Part One

Marketing Plan of ACME Smoothies

Company Overview

ACME Smoothies is company based in Hull, United Kingdom. The company is involved

in producing fruit smoothie. Smoothie is a drink that is made from vegetables and fruits. These

fruits or vegetables are then blended with yoghurt, juice, or milk till the time all of the

ingredients are liquefied. It can also be served with additional topping such as honey, syrups, and

spices. There are various benefits of consuming smoothie instead of juices as in smoothies

contain whole fruits or vegetables that are the main sources of fibre. This eventually helps in

maintaining healthy digestive system. In addition to this, smoothie is a pleasant and easy way to

consume daily intake of vegetables and fruits. ACME has a range of smoothies with different

combinations of fruits and vegetables. The founder of the company has vast experience of

cooking and setting healthy diet plan but at the same time, he doesn’t have any experience of

trading or launching a product. He wishes to launch the product line of ACME into UK market.

This report is targeted towards formulating the complete marketing plan of the business by

highlighting the target market, setting marketing objectives, promotions and advertising plan,

and financial resources that would be required to launch the company successfully.

Situational Analysis

Situation analysis is actually a collection of various analytical techniques in context to

both internal and external environment in which a company is going to operate (Gilmore et al.,

2012). The authors highlighted various techniques of situation analysis such as TOWs Matrix,

SWOT, PESTLE, and internal analysis of the firm. According to researchers such as Cravens
and Piercy (2006), situation analysis is one of the most important parts of marketing plan. This

also helps in providing strong base for the company to start its operations in a new market

(Cravens and Piercy, 2006). Situation analysis for ACME Smoothies starts with the explanation

of PESTLE of UK market.

PESTLE Analysis

PESTLE is the acronym of Political, Economic, Social, Technological, Legal, and

Environmental analysis of the market in which the business is going to operate. Manjunath

(2010) regarded the PESTLE analysis as one of the most important techniques of market

research. Extensive analysis of UK market for ACME Smoothies with regards to PESTLE is

discussed below:

Political Factors

The first element of PESTLE analysis is about political factors. The political structure of

the country and its effects on business sector is discussed in this. UK is one of the most advanced

and prosperous country in Europe and also at global level. It is comprised of Scotland, England

Wales, and Northern Ireland. Prime Minister is considered as head of the government whereas

there is constitutional monarchy in the country and Queen Elizabeth II is head of the state.

Theresa May is present Prime Minister of the country. UK is considered as the country with

fairness in its policies and with lots of opportunities. Over the past many decades country has

witnessed stability in its political structure but in last few years there were also few disturbances

in shape of Scottish Independence Referendum and Brexit. The country has decided to leave

European Union (EU). Most of the businessmen and researchers such as Cumming and Zahra

(2016) believe that leaving EU will have negative impact on country’s economy. The prime

minister has not yet triggered Article 50 for setting the path in leaving EU. As our target market
is UK for now so there will no effect of Brexit on our business in the short-run but if in future we

decide to expand our operations to other countries in Europe then it will be problematic for us.

Economic Factors

In this element of PESTLE, economic conditions, challenges, and opportunities related to

UK will be discussed. The global standing of a particular country can be assessed by its

economy. UK is ranked 5th as per its GDP of $2.85 trillion (WorldBank, 2016). The per capita

GDP of the country is about $43,876 whereas the unemployment rate stands at 5.3%

(WorldBank, 2016). Both public and private sector companies are strong with highly diversified

economy. In 2015, the FDI touched the figures of $40 billion (UNCTAD, 2016). These figures

speak about the strength of British economy. People have more money to spend as most of the

public services are free for British nationals. Moreover our products are not so costly. The

economic conditions of the country will help our company to grow both in long-run and short-

run.

Social Factors

Consumer dynamics, cultural trends, and overall population analysis is conducted in

social factors of PESTLE. In UK, higher social standards and better public lifestyle can be

observed. Various researchers such as Browne and Hood (2016) have also found positive relation

between British social standards and the growth of business sector. As discussed previously,

most of the public services such as National Health Services (NHS) are totally free for British

nationals and that is why people have more money to spend. The labour market of the country is

highly diversified and skilled as the immigration policy of the country has allowed highly skilled

individuals around the globe to come to UK. At the same time, the country is one of the most

populous countries in EU. This has also helped the small businesses to grow in least amount of
time (Browne and Hood, 2016). Living standards of people in UK are higher than other countries

in EU. There are also some challenges as the country has dependency ratio of 55 that is very high

and the most disturbing thing is that it is on rising trend (WorldBank, 2016). It can be concluded

by the extensive analysis of social factors of UK that it is favourable for our company to start

operations in UK.

Technological Factors

Technological factors such as technological development, availability of advanced

technology, and technological infrastructure of a country play an important role in economic

stability of country and growth of business sector (Hoffman et al., 1998). UK has tremendous

R&D capabilities and witnessed major technological advancements in last few decades. Hoffman

et al. (1998) argued that the internal competition within technological sector has allowed the

country to gain new heights. The authors further added that access to latest technology is easier

in UK than other EU states. The technology that is needed for our company is easily accessible

and the prices are also competitive. All of these factors can contribute towards the success of our

company in UK.

Legal Factors

The legal structure in UK is considered as one of the most efficient in the world. Supreme

Court is the highest court in the country whereas there are three different territorial laws such as

English law for England and Wales, Northern Ireland law, and Scottish law. Supreme Court

handles all of the civil and criminal crimes. On the scale of Economic Freedom, country is

ranked 12th at global level (Heritage, 2017). All of the laws for opening new business are

simplified and well-organised. Moreover, country laws are favourable for opening small

businesses. This will allow us to open our business in least amount of time.
Environmental Factors

There are strong laws in UK to ensure the safety of environment. Environment Protection

Law of 1995 is concerned about manmade climate change and also to control the pollution. At

present, the major concern for UK government is to decrease the level of CO2 emission and for

this a new law was passed in 2006 with the name of The Climate Change and Sustainable Energy

Act. It is noted by various researchers such as Arvola et al. (2007) that people in UK are more

concerned about their health so it will be good for our company’s growth.

Internal Analysis of the Company

The business idea must be unique and differentiated than competitors in order to get

customer attention (Killing, 2012). This also helps in making the company profitable in least

amount of time. There is no doubt in the fact that the founder has no experience in trading but at

the same time, he is renowned chef and nutritionist. This will help in gaining customers’

attention as they will value the products from a health expert. It is also inevitable that the

company can face few difficulties at the start but the experiences from first few years of the

business inception will help in making strategies for future growth. Most of the competitors of

our company are purely businessmen with no experience in health and nutrition. This gives us

competitive edge and will help to gain consumer acceptance for our products. Arvola et al.

(2007) found that people in UK are more concerned about their health than ever. The authors

further added that customers try to find such products which would be better for their health.

This will help our company to get consumers’ attention and acceptance as we don’t have any

unnatural ingredient in our products other than just fruits and vegetables. We will also ensure the

easy availability of our products for our customers.

SWOT Analysis

The role of SWOT analysis is very critical in order to assess company’s strengths, future

opportunities, weakness, and expected threats (Winston and Cahill, 2013). SWOT is the acronym

of Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis of ACME Smoothies

is discussed in table 1.

Table 1: SWOT Analysis of ACME Smoothies

Strengths Weaknesses

 Product features of all natural  Lots of competitors in the same

ingredients with no additives business
 Highly skilled and professional  Inexperience of founder in the area of
employees trading and managing business
 Founder’s years of experience in food  Will take time to establish the name of
and nutrition the business
 Highest quality of product  Need to recruit staff and will have to
 Affordable rates provide them proper training
 Starting business in already existed
market
 Need of extensive resources to establish
business
Opportunities Threats

 People are more conscious about their
health and food selection
 Easy alternate for fruit and vegetable
intake
 Less room for business failure
 More opportunities of growth in UK
market

 Higher barriers of entry in shape of
established competitors
 No room for errors and mistakes as the
business is new
 Higher number of alternates for
consumers
 Lower switching cost for consumers
Market Planning

Market Segmentation

Division of whole market into appropriate categories is done in market segmentation.

This is done to fulfil the needs and wants of customers in a better and efficient way (Cravens and

Piercy, 2006). Segmentation can be done in many ways such as ethnic segmentation, geographic

segmentation, and demographic segmentation. We will do the segmentation for our products by

only demographic characteristics of our customers.

Demographic Segmentation

Demographic segmentation can be done in ways such as by the age, family size, income

level, and gender of customers (Luo and Bhattacharya, 2009). The demographic segmentation

for ACME Smoothies is as follows:

Age: We will categorise our customers by their age. We set four segments as per the age of the

customers.

 10-15

 16 – 25

 26 – 45

 46 and above

All of the marketing strategies and our marketing campaigns will depict these age-based

segments. Although, our products are equally useful for people of any age but to make our

advertising campaign attractive for everyone, we will categorise our customers.

Gender: It is important to mention here that our products will not be segmented by the gender of

our customers as the nature of our products is not gender specific. So, ACME Smoothies will be

suitable for male and female customers.

Income Class: Our products are not very costly and it will be in the affordable range for people

from any income group.

Family Size: Although, our products are equally suitable for kids, youngsters, single adults,

couples, and couples with kids. But we will segment our customers on the basis of family size

and status in our advertising campaign. So segmentation will be as follows

 Kids

 Youngsters

 Single Customers

 Couples

 Couples with kids

Target Market

The people who are conscious about their health and also about their food intake will be

our customers. Not only this, we will also persuade people to be more conscious about their

health and also about the benefits of consuming our products through our advertising campaign.

As mentioned previously, people from all income groups will be considered as our target market

as the prices of our products are within the affordability range for everyone.
Marketing Mix Strategies

Product

Our company is going to offer an instant and tastier way of fruit/vegetable intake for

people who are more health conscious. Our products will be offered in environment friendly

packaging. Moreover, all of the ingredients of our products will be comprised of natural fruits

and vegetable and there will be no additives. Furthermore, the founder of ACME Smoothies is

renowned in the area of food and nutrition. This will also help in gaining customers’ acceptance.

Our products will be offered in two sizes. The bigger pack will make 1 litre of smoothie and the

smaller pack will make half litre of smoothie. There will be different combination of fruits and

vegetables and packaging will be different for each combination.

Price

The prices of our products will be in the affordability for people from all of the income

groups. The bigger pack will be priced as £6 and the smaller pack will be priced as £3.2. At the

start of the business in first month, our products will be offered at buy one get one free offer.

This is a costly offering but it will help to get market penetration and consumer attention in least

amount of time.

Place

Our products will be available at all of the Tesco stores throughout UK. We are target

towards getting 15% of market share within next three years.

Promotions

The advertising and promotional strategy of a company especially a newly established

company is extremely important for its future growth and getting customers’ attention. We will
follow both above the line and below the line promotional strategy. Above the line promotional

strategy will be comprised of advertising through radio and television advertising. The below the

line advertising will be comprised of online advertising at Facebook, health blogs, and on

Twitter. Company will ensure to have strong presence of social media by setting pages on

Facebook and Twitter.

Marketing Budget

At the time business inception, the promotional and marketing budget will be set for first

year and by the end of first year, the performance of the company will be assessed and the next

budget will be set accordingly. Table 2 depicts the marketing budget for ACME Smoothies.

Table 1. Marketing Budget of ACME Smoothies

Contingency
Amount (£) (5%) Total (£)
Promotional Strategy

Below Line Promotions

Online Advertising 19,000 950 19,950
Social Media
Advertising 21,000 1,050 22,050

Above the line

Promotions

Outdoor Advertising 17,000 850 17,850

Brochures Advertising 13,000 650 13,650

Radio Advertising 42,000 2,100 44,100

Newspaper Advertising 21,000 1,050 22,050

Advertising Agency 60,000 3,000 63,000

TV Advertising 85,000 4,250 89,250

Conclusion

In order to develop the feasibility study before entering into new market and also to

launch a new business, the role of marketing plan is very crucial as it helps in making assessment

about a particular market. This marketing plan is targeted towards planning the launch of ACME

Smoothies in UK. It is a huge decision for the founder to be involved in trading area as he

doesn’t have any experience of doing so. But as far as UK is concerned, it is one of the richest

countries in the world and people are more conscious about their health and food intake. After

doing PESTLE analysis, internal analysis, and SWOT analysis; it is recommended to the

management of ACME Smoothies to start its operations in UK.

 Part Two

How the web can be used to vary the price element of the marketing mix?

Theoretical Background

It is rather a common practice by various online retailers to change price as per the

location, browser history, search frequency, and operating system of the customers. Elmaghraby

and Keskinocak (2003) argued that it is a misconception of consumers that every one of them

gets the same price deal but it is not true anymore. The variance in the price is named differently

as dynamic pricing, price dispersion, surged pricing, demand pricing, time-based pricing or

customised pricing by various researchers (Kopalle et al., 1996). Based on the location of the

customers, retailers significantly change the prices of their products. Latest shift towards online

sales by websites has enables retailers to change prices that are based on specific algorithms.

Kephart et al. (2000) argued that these algorithms are set on the basis of various internal and

external factors such as competitor pricing, demand and supply, and various other factors. The

trend of dynamic pricing is evident in several industries such as retail, transportation,

entertainment, hospitality, and electricity. Biller et al. (2005) found that each industry adopts a

slightly different approach towards reprising that is entirely based on demand of the products and

company/industry specific needs.

The trend of dynamic pricing came to surface as early as 2000 when Amazon made an

experiment of dynamic pricing on DVDs sales as they offered three different prices to different

customers. Then in 2005, a comprehensive research was conducted by researchers from

University of Pennsylvania. The study found that about 70 percent of people had no idea about

being charged differently as per their spending habits. The study has also pointed out some
prominent examples as one of the camera retailers was offering different prices based on whether

the customer had already visited the price-comparison website or not. The study pointed out

another example where a computer retailer was offering different prices for different government

entities (Başar, 2012). The author also pointed out conversion rate measures by various websites.

The authors added that conversion rates are measured by assessing the number of visitors on a

particular website turn into buyers. The prices are dropped when the conversion rates are low.

Conversion rate measure is a standard strategy the various online retailers/sellers (Başar, 2012).

Examples

The examples of web-based dynamic pricing can be seen in various industries. Some of

the examples are from hospitality, transportation, and retail industries.

Hospitality

Dynamic pricing in shape of time-based pricing can be seen very commonly in tourism

industry. During special events or in peak seasons relatively higher prices are charged. However,

only operating costs are charged during off-season. McAfee and Te Velde (2006) argued that

hotels tend to gain profits on their investments only during peak season. You (1999) regarded

this pricing strategy as long run marginal cost pricing. Hotels and resorts use dynamic pricing to

adjust the prices for their rooms by their websites. Hotel industry also used the term of demand

pricing for their pricing strategy. This is done to maximise the revenue based.

Transportation

Dynamic pricing can also be seen in air transportation industry. Elmaghraby and

Keskinocak (2003) argued that the prices are changed by time of day, day of the week, and even
the number of days before the time of travel. The authors also added some other factors such as

number of cancellations on a flight, departure time, number of vacant seats in a flight, and

number of people searched for the same flight in price fluctuations. Dynamic pricing is also

observed in public transportation and roadways travels in which higher prices are charged in

peak periods. The example of San Francisco Bay Bridge is common where toll charges are

higher during rush hours and also on weekends.

Retail

Online retailers also use dynamic pricing strategy to increase their revenues and customer

base. Kauffman and Wang (2001) found various factors behind dynamic pricing strategy in retail

industry. Some of the most common factors identified by authors are such as competitors’

pricing, time of purchase, traffic, sales objectives, and conversion rates. Kauffman and Wang

(2001) found three different ways of dynamic pricing in retail industry. These are as follows:

 Use of price intelligence based on the prices offered by competitors

 Decrease in prices when demand decreases

 Increase of price when demand is high

Conclusion

The new developments in e-commerce and internet technology have enabled the retailers,

airlines, and various other industries to maximise their revenues and profits by employing

dynamic pricing strategy. Elmaghraby and Keskinocak (2003) regarded dynamic pricing as the

win-win for both buyers and sellers as both gain from it. The most common example of dynamic

pricing is of airline ticketing where prices changes even in seconds.

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