Question 1:

To initiate a Marketing Strategy, it is undisputed that my firm must first be

aware of market gaps, which would in some way disrupt their path to reach the
consumers. In this case, there are three main challenges that the business must
overcome: Information, Time, and Value.
To kick-off, as stated in the second article, the perception that is attached with
cannabis-based products is still acknowledged as “getting high”. With that prejudice
towards cannabis, they would rather never touch anything related to it and tend to
avoid these types of merchandise. The vague and misleading information that they
possess would prevent them from researching CBD Oil, although the products have
been legally proved to have no detrimental effects to one’s health, not to mention
purchasing the product. In order to be more approachable, my company must clarify
CBD oil’s Information. In that way, the customers would lower their barriers and
become more open with the products.
Secondly, Time should be a concern, which the two articles have not yet
mentioned. Given the fact that my manufacturers originated in South Africa, the same
place that CBD oil would be selling, still, a scrutinized timing is required. If there is
no calculation, the time from when the oil is manufactured to when it is sold could be
long enough to make the product expire. By then, the quality would decrease
dramatically and may negatively affect the customer’s experience. Thus, my business
would consider remedies so as to assure the freshness of the CBD oil and warrant the
time taken to hand the products to the consumers.
Value is arguably the most crucial among the gaps, as the competition in the
market is undeniably harsh. To distinguish our company’s CBD oil and make a profit
out of it, we must create a unique value for the merchandise, through that, the
consumers would be more willing to pay, as they have understood why they are
paying and will be spending their money on our terms, without too much comparison
with the rivals’ prices.

To close the gaps, intermediaries such as Middlemen and Sales Intermediaries

could be the possible choices. While the latter could ensure that the process would be
on time and smoothly operated, as they are paid to do so; Middlemen, who buy and
resell the CBD Oil, would have more engagement and responsibility, thus have the
incentive to educate the consumers about the products and spread the distinguishable
properties of the product to the buyers.
Regarding the factors of the macro-environment, there are four variables that
my company needs to focus on. Firstly, the Political and Legal variables should be
taken into consideration since the ingredients in the CBD oil have already been
dramatically sensitive. For this matter, it is crucial that the regulations are respected
and only the products that have the proper amount of cannabis should be
manufactured. Besides, the Technological and Physical aspects also needed to be
noticed, as it can contribute to the packaging process. If the manufacturers can utilize
utmost these aspects, the company could reduce the production cost through time, as
the machines and the available materials could be helpful. Last but not least, the
Economic variable is undoubtedly vital to the product’s value, as inflation could be
extremely detrimental and my company should closely and regularly evaluate the
situation to have the best pricing strategies.
All in all, without a doubt, to enter this market would require much effort
and consideration. To be successful, my company would need to consider the
variables and market gaps given above and be flexible to deal with them

Question 2: (607)
Before launching a new range of CBD Oils into the South African market, it
is essential to determine the segmentation, targeting, and positioning. To answer
the question, there are three behavioral segmentation bases that I want to focus on
which are benefits sought, user status, and readiness stage; for positioning
methods, this report will discuss the benefit positioning and user positioning.
According to Synthesio’s research (2019), persons aged 18-24 and 25-34 are
more interested in CBD’s anxiety treatment, whereas adults of older users are
more interested in pain relief benefits. Also, based on the SingleCare survey in
2021, CBD consumption is most common among people aged 18 to 34.
Therefore, for benefits sought, the strategy should put emphasis on anxiety and
pain relief, especially stress and depression relief to reach a huge and potential
market which are 18-34 years old customers.
For the user status, the strategy should mainly focus on potential and regular
users. The reason is that, according to Brightfield Group’s research (2019), 44%
of regular CBD users spend $20-$80 per month on CBD products, and 13% of
them spend over $160 every month. In addition, it has been demonstrated to be
effective in the treatment of chronic pain, arthritis which is common for elders,
and also anxiety, sleeplessness which are mainly caused by the pressure of
modern and developed countries. Therefore, there are large numbers of potential
customers from many age ranges and that is the reason why the strategy should
emphasize reaching potential users.
The last part of behavioral segmentation that the report focuses on is the
readiness stage, and the target market is customers who are informed and
interested in the products. From 2016 to 2017, and 2017 to 2018, CBD web
searches climbed by 125.9%, and 160.4%, respectively (JAMA Network, 2019).
That data shows the number of people who have knowledge or information about
CBD is significantly increasing; therefore, the strategy should target those
individuals to persuade them to buy products and also engage them in the
long-term to enhance repurchases.
Moreover, based on the article, Schewitz said that the users have given his
company a lot of favorable feedback, indicating that this product has improved
people’s life quality. Additionally, there are many stories sharing about how their
life has changed after using CBD on social media pages such as CBD Changed
My Life on Twitter, Reddit, etc. Therefore, customers who have positive
impressions and interest in the products can be increased through feedback,
networking, and reviewing by word of mouth or through social media, and this is
the market that the company should target to promote the products.
In addition to the behavioral segmentation, determining positioning methods
is the critical step to gain success before launching a new range. First, considering
the benefit positioning, as the health issues among people are increasing but the
side effects of medicine can cause problems in the long-term, our products should
 show the benefits to cure disease or symptoms without any side effects and in the
natural way. Second, for user positioning, the company can position their products
to appeal to elders for the pain relief purpose and those who care for their skin.
According to Medical News Today (2021), CBD may be effective for treating a
variety of skin disorders, including acne, eczema, and psoriasis, due to its
anti-inflammatory qualities.
To conclude, the segmentation and positioning are crucial steps before
entering the market. With the fast-changing market, those methods will help the
company to target specific groups with suitable marketing approaches and also
create a distinctive position of the company’s product relative to competitors in
the mind of targeted users.

Question 3:
South African market is a potential market that CBD aims to target so
obviously at this stage our target consumer is just at the stage to be aware and
adapt to the new products. The consumer adoption process would count from the
psychological stage in customers’ minds when they are first aware of the
innovation to the final point when they use the innovation. Consumer adapts to
innovation would be varied depending on the characteristics of their readiness.
The customer readiness categories include 5 types: innovators, early
adopters, early majority, late majority, and laggards. Those mentioned adopter
categories occupy a proportion of 2.5%, 13.5%, 34%, 34%, 16% respectively.
Innovators are those who love to be the ones trying out or possessing new
creations. Whereas, early adopters would be those who have a voice in their
communities and have the ability to influence the consumption behavior of others.
To speed up the adoption process of the tarIn order to speed up the adoption rate in
this new marketplace, the brand marketing tactics will focus on the early innovator
and adopters first.
As the aforementioned statement, because we aim to introduce our new
range of CBD products into the market, we need to determine our product's stage
in the market. According to the theory of the product life-cycle stage, it has 4 main
stages including introduction, growth, maturity, and decline. The introduction
phase is the phase when a new product or present product enters a new market as in
our situation.
Knowing the right product life-cycle stage would help us determine the
right strategic planning. At the introduction stage of our product in the South
African market, we would expect our sales to be completely zero and the profit
curve may decline sharply due to our investments in facilities and marketing
activities. Our marketing objectives would be to create mass awareness,
specifically target the innovators and early adopters and educate customers for the
use of CBD oils. For our business objectives, we care much on optimize the
production and any variable costs. The communication objectives would
participate to promote the core function of CBD content products and promote our
brand to be the customer safety-lead brand.
With regard to the market entry strategy, we would consider the use of rapid
market penetration strategy recommended in the book “Marketing Management -
A South African Perspective -3rd Edition”. It includes the tactics that marketed our
products at an affordable price and invest aggressively in marketing
communication serving the aim of gaining a large market presence and share.
To conclude, establishing a product position in the new market or
introducing an innovation need our clear cover about the customer adoption
process, product life-cycle stage, research on that market innovators and early
adopters’ trait, purchasing behavior, and media use characteristics.

Question 4:
To compete in the market, navigating the proper pricing strategy is undeniably
essential. There is no doubt that my CBD oil products would also need to be evaluated
and priced appropriately, if not, there would be no chance to survive in the intense
market. After some consideration, I believe that the market penetration strategy would
be the most suitable.

The decision is attributed to three main reasons.

To start off, as cannabis has been legal due to the latest regulations, many firms
would certainly seek the opportunity to enter this tempting and profitable market. As
the market would be likely to be crowded, the Market penetration pricing strategy
would allow my company to be competitive with the rivals as the prices would be
affordable for a huge range of consumers.
Secondly, CBD oil is still a new and strange product for the majority of
customers. There is almost no guarantee that they would be willing to splurge their
money on these merchandises. By keeping the price at a suitable rate, my firm’s
products would gain more possibility in capturing the consumers’ attention.
On top of that, market penetration helps my business to limit new competitors
as most as we can. If CBD oil products are initiated at a high price, as the price would
appear to be in market skimming strategy, more and more rivals would come to the
market and they would have many more options to price their merchandise. Therefore,
my company would rather set a fairly low price, which should seem discouraging for
potential competitors, thus preventing them from entering the market. After a
considerable period of time when my brand’s image has been apparent and my
company owns a sufficient share of the market, only by then should the company
reconsider the price.

According to the textbook, there are six attributes that I would need to contemplate
while creating my firm’s pricing strategy.
At first, the pricing objective needed to be determined and from my
perspective, survival would be the best option. As mentioned above, the market is
likely to be ruthless and dramatically intense. My brand would rather prioritize
surviving in the market first, rather than focusing on maximising the profit.
Next, since the price is set quite low, the demand would be expected to rise
through time, as the theory in the textbook has pointed out that price and demand are
inversely related. The demand would help my company’s product become more
ubiquitous among the others in the market and gradually, my business could generate
profit from it.
The cost should always be calculated. Being able to estimate it would do
wonders for the balance of the company in terms of monetary aspects, as the company
would be deeply in trouble if the production or distribution costs are too excessive.
Along with that, if possible, these issues should be compared with the competitors
also. By observing the rivals, we may construct even better strategies and methods
that will maximize our efficiency. As a way of illustration, the competitors’
production cost could be reduced by some techniques, which may not be exclusive
and we can learn from.
Lastly, the two final steps which are selecting and actually pricing the products
are undisputedly crucial. At this point, my company would need to reconsider every
factor and issue that has been put to the table and come to a price that would satisfy
the most.
In short, the pricing strategy should follow market penetration due to the
reasoning above and the company should observe the market closely to give out the
best decisions, depending on the circumstance.
Reference
Cant, M.C. & Heerden, C.H.V. (2017). Marketing Management -
A South African Perspective. 3rd ed. South Africa: Juta and Company (Pty)
Ltd
The Checkup. (2020). How popular is CBD? [online] Available at:
https://www.singlecare.com/blog/news/cbd-statistics/.‌
Understanding Cannabidiol | CBD. (2017). [online] Available at:
https://daks2k3a4ib2z.cloudfront.net/595e80a3d32ef41bfa200178/59946dd8
6c6b200001c5b9cb_CBD_-_HelloMD_Brightfield_Study_-_Expert_Report
_-_FINAL.pdf.
www.medicalnewstoday.com. (2021). CBD oil for skin: Benefits, side effects, and
more. [online] Available at:
https://www.medicalnewstoday.com/articles/cbd-oil-for-skin.‌
Yeung, C. (2019). Social Media Consumer Insights on Who the CBD Industry
Should Be Targeting. [online] Synthesio. Available at:
https://www.synthesio.com/blog/social-media-consumer-insights-cbd/.