LASA 1- Product & Price

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Using the Waters Bottling Companyin Module 1, continue to build the Marketing Plan Sections for the product you have selected/ invented/ created. Complete the following in MS Word: Be concise but complete in your analysis of each plan element. Your employer wants to know you have left nothing out in your analysis.

This assignment represents Section 3 of the Marketing Plan. Use the guide to identify the sections of the Marketing Plan and the marketing elements contained therein. This assignment will focus on Section 3– Product & Price (Module 3).

 

Section 3 – Product & Price (Module 3 LASA 1)

 

The Product

Product Levels: Core, Actual, & Augmented (Packaging)

Product Life Cycle

BCG Model

Services Marketing

Price Determination & Pricing Strategies

Supply & Demand

Competition

Objectives and Strategies

 

You will create a complete Marketing Plan by the end of the course. You will write the third section of the Marketing Plan for this assignment. Use the Marketing Plan guide to identify the sections of the Marketing Plan and the marketing elements contained therein. This assignment will focus on Section 3 – The Product & Pricing (Module 3).

Relate all responses using the WBC scenario and the product you have selected to market in Module 1.

Create a 4- to 6-page Word document for your Marketing Plan Section. Apply a standard business writing style using the Market Planning Guide sections as your (headers/ sub heads/ bullets) to your work. Be sure to cite your work in the APA format.

The Waters Bottling Company (WBC) of Munsonville, NH – Marketing Plan

Executive Summary

This is a marketing plan for natural mineral water branded by the name of “BLUE drinking water; introduced by “Waters Bottling Company (WBC)”. It contains the analysis the current market situation including market summary, major industry players of bottled water manufacturing/supplying companies, target market analysis which are consumer & business market, SWOT analysis of the company which shows the strength, weakness, opportunities and threats created by others, the possible competitors of our product, content of the product mainly the ingredients, marketing strategies include target market, market positioning, strategies including promotional activities, market capturing formulas, maintaining relationship with our business partners and consumers and to hold the market share and how we will expand it and finally the financial analysis which includes sales forecast, expense forecast, breakeven analysis, and control process of the organization.

Company Profile

The bottled drinking water would be the first product of this manufacturing unit, later on it will move toward other beverages like soft drinks and energy drinks. Currently the company is focusing on its bottled drinking water manufacturing unit. Consumer item was not the main focus when the original company was formed but now with growing market demand of bottled drinking water and for having a good trading experience, the company decided this strategy to manufacture its own branded bottled drinking water.

Name of Organization: Waters Bottling Company (WBC) of Munsonville, NH

Brand: BLUE Drinking water

Product: Bottled drinking water

Estimated project budget: $16, 00,000

Market Situation Analysis

Water, is the fountain of all life. Even a toddler will tell you it is a prime need of the body. Sixty per cent of our body weight is made up of it. Water can also be the cause of much misery. Getting pure drinking water from municipal taps in cities and towns is now a luxury. At home most people are forced to either bottled water or install purifiers. While travelling or eating out in restaurants, buying bottled water has become a necessity. This need has seen an explosion of companies marketing “safe drinking water” in bottles across the country.

Till about ten years ago branded bottled drinking water were seen to be an item of middle class and elite consumption, mostly produced by multinational companies.

Market share of different brands in the region is given below, here we have given the collective data based on the regular bottled water marketed companies in the region, we are concluding by market leader, challenger & followers.

The total size of the branded bottled drinking water market is about one thousand corer, consumed by some 50 million households

Name of brand Market Share (%)
MUM 22
Yes 19
Pran 17
Fresh 13
Acme 9
Dada 6
Jibon 5
Bislay 3
Safi 2
Dunkan 2
Others 2

Market summary

Target market:

We are targeting our market by segmenting it in consumer market & business market.

Consumer market:

We are segmenting the consumer market by family size and social classes exist in the region.

A mini pack of 250ml has been introduced for a daily basis use; our research says 20% of our population buy at least one 250ml of bottled drinking water in a day.

The average customers will buy 5 litre – 250ml bottled drinking water according to their requirement. It will depend on their income and their daily requirement. The average selling patterns shows that mainly 5 litres to 1 litre containers are mainly sold all over the region, our main target would be those customers. The future forecast says a lot of things but we must learn what our actual customer would like to see from us after using our product.

Most of the family in our country is joint-family structured based, a large number of this is shifting to the single family size, for this our target would be the customers of individual and single family and joint family, our packing size would be according to their demand of consumption.

Business market:

SWOT Analysis

  1. Hotels and restaurants
  2. Catering Services
  3. Motels

Strengths:

Weakness:

  1. The company has strong management
  2. Latest and efficient machineries and technologies will beuse for production
  3. Have a secured line of raw material supply
    • Well trained and skilled employees
    • Extensive distribution network
    • High Quality of the product
  4. Opportunities:

    1. The company is coming in the market with a new product
    2. In short of fund for further investment.
    3. The product (Bottled drinking water) price is slightly higherthan the existing products (Regular bottled water) in themarket
    4. Threat:

      1. Have opportunity of Market/Product development.
      2. People in the metropolitan areas are inclined towardsbranded products
      3. The Bottled drinking water is becoming popular and canbe advertised to gain the market share among healthconscious people
      4. Possible Major Competitors:

        1. Already there are many companies in the market. SoCompetitive environment exists
        2. People always get substitutions. If they think product price ishigher than they will switch to other brand
        3. Increase price of raw materials and other necessary things
          • If Import & export duty & other Government VAT & TAX issue
          • Competitors invested huge amount for promotional activitiesto gain their market share
        4. Our main competition will be with all the companies exist in the market. So we have to compete with other companies for catching the market share. For that we think some company’s product like MUM, Yes, Pran will be our main competitors.

          MUM:

          It is the product of Partex beverage ltd and they have the largest market share. The MUM considered as the main competitor because these are under the same genre. It draws the attention of our target audience due to the well-known products. Right now it captures almost 22% share of total market.

          Yes:

          It has become one of the best-selling bottled drinking water in 2010. Yes Drinking water is a flagship product from XYZ Group. They spent a huge amount of money for promotional activities. Currently they have secured almost 19% of total market. They are trying to be the market leader from market challenger. They do not only contain unique elements in their products but an educational message as the main character strives to achieve the market share.

          Pran:

          In order to differentiate from the main competitors, Pran promoted as a mothers first choice. They took huge promotional campaign to get the attention of the target group. In order to attract a larger audience and make them aware of this product, creative promotional campaigns with some noises are taken. It is popular on the highways.

          Product offerings:

          Blue Natural Mineral water

          Our professional hydro-geologists, expert scientist evaluate the quality and movement of water beneath the ground. These professionals study the layer of rock or sediment which carries the water, looking closely at the quantity of water available. Only those aquifers that meet our strict requirements for water quality and environmental sustainability will be considered suitable to become Blue mineral water sources.

          Product Content

          Bicarbonate 130 m/l
          Calcium 32 mg/l
          Chloride 5.9 mg/l
          Copper 0.02 mg/l
          Fluoride 0.5 mg/l
          Iron 0.02 mg/l
          Magnesium 3.0 mg/l
          Sodium 7.8 mg/l
          Potassium 4.0 mg/l
          Zinc 0.4 mg/l

          Marketing Strategy

          Our target strategy will be mainly based on Marketing strategy and Sales forecast strategy. We are implementing the product development technique, existing market, new product. The definition of marketing strategy says,

          We have done our survey; we have talked with the distributors,wholesalers, retailers, our potential customers, and we know whatdemand we have in the market, now it’s time for theimplementation.

          A five litre can is being sold $20 -25 depending on the brand, whereas we are launching our own brand on only $20 as the labour is still cheap.We will do some serious type of promotional activities, we have tomake such a impression that people has to come to us, frombranding to launching, from distributor to retailer to customers, wehave to be very much conscious to capture their mind and heart. Nomatter what strategy do we need to follow, we will do, our maintarget will be maximizing the profit for our organization, if ourorganization gets benefit, and we get benefit too.

          Branding:

          Branding is a very important part of any product, a product always known by its brand name, image and quality. We have chosen this word BLUE because it’s the image of clean and beautiful water. There are typically four levels of meaning conveyed by a brand name. The following is an analysis of what BLUE brand names convey

          Level BLUE Mineral Water
          Attribute Premium quality, high prestige
          Benefit Pure water, Good health
          Value Healthy life
          Personality Dependable, healthy

          Target Market

          Our target market would be whole region including all the division of it, main focus would be on the major cities first, as we are very much new in this market, later on, we will move to different segments..

          We are going to introduce the following product lines:

          Our packaging will be done in a way so that we may target any kind ofconsumer & business market at a same time. Our target market issegmented in few sections:

          1. 20 litre plastic container
          2. 10 litre plastic container
          3. 5 litre plastic container
            • 2 litre plastic container
            • 1 litre plastic container
            • 500mili litre plastic container and
            • 250mili litre mini pack
          4. Business market usually means the offices, hotels, restaurants, community centres and other commercial and social programs where large amount ofwater is needed in daily basis. And for consumer market is actually for all sortsof people.

            1. Business market:
              1. 20lts plastic container
              2. 10 litre plastic container
              3. Consumer market:
              4. Market Positioning:

                This would be our first Bottled drinking water launched in the NH market; there are few large companies who are currently capturing the market of bottled water, a few of them are in top position as market leader and most of them are following the market follower policy.

                The big companies are dominating cause of their huge investment and promotional activities, their product quality might not be that much of enriched like ours but currently they in exist market with a major market share. Where we are coming as a new comer and we will follow the market follower strategy for few years but we are not here to be a market follower, our main target would be to be the market leader someday. Right now, our position is in zero. We have to take it higher than others, if we can cross the barrier of 10% of the total market, we will create a threat to the existing big companies and they will definitely change their marketing policies and strategies.

                We must understand that, we cannot dominant the market right now as the major market share are on regular bottled water; we will create threat also opportunity for them. Only a single advantage what we got is maybe for two to three years we might dominant the niche market for our good will and brand position and for high demand of Bottled drinking water but, after that other companies will introduce same product maybe with our compete price or less as their business is already established. So we can’t just loose our growing market share, in any mean we have to control the market share and grow it as much as possible.

                Strategies

                Every company takes necessary steps to sell their product in the market, even though our product is highly enriched but without any sales promotion activities or strategy, we can’t get a good response from our target audience.

                We will apply marketing strategy and sales strategy/ promotional activities, we have done our survey, we have talked with the distributors, wholesalers, retailers, and we know what demand do we have in the market, now it’s time for the implementation. We are taking some strategies for both our target customers and the distribution channels.

                For distribution channels:

                High paid commission:

                Every other bottled water company is paying commission to the retailers or distributors, we will also offer them commission, if the competitor market is giving 5%, we will offer 7% but the scale shouldn’t exceed a scale, because we don’t want to create chaos among the competitors, it might go against us.

                Sales target gift:

                We will give sales target to the distributors or the wholesalers, if they can matches our expectations we will great them with corporate gifts, also a very high percentage of commission as gift.

                Reward as best retailer:

                We will choose ten best retailers among the cities. We will call a ceremonial meeting and will provide gifts like diary, notebook, banner, TV, ac, fridge or cell phones etc.

                Financial objective:

                Our total budget of this project is $16, 00,000 taka including land, factorybuilding, equipments, advertising expense, operating expense; it would alsocover the salary of the factory worker to the office manager for onward threemonths. For our marketing expense we have $30000which issufficient enough. We have a time limit of three years to get in the breakevenpoint, our expected break even time period would be three years, and it wouldactually depend on the sales how much we may gain or lose.

                Packaging and Pricing

                Packaging Price per bottle ($)
                20 litres 60
                10 litres 40
                5 litres 20
                2 litres 10
                1 litre 8
                500 ml 6
                250 ml 4

                In the case of pricing three types of pricing is available:

                Advantages of Market Pricing

                1. Low pricing
                2. Market price
                3. Premium pricing
                4. Disadvantages:

                  1. The consumer, so greater chance of accepting the price, accepts the price.
                  2. Quality of the product initially would be accepted.
                  3. References

                    1. No reason for the consumer to shift the product when the price is same.
                    2. Product cannot be positioned as a premium product
                    3. Aaker & A., D. 1998. Developing business strategies (6th ed.). New York; Chichester: Wiley.

                      Aaker & A., D. 2004.Strategic market management (7th ed.). Hoboken, N.J.: John Wiley. 


                      Day & S., G. 1984. Strategic market planning : the pursuit of competitive advantage. St. Paul: West Pub. Co. 





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