Launching A New Product

BTEC EDEXCEL AND DIPLOMA IN BUSINESS (MANAGEMENT & HUMAN RESOURCES) OFFERED BY INTERNATIONAL COLLEGE OF BUSINESS AND TECHNOLOGY
Individual Assignment
Marketing Principles
Individual assignment
Acknowledgement
I would like to express my gratitude to Ms. Inoka Gunarathne and Mr.Frank Gunasekara who gave me the possibility to complete this assignment and for the guidance and support they gave in preparation of this study. Especially, I would like to give my special thanks to my parents who enabled me to complete this work. However, it would not have been possible without the kind support and help from my friends. Last but not the least I would like to thank all our peers and staff at I.C.B.T and specially Mr.Dhilum our coordinator who were ready to lend a hand in whatever way they can. I am making this project not only for marks but also to increase my knowledge. Thanks again to all who helped me.
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Executive Summary
Since the market for energy drinks has increased in an unbelievable manner since the Redbull Company introduced their energy drink I hope this research will help to show the importance of innovating a new product. The main purpose of this project is to make a report on situation analysis of a selected company and launching a new product. This study further explains about goals, culture, strengths, weaknesses, and also market shares of the company. In this project I have done the situation analysis by using the SWOT analysis and also applying the model of Porters five forces. All the relevant theories, techniques, methods, and information have been accurately applied to this study. And also this project has gone into the market behaviour of the selected product as well as its benefits to the community. This study has explained the importance of 7 Ps for the newest productions. This project also shows the importance of innovating new products for the present world.
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Contents
Introduction 4 Concept and process of marketing ......................................................................................................... 5 1.1 Comparison of different definitions of marketing ........................................................................ 5 Introduction ............................................................................................................................................ 6 CARGILLS GROUP ............................................................................................................................ 6 Vision............................................................................................................................................... 6 Mission ............................................................................................................................................ 6 Values ............................................................................................................................................. 6 Macro and Micro Environmental Factors ............................................................................................... 7 Conducting SWOT & PEST Analysis ................................................................................................. 7 SWOT analysis ..................................................................................................................................... 7 PEST ANALYSIS .................................................................................................................................... 8 Marketing objective and Segmentation ................................................................................................. 9 Marketing objective ............................................................................................................................ 9 Choosing a targeting strategy for the new product ........................................................................ 9 Design and recommend the appropriate marketing mix strategy for the new product ...................... 10 Product .......................................................................................................................................... 11 Price .............................................................................................................................................. 14 Place .............................................................................................................................................. 15 Promotion ..................................................................................................................................... 16 People, Process and Physical Evidence ......................................................................................... 17 People ........................................................................................................................................... 17 Process .......................................................................................................................................... 17 Physical evidence (physical environment) .................................................................................... 17 Internationalization decision ................................................................................................................ 18 Suggest marketing mix changes that should be accommodated internationalization decision ...... 18 Conclusion ............................................................................................................................................. 19 Reference .............................................................................................................................................. 20 Appendix ............................................................................................................................................... 21
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Introduction
I have done researches on Cargills (Ceylon) group; Cargills has been over the last 70 years manufacturing its own brands made out of the best quality standards. Guided by the trusted leadership it spearheads the sustainable development of the food industry in Sri Lanka. The new product that we are bringing into the market from Cargills is Slingshot a line of energy drinks, which are coming in fresh new flavors. The product is aimed at the age group 18-35 specially the college students in Sri Lanka. Our range of products has always been welcomed by our loyal customers which in turn has encouraged us to introduce new products regularly. Looking at market going through a low phase, but Cargills still maintain its position which is also another encouragement. Different branches located in different locations are aimed at providing the best service to their loyal customers and for their ease. Marketing plan has different perspectives such as micro and macro environmental factors (SWOT, PEST etc.) where it gives a mirror idea. This report defines how a marketing plan is carried out and what factors we should consider before doing so, such as pricing, distribution, promotions and also the product has been discussed in detail for extra knowledge. Also the decisions taken and how concerned does the organization has to be in order to implement a successful and reliable marketing plan. To earn the objectives of the company they should reduce all uncertainties, risks and costs and also in order to establish the product in the market. Last but not least a plan can never be successful without proper research, understanding, coordination and also planning of activities.
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Concept and process of marketing

1.1 Comparison of different definitions of marketing Source (Philip kotler & Gary Armstrong, a Generic Concept of Marketing) Marketing: is a social and managerial process whereby individuals & groups obtain what they need and want through creating and exchanging products and value with others. Learn marketing association defined marketing as Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer (P.Tailor 7/00) Investopedia explains 'Marketing' as Marketing : Many people believe that marketing is just about advertising or sales. However, marketing is everything a company does to acquire customers and maintain a relationship with them. Even the small tasks like writing thank-you letters, playing golf with a prospective client, returning calls promptly and meeting with a past client for coffee can be thought of as marketing. The ultimate goal of marketing is to match a company's products and services to the people who needs and also want them, so there by ensure profitability
Marketing is having a relationship with the customer and satisfying their wants on a regular basis. This is usually done when the product is new to the market and when the product needs some introduction so that the consumers get familiar with the product. This also creates a good turnover to the company.
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Introduction
CARGILLS GROUP Not unknown to anyone, Cargills commenced in the 1840s with the idea of being the best food producer, is today one of the leading brand companys not only in the island but worldwide. The unique product portfolio spanning from food products to stationary, we have had a solid growth in the market despite having strong competitors, due to its brand value. Currently focusing on areas which are diary product, processed meat, vegetables, ice cream etc. Vision To be a Global Corporate Role Model in Community - Friendly National Development. Mission Serve the Rural Community, our Customers and all other stakeholders through our core business - food with love - and other related businesses, based on our three main principles of; Reducing the cost of living Enhancing youth skills Bridging regional disparities by enhancing local and global markets. Values
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Macro and Micro Environmental Factors
Conducting SWOT & PEST Analysis SWOT analysis SWOT Analysis is basically done here to measure the strengths, weaknesses which are internal factors and opportunities and threats which are external factors.
Strengths
Weaknesses
Leading market presence Strong marketing strategy Consumer centric products Emotional branding Location of our branches Motivated staff Innovating products and services
Opportunities
Pricing Limited electronic relationships
Threats
Expansion of customer base Expansion of our food line International expansion Government rules and regulations
Competitors - like Redbull, Blue, and Consumer tastes may change Prices may be reduced Introduce in Gov. taxation for our new products Government rules and regulations
other energy drinks.
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PEST ANALYSIS
P- Political Factors: These factors are not controllable by the firm but controlled by the government and legislations. Taxation, Import, Export policies and unfair trade practices are factors controlled by these institutions. We manufacture our products from the factories and production sites directly and distribute it to its outlets/branches where we incur heavy payment charges; these are uncontrollable which act as a disadvantage to the organization.
E-Economic factors: Inflation varies from time to time, the increase in prices may be a setback for any firm, another factor is the foreign currency rate and also since Cargills has a solid local as well as international market, the prices and currencies may be very much different, the foreign currency of the country if at good at rates will be an advantage for us. The products are affordable for all types of customers keeping in mind the lifestyles, current income, debt and trends in consumer spending, irrespective of caste, culture and etc.
S- Social & Cultural environment: The social and cultural ethics have always been considered by the organization in order not to offend anyone belonging to any religion or belief. We have always produced advertisements within the norms and done their marketing in a way which is applicable to all societies. In Sri Lanka majority being Buddhists and Muslims we have also focused mainly on their types of likes and dislikes. Our market expands not just to one type of segments or demands.
T-Technological factors: This changes at a regular basis, technology has a huge impact on certain parts and we have brought in improved machinery to shoot up production rate and skilled laborers to handle these machines, the product will be of the best quality.
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Marketing objective and Segmentation
Marketing objective The marketing objective is to launch the new line of Energy drinks Slingshot to the Sri Lankan market on 10thJanuary 2013, introducing another set of funky and uniquely designed beverages for Cargills product consumers and the potential customers.
Choosing a targeting strategy for the new product Slingshot Energy drinks will be segmented following these few factors such as demographic, geographical, psycho graphical and behavioral.
Demographic analysis Age, Gender, Income Age We are focusing more on the college students and junior citizens of ages 18-35. Gender This is consumable for both the parties Income Since this product is a bit expensive the middle income families and higher income families would be able to afford the product.
Behavioral analysis
Since this is an energy drink, it can be consumed twice a day or regularly.
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Design and recommend the appropriate marketing mix strategy for the new product
Cargills marketing specialists use many tactics to attract and retain their clients. These activities comprise of different concepts, the most important one is the marketing mix.
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Product Our newest product Slingshot which goes with the slogan of SKY IS NOT THE LIMIT is representing the introduction level of the product life cycle. This section is elaborating about the product Slingshot for further. Designs of the product
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Product Features and other information of Slingshot Availability available in almost every supermarkets, groceries and Hotels. Product size customer can obtain the product in 2 sizes. 250 ml Cans 450ml Cans Colour Blue Price Flavors Cherry Plum Orange Low fat Ingredients Caffeine, Taurine Glucuronolactone B-group vitamins Sucrose and glucose alpine spring water 250 ml Cans Rs.220 450ml Cans Rs.375
Warranty not applicable After sale services Product can be exchanged if the cover is damaged. Sales people are well conscious about the products so customers can easily tackle their problems.
Brand Name : Cargills - Slingshot
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Price There are few more factors that will be affecting on price of the new product such as suppliers bargaining power, price inflation, exchange rate movements, demand, general inflation rate, ethics and substitute goods etc. Some of the factors can be controlled like suppliers prices, competitors prices, and quality perception etc. But most of the factors are not controllable like inflation rates and substitute goods etc. competitor prices respectively, those are as follows. If Cargills analyses the
Redbull Wild Elephant Blue
250 ml Rs.278.25 250 ml Rs.150.00 250 ml Rs.200.00
So the organization has to use the most accurate pricing method to survive in the market. Pricing methods are mainly divided into four such as Penetration pricing, Price skimming, Premium pricing, and Economy pricing (see appendix 2). Penetration pricing is putting prices artificially law until to gain the market share. Once this is achieved the price is increased. According to the price skimming method organizations are putting high prices if the product has a substantial competitive advantage. But when the competitors are attracting to the market due to high prices of the product organization tries to produce low quality products by cutting cost. According to the premium pricing method organizations put high price due to the uniqueness of that product or service. This method is also used where a substantial competitive advantage exists. Value pricing method is used where external factors such as recession or increased competition force companies to provide value products to retain sales.
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Place Product distribution is mainly divided into two such as direct and indirect distribution. Cargills is mainly using direct selling.
Manufacturer
Wholesale
Retailor
Consumer
For the above direct selling process Cargills uses skillful sales advertisements to sell products successfully. There are main three types of distribution such as intensive distribution, selective distribution, and exclusive distribution. As other retailers, Cargills also uses intensive distribution. That means Cargills products are stocked in the majority of outlets. The advantages of using this system are allowing companies penetration of fragmented/widely dispersed markets, increases profitability by making low transaction amounts viable and eases logistics for buyers who purchase a number of different items.
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Promotion Cargills sales promotions are mainly divided into two such as consumer promotions and trade promotions. When the Cargills decides how to properly utilize the promotion mix to meet their marketing objectives, they consider relative strengths and weaknesses of each element of the mix. Advertising when Cargills needs to inform their latest products to public they use different advertising methods. TV advertisements, radio advertisements, newspapers, Student magazines as well as posters, banners etc. when they do advertising they determine to reach large, geographically scattered audiences, high frequency rate of advertising, low cost per revelation products and mention the uniqueness of their brand name. So when do TV advertisements Cargills has already decided to telecast the advertisement during the news program due to the high frequency rate of respondents. Sales promotion In sales promotion Cargills is using a main way to promote their businesses. Promote consumers
When Cargills promotes consumers, they offer coupons, and contests and free goods (like buy one get one free) etc. Public relations Cargills is doing many advertising campaigns to maximize and close to public relations. Cargills is doing different events and contests to reach the customer satisfaction and public relations. Direct marketing Cargills generally use this system. They always try to increase marketing system by selling their products to consumers directly. Communication Promotional strategies of communication are divided into three such as Push, Pull and Profile base communication. Cargills is using both the Pull, and Push based communication. According to the Pull based communication Cargills makes awareness in customers about the products directly by using TV, and radio advertisements etc. Under the Push Based communication Cargills makes awareness of customers via wholesalers and retailers.
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People, Process and Physical Evidence People People are a crucial ingredient in service provision; selecting, recruiting and training the right staff is required to make a competitive advantage. Clients make judgments about service provision and delivery based on the people representing the organization. According to NBC, retailers and wholesalers are making comments and criticisms on sales representatives about the product provision as Cargills clients. Cargills staff requires appropriate interpersonal skills, aptitude, and service knowledge in order to generate a quality product. The employees in Cargills are having a standard uniform and Cargills specially focuses on friendly and prompt service to its customers from their employees. Process Marketing has a number of processes that integrate together to create an overall marketing process. As an example if a client orders a stock how many days or hours it will take to get the delivery done. And also it checks wheres the process that allows customer to get an efficient service Cargills is having more than 1000s of delivery vehicles and enough sales agents. As well as they have a good communication system with their clients. Customers can do payments by using cash and checks.
Physical evidence (physical environment) Physical evidence is about where the service is being delivered from. Physical evidence can be used to charge a premium price for a service and establish a positive experience. Cargills is always trying to make a friendly and flexible environment. Cargills customer care section has been given special training to deal with clients effectively and make the cool environment.
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Internationalization decision
Suggest marketing mix changes that should be accommodated internationalization decision If Cargills is focusing this product to introduce the international market several changes need to be applied. Generally international market differs from Domestic marketing due to below reasons. Scope The scope of domestic marketing is limited but the International marketing has everlasting opportunities and scope in food industry. Benefits The gain of international marketing are larger than domestic marketing. As well as there is an included incentive of foreign money that is important from the point of view of Sri Lanka as well. Sharing of technology Domestic market is limited in the use of technology rather than using it in International market. Barriers - In domestic marketing there are few barriers but in international marketing there are many barriers such as cross cultural differences, currency, language, customs and traditions. But lots of organizations are willing to go to the International market due to the huge profit. So Cargills has to make few differences such as revising their distribution methods, and promotions. There are three modes of engagement in international market. Exporting (direct and indirect exporting) Joint ventures Direct Investment (split into assembly and manufacturing).
Most suitable method for Cargills is exporting. Direct exporting involves firm shipping goods directly to a foreign market. A firm employing indirect exporting would utilize a channel/intermediary, which in turn would distribute the product in the foreign market. As another example Cargills can use courier services (like DHL, Arrow express, and world express) and online business.
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Conclusion
The purpose of this project is making a report on situation analysis of a selected organization and launching a new product. This assignment has further expressed about culture, goals, opportunities, threats, and consumer behaviour of Cargills. This project has done the situation analysis by using SWOT analysis and applying the model of Porters five forces effectively. Under SWOT analysis it shows how to change weaknesses into strengths and how to make opportunities by overcoming company threats. And also this assignment has further investigated on the market behaviour and buyer behaviour of the selected product. This assignment has elaborated the importance of 7 Ps for the latest product as well as benefits of those factors to the company. As well as relevant methods, information, theories, and accurate techniques have also been effectively applied for this research.
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Reference
Books Kotler, Phillip, (1998)"A Management- April: 48-54. Generic Concept of Marketing Marketing
Marketing is a social and managerial process whereby individuals & groups obtain what they need and want through creating and exchanging products and value with others.
Websites
Cargills official website , [Online], Available:

http://www.cargillsceylon.com
[Accessed 4th December 2012]
Investopedia
marketing
definition,
[Online],
Available:
http://www.investopedia.com/terms/m/marketing.asp#ixzz2EOWTl5y0
[Accessed 4th December 2012 ]
Learn
marketing
association
marketing
definition,
[Online],
Available:
http://www.learnmarketing.net , [Accessed 5th December 2012 ]
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Appendix
Appendix 1 Product life Cycle.
Appendix 2 Pricing strategies matrix
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Launching A New Product

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BTEC EDEXCEL AND DIPLOMA IN BUSINESS (MANAGEMENT & HUMAN RESOURCES) OFFERED BY INTERNATIONAL COLLEGE OF BUSINESS AND TECHNOLOGY

Concept and process of marketing

Macro and Micro Environmental Factors

Pricing Limited electronic relationships

Marketing objective and Segmentation

Brand Name : Cargills - Slingshot

Redbull Wild Elephant Blue

250 ml Rs.278.25 250 ml Rs.150.00 250 ml Rs.200.00

Cargills official website , [Online], Available:

[Accessed 4th December 2012]

[Accessed 4th December 2012 ]

http://www.learnmarketing.net , [Accessed 5th December 2012 ]

Appendix 1 Product life Cycle.

Appendix 2 Pricing strategies matrix

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