consignments will have to be carried out with airlines only (Westwood, 2002). The distribution network of the company will be decided based on the target markets and the market demand of the products. Another essential strategy for Atlantic Quench will be to use their existing alliances with Gerber in the UK and Coca-Cola and use them for distributing their new product in the markets. An organisation like Coca-Cola that has a global presence can help in highlighting the new product of Atlantic Quench in the overseas market. 5.5 Marketing communication: Marketing communication has been a weak segment of Atlantic Quench as they have never been in direct communication with their consumers for selling their products. However, in order to develop consumer awareness about the brand and its services, Atlantic Quench has to develop a communication platform for consumer communication. Figure 2: Communication Means for Atlantic Quench (Source: Baker, Nancarrow and Tinson, 2009, p - .527) One of the basic steps will be the opening of personalised stores in the market which will enable them to directly communicate with their customers and increase consumer knowledge regarding the brand of the company. Apart from this, creating an online profile is essential in the existing scenario of digital marketing (Palmer, 2012). The company needs to develop an interactive website of their own, create social media profiles and also participate in online blogging. Apart from these, the financial status of the company needs to be published for their shareholders and the consumers in order to build a trustworthy relationship (Palmer, 2012). 5.6 Marketing research: The market research process of the firm will begin from the objectives set and assessing the markets that will be focused for achieving the respective organisational objectives. Moreover, the process of collecting market data will be conducted mainly through online and offline survey (Chaffey et al. 2009). The survey will include the consumers, the retailers and the distributors operating in the target markets. Figure 3: Ansoff Matrix (Source: Chaffey et al. 2009, p.365) The collected data will be validated and analysed with the MYSQL database management process which is a cheap but accurate data analysis tool. The data collection process will focus on assessing the changes in consumer behaviour and consumer affordability from the retailers and distributors while the consumers will be enquired regarding the experience with the existing products in the market and their expectations from a new product (Chaffey et al. 2009). The market research will help Atlantic Quench decide upon the price, supply, promotional process and the consumer communication techniques for the new product launch. Based on the market plan of Atlantic Quench, it can be observed that they are trying to create product and market diversification. Chapter 6 Marketing Implementation: In order to ensure the appropriate implementation for the new product of the company and its sustainability in the market, differentiation focus will be the framework of Atlantic Quench. The implementation process of the marketing plan of Atlantic Quench will begin by resolving the internal issues and gaining the support of the stakeholders of the business. A participative management team will be necessary in order to identify the objectives of the new product launch and market entry. Figure 4: Porter’s Generic Strategy (Source: Porter, 2013, p.154) Once the objectives have been defined, Atlantic Quench can focus on consumer segmentation considering the primary variables as age and income group. Based on the segmentation of the customers, the target markets can be identified by Atlantic Quench. The market research will be a key activity for further execution of the marketing plan (Dobson, 2009). The results derived from the marketing research will provide directions for developing the business expansion of Atlantic with their new products. Once the target markets and the consumer segments have been defined, the next step will be to develop the distribution network with the help of their alliances. The promotional activities for the new products will be conducted by direct stores of the company and the online portals/profiles. Chapter 7 Budget: Pro Forma Profit and Loss   2015 ($) 2016 ($) 2017 ($) 2018 ($) Sales 400000 800000 1200000 1600000 Direct Cost of Sales 101349 235715 372113 410653 Other Costs of Sales         Total Cost of Sales 101349 235715 372113 410653           Gross Margin 298651 564285 827887 1189347                     Expenses         Payroll 39031 56000 75000 110000 Marketing/Promotion 55000 67000 25000 20000 Depreciation 10000 12000 14000 16000 Rent 24000 48000 72000 96000 Utilities 15000 25000 21000 16000 Insurance 10000 12000 18000 25000 Others 15000 25000 40000 50000           Total Operating Expenses 168031 245000 265000 333000           Profit Before Interest and Taxes 130620 319285 562887 856347 EBITDA 140620 331285 576887 872347 Taxes Incurred 14062 33128.5 57688.7 87234.7 Interest Expense 17000 15500 14000 13500           Net Profit 99558 270657 491199 755613 Table 1: Budget for New marketing plan of Atlantic Quench (Source: Created by Author) The budget has been developed following the objective of selling 250000 units of 250 ml tetra juice pack by 2018. The key assumptions of the budget are as follows: The price of the 250 ml tetra packets has been considered as $16 based on the standard price in the market. The first two years have been considered as slow economic growth without any influence or occurring of major economic events such as recession. The loans of the company have been kept to a minimum on which the interest rates have been calculated. The taxes have been considered at 10% on aggregate. Chapter 8 Control The control of the marketing planning process will be mainly directed towards reducing the operational expenses of the business and the marketing implementation process. The cost reduction can be developed by streamlining the operational activity of the business with their marketing information gathering system. As a result automated accuracy can be generated in the manufacturing segment of Atlantic Quench and help them in matching their production output with the market demand. 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With the entry of the internet in the market, online marketing has become more common especially with the multinational companies.... Traditional marketing entails the use of audio, visual, and print media.... However, unlike in online marketing, this form of marketing does Although it is referred to as traditional, it is still commonly used by both the local and international businesses in order to pass a message to the customers....
5 Pages (1250 words) Research Paper

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?Internet Marketing: Strategy, implementation and practice.... ?Planning Your internet marketing strategy: A Doctor Ebiz Guide.... ?Strategic internet marketing.... ?Strategic internet marketing.... eneral StrategyWe are intending to use a focused strategy.... Our strategy is to become the clear market leader in internet sales.... This strategy of choice will ensure that we give our customers the best services that is worth their money....
1 Pages (250 words) Assignment

Internet Marketing Strategy Implementation

The following essay "internet marketing strategy implementation" concerns the management of the worldwide company Microsoft.... A problem that a successful innovation strategy must solve is how to communicate effectively about innovation throughout the organization....
6 Pages (1500 words) Essay
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