Marketing Management Theory and Practice
Word Count:3500 words (+/-10%)
Mode of Assessment:Individual Report
Weighting within Module: 100%
Fruit and vegetable sales reach billions of dollars every year in China. Their juice consumption fluctuates around 15 litres per year per person. This may seem relatively small in comparison with some other nationalities (3 times less than in the UK) and it is also under the global average. However, with 1.5 billion inhabitants, China remains a very interesting market. Most residents are drinking juice at least once a week. Orange juice is the dominant product in this market. However, its share is declining because Chinese consumers are getting more and more interested in original and exotic flavours, such as pomegranate, grapes, or carrots. They are also particularly interested in mixtures of fruits or vegetables, or both mixed. Smoothie style drinks are all the rage because they like the flavour mix and look for the nutrients of each component.
Your task as a marketing manager in a global soft drinks organisation that produces fruit juices and / or smoothies which targets a consumer market of younger, health-conscious, up- market consumers, is to assess the attractiveness of introducing a new brand of fruit juice and
/ or smoothie product into the Chinese market.
The task is divided into three sections and you are expected to address all of the following:
This assignment is divided into three sections. You will need to complete all three sections in order to successfully complete the assignment. You will need to achieve an overall mark of 40% in order to successfully complete this module.
Please ensure you submit your assignment in Report Format.
In your role as Marketing Manager:
Part 1. Using appropriate knowledge of business and marketing philosophies and concepts, critically evaluate the strengths of the organisation’s strategy in delivering value with respect to its current brands and customers. (30%)
Part 2. Research and evaluate the dynamics and trends within the competitive and external environment with regard to the fruit juice and / or smoothie category. Produce a situational analysis identifying the key factors that underpin the opportunities and challenges for a new brand of fruit juice and / or smoothie product in China. Based on this, and your earlier analysis and findings, ‘suggest’ the potential target market and include a proposed market research proposal that would enable you to qualify and underpin your ‘suggestion’. (note – you are not expected to undertake primary market research) (30%)
Part 3. As a newly appointed marketing manager and in accordance with your knowledge of the marketing planning process, make appropriate recommendations to build a sustainable new brand. Your suggestions for implementation must be underpinned with relevant theory
and real-life/academic case studies. (40%)
You are to suggest ways on how you would significantly leverage the new brand of product in making it the market leader in the fruit juice and / or smoothie segment in China.
Your arguments, findings and recommendations should be supported by theories, facts and figures published within academic books, journal articles, recognised business magazines and market intelligence reports.
Part 1. Students are expected to critically evaluate marketing management theory with applied discussion relating to the current organisation and its existing brands. In doing so, students will consider how the organisation delivers value to consumers through the adoption of marketing theory and concepts; these may include, however are not limited to; market orientation and holistic marketing approaches.
Part 2. Students should apply relevant frameworks to critically evaluate the competitive and external environments for this category of products. Students must demonstrate that they have undertaken research using a wide range of relevant and current sources which must be referenced. In this section students will be expected to synthesise the market intelligence from their research, demonstrating the ability to evaluate what is relevant and significant for the organisation. Students will propose a market research strategy – students are not required to undertake primary research.
From the knowledge gained in Part 1 and the evaluation undertaken in Part 2 students will have identified key opportunities to launch a new sustainable brand of product of fruit juice and / or smoothie in China. This will form the basis of objectives and recommendations.
Students should provide a product rationale and overview, followed by formulation of objectives and recommendations. With reference to the marketing management process students will make recommendations on segmentation targeting and positioning (STP) strategy, brand building, marketing mix, shaping the market offering through application of holistic marketing management approaches, and implementation and control. It is expected that recommendations will be underpinned with relevant theory and organisational case studies.
Britvic plc. is one of the leading soft drink companies in England that sells different soft drinks and health drink products across the globe. The company has become a famous brand name in three other countries apart from England and now wants to penetrate other competitive markets among which China is their first preference. The company wants to hold a strong position in the challenging Chinese market. Britvic Plc. is well known for its soft drinks and carbonated drinks. But the organization also sells health drinks, fruit juices as well as syrup brands (Britvic. 2020a). The young Chinese population is admirers of soft drinks and juices which the organization is well aware of. To penetrate such a competitive market Britvic Plc. needs to know the market of the country in the first place. Product designing must be based on exclusive attributes that will comply with customer preferences. Being a market manager the concepts and different strategic approaches will be considered for introducing the company's products in the Chinese market. Knowing the marketing condition and the different strategic approaches will help to understand the consumer tastes as well as the competitors that have a strong grip in the Chinese market.
1.0 Evaluation of Marketing Management Theories
1.1 Market orientation
The concept of market orientation is a very significant approach to a business philosophy. This theory focuses on identifying consumer needs and accordingly works to fulfill those requirements. This philosophy in the business world deals with the framing of products and services and selling them considering customer preferences (Beneke et al. 2016). There are four stages of this philosophy which are:
Britvic Plc. being a global company functions on three principles of simplicity, focus, and accountability(Britvic, 2020b). Being an experienced company of the sector it realizes the needs of understanding a market through the customer's perception and preferences and in this respect, the approach of market orientation can be fruitful for the company in their penetration to the Chinese market.
1.2 Social marketing
Another very significant approach that works effectively in the marketing aspect of any business is social marketing which focuses on working for the betterment of the people and society through electronic mediums or social platforms (Key and Czaplewski, 2017). This approach has two main aims: one to recognize the consumer attitudes towards the products and secondly changing the perception of people for social goods through product promotion. The 4P model of marketing comes under this approach.
Being a global company Britvic Plc. can consider its findings of the new market based on the four aspects - product, place, promotion, and price. Social marketing not only benefits the company but also favors the society (Sadek, 2017). These key aspects will provide complete information about the Chinese market, its targeted customers, the product types, and its pricing models. This knowledge will enable the organization to know about the hindrances and challenges of the new market according to which the marketing plan can be framed.
1.3 Holistic Marketing
In holistic marketing, all the channels are considered to promote a product. It considers all the business parts as a single entity (Pahwa, 2020). The four basic marketing elements are product, price, place, and promotion.
Product: Product refers to the different brands of the company sale. The range of products for Britvic includes soft drinks and fruit juices. The popular drinks are 7Up, Aqua Libra, Club Mixers, Club Orange, Fruit Shoot, Mountain Dew, Energize Sport, Pepsi Max and others (Britvic, 2020a).
Place: Place is where the company is situated and where the products are sold. Britvic is a global market that has its franchises situated in different parts of the world including Ireland, France, Great Britain, and Brazil (Britvic, 2020b).
Price: The pricing plays a key role in attracting consumers. If a varied range of products is available, it will consider the whole market including the middle class to the elite class.
Promotion: The Company uses a proper promotional strategy for popularising its products. Being a global company, promotion needs a lot of effort. Innovation is the company's strategy for promoting goods. Online business through Amazon is available where products are promoted and their brand value increases Brazil (Britvic, 2020b).
1.4 Relationship Marketing
Relationship marketing is directly related to customer satisfaction. The loyalty of customers towards a company is built on trust and quality of service. The company must identify the requirements of the consumer and continue to deliver according to the demands (MacDonald, 2020). Quality control is necessary to make the customer relationship as a long term approach. Short term relationships are not in alignment with the sustainability of any company. Customers are the primary concern and in the food business, quality in terms of health benefits must be considered.
1.5 Internal Marketing
Internal marketing deals with the ethical considerations and moral values attached to a business in dealing with its employees. It deals with the goals, mission statement, and culture of the organization (Smarp, 2019). Britvic pays adequate importance to the satisfaction of the employees. It ensures that the employee is in oneness with the organization. Employees are engaged in the decision-making process of the organizations and their views are given importance. It is the reason for the success of Britvic in the global market.
2.0 Evaluation of the environment of the business
2.1 Evaluation of the external and competitive environment for Britvic
2.1.1PESTLE analysis of China
Table 1: PESTLE Analysis
Source: (Developed by the author)
Porter’s five forces are used to analyse the competitive rivalry in the target market of China for the new company.
Figure 1: Porter’s five forces
Source: (Visual-paradigm, 2020)
The threat of new entrant
|The Chinese market is expanding and the trading policies of China are also favourable for new business ventures. But the high competition and requirement for high quality to sustain in the market makes the threat for new entry low.|
|Existing juice-making companies are a reason for competitive rivalry for Britvic. The competition is high as many companies like China Haisheng Juice holdings; Beijing Huiyuan food and beverage company have already captured the market (Info Seek China, 2020).|
Bargaining power of suppliers
|A large number of suppliers are available in China producing high-quality fruits which is the raw material. Due to increased suppliers, bargaining power is moderate.|
Bargaining power of consumers
|China has an abundance of fruits available in the market. It is the reason why the bargaining power of consumers is high. It is a threat to Britvic as the company is new to the market and lowering the costs will affect its profit margins. The country produces 39% of the World's fruits and vegetables (Fresh plaza,2018).|
Threat of substitution
|As people are becoming health conscious, fruit juice will remain the first choice for consumers. Hence, substitution by other beverages or drinks is moderate.|
Table 3: Porter’s Five Forces
Source: (Developed by the author)
SWOT refers to the strengths and weakness Britvic is already possessing and the possible opportunities and threats it is going to face when entering the Chinese market
Table 3: SWOT Analysis
Source: (Developed by the author)
The opportunities that can be identified for the business to sustain in the Chinese market include:
The target market selection is important for staring a new business. Areas that proved to be effective for business growth include Shandong province. Yantai, a district in this province has the largest fruit and vegetable producing market. Selecting this area will give huge benefits to Britvic due to the low cost of raw materials (China Food Ingredients, 2016). The market is expected to grow by 4.8 % in the next five years (Statista, 2020).
Market research is essential to understand the consumer’s needs for a product. It also ensures that the proper pricing and required quality are met when entering a product in a new country. Britvic must conduct surveys and research to analyse the productivity of fruit juices in the Chinese market. Lean market strategy can be used as it will be cost-effective and will affect the productivity and growth of the organizations. It focuses on a single task and helpful in gaining an advantage (Kanbanize,2018). Using quantitative analysis of data from the consumers and applying the lean strategy can both contribute to selecting the right approach to attract the target consumers.
3.0 Introduction of the new product in the market
3.1 Overview of the product and rationale
Britvic is entering the Chinese market with its fresh fruit juice fruits. The Chinese population has a great demand for healthy drinks. Hence, targeting the market with juices will be a great opportunity for Britvic PLC. The orange juice revenue in the market will be $1 billion in 2026 (Globe News Wire, 2020). A huge population includes juice in their diet as it is a natural product. China is a booming market for launching a range of juice for the diet-conscious population. The existence of other juice-making companies makes it difficult to establish a new business. Hence, a SMART objective is considered for identifying with the condition of the market concerning Britvic’s product:
3.2 SMART Objective
|Specific||To establish its business in China with its new product Fruitsry and establish in the market.|
|Measurable||The growth of the business can be measured by studying the sales rate in its financial reports.|
|Achievable||The goal is achievable if it’s feasible in terms of cost and time. The Chinese market is good for juice producing companies. Hence, Britvic can achieve its goal of expanding fruit juice business in China|
|Realistic||The objective is realistic as the abundance of raw material is present for making good quality juices.|
|Time-bound||Britvic is expecting to penetrate the Chinese market within 6 months.|
Table 4: SMART Objective for Britvic plc. in the Chinese Market
Source: (Developed by the author)
3.3.1 STP Model (Segmentation, Targeting, Positioning)
STP model is used for compartmentalizing and prioritizing the consumer base and targeting according to the needs of the consumers following the product (Kottier, 2017). Positioning is related to using a correct strategy where the product is positioned in the target market.
Britvic is using an undifferentiated strategy (MBA Skool, 2018) while targeting the Chinese population. The juice is in high demand among the complete population. Britvic is not considering any smaller group as their potential consumers in terms of demographic segmentation. From young to old. It is analyzed that everyone prefers fresh fruit juices. Hence, the whole population will be under the consumer base of the companies. It will earn large profit margins due to the increased sale of the product.
Positioning based on price is considered for capturing the Chinese market. Giving a varied range of products with different price can attract consumers. Due to the high competitive rivalry in China, Britvic's price strategy will prove beneficial as a low price product will help in getting the hold of the market (Bhasin, 2018).
Brand building strategies are of significance as it helps in connecting with the consumers. It is believed that the brand building strategies should focus on emotions and mind share rather than market share (Gupta, 2016). Britvic is a reputed name in the global business paradigm. Its brand value is well accepted around the world. For establishing a good name in China, the three steps to be followed design, positioning statement, and value proposition.
The design associated with the packaging, colours used, and the slogan for advertising are considered as design issues for building a brand image. Proper promotional schemes and strategies will attract consumers. Hence, Britvic must introduce a catchy slogan for making its existence visible within the consumers. The slogan may be ‘Drink fresh, stay healthy’. It will grab the attention of fitness fanatics and health-conscious youths.
A company must showcase its product in terms of quality and price. The positioning statement of Britvic will be ‘Take a glass of fresh fruit juice, pure in quality, and move towards living a healthy life’. It will ensure that the dietary regimens of people are matched with the quality of service.
It is the last stage in brand building strategy which is used to understand the effect of rivalry and formulate strategies accordingly. It is about understanding the consumers in terms of segmentation and targeting the consumers (Twin, 2020). It is about what is promised by the company to its customers. Keeping the price low as compared to existing brands is used by Britvic which will give an edge over other companies. Low cost will make it easier to penetrate the Chinese market.
The marketing mix strategy is used for identifying with the uniqueness of the product, its core ingredients, and also allied products. The mix is regarded as different strategies used for the promotion of the product in the target market. 4P’s marketing strategy is considered in this case to enter the market of China.
Price: The price of a product determines the sale and revenue generation for a company. Correct pricing is necessary to ensure increased profitability. Britvic must takevalue based pricing strategy as the completion is very high in China. In the case of completion based pricing, the cost is assigned according to the product cost of similar items of rival companies. Such pricing will attract more consumers. This strategy will prove beneficial for Britvic to capture the Chinese population.
Product: The product is the basis of any business strategy. The product can be differentiated in three forms: the core product, the actual, and the augmented product.
Place: Mass distribution strategy can be used by the company where it will supply its fruit juice to retailers, vendor machines, malls, standalone shops. The mass distribution will allow the product to reach every sector of the market. Confinement to a particular area will not be productive for Britvic.
Promotion: Promotional techniques will help in showcasing the product quality and various offers available with it. Advertisements in print media and television will help the business grow. China is one of the largest populations in the world. Promoting through online portals, social networking sites, and search engines will include in promotional strategies of the company.
Implementation and control identify with the different strategies a company uses for capturing the market and growth of the organization. Implementing those models will relate to formulating plans for achieving and target and have sustainable control in the market for many more years to come. The capability of Britvic, its brand name, and proper techniques will ensure that implementing the strategies is easier in real market conditions.
EPIS means exploration, preparation, implementation, and sustainment (Moullin et al. 2019). It facilitates the use of different strategies in the implementation of the present market. The phases of the EPIS model are defined as follows:
Exploration phase: Exploration is identifying with the needs and demands of the consumers. Research and data collection techniques can be used by Britvic to gain insight into the consumption rate of fruit juices in the Chinese market.
Figure 2: EPIS model
Source: (EPIS Framework, 2020)
Preparation phase: In the preparation phase, both the internal and external factors are studied concerning the opportunities that facilitate the implementation of its strategies. The threats are also identified that will be considered as barriers to progress (EPIS Framework, 2020).
Implementation phase: In the implementation phase, the company starts implementing its strategies in the actual market conditions. It is the most important phase as the fate of the company is decided. The companies pricing strategy and targeting the whole audience will be executed in this phase when it will launch its product in the market (EPIS Framework, 2020).
Sustainment phase: Sustainment refers to future prospects and the life of a business. In this phase, the company must continue to use its policies that have been productive in the past. It must initiate innovation and include a more technological approach in manufacturing. The Chinese market is adaptable to new technology and sustainability is highly dependent on Britvic’s ability to change with the situation (EPIS Framework, 2020).
The above research shows that Britvic’s choice of the market of China is effective in terms of people’s requirements for healthy drinks. Fruit juices are a natural choice among the Chinese population because of its nutritious quality. China’s trading policies are also flexible for new companies. The political aspects considering PESTLE analysis shows that any political disturbances do not exist in the market. Proper pricing and promotional strategies can help in penetrating the Chinese market. The threats are related to the existing juice-making companies and the need for quality among the population. Identifying the threat will encourage in building the correct business policies for the company. Low cost will initially increase the chances of a high purchase rate in the population. Segmentation of clients is not encouraged in the business strategy which will bring a large consumer for Britvic. Britvic being a global organization will have certain advantages for entering a new country. Its brand name will reach more number of consumers. Hence, it can be concluded that expansion to China will lead to the productivity of the organization. The challenges must be handled with proper techniques and marketing strategies to ensure the sustainability and growth of the business.