Viti kei rotuma MBA437 marketing presentation

GROUP 12 – MBA 437

RUSIELI MUAKELERA WHIPPYLANIETA TAGICAKIBAURUTH ATU

1. INTRODUCTIONCOMPANY PROFILE

VISION

ORGANIZATION STRUCTURE

2. SITUATION ANALYSIS MARKET DEMOGRAPHICS

NEEDS

TRENDS

GROWTH & SIZE

3. MACROENVIRONMENT COMPETITION

PERFORMANCE INDICATORS

SWOT ANALYSIS

4. MARKETING STRATEGIES STATEMENT

PLAN OBJECTIVE

TARGET MARKET

POSITIONING STRATEGY

MARKET MIX

5. FINANCIAL ANALYSIS BREAK-EVEN

SALES FORECAST

EXPENDITURE FORECAST

6. IMPLEMENTATION CONTROLAPPROACHES

STRATEGY

MARKETING ORGANIZATION

CONTINGENCY PLAN

DIFFICULTIES & RISKS

ETHICS AUDIT

7. REFERENCE

8. DISCUSSION

1. INTRODUCTION

COMPANY PROFILE :VKR Corporation is owned by four [4] women who

are from two ethnic groups of Fiji, namely Fiji and

Rotuma.

We are a partnership entity registered under the

Companies Act of the Republic of Fiji based in

Lautoka and will be operating from a leased

property of 20 acres in Matawalu, Lautoka through

land tenure agreements of 50 to 99 years lease.

Our 20 acre property will be run from foreshore to

the hills of mataqali land of Matawalu Village.

VKR Corporation aims to promote our product Fiji

Coco H2O first to primary schools within the urban

and peri-urban areas of Lautoka.

VISION :

The premier producer of the drink that

sustains health and wealth in you

ORGANIZATION STRUCTURE : FLAT

MARKETING

ANALYST

MARKETING

CONTROLLER

FINANCE

CONTROLLER

MARKETING

AUDITOR

2. SITUATION ANALYSIS

MARKET DEMOGRAPHICS:

Market segmentation divided into two well defined slices to

understand population and behavioral traits.

In 2012 Lautoka had a total of 84 primary schools

(1 government, 80 non-government, and 3 private schools) MOE Annual Report 2012.

Classes 1-4 lower classes (Ages 6-9)

Classes 5-9 upper classes (Ages 10-13)

Primary school distributions within Lautoka are:

39 schools within urban areas

24 schools in rural areas and;

21 schools in remote areas.

Net enrolment per class: 35 students (Approx.)

Minimum No of streams: 3 x (8 classes) =24

(Approx.)

Total students per school: 840

Target Market (39 schools): 32,760

(approx.: 26.4% of potential target market)

Potential Market: 24,187

Corporation will focus on the 39 Primary

schools located in the Urban areas:

Study on dietary patterns in Fijian children

concluded that almost all adolescents

frequently consume sugar sweetened beverages

(SSB), low intake of fruit and vegetables and

high fat/salt snacks after school.(Wate, Snowdon, Millar, Nichols, Mavoa, Goundar, Kama and Swinburn

(2012) )

Nearly one quarter of sample reported irregular

breakfast during school days with Indo Fijians

more likely to regularly consume breakfast, but

had an unhealthy SSB and snack consumption.(Wate et.al.)

Fiji Coco H2O will be a healthier choice of

product that can substitute such SSBs and

fizzy drinks to improve health and wellbeing.

NEEDS :

The Academy of Nutrition and Dietetics said coconut water is

healthier than fruit juice, as long as its unflavored and doubles the

calories of coconut water and potassium level that help prevent stroke

and heart attack.

Singh, R (2009) argued that coconut water can be used for whole

body rehydration, reduce nausea and no stomach upset, but fullness

when consumed which suits target market, considering their high

activities trait.

Further Athukorale D.P. (2008) pointed out that coconut water has

higher ratio of amino acid, arginine, alanine, cisteina (essential) and

serina, greater than those found in cow’s milk, a perfect natural

isotonic which reinstitutes energies, dissolve kidney stones, protect

against cancer, balances sugar relieves constipation, improves blood

circulation, lowers high blood pressure, posses anti-aging properties

and enhances immune function. (COCOINFO International Journal, Vol. 19, No.2, 2012)

Coconut water is said to be rich in essential electrolytes.

Electrolytes are minerals in your blood and other body fluids that

carry an electric charge. They have an effect on the amount of

water in your body, your blood pH, and muscle function.

Common electrolytes include:

• Bicarbonate

• Calcium

• Chloride

• Magnesium

• Phosphorous

• Potassium

• Sodium

Potassium is one of the most important electrolytes there is and its

functions in the body include regulation of fluids and mineral

balance in cells, maintaining of blood pressure and transmission of

nerve impulses as well as muscle functions.

As it is able to help draw water into cells and into the blood, the body

is thus able to rehydrate quickly.

It is has been suggested that coconut water, extracted

from a nut that has no cracks or damage, is sterile hence

has been used as blood plasma substitute.

Coconut water intravenous (IV) therapy has been in use

for more than 60 years, as far back as World War II.

Drinking water can hydrate you, but it does not have that

speed of hydration [of coconut water] because it doesn’t

have the electrolytes in it. Electrolytes can also prevent

muscles from going into cramps and spasms.

For breast-feeding mothers, young coconut water also

contains lauric acid, which is similar to that found in

breast milk. Its anti-fungal, antibacterial and antiviral

properties help keep diseases at bay in mother and baby.

There are reports dated up to 1976, which documented

similar usage when coconut water was effectively used

in emergency situations as a temporary alternative

where standard medical supplies were not readily

available.

TRENDS:

These health benefits greatly suit both target and potential market,

which is supported and promoted by government as targeted in

three out of the eight Millennium Development Goals.

Fiji Coco H2O is a Fijian natural drink that is familiar and

consumed by all ethnicities cultures, age and communities.

Fiji, is an island paradise. However there is trouble in paradise. Its

people are dying prematurely of lifestyle diseases known as non-

communicable disease [NCD’s] arising from changes in their diets

or the lack of good nutrition in their foods and healthy living.

It is believed that non-communicable diseases [NCD] can be

minimized through consumer behavior.

The available data and information on the health status of our

nation, presents an opportunity for our corporation to assist in

addressing this problem.

TRENDS:

In our marketing research we looked at consumer behavior at

childhood level has been proven that [NCD’s] is the result of

unhealthy diets from younger days. The research on “Diet of

children in Urban and Rural Fiji by [Sinead Katherine Kado BSc,

MBBS] and its relevance to non –insulin dependent diabetes

[NIDDM], concluded that children in the urban areas consumed

more imported foods with a higher intake of saturated fats,

protein and refined sugar, in comparison with the rural group of

children who ate mainly Fijian produce.

It is postulated that these differences in diet form a risk factor in

development of NIDDM. This has many implications for the

health of Fijians where diabetes is becoming more prevalent. The

Fijian government should continue its health programme in

schools, monitor the promotion of refined foods and instigate a

policy for selling of food in schools. Fijians should also be

encouraged to return to their traditional food as much as

possible.

1131

2588

1181

39

267

610

12915

0

500

1000

1500

2000

2500

3000

Diabetes Hypertension Dual RHD

2013 2014 (Jan to Aug)

5149

7062

2853

491

4697

7421

2825

333

0

1000

2000

3000

4000

5000

6000

7000

8000

Diabetes Hypertension Dual RHD

2013 2014 (Jan to August)

MARKET GROWTH & SIZE:

Coconut water is the new trend in soft drinks and is one of the

fastest growing water in the United States and the United Kingdom

due to mass appeal to ethical and health conscious consumers and

those leading an activity lifestyle, with sprouting predictions that it

could overtake orange juice sales (as in Brazil), with 250 companies

having beverages with some form of coconut water in its content

Arnold C. (2012).

Corporation’s current portfolio and desired sales indicate strategic

planning gap where VKR Corporation will identify opportunities to

build or acquire business related to current product (integrative

opportunities) such as aligning itself to market leader in the future,

such as Fiji Water and adding attraction to unrelated businesses

such as introduction of healthy food (diversification opportunities).

3. MACROENVIRONMENT

Fiji Coco H2O falls under the oligopoly market where few

markets dominate and highly concentrated market is shared

between firms (UK Business Economics online). Although

only a few firms dominate it is possible a small firm such as

VKR Corporation may operate in the market. VKR

Corporation works out range of possibilities when

competitors react by observing strategies launched by rivals

and improving on such strategies or undermining them with

better innovative strategies. Fiji Coco H2O product due to

its uniqueness within the country’s borders explore

economies of large scale production to create strong brand

that creates loyalty and locks in customers by extensive

advertising and direct marketing.

COMPETITION:

o Coca Cola

o Pepsi

o Fiji Water

o Rewa Dairy

o Roadside vendors

COMPETITOR PRODUCT & PRICES

Company Product & Bottle Capacity Price

Coca Cola Fiji Pulpy : 375 mls

Frubu: 500 mls

Can coke 375 mls

Coke bttle 600 mls

Jucy bttle* 1 litre

[*new coconut flavor]

$2.30

$2.00

$1.60

$2.00

$2.30

Fiji Water 500ml

1.25 ltrs

1.5ltrs

$2.00

$2.25

$2.50

Rewa Dairy Fun Flavour : 250mls $1.20

Roadside vendor selling fresh coconut juice 1 nut: 200mls to 1 litre $2-$3.00

PERFORMANCE INDICATORS:

DUE TO THE POPULARITY OF OUR FIJI COCO H2O

INTO THE MARKET WE WERE ABLE TO ATTRACT A

LARGE MARKET SHARE

AT INITIAL STAGE, WE HAVE ATTRACTED A LOT OF

BUYERS INTO THE MARKET, ONCE WE HAVE

ESTABLISHED WELL AND APPROACHING OUR

MATURITY STAGE WE WILL STRATEGIZE OUR

MARKET TO TARGET OTHER POTENTIAL

CONSUMERS IN THE VARIOUS GEOGRAPHIC

LOCATION IN OUR DOMESTIC ZONE

SWOT ANALYSIS:

STRENGTHS

• LOW PRODUCTION COST

• YEAR ROUND AVAILABILITY

OF RAW MATERIAL

• PRODUCT SUPPORTS GOVT

INITIATIVE

• PRODUCT IN LINE WITH GOVT

DEVELOPMENT PROGARMME

WEAKNESS• COCONUT VARIETY

EXISTING DETERANT TO

ACHIEVING FORECASTED

SALES

• VKR CORP NEW AND

SMALLER THAN EXISTING

BEVERAGE INDUSTRIES

OPPORTUNITIES

• TARGET NCD CASES IN

LAUTOKA

• WHEN SMALL CAN MAINTAIN

QUALITY,PRICE & GROW

MARKET STEADILY

• EXTENDING PRODUCT

BOUNDARY

• IMPROVE & INCREASE

CULTIVATION OF FIJI SHORT NUTS

IN STRATEGIC FARM PLANS

THREATS

• CLIMATE CHANGE

• PESTS & DISEASES

• LOCATION MOST COCONUT

TRESS VULNERABLE TO RISE IN

SEA LEVEL

• COMPETITION FROM WITHIN THE

COCONUT INDUSTRY ON BY-

PRODUCTS

• SUBSTITUTE PRODUCTS-

BEVERAGES

4.MARKETING STRATEGIES

STRATEGY STATEMENT:

Making Fiji Coco H2O a drink that brings health & wealth

MARKETING PLAN OBJECTIVE:

We will create Fiji Coco H2O offering to serve unmet – or

even unknown customer need. VKR Corporation proposes

to weekly capture 1.2-1.7% of target population within a

school (10 -15 bottles per week in a school roll of

approximately 840) for its first 2 year launch. From the

3rd year VKR

Corporation will target 3.5% of target population per

school, 4.4% in the 4th year, 4.6% in the 5th year and 5%

in the 6th year and 5.3% in the final year, with increased

revenue after the launch. We intend to penetrate the

target population (10%) within 7 years through intensive

marketing and lengthening maturity stage of product cycle

by introducing natural flavors (diversification) to attract

potential markets.

PROPOSED POSITIONING STRATEGY:

Primary target market is 26.4% of total population (primary

schools in the whole of Fiji) and later on to the secondary

schools with target population of 68, 425 (Ministry of

Education 2012 Annual Report).

We plan to penetrate secondary school segment with an

initial size of 10% from the 5th year after launch which will

initially rake in additional revenue of $6,8425.50 and 0.4%

yearly increase thereon. In the long run, we will eventually

target whole population and aim to gain 10-15% market

share of 837,271 (Fiji 2007 Census – Fiji’s total population)

with initial minimum projected sale and revenue of

$83,727.10 per quarter.

During the 7th year, VKR Corporation will explore modifying

product to suit tourism market (total population of 859,540)

with targeted additional 5-10% sales projection during and

after launch.

MARKETING MIX

1. PRODUCT SERVICES

Fiji Coco H2O will be differentiated through packaging and design

and customized to suit each segment providing higher quality for

less money.

Product hierarchy points toward Need Family to highlight core

need that justifies existence of product.

Proposed new product development will promote Product Family

level where all new diversified products will satisfy core need

effectively in order for VKR Corporation to strengthen brand and

create positive impact.

General guarantee will be printed on package where unsatisfied

customers may return, exchange product or can ask for refund.

These general statements suggest high quality and customers may

perceive company to be dependable, which is helpful for products

which are of superior quality than that of competitors.

2. PRICING:

VKR Corporation will use a mixture of pricing objectives - survival,

maximum current profit and maximum market share in order to

cover variable and some fixed cost when intense competition

arises in the short run, choose realistic price (considering target

market’s buying power) that produces maximum current profit,

cash flow or rate of return on investment.

We will use the target return pricing method where we decide

price that yields rate of return on investment. Mark-up pricing will

be used in tourist markets due to buying power. We anticipate

reaching break even volume within the 3rd year (after launch).

There will not be any price discounts and allowances due to its

low pricing method to maintain desirable return, however we will

explore channel pricing where prices may slightly differ depending

on whether customer purchases product at a hotel, fine

restaurant or vending machine. Although we intend to dominate

market with lower costs, we aim to promote quality, health and

wealth to create strong brand.

3. PROMOTION:

VKR Corporation will use the following consumer promotion

tools to promote product offer;

1. Samples – offer free amount of product through direct,

door to door.

2. Prizes (sweepstakes) – to win a free carton of Fiji Coco

H2O if they purchase product and win the draw.

3. Free trials -Inviting prospective customers to try free

product at major supermarkets in Lautoka in hopes that

they would eventually purchase product.

4. DISTRIBUTION:

VKR Corporation will adopt the integrated marketing channel

system where it will place Fiji Coco H2O in school canteens.

This will include all Lautoka city primary schools, and to retailers

to increase market share by running campaigns informing

prospects about product through advertising, taking part in health

and wellbeing programmes and choosing the best communication

marketing mix to optimize coverage, customization and control

while minimizing cost and conflict.

5. FINANCIAL ANALYSIS

BREAK-EVEN ANALYSIS:

Year Target per

school

Target Unit of

production &

Revenue $ or 39

sch.

Total Nuts

Required

TVC $ TFC Total Cost

$

Launch 1 420 16,380 8,190 20,337.50 11,500 31,837.50

Launch 2 630 24,570 12,285 25,756.25 11,500 37,256.25

1 1358 52,962 26,481 43,601.25 11,500 55,101.25

2 1554 60,606 30,303 48,478.75 11,500 59,978.75

3 1638 63,882 31,941 50,626.25 11,500 62,126.25

4 1764 68,796 34,398 53,797.50 11,500 65,297.5

5 1890 73,710 36,855 56,968.75 11,500 68,468.75

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

launch 1 launch 2 yr 1 yr 2 yr 3 yr 4 yr 5

$$

REVENUE, BREAK EVEN PROJECTION

Revenue

VC

FC

TC

SALES FORECAST:

EXPENDITURE:

Launch

1st yr

10 bott

x 42

wks

Launch

2nd

year

15 bott

x 42

wks

1st term

(14

weeks)

30 bott

per wk

2nd

term

32

bottles

per

week

3rd term

35

bottles

per

week

2nd year

37

bottles

per

week

3rd year

39

bottles

per

week

4th year

42

bottles

per

week

5th year

45

bottles

per

week

420/sch 630/sch 420/sch 448/sch 490/sch 518/term 546/term 588/term 630/term

EXPENDITURE FORECAST:

TENTATIVE BUDGET

Variable Costs

Salary (1 operator, I Laborer) $19,000 (9,500/staff)

Cost of Raw material 26,481nuts x $1.25= $33,101.25

Preservatives Cost (Pottasium sorbate

and sodium metabisulfite)

$500 ($400 during launch yrs)

Plus $100 additional/per volume/yr

Fuel/Maintenance/Insurance $10,000/yr

Fixed Cost

$30,000 Building

$25,000 Land

$60,000- complete automatic

coconut water plant machine

Total: $115,000

Repayment: $11,500/year

6. IMPLEMENTATION CONTROL

1. Annual Plan Control in order to examine achievements of

desired results. This would be conducted by Ms. Rusieli

Mua, who will analyze sales and market share by using market

metrics to measure performance weekly, monthly, quarterly and

annually, in order to capture sales to expense ratios and financial

analysis.

2. Profitability Control – to be monitored by the financial

controller, Ms. Kelera Whippy who will examine where company is

generating revenue and identify areas where it is losing money.

Specifically, she will use this approach to measure profitability of

product, localities, customer segments, trade channels and order

sizes from each segment to determine opportunities for expansion,

reduction and marketing activities.

3. Efficiency Control - To be conducted by marketing

controllers, Ms. Lanieta Tagicakibau who will examine

adherence to profit plans, measure efficiency of

promotions, analyze media production costs, evaluate

customer and geographic profitability, and train future

marketing staffs on financial implications of marketing

decisions.

4. Strategic Control – Marketing auditor, Ms. Ruth Atu,

will conduct a comprehensive, systematic and periodic

examination of company’s marketing environment, objectives

strategies and activities, to determine weakness,

opportunities and giving recommendations for improving

performance.

STRATEGY:

Strategy 1: Company will position product by offering the best quality

through extensive marketing to satisfy and retain a delighted target

market. Marketing team which consists of company founders will be

tasked with marketing programmes which will take place before and

during and after launch. Each person will target the ten schools each,

depending on location by conducting direct marketing, advertising,

conducing testers in major supermarkets of Lautoka and supporting

health and community programmes such as Health Walk activities. This

will strategically create awareness and also position brand for potential

market in the long run.

Strategy 2: Company will investigate competitors in the market to

compare value and satisfaction by value offering and position product

by offering the best quality through marketing research and survey. The

top four management will be responsible by periodically analyzing and

monitoring strategic steps taken by competitors and comparing sales

volume to determine value added conviction from each segment. This

will strategically allow team to innovatively surprise target and potential

market with new product development consistent with brand.

Manager

Market

researcher

Communication

specialist

Sales

manager

Distribution

specialist

Finance

specialist

Engineer

MARKETING ORGANIZATION

In the long run, company anticipate tapping into different user groups

which comprises of distinct users with different buying preference and

practices, for example tourism market, health conscious customers and

traditionalist target markets., thus market centered organization is desirable

for company, with a horizontal structure that will encourage empowerment,

higher accountability of overall quality of relationships and employee’s

freedom to take actions in satisfying customers individually (Kotler and

Keller, 2012).

Horizontal Team (Kotler and Keller, 2012)

Contingency Planning:

Insurance and Contingency farming

Difficulties & risks (in the first three years)

1. Lack variety of Fiji Short

2. OHS risks – injuries (high risks)

3. Labor intensive (initially)

Ethics Audit

1. Review VKR Corp’s formal code of ethics

2. Ethnic training programme of compliance policies

3. Look into past breaches of ethics and address it.

4. Speak with employees regarding their impressions of the VKR

Corp commitment to ethics.

7. REFERENCE

Kotler P., Keller K. L. (2012), Marketing Management 14th Edition

High Commission of the Republic of the Fiji Islands, London Media Report ()

Fiji TV Annual Report 2011

Ministry of Education, National Heritage Culture and Arts 2012 Annual Report

Ministry of Agriculture 2013 Annual Report

Rakesh K. (2002) MBA CUSAT Business Plan.Retrieved [03.10.’14] from the World Wide

Webhttp://www.fijitimes.com/story.aspx?id=234913

Kado S. K. () Diet of Children in Urban and Rural Fiji, Pacific Health Dialog Vol. 6. No. 1.

Wate T. J., Snowdown W., Limmar L., Nichols M., Mavoa H., Goundar R., Kama A., Swinburn B., (2013)Adolescent Dietary

patterns in Fiji and their relationships with standardized Body Mass: Retrieved [03.10.’14] from the World Wide

Webhttp://www.ijbnpa.org/content/10/1/45

United Nations Educational Scientific and Cultural Organisation “Education for All Mid-Decade Assessment Report (2008).

UNICEF 2011 Report on Children in Fiji: An Atlas of Social Atlas

Fiji Bureau of Statistics 2007 Census Report

Tropical storm in the food and drink market: launches of coconut water quintuple over the past five years Published on

May 31st, 2013, Mintel

CONCLUSION

The I’Taukei saying “Vinaka Vaka Niu” means that this

product is PERFECT… We present to you the best part of the

coconut, the coconut water, take Fiji Coco H2O.

DISCUSSION !!