Marketing Plan Cereal Bars Essay Example

Marketing Plan Cereal Bars Essay Wake Up! Marketing Plan| January 17 2010 | Seminar Tutor – Hina Khan. | By James Craven, Katie Fortune, Rory Dunlop, Karl Dickey, Omar Farooq and Sarah Crawford| 1. Market Overview The cereal bar market in the UK in rapidly expanding. Bored with conventional approaches to cereal bars Wake Up bar aims to add extra value to an already popular product. The cereal bar market is now looking for extra ingredients in the bars to persuade customers on to that particular brand. 2. The current situation Market Needs Our target market has to find it easy to access our product; this can be established by increasing the supply chain so the product can gain shelf space in supermarkets and general stores. The market is helping people aged 18-25 stay healthy and also help them make up for the breakfast they did not have time to eat. Market trends. Health has been a major driver in the cereal bar market and is becoming increasingly important. A healthy, organic, fair trade and nutritious product is in demand and is the trend in the market. These are also our competencies as a niche cereal bar company and on top of this our USP lies in the added glucose energy boost. Market growth The Organic Food market continues to be one of the fastest growing segments of the European food market, the values of the market has almost doubled by 2005 and is estimated to grow by another 49% by the year 2010. We have made the right decision in entering our product into the market now as it is still growing and has a good rate of growth. We will write a custom essay sample on Marketing Plan Cereal Bars specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Marketing Plan Cereal Bars specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Marketing Plan Cereal Bars specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We expect to take advantage of this growth and implement our brand name and image into the market by gaining market share. Swot analysis Strengths Wake-Up! Is the first organic cereal bar to have added glucose, our cereal bars contain wholesome, organic nutritious ingredients. Wake-Up! Is a relevant product as it promotes a healthy lifestyle which is an ongoing issue, it appeals to a segment which is currently untapped by any other organic food retailer, it also adds value other cereal bars fail to do. Wake Up boasts the competencies to be able to attract many customers due to its USPs which include implementing a fair-trade logo, added glucose for the much needed energy to help you get through a hard day, organic nutritious ingredients, recyclable packaging and a triangular shaped package that stands out amongst its competitors. Weaknesses Weaknesses at Wake Up include being easily copied, many new cereal bar manufacturers are also gearing up to take advantage of a rapidly expanding cereal bar market and cereal manufacturers can also add to their portfolios by introducing their own cereal bars. We are an inexperienced company that has just began its campaign to penetrate a vigorous market, this means that our experience is nothing compared to the likes of market leaders such as Kellogg and Nestle. It is hard to establish a brand, in an already competitive market that is ever growing. There is competition from other markets as well, i. e. cake bars and confectionery that add to the businesses weaknesses. Opportunities This market is an under exploited market, Wake Up complimenting this market with a niche cereal bar could definitely gain the company valuable market share. There is then a great possibility and open opportunity to expand the product range; this could lead to an expansion into international markets. The US has also shown a great interest in the cereal bar market, the consumer market for cereal bars in the U. S. in 2006 is $1. 4 billion and this market grew an impressive 69% between 2001 and 2006. These figures show us that there has been a significant growth in the food culture in America and this is something that Wake Up can capitalise on. Threats The current economic climate does not favour new businesses, in this current recession it seems like it is going to be a financial struggle for Wakeup to successfully establish itself and put its marketing strategies into play. Many Competitors are normally sub-brand of profitable organisations this gives them an outstanding advantage in the market and could ultimately guarantee them market share more rapidly than Wake Up. The supermarkets have great market power, this could cause discussions concerning shelf space and margin pressure. There is also the concern of continuous attention on product innovation: package (colour) and composition (taste, ingredients) Swot summary The market is propelled by consumers’ hectic lifestyles and the growth in healthy eating. The British market is the largest European market for snack food, having munched its way through 268,000 tonnes of crisps. This may seem a large amount but it is a12% fall from 2002, the cereal bar market in 2005 had doubled, now valued at ? 250 million. Forecasted growth for the next 5 years is 49% with a value of ? 73 million. Clearly the SWOT analysis shows that our strengths immediately look certain to compete with the top brands and force competition due to our extra value and business competencies. Our weaknesses can definitely be tackled again by our ethical and organic foundation, with the logos and sponsorships that are complimented with our product as well as being a niche cereal bar manufacturer Wake Up has the underpinning values of a busi ness ready to tackle this optimistic market even its weaknesses. Our biggest weakness at Wake Up is the Wake Up team itself; inexperience and unsuccessful promotion of the values we create are the toughest obstacles we face. According to a new report by Weetabix, the UK cereal car market is worth ? 258M and is growing 7. 2% year after year, Mintel reports have also shown us that the values of the market has almost doubled by 2005 and is estimated to grow by another 49% by the year 2010. These opportunities are limitless, our long term objectives would be to expand our product range and exploit the fast growing US cereal bar markets, Wake Up has the necessary requirements to expand efficiently and effectively filling in gaps in the market and asserting itself as a main competitor. Threats in the markets also slow down any process of penetrating any market, the recession is the biggest concern alongside the already established brand names of cereal manufacturers. In this current climate a slow growth is expected and financial matters take over. The marketing of the product should be carefully administered to get the best results, it is also the key factor in getting the product and brand name established as customer perspective is a vital aspect. 3 . Environmental analysis Macro-environmental factors Wake-UP! May be affected by the external economic climate as due to its high healthy, organic and high quality nature it may be perceived to be a high end, luxury brand. Therefore in times of recession and economic downturn, in which consumers will be watching what they spend their money on, Wake-UP! May feel the negative benefits as consumers and potential consumers may seek alternative, cheaper products. Although Wake-UP! Is targeting predominantly students and young professionals, aged 16 – 24, any other demographics that we decide to target may affect the external areas of the business. This in turn will affect the marketing plan as not only will changes within the business have to be made in order to research and meet the demands of the new demographics, but the way in which the business is recognized externally will also be affected. External legal and regulatory issues will also affect the business heavily; due to the nature of the product, as it contains many ingredients which a large proportion of the public may be allergic to; it is Wake-Ups priority to label and package the products correctly, maintaining the high standards which the government set. For example many consumers may have allergies to wheat, therefore it is our priority to clearly display the legally correct ‘wheat free’ symbol, and alternatively we must state that the product is wheat free. Micro-environmental factors The four main stakeholders of the business are the suppliers, channel members, competitors and consumers. All four affect the business in a direct way as without them the business would not function in an efficient way. It is essential to allocate the correct suppliers who will not only provide the correct ingredients and stock, but who will also deliver on time which has been set by Wake-UP! It is important to select the right channel members who will distribute the product in a way that has been decided upon by the business, Wake-UP! Would be affected by channel members who do not meet the specific criteria, as this is the main way of getting the product out to the consumers; therefore if it is done incorrectly, this will have an adverse effect on the sales and profits of the business. Competitive Strategy As our main demographic is students and young professionals aged between 16 and 24 years old, we will be heavily marketing our product on each unique selling point; such as the fact our cereal bars are organic, have high levels of glucose for energy and also come in a 7 pack rather than a 6 pack. We feel that this will differentiate our strategy from our competitors; we have also researched the various prices of other competing cereal bars in a number of different supermarkets in order to find the correct pricing strategy for our bars. As the market is already full of leading brands, such as Kelloggs and Alpen, we feel that our competitive strategy needs to be well researched from all perspectives. One perspective which will feature heavily in our strategy is the marketing strategy, also taking into account our carefully chosen distribution channels; these will be health food shops, supermarkets, gyms and local shops. We feel that in order to compete against the other businesses in the markets successfully, we will need to get our product out to the consumers in the quickest and most efficient way. Marketing Plan Cereal bars markets around the world are generally led by companies with existing interests either in breakfast cereals, or confectionery or other baked snacks (e. g. biscuits or cakes). Although the sector also supports a multitude of specialist health and natural food suppliers, the products sold through mainstream supermarkets tend primarily to be those manufactured by major food groups. The support of such significant businesses and their sizeable advertising and promotional budgets has been instrumental in creating the strong growth rates seen by the market in recent years. At the moment our leading competitor is Kellogg’s who have over 5 cereal bars in the shops at the moment. Burton’s Foods has also announced that it is building on the success of two of its leading brands by extending their footprint into the ? 305m (+6. 7% MAT) cereal bar segment with the launch of the Jammie Dodgers Snack Bars and Maryland Munch Bars. However the sole focus with many of the cereal bars in the market today like Kellogg’s is the taste. Although extremely important, it is not our only selling point to attract the necessary clientele (16-25 year old young professionals). By us targeting these specific clientele we can hopefully create much more than just a cereal bar, but the key to a quick and effective breakfast alternative, organically sourced to enjoy a healthy start to the day as well. Our product is quite simple and doesn’t just offer a simpler breakfast alternative for the mornings. With it being organically sourced it already separates us from a big chunk of the market who focus solely on the taste. That’s where our product is different, offering an organic, delicious alternative that also contains added glucose to give you that extra boost for an early morning start. Not only this but the bar itself will be sold in a unique way to others on the market. Most bars are sold in a traditional bar fashion (rectangular shaped and sold as a 5 or 6 for a box). Ours however, will be manufactured in a triangular shape making us instantly different appearing more ‘eye catching’ to customers. The other factor is the packaging of the wake-up bars when sold as a box. We felt it would be much more effective to sell the box’s in bars of 7 rather than the traditional 5 or 6 (one for everyday of the week). The idea of having one for every morning of the week and developing the Wake up brand as a part of peoples lifestyle would be quite a generalised objective of ours. Therefore the packaging of the bars as 7 in a box can hopefully encourage our clientele to adopt this way of life (however this would be ideal). 4. Marketing Strategy Mission As the market is propelled by consumer’s hectic lifestyles and the growth of healthy eating we decided as a group to create a healthy eating organic energy cereal bar. The cereal bar market in 2005 had doubled, now valued at ? 250 million with a forecasted growth of 49% by 1010. As the market is far from saturated we found this appealing as there is plenty of room for new and upcoming products such as our own healthy eating organic cereal bar, WAKE UP! Although the cereal car market is far from saturated WAKE UP! will still need to compete against popular competitors such as Nutri-Grain, Frusli, Alphen and Kelloggs. As WAKE UP! is not only organic but also contains glucose this makes our product stand out from the crowd and more original. Marketing objectives To ensure that WAKE UP! is successful we must set SMART objectives which must be specific, measurable, achievable, realistic and timed. The marketing objectives for WAKE UP! are: Customer acquisition, retention and satisfaction Channel Relationships Market Share Product Development It is vital for WAKE UP! for maintain a good relationship with its customers as this ensures customer loyalty which leads to word of mouth giving WAKE UP! more new and exciting customers. A way of maintaining a good relationship with customers is by replying to their queries and complaints straight away whether it is by letter, email or more personally on the telephone. Having a good channel relationship is important as this ensures the WAKE UP! products are delivered on time and in good condition in order to meet customer demand and avoid inventory out-of-stock. Having a large market share is a vital objective for WAKE UP! as this means that our product has successfully dominated the market and therefore we would have reached all objectives is WAKE UP! has a large market share. For our final objective we plan to develop WAKE UP! in to a well recognised successful brand image which eventually might develop new and interesting cereal bar flavours depending on what the customer wants. Financial objectives WAKE UP! ’s financial objectives are like many other businesses financial objectives which are to have a high sales volume in order to reach a high profit because the more WAKE UP! cereal bars sold then the more profit WAKE UP! will gain. It is important for WAKE UP! to produce a positive Return On Investment (ROI) because if an investments ROI isn’t positive then the investment should not be undertaken. Target market As young people today lead such hectic lifestyles they often miss or skip breakfast. Because WAKE UP! is so convenient and handy it is an easy healthy organic energy snack bar you can eat it anytime of the day wherever you are. WAKE UP! ’s target market is 16-25 year olds as this age group is mainly students, undergraduates, postgraduates and sportsmen/women who are always on the go and need that little extras energy snack bar to help them catch up with their hectic lifestyles. WAKE UP! will not be advertised or targeted owards over 60 year olds as they may have underlying problems and as WAKE UP! is an energy snack bar it may not be suitable for anyone with heart problems. Another market WAKE UP! will not be advertised to is the South American and Asian markets as WAKE UP! contains glucose this may not apply to these markets because of different cultures and beliefs therefore we felt it was best to leave out these markets. Positioning As WAKE UP! is targeted tow ards 16-26 year olds who are mainly students, undergraduates, post graduates and sportsmen/women we felt it was best to position WAKE UP! n local shops, supermarkets, university shops and cafes, garages, chemists, health centres and gyms as these locations would be most popular with the target market. Strategy summary As the cereal bar market is far from saturated this is a great opportunity for WAKE UP! to enter into the market and compete against its competitors Alphen, Kelloggs, Nutri-Grain and Frusli which are the most popular cereal bars among today’s younger generation aged 16-25 year olds which also happens to be our target market as this age group leads the most hectic lifestyle. In order for WAKE UP! o be marketed towards this age group it is going to be positioned in places such as local stores and universities which are very popular destinations for students. WAKE UP! will be marketed via billboards, TV and radio advertising, sports events and through street teams who will be giving out free samples to the public in popular city centres and throughout music festivals to help create a well known and trusted brand image. 5. Marketing Mix The Wake Up! Breakfast bar product is a Low involvement product, therefore our pricing strategy should reflect this. Although the product is low involvement, the easiest way to add value is through convenience. We will start with a medium price to enter the market at, as we do not want the product to have cheap connotations. The pricing shouldn’t be above our competitors, as we would like customers to try our product as opposed to others. As part of pricing and promotion within the marketing mix we will also introduce offers on multi packs. The breakfast bar has been created with the idea that people do not have time to eat and prepare a full breakfast and so can pick up a Wake Up! bar on the way into university. Another added value to the product would be the additional glucose, which will provide a steady release of energy throughout the day. This gives our product a unique feature and the edge that we need for placing a product in an already busy market. The packaging will be representative of the particular segment’s cultural and social preferences. We will undertake market research of a variety of packaging styles near to the release date in order for the product to be relevant to the time. This will also create and awareness to the members of the research market group that we choose. The target group is students and young working adults aged between 16 – 24, this will also apply to the market research audience that we choose. The product will be placed in supermarkets, as this is easy access for all available markets. We will also distribute to Health stores and the product can be places in vending machines around university’s, library’s and train stations. As part of channelling Wake Up! we will directly target our segment by handing out promotional bars to students and young professionals in and around university campus’s and in train stations between 8am and 12pm nationwide. This should create an awareness of the product that we need for the release date. 6. Marketing Research —According to a recent report from market researcher Mintel, overall sales of cereal bars in the UK have seen strong growth since 2000. —The values of the market has almost doubled by 2005 and is estimated to grow by another 49% by the year 2010. —Health has been a major driver in the cereal bar market and is becoming increasingly important. —This is a key influence in the driving of our sector and the basis of the customer needs. More specifically according to a new report by Weetabix, the UK cereal car market is worth ?258M and is growing 7. 2% year after year. We have conducted market research in Newcastle library to find out if our target group would be interested in trying our product. 90% of the group who undertook the survey agreed that they think our product sounds appealing and 95% of the group said that they would like to try the product. 7. Fi nancials A. Sales/revenue forecasts. At Wake up we expect to sell in our first month 10,000 bars. Our product will be priced at ? 1. 79 for 7 bars, or 60p per individual bar. Our IMC controls should help thins figure progress to 200,000 bars by the end of year one. B. Marketing Expense Budget Wake Up will be heavily marketed through television, bill board and magazine advertising, PR and by street teams in major cities throughout the UK. The budget set aside for this is as follows * 10,000 for TV advertising * 7,000 for bill board an magazine advertising * 10,000 for PR and street teams. Leaving a total marketing budget of ? 37,000 in year one. C. Break even analysis A priority of Wake Up is to break even within 2 years. With estimated set up costs of ? 00,000 and a contribution per unit of ? 1. 29 per pack this means that as a company we must sell 155,000 units to break even. A further ? 32,000 packs must be sold to cover marketing costs. 8. Controls A. Implementation At Wake up we plan on being organised. Our company will be broken down into divisions. These will include. Sales, marketing, HR, Finance and Development. The introduction of a development s ection of the business will help drive the business forward by initially helping with the set up of the business and then further monitoring and improving the business forward. Each department will be headed by an expert in that particular field. Creativity at Wake Up will be rewarded and a heavy commitment to society is integral. B. Marketing Organisation Within the marketing department there will be several sub departments. These include on department for each IMC measure used, alongside a creative department headed by a creative director. This division will be crucial to Wake Up as to build a strong brand we will rely heavily on good marketing. Community projects discussed previously will full under this department with rewards for creativity and a commitment to the environment. C. Contingency Planning Wake Up is confident in its research and costing, yet cannot prepare for every situation. Due to this we will consider other methods of segmentation and IMC. Wake Up also plans on launching a less niche brand to appeal to a wider segment than the one chosen. Whilst we feel our segment is an untapped on in need of our product the wider segements are also a good place to operate in. This will be looked into by our development section.