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Marketing Strategies for Freshly Juice Pvt Limited - Example

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The paper "Marketing Strategies for Freshly Juice Pvt Limited" is an outstanding example of a business plan. Freshly Juice Pvt Ltd was established in 2008, by qualified professionals from Aaron's family. They came up with the idea of starting the business after acquiring vast experience in the area of agriculture, development, and the sector of marketing…
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Running Head: Developing a Market Plan Marketing Plan for Freshly Juice Pvt Limited Name Institution Date Table of Contents 1.0 Introduction..................................................................................................................................3 1.1 Freshly juice Pvt Limited.............................................................................................................3 2.0 Business Environment Analysis..................................................................................................4 2.1 Technological factors............................................................………….......................................4 2.2 Economic factors............................................…..........................................................................5 2.3 Social-cultural factors..................................................................................................................6 2.4 Political-legal factors...................................................…............................................................6 3.0 Competitor Identification and Analysis.......................................................................................7 4.0 The SWOT Model............................…………………………………………………………...8 5.0 Market Segmentation......................................................………………...................................10 5.1 Demographic Segmentation...............................…....................................................................10 5.2 Geographic Segmentation..........................................................................................................10 5.3 Psychographic Segmentation.....................................................................................................11 5.4 Behavioral Segmentation...........................................................................................................11 6.0 Product Mix..................................................................................................….…….....…..….12 7.0 The Financial Analysis.............................................................................................................. References....................................................................................................................……..... Developing a Market Plan 1.0 Introduction 1.1 Freshly Juice Pvt Limited Freshly Juice Pvt Ltd was established in 2008, by qualified professionals from Aaron family. They came up with the idea of starting the business after acquiring vast experience the area of agriculture, development, and the sector of marketing. The company focuses on the FMCG sector and produces fruit based products with unique test. Freshly Pvt Ltd focuses on bringing together the fragmented informal fruit sector. The objective of the Aaron foundation is to provide great opportunities for the individuals who rely on agriculture sector for a living. It also aims at enhancing a sustainable livelihood, a business environment that is conducive, quality life among families, and to promote appropriate human values. This will be achieved by the use of available qualified management team. The company gets fresh fruits from farmers within Australia, and from other vendors. It then manufactures different juice products, packages them in different sizes. The juice products are distributed to various retailers and distributers from within and without the region. The company has developed a new product called ‘Newly Fresh’ which is fresher like home made juice. ‘Newly Fresh’ is made from fruits collected direct from the plants, which is immediately manufactured and supplied to the market within eight hours. The company is becoming famous among farmers, vendors and customers across the region. There is as an increase in the number of farmers and vendors who associate with the company to five thousand and one thousand respectively. The number continues to grow as the market becomes aware of the company. Our mission is to increase income and create more employment up to the grass root level with equity and fairness. 2.0 Business Environment Analysis According to Dionco-Adetayo and Adetayo, (2003), in order for a company to be successful in business, it has to consider the environment in which it operates. The company should be ready to deliver what the environment wants without affecting the people. Business environment are uncertain, and thus companies have to develop strategies that enable them fulfill the demands of the market. Uncertainty in the environment makes managers not to establish long-term plans and to develop strategic decisions to maintain equilibrium with the external environment. Environmental factors comprise of the forces which do not affect the company directly, but have the potential to influence the activities of the company in the long run. Freshly Juice Pvt Limited shall be careful when dealing with these factors since they can affect its existence, given the extreme completion in juice production industry in Australia. Environmental factors that have to be analyzed by Freshly Juice Pvt Limited include economic forces, technological forces, political-legal forces, and socio-cultural forces. 2.1 Technological factors Industries have to adjust to technological changes if they have to survive in the market. Technology is used in the manufacturing of products, and thus industries rely so much on it to carry out business. It is through embracing technology that a company is able to produce modern products that meet the changing customer needs (Banham, 2010). The production of juice products depends on technology, therefore, Freshly Juice Pvt Limited should adopt new technologies of producing juice so as it can satisfy its customers’ needs. Technology determines the type of products or services produced, the equipments used in production, and the operations required to manage the production process. The company shall focus on improving the packaging of its juice products in more appealing package materials in order to attract more customers. It also intends to increase its product line. The launching of ‘Newly Fresh’ was a beginning of the company’s strategic goal to developing new products that are in line with the current technology. 2.2 Economic factors Companies depend on economic factors to run business. It important for the management to consider the major costs incurred in production like the raw materials and labor so as to make informed decisions. Given that the costs of production changes over time, they should be able to evaluate the possibility of price fluctuations in the future. The price established by the government through its monetary and fiscal policies affects the cost of production. The pricing behavior of the suppliers and competitors also influences the market conditions for goods and services (Dobbins, 2003). The management of Freshly Juice Pvt Limited shall more time in forecasting the trends of the economy and predict changes in the prices of juice products so as we can adjust the prices of our products accordingly. In situations where products have relatively low prices, population determines market potential. Freshly juice Pvt limited’s marketing team understands the relationship between customers’ income level and their consumption behavior. This places the company in a better position to define its target market. The price of our juice shall be slightly lower than the competitors’ to allow the company increase its annual sales. Management is also aware that when the purchasing power for consumers increases, it is necessary to consider other determinants of price rather than income level. When the demand for juice products go high especially when there is much money in the hands of consumer, management would consider adjusting its prices slightly high. This shall be carefully to avoid losing customer’s loyalty. 2.3 Social-cultural factors Culture defines the behaviors of a certain group of people and it is passed from one generation to another. It is usually difficult for individuals to fit into other peoples’ cultures without going through the learning process. It displays a distinct pattern of life in societies. People with the same culture have their own belief, values and customs that bind them together as a society. The aspects of culture guide the companies on how to behave in various market segmentations. For instance, taste as a learned response differs from culture to culture, and would greatly influence the buying behavior of consumers. Another cultural aspect is style and colors. In the West, for instance, white color is associated with cleanness and therefore attracts many (Dionco-Adetayo and Adetayo, 2003). Freshly juice Pvt limited shall be very careful with the color it uses to package the juice. The colors the company shall use in the advertisement shall be selective, considering how different societies perceive the colors. For people who don’t like sugary drinks, ‘Newly Fresh’ will serve them best since it is processed in a way that maintains its natural taste and aroma. 2.4 Political-legal factors Government intervention in business has gradually increased over the past years. Regulatory laws have been put in place and information on the agencies provided. The government involves in business in order to protect consumers from exploitation, promote equality in employment, to conserve environment, and fix minimum and maximum prices for goods and services. Consumers within a nation are protected by the same political agenda, which often influences the conduct of companies in the economy (Dionco-Adetayo and Adetayo, 2003). The management of Freshly juice Pvt limited ensures that it adheres to the ethical principles established by the law when conducting business. As it is a requirement by law, the company will be careful when setting the price for its new products so that it does not go beyond the maximum price set by the government. This is a challenge to the company since it has to consider other costs and expenses incurred in production before it arrives to the final price. Therefore, management shall make sure that it minimizes the production costs so that it is not forced to set high prices for its products. 3.0 Competitor Identification and Analysis Identifying the possible competitors is important for managers to establish a stronger competitive base, understand the strength of their competitors, and develop strategies that would help them out play such competitors. When carrying competitor analysis, it is prudent for a company to first do an analysis of the competitive strategy dynamics (Goi, 2009). Competitor analysis provides the basis for identifying the threats and opportunities of the competitors. Companies which invest in competitor analysis are able to compare various firms in the same industry in order to understand their potential to satisfy the market needs (Bergen and Peteraf, 2002). Fruit juice manufacturing industry is wide in Australia, and has stiff competition. It is a challenge for SMEs to operate alongside large industries like Coca Cola and Pepsi. Freshly juice Pvt limited shall have to create consumer awareness about its existing and new products through promotion and advertisement in the local market. The company shall utilize the weaknesses of its competitors and ensure that its brand is unique in the eyes of consumer. Freshly juice Pvt limited shall also consider the attributes of the demand and supply side of its competitors to be able to it remain relevant in the market. According to Bergen and Peteraf, (2002) the demand side attributes helps in the development of substitute goods which can meet the needs of the customers. As mentioned earlier, Freshly juice Pvt limited has plans to expand its product line, and this shall be a factor to consider during the implementation stage. The objective shall be to produce products that will satisfy the market needs. 4.0 The SWOT Model The SWOT model represents the Strengths, Weakness, Opportunities and Threats which businesses encounter during their daily operations. SWOT analysis is used by managers during strategic planning. It helps in establishing a common vision which facilitates the achievement of the development strategy designed by the company. Companies analyze their internal and external environments by use of the SWOT analysis (Gasparotti, 2009). Freshly juice Pvt limited use this model to formulate its strategies by considering both the internal and external environmental factors. The SWOT Analysis for Freshly juice Pvt limited Strengths Availability of raw materials (fruits) at a fair price Professional management team Customer loyalty Good relationship with suppliers and vendors Weaknesses Delayed supply of raw materials to the company Less staff to operate the machines Inadequate use of technology Few varieties of juice brands Opportunities Increase in the market share Acceptance of the new product to the market (Newly fresh) Expansion of the product line Threats High competition in the industry Technological changes Government policy of price control Considering the number of strengths and opportunities experienced by Freshly juice Pvt limited, it is not performing badly, the fact that it has not been in the industry for a very long time like its competitors. The company should improve on its weaknesses and maximize its opportunities so as to realize its objectives (Gasparotti, 2009). 5.0 Market segmentation This is one of the major factors in current marketing. It involves dividing the market into sections based on demographic, psychological, geographic and behavioral factors in the market. Market segmentation enables a company to identify her target market to be in a position to market its products effectively without incurring unnecessary costs. By identifying a target market, a company is at advantage of supplying the required products or services to the customers (Larsen, 2010).Our company shall consider the three factors of market segmentation when promoting its juice products. 5.1 Demographic segmentation Freshly juice Pvt limited designs its products to meet the demographic aspects of age, family size, gender, income, education, and social class. The reason why the company focuses of different demographic values to define its market is because the variables used can easily be identified and measured. Demographic variables are used to describe the target market. The needs of customers changes as they grow older (Thomas, 2007). The company focuses on producing juice with different taste. The young people prefer sugary juice products unlike the old, an issue Freshly juice Pvt limited considers when manufacturing its brand. Also the buying pattern depends on age. Unlike the old, young people often involve in impulse buying, especially when they are attracted to a certain brand. By developing attractive packaging, the company shall be able to win many young people to buy its brand. 5.2 Geographic segmentation This divides the market into sections based on location like cities and counties up to the national level (Larsen, 2010). Freshly juice Pvt limited pays attention to customers across Australia, but more so those stay within its region of operation. Customers' buying behavior is influenced by where reside. The company experiences more sells from the region where the company is located than in other areas. One of the reason for the trend is customer trust in the company and its brand. 5.3 Psychographic segmentation The market is defined based on the personality traits and life profile of customers. Psychographic profile usually supplement both geographic and demographic segmentation when they fail to determine consumer behavior. It provides extra information about the two market segmentation, which facilitates a better understanding of the current market behavior and potential target markets (Thomas, 2007). The information gathered from the psychographic profile helps Freshly juice Pvt limited to develop a brand that satisfies customers attitudes, lifestyles and interests. 5.4 Behavioral segmentation Behavioral market segmentation focus on how the customers respond towards use of a product. Behavioral variables like readiness to buy, attitude, loyalty, occasions, benefits, user status, and usage rate initiates the process of developing market segments. Customers response to Freshly juice Pvt limited's products has enabled the company to make several improvements. In fact, during the last quarter of 2011, the company registered higher sales than before. Taking into consideration the ideas and views of its customers has seen the company improve in product delivery. 6.0 Product Mix Freshly juice Pvt limited specializes in producing fruit juice. Fruit juices comprise 100% pure juice which is produced from fresh fruit or its concentrates, without colours, flavour, and other ingredients. However, there are some exceptions in making the juice, but the ultimate goal is to have a product with acceptable taste. The company produces three categories of juice: juice with long shelf life, juice with short shelf life, and freshly squeezed juice. The last type was introduced recently to the market, and is competing favorably with other related products from the competitors. 7. 0. FINANCIAL ANAYSIS Freshly Juice Pvt Ltd requires adequate financial resources to invest in new fixed assets, which include office furniture and shop fit-out, motor vehicles, computer equipment and computer software among others. This will require a total of $1.17 million. Since the business is a new venture, it has no internal sources of funds hence it will utilize the external sources of finance. The business has applied for a loan of $540,000 from a local bank and intends to benefit for $300,000 from lease of motor vehicles. The initial capital will come mainly from personal assets, which will be in cash and will amount to $330,000. 7.1. Key objectives and financial review The key financial objectives for Freshly Juice Pvt Ltd are outlined below The business intends to achieve a double digit rate of growth for each future year. This is possible since the business has an excess capacity of manufacturing and selling a wide range of juice products The business also aims at reducing the overhead costs in each of its outlets through disciplined growth. The business will ensure that no firm resources are left idle and that workers will report to work as stipulated so that at any given time the assets of the company will be gainfully employed in the production of sales revenue. The main variable cost is the costs of fresh fruits from farmers within Australia. The business aims at reducing variable costs through purchasing fresh fruits from farmers within Australia in large quantities so as to take advantage of the quantity discount from the farmers. 7.2. Assumptions Based on economic forecasts, Freshly Juice Pvt Ltd assumes that interest rates are staying steady and so will have no negative effect on disposable income. Therefore, the volume of sales of the firm’s juice products will continue to grow. The same assumption is made about the level of employment. This has meant that the wage rate will remain constant throughout the forecast period hence salaries and wages will constitute the fixed expenses of the firm. 7.3. Start-up costs The start-up costs below are for the first year of operations. START-UP COSTS Cost ($) EQUIPMENT/ CAPITAL COSTS Cost ($) Registrations $20,000 Plant, Property & equipment   Accountant fees $5,000 Property & land $400,000 Solicitor fees $5,000 Renovations/improvements $100,000 Rental lease cost (Rent advance/deposit) $60,000 Vehicles $300,000 Utility connections & bonds (Electricity, gas, water) $500 Computer equipment $50,000 Phone connection $500 Computer software $10,000 Internet connection $1,000 Security system $20,000 Computer software $2,000 Phones $15,000 Training   Fax machine $5,000 Wages $40,000 Total Plant, Property & Equipment $900,000 Stock/raw materials $180,000 Office equipment   Insurance $75,000 Furniture $50,000 Printing $500 Shop fit-out $10,000 Stationery & office supplies $1,500 Other $40,000 Marketing & advertising $5,000 Total Office Equipment $100,000 Other $4,000     Total start-up costs $400,000 Total equipment/ capital costs $1,000,000 7.4. Balance sheet forecast for 3 years BALANCE SHEET FORECAST [Year 1] [Year 2] [Year 3] Current assets       Cash $230,000 $241,500 $253,575 Petty cash $100,000 $105,000 $110,250 Inventory $180,000 $189,000 $198,450 Pre-paid expenses $60,000 $63,000 $66,150 Total Current Assets $570,000 $598,500 $628,425 Fixed assets       Property & land $400,000 $420,000 $441,000 Renovations/improvements $100,000 $105,000 $110,250 Furniture & fitout $60,000 $63,000 $66,150 Vehicles $300,000 $315,000 $330,750 Equipment/tools $80,000 $84,000 $88,200 Computer equipment & Software $60,000 $63,000 $66,150 Total fixed Assets $1,000,000 $1,050,000 $1,102,500 Total assets $1,570,000 $1,648,500 $1,730,925 Current/short-term liabilities       Accounts payable $250,000 $262,500 $275,625 Interest payable $80,000 $84,000 $88,200 Accrued wages $20,000 $21,000 $22,050 Other Liabilities $150,000 $157,500 $165,375 Total Current Liabilities $500,000 $525,000 $551,250 Long-term liabilities       Loans $540,000 $540,000 $540,000 Other Long term debts $200,000 $253,500 $289,675 Total long term liabilities $740,000 $793,500 $829,675 Total liabilities $1,040,000 $1,318,500 $1,642,500 Owner's Equity $330,000 $330,000 $350,000 Total Liabilities & Owner's Equity $1,370,000 $1,648,500 $1,730,925 7.5. Profit and loss forecast PROFIT & LOSS FORECAST [Year 1] [Year 2] [Year 3] Sales $1,000,000 $1,100,000 $1,265,000 less cost of goods sold $600,000 $660,000 $759,000 Gross profit/net sales $400,000 $440,000 $506,000 Expenses       Accountant fees $5,000 $5,000 $5,000 Advertising & marketing $20,000 $22,000 $25,300 Bank fees & charges $1,000 $1,000 $1,000 Loan interest $30,000 $30,000 $30,000 Wages (including PAYG) $80,000 $80,800 $81,608 Utilities (electricity, gas, water) $500 $500 $500 Telephone $1,000 $1,010 $1,020 Lease payments $30,000 $30,000 $30,000 Rent & rates $60,000 $60,000 $60,000 Motor vehicle expenses $40,000 $40,000 $40,000 Repairs & maintenance $10,000 $10,000 $10,000 Stationery & printing $2,000 $3,000 $4,000 Insurance $75,000 $75,000 $75,000 Superannuation $4,000 $4,040 $4,080 Total expenses $358,500 $362,350 $367,509 Earnings before tax $41,500 $77,650 $138,492 Income tax $10,375 $19,413 $34,623 NET PROFIT $31,125 $58,238 $103,869 7.6. Expected cash flow EXPECTED CASHFLOW [YEAR] Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec OPENING BALANCE $0 -$73,208 -$58,538 -$51,367 -$36,697 -$22,027 -$29,856 -$15,186 -$515 $6,655 $21,326 $35,996 Cash incoming                         Sales $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 Debtor receipts $0 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 Total incoming $75,000 $83,333 $83,333 $83,333 $83,333 $83,333 $83,333 $83,333 $83,333 $83,333 $83,333 $83,333 Cash outgoing                         Purchases of raw materials $45,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 Accountant fees $5,000 $455 $455 $455 $455 $455 $455 $455 $455 $455 $455 $455 Solicitor fees $5,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Advertising & marketing $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 Bank fees & charges $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 Interest paid $0 $0 $0 $0 $0 $15,000 $0 $0 $0 $0 $0 $15,000 Wages (including PAYG) $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 $6,667 Utilities (electricity, gas, water) $42 $42 $42 $42 $42 $42 $42 $42 $42 $42 $42 $42 Telephone $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 Lease payments $0 $0 $7,500 $0 $0 $7,500 $0 $0 $7,500 $0 $0 $7,500 Rent & rates $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Motor vehicle expenses $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 $3,333 Repairs & maintenance $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 Stationery & printing $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 Insurance $75,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Superannuation $333 $333 $333 $333 $333 $333 $333 $333 $333 $333 $333 $333 Income tax $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,375 Total outgoing $148,208 $68,663 $76,163 $68,663 $68,663 $91,163 $68,663 $68,663 $76,163 $68,663 $68,663 $101,538 Monthly cash balance -$73,208 $14,670 $7,170 $14,670 $14,670 -$7,830 $14,670 $14,670 $7,170 $14,670 $14,670 -$18,205 CLOSING BALANCE -$73,208 -$58,538 -$51,367 -$36,697 -$22,027 -$29,856 -$15,186 -$515 $6,655 $21,326 $35,996 $17,792 7.7. Breakeven analysis BREAK-EVEN CALCULATOR Timeframe (e.g. monthly/yearly)   Average selling price of each juice product sold $3.50 Average cost of each juice product manufactured $2.10 Fixed costs for the year $358,500 Contribution margin per unit $1.40 Total sales needed to break-even $896,250 Number of units sold needed to break-even $256,071 References Dobbins, C. (2003). Strategic planning: External environmental scanning. Dionco-Adetayo, E. A., & Adetayo, J. O. (2003). Business Environment Analysis: Globalization Era Imperative For Small Scale Industries. J. Soc. Sci, 7(5), 283-292. GASPAROTTI, C. (2009). The internal and external environment analysis of Romanian naval industry with SWOT model. Management, 4(3), 97-110. Banham, H. C. (2010). External environmental analysis for small and medium enterprises (SMEs). Journal of Business & Economics Research (JBER), 8(10). Bergen, M., & Peteraf, M. A. (2002). Competitor identification and competitor analysis: a broad‐based managerial approach. Managerial and decision Economics, 23(4‐5), 157-169. Thomas, J,W. (2007). Market segmentation. Decision Analyst Larsen, N. (2010). Market Segmantation- A framework for determining the right target customers. Goi, C. L. (2009). A review of marketing mix: 4Ps or more?. International Journal of Marketing Studies, 1(1), P2. Read More
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