Positioning
We are going to use the undifferentiated marketing strategy and target
the whole market or sell it on a mass; Focusing on common needs rather
than what’s different because the general customers don’t tend to think
much when choosing beverages apart from the taste. Our marketing will
focus on the health benefits from our product as well as the refreshing
new taste that is being offered. The beverage industry well will enter and
place our product is the juice industry, one of our advantage is that most
of the juice products currently offered in the market are artificially
flavored where as our product is purely made from coconuts obtained
from all around the world; 100% natural.
Product Strategy
As there are many competing juice products in the industry , we need to
provide convenience to customers and attract them. We will offer
different flavors of the coconut juice with various sizes and packs –
Package Size Price per unit tk
Aseptic - 200ml 22
500ml 40
1 litre 70
Pet bottle 250ml 25
Tin can 250ml 30
Pricing Strategy
It is one of the important elements of marketing plan. As this is a new
product and we need to anticipate customer feedback, so we will go for
market penetration. We will use cost-plus as our pricing strategy because
we need to capture market share away from the traditional juice
industry. Our products will introduced at 65tk per litre wholesale. As we
all know companies such as Pran, Shezan, Acme etc are some of the
market giants so we need to compete with their brand prices. Such a
product pricing will give our sales a boost until the market is aware of
our product and then we can shed light on the health & nutritional
benefits of it to mass market.
Setting prices based on cost – We will start with cost-plus pricing by
simply adding a markup to the cost of the product. Calculations are
based on assumptions that sales units 800,000, fixed costs 8000000tk,
variable cost 50tk per unit (here per unit means per litre), thus cost per
unit is given by following-
Unit cost = variable cost + fixed cost/ unit sales
= 50+ 8000000/800000
= 60tk
Based on the same assumptions, markup shall be given by
Markup price = unit/ (1- desired return on sales)
= 60/(1-0.09) = 65 tk
Distribution Strategy
We need to choose a proper channel so that the product gets to the right
place at the right time. We need to consider the freshness of our product
and the costs when choosing the channel. Too lengthy a channel could
make it more costly but we need to make it widespread throughout the
country in order to reach the masses. We could have delivered directly to
retailers but then it will incur in high storage costs, delivery costs and
overall working capital will be tied up in such activities; increasing the
risk of overflowing the budget and failure. We will use the traditional
means of distribution as used by the other companies in this industry as
its costs and reliance seems optimistic and it seems with minimum risk
as well. The channel chosen is show below -
Manufacturer-Wholesaler-Retailer-Consumer
Marketing Communications Strategy
The promotion mix is the specific blend of advertising, public relations,
personal selling, and direct marketing tools that we can use to
persuasively communicate the customer and build customer awareness
& relationships. Vita Coco is a new product so we need to create
awareness. We will use pull promotion strategy which calls for spending
intensively on advertising and consumer promotion to induce final
consumers to buy the product, creating a demand vacuum that ‘pulls’ the
product through the channel. We will focus our promotion on creating a
brand image and try to convince consumers that ‘yes we are providing
100% natural health beverage’. We will use television advertising, to
broadcast it to our target age sector which is 12-40 years old people. Our
advertising agency will advise us which television channels to broadcast
in and what time with regards to our target customers. We will also use
mobile advertising vans throughout poplar locations in the country and
offer free samples, encouraging and gathering feedback from this
activity is also an objective. Also we will use sales promotion to lure
the customers into buying the product for the first time through buy one
get one free offer.
Market Research
Budgets
Total first year sales revenue for Vita Coco beverages is projected to be
52 million taka with an average wholesale price of 65tk per unit and
variable cost 50tk per unit for a unit sales volume of 800,000. We
anticipate a first year loss of up to 5.2 million taka. Break even
calculations indicate that Vita coconut water will become profitable after
the sales volume exceeds 53333 units, mid of the products second year.
Break even calculations are based on, assumed wholesale price of 65tk
per unit and variable cost 50tk per, which is –
800000
Break even analysis = = 53333 units
65−50
