UNIVERSITY OF SARAJEVO

SCHOOL OF ECONOMICS AND BUSINESS IN SARAJEVO

NEW PRODUCT PLACEMENT ON THE MARKET

“DŽEZVA TO GO”

INTERNATIONAL PROJECT

PhD. RUSMIR SENDIĆ

PhD. EMIR KURTOVIĆ

PhD. ADI ALIĆ

SARAJEVO, DECEMBER 2017

 UNIVERSITY OF SARAJEVO

SCHOOL OF ECONOMICS AND BUSINESS IN SARAJEVO

NEW PRODUCT PLACEMENT ON THE MARKET

“DŽEZVA TO GO”

INTERNATIONAL PROJECT

Course: Marketing Channels

Mentor: PhD. Rusmir Sendić

Students: Čivša Ivana Index: 73222

Čopra Kanita Index: 73454

Sirćo Amila Index: 73230

Veledar Lejla Index: 73467

SARAJEVO, DECEMBER 2017

Contents
1. INTRODUCTION.........................................................................................................6
2. EXECUTIVE SUMMARY...........................................................................................7
2.1. Outline of the Management Team..........................................................................7
2.2. Overview and project aim.......................................................................................7
2.3. Outline of the Process and Planning Stage.............................................................7
2.4. Outline of the Initial Design Stage and Prototype Testing.....................................7
2.5. Outline of the Competitive Advantage and the Market Demand...........................8
3. SITUATIONAL ANALYSIS........................................................................................9
3.1. Current Market Situation........................................................................................9
3.2. Product Review.....................................................................................................10
3.2.1. Zlatna Džezva....................................................................................................10
3.2.2. Džezva to go......................................................................................................11
3.3. Competition Review.............................................................................................12
3.3.1. Corporate level competition...........................................................................12
3.3.1.1. Franck Inc....................................................................................................12
3.3.1.2. Podravka Inc................................................................................................12
3.3.1.3. Nestle Inc....................................................................................................13
3.3.2. Product line level competition...........................................................................13
3.3.2.1. Zlatna Džezva's competition.......................................................................13
3.3.2.2. “Džezva to go” competition........................................................................14
3.4. SWOT Analysis....................................................................................................16
3.4.1. Strengths.........................................................................................................16
3.4.2. Weaknesses....................................................................................................17
3.4.3. Opportunities..................................................................................................18
3.4.4. Threats............................................................................................................18
4. MARKETING STRATEGY.......................................................................................19
4.1. Positioning............................................................................................................20
4.2. Product strategy....................................................................................................20
4.3. Pricing strategy.....................................................................................................20
4.4. Distribution strategy.............................................................................................21
4.5. Marketing communication strategy......................................................................21

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 4.6. Media selection.....................................................................................................22
5. MARKETING RESEARCH.......................................................................................22
5.1. Research design....................................................................................................22
5.2. Sampling...............................................................................................................22
5.3. Tools and instruments...........................................................................................23
5.4. Procedure..............................................................................................................23
5.5. Data collection......................................................................................................23
5.6. Data processing and analysis................................................................................23
5.6.1. General information.......................................................................................24
5.6.2. Consumption of coffee...................................................................................25
5.6.3. Effects on purchase........................................................................................26
5.6.4.General questions about Vispak......................................................................27
5.6.5. Introduction of new product...........................................................................28
5.6.6 Analysis of the data.........................................................................................29
6. IMPLEMENTATION PLAN......................................................................................30
7. BUDGET.....................................................................................................................32
8. CONTROL..................................................................................................................32
9. CONCLUSION...........................................................................................................33
REFERENCE LIST.........................................................................................................34

Figure 1 Grand coffee......................................................................................................14

Figure 2 Franck coffee.....................................................................................................14
Figure 3 Doncafé.............................................................................................................14
Figure 4 Nescafé..............................................................................................................15
Figure 5 SWOT analysis of Vispak.................................................................................16
Figure 6 Age of population sample.................................................................................24
Figure 7 Personal income of population sample.............................................................25
Figure 8 Consumption of coffee......................................................................................25
Figure 9 Consumption of "Coffee to go"........................................................................26
Figure 10 Importance of coffee quality...........................................................................26
Figure 11 Importance of coffee price..............................................................................27
Figure 12 Consumption of Vispak products....................................................................27
Figure 13 Consumption of "Zlatna džezva"....................................................................28
Figure 14 Introduction of Vispak "Coffee to go"............................................................28
Y

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Table 1 Implementation plan - first version (tasks determination).................................27
Table 2 Implementation plan - second version (goals determination)............................27

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1. INTRODUCTION

Knowing what we as customers would want to see on the shelves of our favorite stores,
as well as deriving information through conducted market research, gaining insights in
popular market demands, our team agreed upon creating the perfect product to fit the
needs of our well-respected consumers. The idea of creating “Džezva to go” emerged,
and so the process of brainstorming, conceptualizing, and creating began.

The idea was to provide our consumers with an optimal solution for their needs, to fit
right into the market where demand is particularly high and our product marks that
exact spot. Demand for coffee on the go was always existent and new products
launching every now and then peaked in the last few years. Nevertheless, meeting the
needs of our consumers by producing the adored, traditional black coffee for
consumption ‘on-the-go’ while keeping it the perfect temperature should not be an idea
that fails us, so the thought of “Why not?” rose.

Through the rest of the business plan, our team will lead you along every single step of
the creation, perfecting and launching the product into the market, for the end users to
consume.

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2. EXECUTIVE SUMMARY

2.1. Outline of the Management Team

The management consists of four young people, students, co-owners, and co-founders
of the project Džezva to go. Every single management board team has a preferred
skillset for governing a specific project, as well as tackling arising problems head-on.
The management board, alphabetically sorted, consists of the following people:

1. Čivša Ivana
2. Čopra Kanita
3. Sirćo Amila
4. Veledar Lejla

All members have an equal share in the project.

Earned capital will be split into four equal parts, each belonging to a particular team
member.

2.2. Overview and project aim

This project deals with the core creation of the product Džezva to go – a new and
bettered concept of the simple coffee to go. The primary aim of the project is to
manufacture a thermoregulatory system in a cup / bottle which will enable the
consumers to enjoy a cup of hot, traditional Bosnian coffee at any place, and at any
given time.

2.3. Outline of the Process and Planning Stage

Initially, team members were working on designing separate components of the product.
The product was visualized, sketched out, all productive ideas were integrated, and the
final product was outlined, and somewhat created.

2.4. Outline of the Initial Design Stage and Prototype Testing

The development process was accompanied with continuous testing. Either the
components were tested individually or in combination with other parts. The creation of

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the first prototype included the analysis of the best thermoregulation material, general
design of the inside of the cup / bottle, as well as long-term functionality of the product
itself.

Prototype testing was followed by the modifications of the product with the end goal to
improve overall efficiency and functionality of the product. Some parts of the design
were removed, some were replaced, while others were fairly modified to gain better
results.

When the creation of the final product was completed, some finishing touches were
made, such as the improvement of the design of logo, and adjusting the color scheme of
the outside of the cup / bottle.
With the end product in our hands, we were ready to place it on the market, and offer it
to the end consumers.

2.5. Outline of the Competitive Advantage and the Market Demand

Conducting the thorough analysis of the market, and consequentially the direct, as well
as indirect competitors, has enabled us to create the exact answer to consumers’ needs.
The project, and the product Džezva to go, which enables consumers to enjoy a hot cup
of traditional coffee that they like and need in the mornings is a perfect solution for the
coffee addicts ranging from university students, spreading to the whole another part of
the spectrum, those being elderly people. The demand on the market for the coffee in
general is obvious but the lack of availability of traditional coffee without having to lose
precious time by sitting down and waiting for it to come to the consumer has made us
want to resolve that problem. Other companies have proposed solutions such as iced
coffee, available on the shelves of almost all stores, or gas stations. The other solution
was an instant strong, dark coffee which can be made in minutes, just by boiling water
and pouring it over the powder in the cup. Our proposal saves you the time of preparing
coffee yourself, as well as spares you the inconvenience of consuming cold coffee.
Our solution proposes time-saving, taste-buds-appreciating consumption of the overall
favorite traditional Bosnian coffee, available on stores’ and gas stations’ shelves all over
the country.

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3. SITUATIONAL ANALYSIS

3.1.Current Market Situation

Vispak is one of the most recognizable and reliable Bosnian brands and companies. The
company is located in Visoko and it is established in 1972 as part of Velepromet, one of
the biggest retail and wholesale chains in former Yugoslavia. 1Vispak first began
producing its most famous product Zlatna Džezva, and then it started producing
Espresso coffee, Tea, Stampi choco cream, spices and other less famous brands in the
food market.

After the war, our company had a lot of problems to continue its successful production
in Bosnian market. But we survived that hard period. Since 1997, the range of creams
is enriched with cream ČOKO MILK, which quickly found its place in the market for
good prices and high quality.

Significant moment in the development of VISPAK took place in 1998. The export of
our products to Sweden marks the beginning of export activities. Today our export
markets are USA, Croatia, Sweden, Saudi Arabia, Kosovo, Austria, Slovenia, Australia,
Montenegro, Canada, Italy, the Netherlands, Serbia, Turkey, Germany, Macedonia,
Switzerland, UK and the Czech Republic.2

At the end of 2010 the most significant change in the entire business has occurred,
VISPAK became part of AS GROUP which besides VISPAK are AS Jelah, Kent
Visoko, Napredak Tešanj, Vemal Tešanj, Fortitudo Travnik and Oaza Tešanj.

 AS Group d.d. now owns 95% shares of Vispak d.d., and firm is now in good overall
condition and it tends to be much better in the future. Just a half year after AS Group
d.d. overtaking Vispak, the food industry in Visoko achieved record production and
sales in its after-war history. Net income in 2012year was KM 28,799,965, which
represents 21% increase from 2011, and a significant increase from the last year before
AS Group bought it in which net income was just 2,464,376 KM. The main reason for
this increase can be found in record sales of coffees, introduction of new food brands,
and increased exports to foreign markets, essentially in U.S. and the largest Muslim
countries such as Saudi Arabia, Turkey and U.A.E.

1
Akta.ba. (2017).D.D. VISPAK prehrambenaindustrijaVisoko. [online] Available at:
https://www.akta.ba/Firma/dd-vispak-prehrambena-industrija-visoko/27297 [Accessed 24 Dec. 2017]
2
Vispak.ba. (2017).Vispak. [online] Available at: http://www.vispak.ba/ [Accessed 18 Dec. 2017]

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Company wanted to differentiate itself on food market as a company that offers
authentic Bosnian products, and improves the experience of Bosnian cuisine. In the last
four years, Vispak has developed new brands such as: Tiru - Liru, Tajna, Laganini
Powder Products, Hot Drinks Mr.&Mrs. Vi, and the plan is the development of new
products. The company rebranded Tea image in image that represents Bosnian tradition
and history with introduction of new packages in shape and style of Bosnian "sehara".
We also introduced new product line called "Bosnian cuisine" and products such as
Tajna which represent a mixture of spices for authentic Bosnian meals. These all
activities help the company to differentiate itself on Bosnian and foreign markets as
"original Bosnian food company".

This year, Vispak celebrates 45 years of existence and successful business, or we can
say 45 years of existence of "Zlatnedžezve". Breaking a Guinness World Record with
the citizens of Mostar, after having caught and drank coffee from the largest "džezva" in
the world, Vispak was awarded the Guinness Certificate in 2005, entering the record
book.

Also, currently there are 180 people employed in this company. Vispak is the owner of
three food safety and quality management certificates: ISO 9001: 2008, HACCP and
HALAL.

3.2. Product Review

3.2.1. ZlatnaDžezva

„ZlatnaDžezva“ is the most recognizable brand from Vispak d.d.. We started producing
this highly quality coffee in 1972. and today it is their most profitable and famous
brand. Vispak states that „ZlatnaDžezva“ is original and real Bosnian coffee in almost
every contact with consumers. ZlatnaDžezva has HALAL certificate which also
confirms its quality and reliability. In 2004. Vispak broke the Guinness record together
with Mostar citizens, by drinking coffee from the biggest džezva coffee-pot in the
world.3

Vispak„ZlatnaDžezva“ Ground Coffee takes specific preparation. It is that when the

water reaches its boiling point, a small amount is saved aside for later, usually in a
coffee cup. Then, the coffee is added to the pot (džezva), and the remaining water in the
3
Vispak.ba. (2017).Vispak. [online] Available at: http://www.vispak.ba/ [Accessed 20 Dec. 2017]

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cup is added to the pot. Everything is put back on the heat source to reach its boiling
point again, which only takes a couple of seconds since the coffee is already very hot.

„Zlatna Džezva“ has green package with golden "džezva", Bosnian coffee-pot,
"fildžan", Bosnian coffee-cup, and golden tray with highly outlined Bosnian symbols.
Everything on its package says that „Zlatna Džezva“ is premium quality coffee, and
customers are recognizing it. In last year sales of coffee were 17% larger than sales
before the war, which is record in our history. „Zlatna Džezva“ is brand that had most
impact in this success.

3.2.2. Džezva to go

We decided to expand our product mix by adding a completely new product“Džezva to

go”. Since „Zlatna Džezva“ is the most successful brand among our product lines, we
have come up with the idea of bringing a new form of that same product but still
providing the premium quality coffee our customers are loyal to.

Our plan is to develop the ultimate experience of drinking coffee to go in a can. We

want to solve the problem of lack of time to make a cup of coffee or waiting in line for a
fresh and hot cup of coffee. “Džezva to go is Always Hot and Always Ready” is our
slogan and we mean it literally. We are the first on our market to implement the most
innovative way to drink hot coffee, but not just any coffee, the best Bosnian coffee.

“Džezva to go” cans are stored in the "Hot Fridge" which keeps them at a constant
temperature of 60°C. “Džezva to go” is ready to go with zero wait time. By using our
innovative patented heating technology, our hot fridges uses less electricity than most
household appliances. With the conductive heating technology, the hot fridges only
apply heat to each can, so no power is wasted trying to keep the entire environment
heated.

As for our planned label technology, in order to keep “Džezva to go” at the perfect
drinking temperature without burning your hands, we are bringing an insulated label
which is simply the material that keeps your coffee hot and your hands cool.

“Džezva to go” will be sold in packages of 240mL of aluminum cans. Our intent is to
attract young and middle-aged consumers that will be entertained by our innovative
package and a new way of drinking coffee, but also to retain our current target market
by keeping the finest quality, 100% coffee beans, which are always roasted to
perfection. Our plan is to offer the original flavor of “Zlatnadžezva” as the first

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launching product of this new product line. New variations of coffee and tea flavors will
be released in the future.

3.3. Competition Review

Vispak d.d. is a company that produces large variety of product lines, and we have done
competitive review on two levels. First, we have researched our competitors at
corporate level, and then we identified competitors for„Zlatnadžezva“ and our new
product „Džezva to go“.

3.3.1. Corporate level competition

At the corporate level competition of Vispak d.d. we have recognized four companies,
Croatian Franck Inc.and PodravkaInc., and Swiss Nestle Inc. These companies carry
out product lines that are similar to Vispak's in some points, and that is the main reason
we chose them to be main corporate level competitors for our company.

3.3.1.1. Franck Inc.

Franck Inc. was founded in 1892. as a subsidiary of a German company Heinrich

Franck Söhne. Franck is one of the most successful Croatian producers and exporters of
food products with a leading position in the categories of coffee, tea and snacks. In their
success stories they include Superiore espresso, Jubilarna coffee, Franck teas, Franck
café, KrokiKroket and Chipi Chips.4 Franck has large variety of product lines in their
product mix, and some of those lines are similar to Vispak's such as teas, coffee, and
snacks.
According to their financial report from first half of 2012. Franck has increased its
market share of coffee by 20%. eventhough their Jacobs brand recorded decrease in this
period, their Franck coffee brand continued to increase. They also increased their
market share of tea by 12%. In this section their Cedevita brand recorded a decrease, but
their Franck tea brand recorded an increase. In the section of snacks they increased the
market share by 8%, by major help of their Lidl and Stark brands. In 2012. Franck Inc.
recorded net income of 4 million and 500 thousand euros.

3.3.1.2. Podravka Inc.

The 1934th Wolf brothers in Koprivnica founded a workshop for fruit processing, the
precursor of Podravka. Today Podravka is one of the leading companies in the
Southeast, Central and Eastern Europe. There are three main business segments
companies: food, beverages and pharmaceuticals.
4
Franck. (2017). [online] Available at: http://www.franck.eu/en/[Accessed 22 Dec. 2017].

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„Podravkad.o.o“ Sarajevo in Bosnia and Herzegovina was registered in December
1992., and the work began in March 1993rd. Today „Podravkad.o.o. BiH“ is by the
number of employees among the most numerous Podravka subordinates, and its
employees are largely responsible for the successful sale of a wide range of Podravka
products on Bosnian market. Among the most wanted Podravka products in BiH are:
Vegeta, Chicken and noodle soup, LinoČokolino, LinoLada, Dolcela puddings,
whipped creams and foams, and Studena cranberry iced tea. As we can see from product
that are most wanted on our market, Podravka is competitor of Vispak in mixed spices,
soup and several other product lines.
According to their financial reports from 2016., their revenues from food and beverages
were 555 million and 212 thousand Euros. Podravka also recorded an increase in
revenue in Southeast Europe of 16,4% which means that they are getting even bigger
competitor for Vispak.

3.3.1.3. Nestle Inc.

Nestle Inc. is biggest food manufacturer in the world, and has annual revenue in billions
of Euros. We have chosen their sub-ordinary in Balkan, Nestle Adriatic, as a direct
competitor to Vispak d.d., because it operates in the same region, and offers almost
same product lines in the market as Vispak does.
Nestle Adriatic company was established in 2003., and it includes Croatian, Serbian,
Bosnia and Herzegovina, Macedonian, Montenegro and Kosovo markets, with
headquarters in Zagreb. On the regional market it offers world-famous brands:
„Nescafe“, „Thomy“, „Maggi“, „Nesquik“, „KitKat“, and cereals.5

Branch office in Bosnia and Herzegovina was awarded the status of a limited liability
company in 2006., and distributor (company Teleoptic) was changed the same year.
Nestle begins with the direct importation of their products on our market.
In the 2012. Nestle recorded sales in Europe in amount of 12 billion and 384 million
Euros with 4% of organic growth, and 1,8% internal growth. As they stated in their
financial report, they had strong performances in the Adriatic region.

3.3.2. Product line level competition

After we identified corporate level competition of Vispak d.d., our next task was to find and
identify competitors for „Zlatnadžezva“ and new product„Džezva to go“.

5
Nestle. (2017) Nestle.. [online] Available at: https://www.nestle.ba/[Accessed 22 Dec. 2017].

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3.3.2.1. ZlatnaDžezva's competition

The major competitors for „ZlatnaDžezva“ coffee brand are „Grand Coffee“, „Franck
Coffee“, and „Doncafe“.

 „Grand Coffee“ is a Serbian brand that is established in 1997. It was very

successful in Serbia and in 2004. it decided to expand to Bosnia and
Herzegovina. The company opened factory in April of 2004. which meets all
requirements of Bosnian market.

Figure Grand coffee

 „Franck Coffee“ is a Croatian brand from Franck Inc. and it has several forms
of product. Most important are Jubilarna, Jubilarna decaffeinated, and
Guatemala.6It is a very recognizable brand in our market and major competitor
to „ZlatnaDžezva“.

Figure Franck coffee

 „Doncafe“ is one of the largest processors of coffee in Bosnia and

Herzegovina. The main and only activity of the company is the production and
sale of coffee and coffee products. Regardless of whether the consumer likes
mild or powerful, bitter or sweet, spicy or strong coffee, it can easily find a mix
or size of the package that suits him. Products are sold to the domestic market
and exported to Slovenia, Montenegro, Croatia, Austria, Kosovo, Sweden and
Russia. 7

Figure Doncafé

6
Franck. (2017). [online] Available at: http://www.franck.eu/en/ [Accessed 22 Dec. 2017].
7
Doncafe.rs. (2017).Doncafe – Mirišenadobro.. [online] Available at: http://doncafe.rs/en/[Accessed 23
Dec. 2017].

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3.3.2.2. “Džezva to go” competition

Direct competitor

The main competitor for our product is coffee in cans from well-known brand Nescafe.
Nescafe is a strong brand and have a very good reputation in our market, so a lot of
consumers choose this type of product because of loyalty and attitude that this product
has more quality rather thanours.

Nescafé is a brand of coffee made by Nestlé. Nestlé first introduced their flagship coffee
brand in Switzerland in 1938. Their most important products that may represent a threat
to our product are: Nescafé coffees in cans, NescaféShakissimo and NescaféSmoovlate.8

Figure Nescafé

Indirect competitors

There are a lot of indirect competitors for us. Today almost every store has a machine
for selling coffee to go which people prefer because it’s fast way to get a warm coffee
so that machines are our indirect competitors. Also, if people have a more free time they
will prefer to go drink coffee in the coffee bar rather than buy coffee in store. Coffee in
bag could be our competitor also, because sometimes people like to buy this coffee and
make it for yourself.

We can see that there are a lot of competitors for our product which we can “win” with
a good marketing campaign, promoting quality and taste of traditional Bosnian coffee,
so we are sure that there is a good place for "Džezva to go" in our market.

8
NESCAFÉ.(2017). A FRESH START FOR EVERYONE EVERYDAY. [online] Available at:
https://www.nescafe.com/[Accessed 23 Dec. 2017].

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3.4.SWOT Analysis

STRENGTH WEAKNESSES

Brand image as producer of autenthic Bosnian Poor shelf space in the biggest retailers in the
product country

Achievement of world's high quality standards Difficulties to export

(ISO, HACCP, HALAL)

Good knowledge of domestic consumers SWOT

THREATH
OPPORTUNITY
A new competitor in your home market.

Competitive advantage
Domestic consumers have prefer foreign over domestic
products
HALAL certificate
The low purchasing power of domestic consumers

Figure SWOT analysis of Vispak

3.4.1. Strengths

Brand image as producer of authentic Bosnian product

The power of the Vispak company is reflected in the fact that it is the only company in
our country that produces this type of product in this way (warm and fresh traditional
Bosnian coffee in the form of coffee to go). The Vispak company is the only company
that can do this because it positioned itself on the market as a company that produces
authentic Bosnian products and supports traditional Bosnian cuisine. Also Vispak has
already built a strong and well-known brand "Zlatnadžezva," and its advantage is in the
known quality of that product. Another advantage is that in our country there are lotof
people who support domestic production and buy it rather than some other brand. Hot
Coffee to Go is an excellent example of a product that nurtures the tradition of Bosnia
and Herzegovina but also follows trends and a fast way of life.

Achievement of world's high quality standards (ISO, HACCP, HALAL)

Also, the strength of the Vispak is reflected in the quality of the product. Vispak owns
four certificates for food safety and quality management: ISO 9001: 2008, HACCP,

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HALAL and certified organic products KRAV. This proves that we are the company
that cares about its customers and that always wants to give them the best quality food.

Good knowledge of domestic consumers

Vispak is a company with big history on Bosnian market. We are founded in 1972.and
since then we are continuously providing our customers with great products. We are one
of the few domestic companies that existed before the war, and survived after, which
just confirms our knowledge of needs of domestic consumers.

3.4.2. Weaknesses

Poor shelf space in the biggest retailers in the country

Vispak has agreements with biggest retailers such as Mercator, Konzum, and Bingo,
but these retailers don't pay too much attention to our products, especially Konzum and
Mercator. Because of that, it is very hard to find our products on the shelves of these
retailers and consumers must make a great effort for our products if they want to buy
them. Vispak should negotiate with these retailers and convince them to treat our brand
with much more attention.

Difficulties to export

The foreign market is highly attractive because of potentially bigger revenue and
profits, but our company isn't in condition to do it now, especially because this product
is in the introductory phase. It's much easier to introduce it to our market because
people love traditional Bosnian coffee, but it's hard to adapt this product to some other
countries. But exporting isn't turned off as option, we plan to export this product, just
that plan is not in near future. There should be invested a lot effort, research and
analyzing of markets, and we are not sure that it's a safe step in the near future.

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3.4.3. Opportunities

Competitive advantage

As we have already said, Vispak is the only company in our country that offers a warm
and fresh traditional Bosnian coffee in the form of coffee to go which has great quality.
And given that Zlatnadžezva is already the brand known to buyers, the new form of this
product can only bring success. With a good marketing campaign that would help in
selling the products and promoting the quality and uniqueness of what we offer, Vispak
can surely achieve a competitive advantage by differentiation.

HALAL certificate

Because our company has HALAL certificate, it is a great opportunity to export in

Arabian and other Islamic countries such as Turkey and Malaysia. Vispak has already
started to export to countries of Arabian Gulf, but this can be raised to a much higher
level in the future. The HALAL certificate can also be helpful in the minds of domestic
consumers because Muslims in Bosnia are paying more and more attention to buy
products with this certificate.

3.4.4. Threats

A new competitor in your home market

As we said before, Vispak has a large number of big and powerful foreign companies
as competitors. This is a unique product in our country for now, but this type of product
exists in other countries, so there is always fear of threats from competitors. One
solution is to build competitive advantage differentiating itself by quality and the fact
company produces authentic Bosnian products.

Domestic consumers have prefer foreign over domestic products

Consumers in Bosnia and Herzegovina usually think that products from foreign
companies are more quality and better than domestic. Vispak needs to overcome this

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problem by investing more in good marketing, and convincing domestic consumers that
our products are good as any other.

The low purchasing power of domestic consumers

Bosnia and Herzegovina is a country that has one of the highest levels of
unemployment, and lowest levels of GDP per capita in Europe. When we add recent
economic recession to this picture, we can say that domestic consumers don't have too
much buying power. Our company needs to consider this and pay bigger attention to
pricing strategy or to places where to distribute the product.

4. MARKETING STRATEGY

“The marketing strategy is the way in which the marketing function organizes its
activities to achieve a profitable growth in sales at a marketing mix level”. 9

It is hard to predict all of the movements in the market, every move of our competitors
or any other factor that could affect our business. Trough detailed analysis, we can
actually guess and come to conclusion what is likely to happen on the market.

When it comes to introducing Vispak’s new product, “Džezva to go”, the only good
strategy to be used and the only way for a brand to become successful is differentiation
strategy.

That means to make a product for specific purpose, with superior taste, very hard to
imitate, forcing customers to pay extra money for having it. The greatest thing regarding
this new product, “Džezva to go” is actually the thermo-regulation that is included in
the packaging of the product. Besides all other features of our product, like unique
flavor, the thermo-regulation (which keeps the drink/coffee warm) is competitive
advantage on which our company is going to differentiate this product line.

Strategies that are going to be analyzed within this paper are positioning, product
strategy, and pricing strategy, distribution strategy, and marketing communication
strategy and media selection.

9
Kotler, Philip. 1987. Marketing — An Introduction. Englewood Cliffs, NJ: Prentice-Hall.

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4.1. Positioning

Positioning is a marketing strategy that aims to make a brand occupy a distinct position,
relative to competing brands, in the mind of the customer.

Vispak is a company that is positioned on the market and in the minds of customers as a
company with great products with high quality and low prices. By using the
differentiation as our strategy, a warm Coffee to go will be positioned as a coffee that is
tempting to the buyers, which gives them totally new experience because of its special
package and ability to keep the beverage warm.

Our strategy will be focused primarily on high quality of both coffee and the whole
packaging, and afterwards on acceptable prices.

4.2. Product strategy

Our product “Džezva to go” will be sold initially as regular Bosnian coffee. The
packaging will be a can with thermal regulators and the size of it will be 240ml.

Demand for our product will hopefully rise in the future, and because of that we will
need to expand our line with more different flavors. The flavors will be introduced in
accordance with what our customers want. If this new product launching shows as a
great deal on the market, the company Vispak will probably want to extend the line,
adding coffee with milk or something similar, or for example by having partnerships
with some other companies, to create limited edition beverages that will be on the
market for a very short period of time.

4.3. Pricing strategy

Pricing is an important strategic issue because it is related to product positioning.

Furthermore, pricing affects other marketing mix elements such as product features,
channel decisions, and promotion.10

Penetration Pricing Strategy: Here the product is introduced to the market at a lower
cost. Penetration pricing is the pricing technique of setting a relatively low initial entry
price, usually lower than the intended established market price, to attract new
customers. The strategy aims to encourage customers to switch to the new product of
Vispak because of the low price.

Vispak’sCoffee to go is in the close range with NESCAFE’s iced coffee, but slightly
different, because of the thermal regulation of packaging of Vispak’s coffee. We think
10
Pricing strategy (http://www.netmba.com/marketing/pricing/)

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that this mix of quality and low price will attract customers and hold them in the future.

4.4. Distribution strategy

Under this, the marketer has to look into various activities which place the product in
the hands of the customers. Here the firm needs to select the appropriate channels of
distribution and effective distribution system to place the product at right time in the
market. Market is an arena for potential exchange.11

Vispak will use the pull strategy in distribution in the beginning of this product
launching. Pull channel is shorter and it goes directly to consumers, and then consumers
demand product from retailers. The communication program, in relation with relatively
low price of coffee will increase demand of it and that will lead to them seeking our
product from their stores and retailers. When “Džezva to go” is stable on the market,
company Vispak will switch to other strategy if there is a need for that.

4.5. Marketing communication strategy

The last step which comes after all these marketing activities is marketing
communication strategy. It includes all the activities carried out to make people aware
about the product.
The most usual types of media advertising that Vispak used in the previous launchings
are regular advertisings such as press and television. Internet advertising is rapidly
growing, and there are more people companies can reach through internet and social
media. With this being said, the main channel we will use is the Internet.

Other marketing communication tools such as direct marketing, public relations, posters
and radio marketing will also be included in our communication strategy. Also, a great
opportunity for our product “Džezva to go” is to include some event into our
communication strategy where potential customers will have a chance to try our product
for free.

When it comes to internet promotion, we will primarily focus on the main social
networks, but also try to seek promotion opportunities on different news portals, etc.

11
Kotler, Philip. 1987. Marketing — An Introduction. Englewood Cliffs, NJ: Prentice-Hall.

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4.6. Media selection

The types of media we will use, as already mentioned are internet, television,
newspaper, public relations and we will include personal selling in the larger retail
stores such as Bingo, Konzum, Mercator, etc.

Internet channels we’ll use are social media, news portals, and other types of media
Vispak will use in communication are: television ( BHT1, FTV, FACE,..), newspaper
(DnevniAvaz, Oslobođenje, etc.), and public relations that are actually included in the
creation of the event intended to promotion of coffee “Džezva to go”.

5. MARKETING RESEARCH

Marketing research is the process of designing, gathering, analyzing, and reporting

information that may be used to solve a specific marketing problem.12

In our marketing research we used an online approach, i.e. created online questionnaire
which included questions that are relevant for company Vispak and the product we are
doing marketing plan for.

5.1. Research design

The methodology used in the research is quantitative, that is, it consists of questions on
which respondents have recommended answers from which they choose one option.
This helps us have a better insight on what respondents think generally about the
company Vispak and about the introduction of coffee to go in their existing business.

5.2. Sampling

In order to conduct the research, we need to determine the sample as representative of a

larger target group. We have set the sample of our research to be 100 participants.

12
Alvin C. Burns, Ronald F. Bush: Marketing Research – online research applications, 4th edition,
Prentice Hall, 2003

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5.3. Tools and instruments

Tool that has been used to reach the respondents, that are main factor in conducting
research, is online survey (questionnaire). This type of instrument is mainly used
because that is the easiest and the least time consuming way for the participants to be
involved in research. Also, it is the best way for us to get the answers faster and to
actually reach larger audience.

5.4. Procedure

First of all, we have assessed what we are actually going to research about. After, we
have decided on the launching a new product, and what the main features of the product
are, we determined the target audience (sample). After that comes the method and tools
which we will use to conduct the research. Online research seemed to be the best and
fastest way to reach the audience, and the questions and questionnaires are formed. The
questionnaire was distributed and after we collected the sample we have already set, the
questionnaire was closed.

5.5. Data collection

As for primary data collection, online surveys are conducted to get more information
from the target audience. In this research, data collected are mainly primary. As already
mentioned, questionnaire is distributed online, in order to get more information and to
easily get to potential participants.

When it comes to the secondary data, we have researched the competition and what
products they are offering. In this secondary data, we have used Internet based research.
By visiting the competitions main websites, we have easily come to information about
their businesses.

5.6. Data processing and analysis

The research conducted on brand VISPAK and potential new product “Džezva to go”,
was done via online networks including Facebook, where the survey was distributed to
the potential respondents fast and very easy. The number of people that have
participated and filled out the questionnaire is 100. This research helped us to have a

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better insight in people’s awareness on company Vispak and their thoughts on the new
product “Džezva to go”.

In this part, there will be the whole questionnaire shown and the detailed analysis of the
answers, including the conclusion about the product itself.
After the conducted research, responses are grouped in accordance to the topics where
the responses are presented.

First part is concerning the general information on respondents like gender, age of
respondents and personal income, including questions about consumption of coffee,
their preferences and consumption of “Coffee to go”.

The second part of the questionnaire is regarding the features of coffee and their
importance to consumers. Also, questions about company Vispak, their product
“Zlatnadžezva” and new product “Džezva to go” are included in this part.

5.6.1. General information

In the beginning of our research and the questionnaire itself, we wanted to find out who
are the consumers and some general information about them. The research has shown
that most of our respondents (48%) are people that fit into age group from 20-25 years.
Also, regarding personal income, 59% of the respondents have income lower than 1000
KM.

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