[Type the company name]

Marketing Plan- Health

drinks
[Type the document subtitle]
XYZ

[Year]
Table of Contents

Table of Contents............................................................................................. 2
Executive Summary ........................................................................................ 3
Target Market & Buyer Behavior......................................................................4
Generic Market.............................................................................................. 4
Product market............................................................................................. 4
Perceptual Map ............................................................................................... 5
Product Strategy ...................................................................................... 6
Place Strategy ............................................................................................... 8
Price Strategy ................................................................................................ 10
Promotion Strategy ....................................................................................... 13
Integrated Marketing Communication Strategy..........................................13
Operational Plan.......................................................................................... 15
Appendix A – Choosing A Target Segment.....................................................18
Industry Analysis......................................................................................... 23
Competition Analysis: Porter’s Five Forces Model.......................................24
SWOT Analysis............................................................................................ 25

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Executive Summary

The consumption of energy and health drinks is increasing at a high pace,

demonstrated by high compounded annual growth rates for the functional
beverages market. The report presents a marketing plan for the launch of a
new to market product – Nutri, which is milk and soya based ready-to-drink
drink. The drink is planned to be launched in the month of March, 2012 with
initially three real fruit flavors. The target customer for the new product are
health conscious teenagers and young adults who would like to consume a
health drink regularly to suffice for their nutritional needs in a faced paced
world.

The report presents an elaborate marketing plan focusing on the marketing

mix strategy including – product strategy, place strategy, price strategy and
promotion strategy. The report also sets timelines for implementation of
various activities in the marketing mix strategy. Product strategy includes
development and launch of the product and future direction of development.
The place strategy focuses on the distribution strategy for Nutri including
details of the channels and policies to be used. The pricing strategy indicates
the product pricing for a 250ml bottle of the health drink. It focuses on the
strategic pricing and its implication on product positioning in the minds of the
target customers. The promotional strategy focuses on the pre and post
launch promotional tactics and the integrated marketing campaign to be
launched for product promotion with times lines.

The report presents a complete marketing plan for the new product launch
with timelines and tentative print media advertisements to present a
comprehensive view of how the product has to be positioned and marketed.

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Target Market & Buyer Behavior

The consumer market of health drinks can be segmented on the basis of

demographics, psychographics and the behavioral attributes of the
consumers of energy drinks. The customer markets can be segmented on the
basis of age – infants, teenagers, young adults, adults and elderly people.
The psychographic and behavioral segmentation of these markets will include
the lifestyle, attitude, social or personality characteristics or behaviors.

As a product, energy drinks are a part of the functional beverages market.

The market for functional beverage is categorized into four different
categories – Hydration, Energy/Rejuvenation, Health and Wellness; and
Weight management products. Hydration drinks include anti oxidants and
fruit extracts that are believed to provide hydration to the inner and outer
layers of the skin. Energy/ Rejuvenation products are highly caffeinated, high
energy beverages available that provide instant energy. The Health and
Wellness products are beverages low on calorific value, sugar and include
supplements of vitamins and other essential minerals.

Generic Market

The generic market of the new product will include a large segment of
customers who purchase beverages for the purpose of taste, health,
rejuvenation or thirst. These includes customers from all age groups that are
looking for functional beverages to satisfy their needs for a beverage that
they can consume regularly or occasionally serving their basic needs or
pleasure, instant energy or nourishment.

Product market

The target customers for the new product are teenagers and young adults
between 18-34 years of age, who live a hectic work life and are conscious

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their health. The product which is a health and wellness drink will target
customers who are health conscious and understand that their demanding
work schedules as well as their lifestyle are leading to them to not taking
adequate nourishment and healthy food. The product though will have mass
appeal spread across all age groups owning to the nourishment it provides.

Perceptual Map

Perceptual maps are used to graphically represent the positioning of the

product vis-à-vis their substitutes and competitors.

Nourishment

Health
Taste

Lifestyle

The new product which is a health drink is placed on the perceptual map
wherein its competitors will include global brands like Freshup. The
perceptual map includes four quadrants and measured on the attributes of

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the product being perceived by its customers as a lifestyle product, Health
and wellness product, taste and nourishment.

Product Strategy

The product strategy is one of the most important strategic tools in the hands
of the company by which the company launches, establishes and markets its
product. In other words, the product strategy enables the company to create
a value offering and deliver that to its customers in a time bound manner.
The product is the main element of the marketing mix. Therefore, the product
strategy needs to be established before planning the marketing mix. The
objective of the product strategy is to decide the value offering which is to be
delivered to the target customers of the company to satisfy their specific
needs.

We will be developing a health and wellness product in the functional

beverages segment of the market. The drink will be based on the nutritional
value of its key ingredient that include milk, soya extracts and other food
extracts that have not been captured till now by existing player. An important
part of the product strategy will be the primary and secondary research to be
taken for the initial three months to get the customer insights into health
drinks / energy drinks market. The insights will be used in developing the
desired product. The product will cater to the needs of the target customers
who want a regular health drink that is affordable and is less in calorific value
but high in nutritional value. The product caters to the teenagers and young
adults, mostly working people or mothers at home who are looking for a
regular health drink for themselves or their family members. Most of them
are not able to intake sufficient nutrients required by them due to their hectic
work schedules and living habits. The product is aimed at capturing market
share from the existing energy drinks market as well as creates a new market
for itself by becoming a popular drink that substitutes nutritional drinks like
milk.

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The basic product is a health drink. The tangible product is a milk based
health drink with nutritional benefits of milk, soya and other fruit extracts
that can suffice for one’s daily intake of proteins and other minerals essential
for maintaining healthy diet. The product aims at providing an easy solution
to its target customers for their nutritional needs and a solution that can
easily be absorbed within the present lifestyle of the target customers. The
augmented product in the health drinks market will provide all the necessary
nutrition for the day and comes in a lot of choices in terms of the flavors and
taste. The augmented product also includes health supplements that can be
added to your food to make it more nutritional and healthy.

The product will initially be launched with a single product line of milk and
soya based drinks flavored with real fruit extracts. The initial flavors launched
will be apple, grapes and blueberry. The company will extend the product line
after gauging the initial response of its customers. The company will enter
into new product lines that will include spreads and supplementary products
used in daily breakfast that will be good in their nutritional value and can be
taken with sandwiches and breakfast meals.

Being a new product, the branding and packaging of the product are critical
to the overall product strategy. The product needs to be strategically placed
in the minds of the target customers who have an unfulfilled need for daily
nutritional products and supplements owing to their existing lifestyles and
schedules. The success of the product will depend immensely on the ability of
the marketers in promoting the product as a regular health drink, that is
easily accessible and that provides for all the daily required nutritional value.
The marketers will have to differentiate between the existing products in the
health drinks that may include fruit juices or cola beverages, but be apprised
of the fact that the product aims at overtaking a part of their market share as
the basic needs to which these different products cater overlap.

The company should be able to build its brand and faith among its target
customers that the product is high on quality and easy to access and store.
The warranties and guarantees given by the company on the product’s

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nutrition value are extremely important both in legal terms as well as for
gaining the market share. The marketing team will have to take all the
advantages of the product to the target customer and focus on how this
nutritional product can match their present lifestyle and habits. Managing the
product life cycle is important for business sustainability. We intend to launch
new flavors including seasonal fruit flavors to extend the product line. We will
also add new product lines in the supplementary foods segments that
includes spreads and cheese based product that are consumed with
breakfast of fast foods. The extended product line will include spreads based
on similar ingredients as well as concentrations or pastes that can be added
to the food cooked at home to provide it the required protein and minerals
essential for a healthy diet.

Place Strategy

The place strategy is an important part of the overall marketing mix of the
product or value offering. The objective of the place strategy for the new
product is to reach out and make the product accessible to each and every
target customer within two hundred yards of his or her home or office within
the next three years. The company will aim at strengthening its existing
channels and create and maintain new channels by leveraging the
distribution ability of various players in organized retail to reach out to its
target customers. The customers today look for ‘convenience’ while
purchasing the product. Thus any product must be accessible to its target
customers. Therefore, we aim that our product will leverage the strong
distribution network of national and local retail players to each to its target
customers and will be present in each mom- and- pop store in the
neighboring market as well as organized retail chain in the up-market.

Thus we will be requiring two separate channels for distribution of our

product. The first channel will focus on the availability of our product in the
super market chains as well as organized retailers that have a wide presence
nationally or globally. This channel will take care of the modern trade
partners like super markets, or hyper market chains for distribution and sales

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of the product. The second channel will be a larger and more comprehensive
channel that will focus on creating a distribution network for the distribution
of the product. This channel will segment the territory/ geography into
distribution regions. Every region will have key distributors and sub-
distributors at the local level to distribute the product offering. At a local level
the sub distributors or the wholesalers will distribute to the retailers. The
sales teams will focus on enrolling more and more local wholesalers and
distributors to create a strong network of sales and distribution. The
distribution network of the company will be its primary channel. The company
can use its existing network of distributors and retail partners to distribute
the new product offering. A strong sales force at a local level will ensure
availability of the product at each and every local store.

We will use an indirect channel to cater to the target customers. The indirect
channel has been chosen for distribution of the product as the product is
intended to be a mass product and a fast moving consumer good (FMCG). It
is thus not possible to directly sell the product to each and every customer as
the cost of trying to establish such a channel does not make commercial
sense.

In the initial phase of the launch the market exposure will be lesser and
limited. Though, the market exposure will rise gradually to serve the growing
demand for the product. The product launch will also happen in a phased
manner. A pilot launch of the product will be made in a limited geography. As
the operations will settle down we will enter into newer geographies and
extend our market reach. For the purpose of distribution, the company will
focus on establishing and utilizing its vertical market system. The vertical
market system will be a Contractual Vertical Marketing System (CVMS). The
contractual marketing system will consist of the wholesaler – sponsored
voluntary chains, retailer cooperatives and the franchisee organizations for
distribution of the product. The contractual VMS consists of independent firms
at different levels of the supply chain that come together through contracts
to obtain more economies and sale impact. Thus, the company will leverage

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the networks and expertise of the wholesalers, retailer networks and
franchisee in reaching to the target customers.

The customer service would include streamlining the operational difficulties

in managing the supply chain and addressing the problem and grievances of
the channel partners. The company will use high level of customer service
standards that will match the best in the industry to create an increasing and
loyal customer base. As our product is not targeted to a niche market, the
availability of the product at key outlets is the key to the success of the
distribution network. The sales and distribution tactics may include sharing
higher margins, offers and incentives to channel partners for greater sales as
well as forums and sharing of information among channel partners to help
them be more competitive. In a Contractual VMS the wholesalers play a key
role in helping the retailers in competing with the larger corporate. Therefore
the strategy will be to include wholesalers with significant and wide spread
presence in the target customer markets. The distribution network will
include retail chains and retailers that are located at residential areas or up
street markets to gain access to the large population of target customers
tapped by them. The transportation for distribution will depend on serving the
distributors and the wholesale/retail networks. We will use the best practices
in supply chain management to bring out efficiencies in our supply chain
operations. The channel will be managed by the sales team of the company.
The sales hierarchy shall include area managers at local levels reporting to
regional managers. The sales function will be based on geography and
channel.

Price Strategy

The objectives of the pricing strategy are the overall goals that describe the
role of the price in the long term plans of the organization. The
objective of our pricing strategy for our new product is to penetrate the
market and gain a five percent market share within the health drinks market

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in the first year with an average rate of return of 15% for the initial period. In
the longer run the organization will focus on growing the market share to
20% in the next five years and taking the targeting a 20-25% rate of return
on our investments.

The product is targeted at the mass market segment towards the teenagers
and young adults. The aim of the pricing strategy is to further the product
strategy of launching the product as a regular health drinks that can add to
your daily diet or be a substitute to the existing energy drinks, or flavored
soft drinks. The pricing strategy is thus to price the product at the mid range
of the price band that includes soft drinks and premium energy drinks. The
product will use the penetration pricing strategy initially to gain customer
share and later raise prices as the demand for the product rises. As the
product is a new product development, there are no immediate competitors
to the product, but there is competition in the product category of functional
drinks. The pricing of the product has to ensure that the product is priced in a
lucrative manner and the customers perceive the product as a value buy and
start replacing their existing choice of health related drinks with the new
product.

Pricing Policy

The company will use a uniform pricing policy wherein every product
produced by the company will be priced the same. However given the
geographical spread and competitive environment of doing business the
organization will be flexible to include price adjustments following changes in
demand and cost. The cost of production of the milk based health drink is
open to the effects of price changes in the cost of the ingredients used to
produce the final product as well as the cost of packaging and distributing the
product via the marketing and distribution channels. As the demand for the
product will be elastic during the initial few months of the launch, we will be
happy with lesser incremental margin on our product to start with. The
organization will be flexible in its pricing policy to the extent that the
flexibility creates a advantage in the highly competitive markets and does

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not affect our brand name and customer share of wallet in a negative
manner.

To support the pricing objective of the firm, we will have to use better
technologies in production and processing our product such that we are able
to save cost and price our product at the mid price range. The role of supply
chain management and distribution efficiencies is also critical as that will
help us create competitive advantage by being leaner and more efficient. The
pricing strategy and the price might have to be supported by negative or zero
margins at times during the initial period of market penetration. We will
leverage our existing supply chain and distribution network to help the
product reach the target customer faster and more efficiently.

Product Pricing

A 250ml bottle of the drink will be priced at $0.95. The price is in congruence
with the pricing strategy or pricing the product mid way in the functional
beverages category. The functional beverage price ranges from $0.3 to $2.25
for the same amount. The price of $0.95 will position the product as a budget
drink affordable to all and which can be had regularly. The price will take care
of the production cost and the overheads and provide for the targeted
margins. The product has to be given at a discount to the distributors,
wholesalers and the retailers. The retailers will have larger margin than the
distributors. Normally the margins will be approximately 5-7 percent for
retailers and 2-3 percent for the distributors or wholesalers.

The basic distribution pricing method includes the price volume model.
However the prices of the product are influenced by a lot of other variables
like geographic competition, cost to serve and mix of transaction. Thus the
distribution pricing policy will remain a little flexible to accommodate other
factors that may influence the distribution cost of the product.

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Promotion Strategy

The objective of the promotion strategy is to reach out to the target customer
segments through different marketing channels and provide information,
differentiating the product and increasing the market share of the product.
Positioning the product in the minds of the target customer segments is the
prime objective of the promotion strategy. We will use the promotion strategy
to communicate to our customers the difference in our products with respect
to the price, quality and nutritional value and taste.

Integrated Marketing Communication Strategy

The promotion of the product will involve an Integrated Marketing

communication Approach. The marketing communication strategy will involve
use of different marketing channels.

 Sales Promotion
 Print Media Advertizing

 Digital Media

 Outdoor Media

The marketing campaign will use an integrated approach to reach out to its
target customers through different communication channels.

Print Media Advertizing

The print media advertising campaign is the most effective campaign to

reach the masses. Print media includes local dailies, magazines, tabloids and
newspaper. The print media campaign will focus on newspapers and
magazines that have a large readership among the target population of the

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new product – Nutri. The target customers are health conscious teenagers
and young adults between the ages of 18-34 years. The target customers
also include parents of young children. The frequency of advertising in print
media can be twice a week, specially on the weekends as that are usually
read by the target customers. Advertisements including awareness of the
product details and the benefits of the nourishment value of the drink can be
emphasized.

Sales Promotion

The sales promotion plan includes the promotions in the form of flyers at
various point-of-sales to attract and draw the attention of the target
customers. Point of sales promotions are used in retail outlets, super market
chains and grocery stores at the place where the customer picks up the
product for purchase. It helps to improve sales by encouraging instantaneous
purchase. Other sales promotion strategy will include discounts and
promotional offers during the launch of the Product – Nutri. The company can
also include loyalty programs or warrantee on the nutrient value of the
product to promote its product. Discounts on purchase of larger packs as well
as future purchases can also result in improving market penetration.

Digital Media

Digital media is today the most widely used communication channel to

promote and position value offering of companies. The digital media includes
television, internet, radio, mobile phones, social networking websites as well
as blogs. Companies today can use digital media extensively to reach to their
target customers and communicate their value proposition through the use of
digital media. Promotions through advertisements on televisions have been a
common tool for a long time.

Today, the focus of marketers is shifting towards public relation activities and
road shows organized to increase the impact of the product launch and
communicate the uniqueness of the brand to the target customers. Social
media tools and websites like facebook and twitter are subscribed by millions

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of people who will also be target customers for the Nutri brand of milk and
soya based health drinks. Digital media promotions can be used on by
advertising on time slots that are frequented by the target customer segment
on television and radio. Advertizing on the websites through clicks and
banners can also be used.

Outdoor Media

The outdoor media is another tool used to communicate or reach out to the
target customers. Outdoor media like bill boards, hoardings, banners, wall
paintings are effective ways to convey the product benefits as well as
advertise. We will use outdoor media to communicate the brand and our
unique product and value proposition to our target customers.

Operational Plan

The operation plan for promotion strategy will include the time lines for
promotions and advertising on different media of marketing communication.
It also indicates the control metrics of the strategy.

Activities Timelines
Launch of new product - Nutri March 2012
Road shows and Public relation events March 2012 – April 2012
Launch of promotions in print media – March 2012 onwards
newspaper, magazines and on social media
websites
Advertisement campaigns on digital media like April 2012 onwards
television, radio and outdoor media
Sales promotion activities- discounts , offers April 2012 onwards
and point of sales advertizing
Assessment of marketing campaign December 2012
Rollout of new products January 2013
Follow-up Marketing Campaign January 2013

The Nutri brand will be launched in the month of March 2012. After
completing six months of the launch of the Nutri brand, we will assess the

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failures and success of the marketing campaign we have run and obtain fresh
insights and customer perception studies on the position of our product in the
minds of the target customers. These insights will help is to bring the
necessary changes in our campaigns and improve the positioning of our
product.

Advertisement

Below is an example of a typical print media advertisement to be used for

marketing NUTRI

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Appendix A – Choosing A Target Segment

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Flowchart

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Age groups -> Infants and Teenagers Young Adults and
children Adults elderly
(13-18

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Needs (0-12 years) (18-34 (35 and
years) years) above)
Hydration
Energy/Rejuven Target Target
ation Market Market
Health and Target Target
Wellness Market Market
Weight
management

The total market was segmented on the basis of the demographic

characteristics like age, income and sex. We segmented the market on the
basis of the age and on the basis of their need for consumption of various
categories of functional drinks. The market size of different segments as
depicted above differs and so is the potential opportunity in each market. As
the behavior and attitudes of most teenagers and working young adults is
shifting towards health and energy drinks, we realized that this segment
presents significant opportunity for new product development. The
unsatisfied needs include need for a regular health and energy drink like milk
that can offer a high dose of nutrients and minerals to the consumers. Thus
we choose the four sub-segments as depicted above as the target market we
need to cater to and came up with an idea of milk and soya based health and
energy drink for the masses that can be consumed daily.

Appendix B - Timeline for Marketing Mix Strategy

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Marketing Mix Actions Timelines
Product • Primary and secondary research • November, 2011

• Product development and • January, 2012

research
• March, 2012
• Product commercialization and
• December, 2012
launch

• Product line extension • January, 2013

• New product launch

Place • Finalizing distribution strategy • December, 2011

• Appointing managers for • January, 2012

channels
• January, 2012
• Establishing Distributors network .
and Retailers tie up
• February, 2012
• Implementing sales and
promotion strategy
Price • Finalizing cost plan and structure • December, 2011

• Product pricing • December, 2011

• Devising product and distributor • January, 2012

discounts
Promotion • Product launch and road show • March, 2012

• Print media campaign • March, 2012

• Launch of media campaign • April, 2012

• Outdoor advertising campaign • April, 2012

• Assessment of promotion • December, 2012

strategy

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Appendix C - Situational Analysis & SWOT

Industry Analysis

Energy or health drinks form a part of the functional beverages category,

which includes nutritional drinks and sport drinks. Sport drinks contain good
supply of carbohydrates, electrolyte and are non caffeine, typically for the
reason that they are designed to be consumed before exercise to prevent
dehydration. Nutritional beverages on the other hand are designed to
promote a health and fitness and they contain bioactive compounds like
extracts of teas, fruits vegetables, milk and other health foods. The energy
drinks segment is divided into powder and ready-to-drink categories.
According to Datamonitor (2008a) energy drinks account for almost 47.3% of
the overall market share of the functional beverages globally and 62.6% in
the United States. The industry has seen extremely high growth rates of more
than 240% globally from the year 2004 to 2009. The functional beverages
industry has seen more modest compounded annual growth rates of around
8% from 2004 to 2008 and have reached to $26.9 billion in annual sales. The
nutritional drinks segment has been marginal but present huge opportunities
to functional beverages companies as the market is largely untapped and the
need for nutritional products is rising exponentially. The entry of private
labels, juice hybrids and FMCG conglomerates in the functional beverages
market has given rise to innovations in product, packaging and brought about
a shift in consumer demand towards ready-to-drink beverages. Energy drinks
brands like Red Bulls have captured energy drinks markets. Nutritional
beverages market also has established players like Nestle, Cadbury and
Unilever among a few competing for the share of wallet.

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Competition Analysis: Porter’s Five Forces Model

Porter’s Five Forces Model is a tool that helps to analyze the attractiveness of
the industry the firm is operating in. The model assumes there are five
competitive forces that identify the competitive power in a business
environment. These competitive forces are mentioned below

1. Threat of substitute products

The substitute products and services include alternate beverages that

similar or complimentary needs. The presence of too many substitutes
indicates high level of competition within the industry as all functional
beverages target almost the same target market.

2. Threat of new entrants

The beverages industry has low entry barriers. There are a number of
regional, local and international player. The industry is based on
innovation and new product ideas. The entry of new firms in the
industry providing similar or competing products will lead to higher
competition and lower profit margins for the existing players.

3. Intense competition among existing players

The competition from existing players include local players and large
corporate like Unilever, Cadbury and Nestle in this space is intense. It
is important that any new company entering the market should focus
on new product development and innovation to gain market share.

4. Bargaining power of suppliers

The suppliers do not hold significant bargaining power as the industry

is run on marketing and distribution power of the beverages
companies. Lower bargaining power of suppliers also provides an
incentive for new firms to enter the market

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 5. Bargaining powers of buyers

The bargaining power of buyers is limited in the sense that the energy
and health drink markets are related to either consumer’s health of
lifestyle. Therefore in spite of intense competition among existing
players, beverage companies are able to price the products to fit their
strategy.

SWOT Analysis

The SWOT Analysis is an analytical tool that can be used to gauge

the internal strengths and weakness of the firm as well as study the
external opportunities and threats the firm is facing. The below
mentioned SWOT analysis relates to the marketing strategy of the New
Product - Nutri

Strengths:

• New to market product with nutritional benefits

• Ready –to-use drink and packaging

• High margin of the business giving scope for more marketing

spends

• Differentiated product offering

Weakness:

• Being a new product, the product has not yet faced competition
• Ability to scale up operations and production in a short time

• High level of competition

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• Management and sales staff to be hired will be comparatively less
experienced

Opportunities:

• Create and increase in market share for the product

• Change consumer spending patterns towards nutritional drinks

• Optimize distribution and supply chain efficiencies

• Creating a strategic advantage which is difficult to be emulated by

competition

Threats:

• Competition from existing and new players.

• Lower spending by clients as a result of political and economical
turmoil in developed nations leading to a cut on outsourcing.

• The challenge of scaling up operations and maintaining the quality.

• Threat of the product being emulated by competitors and new

entrants leading to disappearing of the competitive advantage.

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