Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
GET A 40% DISCOUNT ON YOU FIRST ORDER
Strategic Marketing report – VEREYA CW1
This report is focused around a healthy and famous Bulgarian product – the Bulgarian yellow cheese and the potential marketing entry strategy for it. The product is offered by a couple of brands in Bulgaria, however this report is focused around the largest one – VEREYA. The organisation is one of a kind and one of the largest ones in Bulgaria, however their unique products like Bulgarian cheese and Bulgarian yogurt are unknown in most other countries, which gives the brand a good reason to venture out and expand its market.
In the beginning of the report, a detailed PESTLE analysis of the UK would be provided, which gives explanation and justification to why the most appropriate market that this product should enter is the UK. The macro and micro analysis of the market provides important information as to what strategies should the organisation choose when entering the market in order to have a large competitive advantage.
Three different market entry strategies would be later on discussed and the most appropriate for this case would be proposed and justified. With the help of some research the strengths and limitations of all strategies would be further explained.
Last, but not least the market segmentation process would be discussed. As in the previous parts of the report, in this final one, the strategy which would ensure competitive advantage would be proposed and justified.
Table of Content
In this report as a junior marketing manager, I would suggest a marketing strategy for a well-known Bulgarian brand – VEREYA. The organisation currently offers a variety of milk products such as Bulgarian yogurt and cheese. In order to enter the foreign market, VEREYA would use one of their most famous products – Bulgarian yellow cheese. This product is very different from any other cheese in the world as it is made with specific Bulgarian ingredients. This report proposes a strategy where VEREYA enters the UK market with their Bulgarian yellow cheese. Therefore macro-environmental analysis which comprises of PESTLE of United Kingdom will be analysed to assess the organisation’s possible opportunities and threats for the organisation in the UK dairy market. Also three mode of entry strategies will be assessed to justify an appropriate entry mode for the organisation into the UK market. In addition market segmentation will also be applied in order to select a prioritised segment for the chosen organisation. In addition to this also the Porter’s generic strategies will also be analysed to select an appropriate one which the organisation might embark on to gain competitive advantage.
PESTLE analysis of the UK
In order to justify as to why the UK is the most appropriate country that VEREYA should sell their products to, a detailed analysis of the macro environment would be provided.
The UK, which includes England, Scotland, Northern Ireland and Wales, is one of the most powerful countries in the world. The political situation in the country has been very stable for a long time, however there have been some debates and political issues after Brexit. According to some professionals Brexit would have a very negative impact both on the UK and the European Union and it will create a complete chaos. On the other hand some people claim that it would be beneficial and create opportunities.
The corporation tax rate for company is 19%, but from April 2020 it will be 17% (GOV. UK, 2018). Since 2011, the VAT has been 20%.
Strengths and opportunities:
The political stability is one of the major strengths of the UK in terms of the political factor. The country has a very low political, economic and financial system risk, which makes it very appropriate for business growth and companies which wish to expand and sell worldwide. This is a great opportunity for VEREYA, therefore the chances of growing their market share there is positive. Another strength which could benefit the organisations operating in the UK market is their constitution, which is uncodified. This means that it could be adapted to certain situations and new circumstances. The banking regulations are also a political strength, because it ensures financial stability for the country.
Weaknesses and threats:
The main weakness in this case is Brexit, which is going to change the whole relationship between England and Europe. This could be a potential threat for companies which want to operate there. The UK also has very high tax rates and a very weak protection of human rights, which all could be potential threats for VEREYA.
According to the World Bank, “UK is the 5th largest economy in the world by nominal GDP” (The World Bank, 2017). Recession is one of the biggest economic issues that most countries face, however the government in the UK has taken some serious measures to improve their economy. The economy in the UK has increased by 9.7%. In November 2017 the inflation rate rose to 3.1%. Inflation, the economy crises and Brexit seem to be the biggest challenges that UK and businesses who wish to sell there, are facing.
Most households experienced difficulties after Brexit due to the higher prices in the stores. In the UK, Bulgarian products do not have high prices, therefore the product would be available and quite affordable for the consumers. This means that “VEREYA” would not experience small amount of sales.
Strengths and Opportunities:
London is the number one centre for foreign exchange in the world, which provides a lot of opportunities for foreign companies operating there, including VEREQ. London is also an important centre of the world financial activity. The simple tax system also makes it easier for foreign organisations.
Weaknesses and Threats:
The main aspect that Brexit would have a large impact is the economic system. Ever since Brexit the pound went down and has not been able to recover. The economic relations with the European Union are also very important for every organisation and with Brexit it is a bit unclear how things are going to be in the future. In this case. VEREYA should keep in mind the situation and prepare a risk management report including appropriate actions which could prevent any risk situations in the future. The inflation is another weakness of the UK.
Currently the population of the UK is 66.5 million (Worldometers.info, 2018) and is predicted to rise in the future.
One of the main trends in the UK and in the world in general is healthy eating. Many people have started to choose healthier meals, which would be very beneficial for VEREYA, as their yellow cheese product is a protein, which many people include in their healthier meal options. They also offer very low-fat or non-fat options which would be even more appropriate for people who want to eat healthier.
The new generations are also very active on social media and their opinions are often influenced by the information they find online. VEREQ should be quick on their feet with the marketing strategy and promote their new product online. According to a research online, calcium is one of the 4 major nutritional deficiencies that the population of UK currently has. “Calcium is one of the most important minerals, of which we also need the largest daily intake. It is necessary to develop and maintain strong bones and teeth, to develop normal muscle and nerve function, and to maintain healthy blood pressure” (Water for Health Blog, 2018). Calcium is also not produced by our own body, therefore we need to get our daily dosage through the food we eat. The Bulgarian yellow cheese is very high in calcium and a recent study also points out that it could prevent the risk from hearth-diseases by 14% if consumed carefully in small portions each day.
Overall in terms of the socio-cultural factor, VEREYA do have a high chance of attracting a lot of new customers with the Bulgarian yellow cheese, considering the fact that it is a healthy product, which could be beneficial for everyone who has calcium deficiency.
VEREYA also have other very unique products that could create a “boom” on the UK market, considering their benefits and the fact that they are bio-products which can provide a lot of heathy enzymes and vitamins to the customers. A good example for this is the Bulgaria yogurt, which is very different from the UK and US yogurt that is sold in the supermarkets. Bulgarian yogurt is not sweet at all, there is no sugar in it and it is very natural. After the success of the Bulgarian yellow chees, the brand could also introduce their other products to the UK consumers.
Strengths and Opportunities:
The UK has a very large market and there are a lot of consumers which is a great opportunity for each organisation as there are going to be a lot of potential new clients. As mentioned above in the UK there are a lot of young people interested in healthy lifestyle which is a great opportunity for VEREYA in particular. Another strength is the fact that UK is very high in charts in terms of education of the population.
Weaknesses and threats:
The education costs are increasing throughout the years which would lead to less educated people in the future, as not all of them would be able to afford education. The population there is also very influenced by social media trends. This could be a potential threat to VEREYA if they do not promote themselves appropriately, or if other trends clashing with their products, come into light in the next years.
The technology sector is one of the fastest developing sectors right now and this gives amazing opportunities not only to people in their everyday life, but also to the companies as well. The UK is also one of the most advanced countries in terms of technology, therefore VEREYA could really benefit from this.
VEREYA could use the advanced technology for social-media advertising and engagement with their customers. This would give the company a very nice and positive reputation that could stand out in the crowd. They could also use the new technologies for improving their cost-effectiveness, researches on the market and their potential customers, the operational time, etc.
Strengths and opportunities:
The fast developing technology and the access that organisations have to it in the UK is a great opportunity for VEREYA if they would be operating there in the future. They could use a lot of new technologies for producing, delivering and marketing their products. There are also a lot of experts and scientist that could get on board of the company and help them with new innovations and products.
Weaknesses and threats:
Technologies can be quite expensive, therefore VEREYA needs to have a good start and earn profits in order to be able to afford all of the new technology to keep up with the current UK tech trends.
The UK has made a lot of changes that have improved and reduced the negative impacts on the environment. The government as well as the local councils have worked hard for the past couple of years to bring awareness to the problem and encourage people to work on it themselves. The laws in the UK in terms of protecting the environment apply to the organisations as well.
VEREYA is a brand which works with healthy products and is also very environmental-friendly. All of their campaigns promote protecting the nature. They are also the first Bulgarian company to use only certificated packaging following the FSC program about using eco-friendly materials.
Strengths and opportunities:
The UK strive more and more each year to become a better eco-friendly country, which falls great in line with the eco-friendly policy of VEREYA. This means that they could have great support from the government and the consumers.
Weaknesses and threats:
The UK also has a lot of environmental regulations, which VEREYA would need to follow in order to operate and sell there. The packaging is not enough for the company to successfully enter the foreign market.
There are a lot of laws and regulations in the UK that need to be followed and the authorities, which are obligated to research if the rules are being followed, are very strict.
Food retailing commission code of practice is one of the codes that VEREYA would have to follow in order to operate in the UK and sell the Bulgarian yellow cheese in supermarkets.
One of the things that the health department in the UK has been trying to improve in their country is the consumption of sugar. In these terms VEREYA does have a competitive advantage, due to the low to none amount of sugar in their products. In fact their only product which currently contains any sugar is the fruit Bulgarian yogurt.
Market penetration strategies
In order for VEREQ to have a successful launch of their product on the UK market, a large amount of research and planning needs to be done. There are many different market entry strategies that the organisation could choose from. In this report some of them would be discussed as well as the most appropriate for VEREYA with explanation why.
One of the options for VEREYA is joint venture – a business arrangement where two or more parties put together their resources with the combined goal of achieving something together. This could be just a project, or a new business idea (Shaw, 2015). The joint venture is separate from the individual businesses of the companies and can be exited at any time. All participants are responsible for the budget, the losses and the incomes of the JV. This strategy is often used when a company wishes to enter a new market, yet they have limited resources or experience (Davies, Egger and Egger, 2010). When the new company reaches their desired market share, exposure and profit, they often leave the joint venture. If a small company joins forces with a top retailer in a specific country or market, it could get a lot of recognition and possibilities for success (Shaw, 2015).
This strategy could be beneficial for VEREYA as they can create a strategic alliance with a large retailer, for example ASDA, M&S or Tesco. Those retailers are very successful in the UK, therefore a joint venture with one of them would give VEREYA an amazing opportunity to introduce their brand and products to the consumers. Offering people more choices for their meals and new brands and products would be beneficial for the retailer as well, because people enjoy trying new things and often having new options to choose from. Promoting healthy eating could also attract a lot of customers who have that belief and increase the sales of the store.
This strategy could be beneficial for a larger brand or company. In this case they would start manufacturing their products in foreign countries (Davies, Egger and Egger, 2010). This excludes the taxes and fees that the company has to pay when producing in their own country and exporting to the UK. This strategy however depends a lot on the government and law restrictions in the foreign country, as well as on the possibilities of the organisation.
This strategy is very appropriate for organisations with a large income that can afford to start producing in a completely new country, therefore it is not the most appropriate for VEREYA at this point. They only operate in Bulgaria, which is a small country and the wages there are some of the lowest ones in the Europe, which leads to a smaller profit for the company.
Strengths and opportunities:
As there are no regulations and taxes in terms of importing the product to the UK, this would mean that VEREYA will have more money resources to spend on production instead of on fees. It also gives a shorter time for delivering their products and transporting them, because they are produced in the UK. The UK have been working hard on making the supply chain shorter for businesses, which could be possible if VEREYA operates there.
Weaknesses and threats:
As mentioned above this strategy requires some investments as it is not heap to move a manufactory from one country to another. This is a threat for VEREYA. Setting up the business there and making sure that all paperwork and documents are in line would also take a lot of time and resources.
Exporting could be direct or indirect and it is one of the most frequently used strategies by organisations looking for selling in foreign countries (Davies, Egger and Egger, 2010). Marketing, selling and delivering directly to the consumers in that country is considered to be direct exporting. On the other hand if there is a trading house or agent involved in the process the exporting becomes indirect (Shaw, 2015).
Both of these options are not very appropriate for VEREYA at this stage, due to the fact that their income is not very big and they would need some kind of support when entering the UK.
Strengths and opportunities:
Going into the UK market without any support would give VEREYA more freedom as to where they want to position their product. If they are not entering a joint venture with a specific organisation, they would be able to sell their product in more than one supermarket chain.
Weaknesses and threats:
On the other hand, this would exclude the financial support that VEREYA needs and would get from a joint venture, as they are not a very rich company. Entering the UK market is not easy and doing it without local support could be very damaging for the income or VEREYA.
Market segmentation is the process of combining customers with similar interest and needs into groups. The members of the groups share similar characteristics and this helps the marketing managers with the analysis of the future customers and opportunities for the brand (Brochado and Martins, 2008).
This segmentation puts people into groups according to geography and where they live. This is beneficial for organisation which are focused around certain regions and would like to advertise and operate there (Eilon, 1993).
In this case the factors are much more and all of them relate to demographics. The groups are formed according to their age gender, nationality, race, religion, occupation, income, family members, etc. (Eilon, 1993). This market segmentation could be used within or without the geographic one and is one of the most common market segmentations used by organisations. Managers often use this method due to the many different specific factors that separate the customers.
Instead of demographics, this market segmentation method forms the different groups according to their choices, behaviour, decision making processes, etc. According to Meidan (Meidan, 2015) if the customers are aware of the product and know how and what to use it for, they are much more willing to purchase it (Brochado and Martins, 2008). On the other hand if the customers do not know any information about it, they might choose not to purchase it. In this case there are a couple of groups that could be formed:
Current users – those are the people who are currently using the product
Ex-users – people who used to buy the product, but no longer do. In this case they might go back to using it (Ray Chaudhuri, 2014).
Customers who are aware of the product – this group includes all customers who are aware of the product, they have seen commercials, or have shown interest in it and have informed themselves about the advantages and disadvantages of it (Brochado and Martins, 2008).
Customers who are not aware of the product – those are the consumers who have not seen the product anywhere yet and ae not aware of its existence (Ray Chaudhuri, 2014).
First – time users – this group includes everyone who decides to purchase the product for the first time and use it.
Potential customers – those individuals fit into the category that the managers have set out for their potential clients. The advertisement of the product and the brand are aimed mainly towards people who fit into this category (Eilon, 1993).
Psychographic segmentation – last but not least, this category divides people according to their lifestyle, habits, personal traits, etc.
Market segmentation for VEREYA
In terms of the geographic segmentation, VEREYA aims to sell their Bulgarian yellow cheese product to people living in the UK.
In terms of demographic segmentation, the Bulgarian yellow cheese is appropriate for people from all ages, except babies under 1. It is also a product which both males and females could enjoy. These categories are very wide and include almost everyone in the UK, therefore further segmentation needs to be made (Ray Chaudhuri, 2014). If the brand has a clear group of potential customers to aim towards, they would have much more success. The Bulgarian yellow cheese is a healthy product often used by people who wish to live a healthy lifestyle, therefore people interested in this type of lifestyle are potential consumers of it. Some of the reasons as to why they would choose this product are: the healthy ingredients, the valuable minerals and vitamins which people need and the affordable price (Ray Chaudhuri, 2014). VEREQ is also an environmental friendly company, which means that people who care for the environment and only choose such brands would also be willing to use their products.
There are three main strategies in terms of achieving competitive advantage. Porter’s generic strategies are explained and justified below:
In the case of cost leadership, VEREYA would offer their products for a lower price than their rivals. This would ensure and maintain he profits of VEREQ, as well as expand their market share (Ferdinand, 2013). Low prices attract customers, therefore the level of their sales would be high. This would also make the market entry process harder for new organisations as it would be hard to beat a very low price.
There are some disadvantages to this strategy as well. If VEREYA focuses primarily on the price, they would not create a loyal consumer group with evolving standards and taste. Their technique could also be easily copied by the rivals of VEREYA, which could lead to price wars (Ferdinand, 2013).
Overall VEREYA is an organisation focused on the average consumer, therefore this strategy would not be clashing with their potential consumers and could give them a nice boost in terms of market share and profits.
According to Miles (Miles, 2015) differentiation is a strategy where the organisation offers new and innovative product that are different form the ones already on the market. This makes the company stand out and attract new customers. A good innovation strategy and research is required in order for the product to be one of a kind and differentiate from the others. At the same time it should be high quality and answer to the needs of the consumers (Ferdinand, 2013).
Having an innovative and different product would definitely attract the individuals and increase sales. It is also a great competitive advantage strategy as there would be no other similar product that could be used as a substitute.
A very good marketing strategy should be created in order to inform the consumer why this product is different and why is it better than the others. Different products also have a harder time in the beginning as most people prefer to use what they are used to. There are different tactics that VEREYA could use in the beginning in order to inform the consumers about the product and why they should buy it. For example promotions in store with stands and people who offer the product to the shoppers, tell them all about the benefits of it and why it is one of a kind. Hey could also offer them to taste it as this is the main aspect of their decision making process.
Focus strategy is essentially when an organisation creates a specific product which would answer to specific customers and their needs. In this case the product is more niche and not so generic.
Offering such a niche product and focusing on specific market group would ensure sales and loyal customers.
There would be less consumers that are in this exact focus group rather than the general customer.
Appropriate strategy for VEREYA and justification
In this discussed case, the most appropriate strategy for VEREYA would be cost leadership. Differentiation is another possibility, however it would take longer for the brand to establish itself and for the consumers to start buying it, as they can often be afraid of new products. In the case of cost leadership VEREQYAwould offer their product for the lowest price on the market, which would attract a lot of customers. Learning about the benefits of it would also ensure that those customers sty loyal to the company. Offering the lowest price in terms of cheese on the market would give competitive advantage to VEREYA and its yellow Bulgarian cheese product. It is also very unique and unlike anything else on the UK market, which would also enhance its reputation and attract the consumers.
This detailed report evaluated the possible strategies for market entry in the UK. It also proposed and justified specific options that could be beneficial for VEREYA and it’s innovative for the UK market – yellow Bulgarian cheese. The PESTLE analysis proved that the UK is a good choice for the company, but some further research would be needed. The UK market is very wide, however with the help of the chosen strategies, VEREYA would be able to penetrate the market and introduce their product to the consumers as something healthy, different and cheap. Those three factors would attract a lot of consumers and also ensure the competitive advantage and success of VEREYA.
Bases of Market Segmentation Success: A Marketing Decision Makers’ Perspective. (2016). International Journal of Business and Administrative Studies, 2(3).
Brochado, A. and Martins, F. (2008). Market Segmentation Methodology: segmentation basis and classification methods. Review of Business Management, pp.132-149.
Davies, R., Egger, H. and Egger, P. (2010). Profit taxation and the mode of foreign market entry. Canadian Journal of Economics/Revue canadienne d’économique, 43(2), pp.704-727.
Eilon, S. (1993). On market segmentation. Omega, 21(5), pp.507-510.
Ferdinand, A. (2013). Company Specific Advantage and Sustainable Competitive Advantage. SSRN Electronic Journal.
Meidan, A. M. L. a. C. R., 2015. Marketing Effectiveness Index (MEI)-Tool for Strategic Marketing Planning.. In Proceedings of the 1992 Academy of Marketing Science (AMS) Annual Conference. Routledge, pp. (pp. 480-485).
Miles, M. G. A. H. P. L. G. a. S. Z., 2015. Exploring entrepreneurial marketing.. Journal of Strategic Marketing, 23(2), , pp. pp.94-111..
Mokwa, M., 2017.. The policy characteristics and organizational dynamics of social marketing. In Marketing the Public Sector , Routledge, pp. (pp. 43-55)..
Ray Chaudhuri, A. (2014). Cross-Border Mergers and Market Segmentation. The Journal of Industrial Economics, 62(2), pp.229-257.
Shaw, K. (2015). Foreign Market Entry Strategies. China-USA Business Review, 14(8).
Worldometers.info. (2018). U.K. Population (2018) – Worldometers. [Online] Available at: http://www.worldometers.info/world-population/uk-population/ [Accessed 16 Jun. 2018].
Water for Health Blog: Promoting better health through hydration, nutrition and mindful eating. (2018). The Four Most Common UK Nutritional Deficiencies. [Online] Available at: https://www.water-for-health.co.uk/our-blog/2015/10/the-four-most-common-uk-nutritional-deficiencies/ [Accessed 16 Jun. 2018].
Group Marketing Management Report
The current analysis of Bulgarian Yogurt emphasizes on the necessary adjustments in the marketing mix in the UK. The success of the new product requires an adaptation of the elements of the marketing mix in accordance to the local specifics. Based on the Keller’s Brand Equity Model, the relevant actions leading to building a closer customer relationship are also explored. Furthermore, some integrated communication methods are justified. In this case, the joint venture has to focus on advertising, promotions and special events in order to target the desired customer segments. Finally, the proposed marketing, strategic and communication policies have to be objectively analyzed. For this purpose, the analysis justifies the use of market share, profitability, customer satisfaction and loyalty as appropriate performance measures.
Consider adding brief findings from the analysis of the concepts in the report to the executive summary
This analysis is a continuation from coursework 1 where the prospects for launching a new product – Bulgarian Yogurt – were assessed. Based on the discussed external factors, generic strategies and level of industry competitiveness, relevant and practical market entry modes were considered. This analysis aims at expanding the discussion about the market entry of Bulgarian Yogurt in the UK. There are specific recommendations with the purpose of suggesting relevant marketing, strategic and communication policies and activities. In addition, the analysis aims are elaborating a list of possible performance measurement indicators, so that a more objective assessment is conducted.
1. To what extent should the different elements of the marketing mix be standardised or adapted for your chosen country. Give a full justification for your ideas (25%)
2. Applying the Customer Based Brand Equity model, critically analyse how your client could build and manage a strong brand in this new market (15%)
3. Applying the concept of integrated marketing communications (IMC) critically evaluate three effective marketing communication methods your client could incorporate within this market. (15%)
4. Critically assess how your client could measure its marketing success in this market and how it could improve in the future (15%)
2. Marketing mix – standardization or adaptation
The marketing mix (4P’s) concept – product, price, place and promotion – was first proposed by McCarthy (1964). The elements marketing mix can be used as a set of controllable variables in order to influence buyer’s response (Cuellar-Healey and Gomez, 2013). In international context, the management of the marketing activities tends to be more complex because marketers face different environments in comparison to the domestic one, including variations in consumer tastes, preferences, cultures, technological level, political and regulatory environments, etc. (Onkvisit and Shaw, 2009).
The standardization approach suggests the application of the same marketing mix across all markets. Standardization is a global approach where the marketing mix activities are centrally managed (Hollensen, 2001). This is a cost-effective approach because there is no need to study the specifics of the new market environment and implement any changes. The standardization approach is found to be applicable when selling in very identical (homogeneous) markets (Akgün et al., 2014).
In contrast, adaptation suggests altering the elements of the marketing mix in order to reflect the above-mentioned specifics of the new market. Adaptation assumes a more local approach in managing the elements of the marketing mix in heterogeneous markets (Hollensen, 2001). The adaptation strategy tends to be riskier in comparison to the standardization one, as it requires a differentiated approach. Nevertheless, it is likely to produce better positioning and customer responses when executed appropriately (Akgün et al., 2014).
As discussed in coursework 1, the UK market has unique political economic, social, technological, environmental and legal specifics which have to be taken into consideration when offering the new product. Hence, the replication of the existing marketing mix (standardization), which is currently applied at the home Bulgarian market, is unlikely to produce the most optimal performance outcomes. As a result, the elements of the marketing mix have to be adapted in accordance to the UK specifics, as shown below:
Product – The analysis of the consumer tastes recognizes the existence of different preferences. The current trend for healthier consumption requires the proposition of different yogurt variations. In addition to the classic yogurt type, it is also necessary to consider low-fat (0.1%) and organic variations. The organic segment is particularly important, since the share of the organic market in the UK already exceeds £2.2 billion and grows at more than 6% per annum which is considerably higher than the overall food market (Montague, 2018). Furthermore, some fruit-flavor yogurt variations (strawberry, raspberry, etc.) are also possible in order to appeal to specific customer segments. Discuss whether the product will be standardized or adapted and then justify
Price – In alignment with the proposed cost leadership strategy from coursework 1, the yogurt will be offered at a very competitive price in order to appeal to a broad group of customers. The lower price is possible through the realization of economies of scale, as Tesco is the largest UK retailer. Maintaining the production process in Bulgaria, which is much cheaper than the UK, can additionally allow for maintaining lower prices without put at risk the profit margins.
Discuss whether the price will be standardized or adapted and then justify
Place – The product will be distributed through the extensive network of Tesco stores. In addition, consumers will be able to purchase the yogurt via the online sales portal of Tesco. Online sales constitute a serious adaptation of the marketing mix in accordance to the UK specifics. The share of online sales of food has been steadily increasing by 10%-15% per annum in the last several years – considerably higher than the conventional brick-and-mortal sales (Statista, 2018a). Therefore, these relevant consumer trends have to be reflected as a part of the distribution strategy.
Discuss whether the place/distribution will be standardized or adapted and then justify
Promotion – The new product can be promoted in several ways. First, the traditional promotional methods, as applied by Tesco, will be implemented – TV commercials, printed media ads, etc. Furthermore, social media platforms can also be utilized as a part of the promotional process. Social media allow for enhanced customer communication and product promotion. In addition, some specialized organic product platforms may be considered as a part of the promotional process.
Discuss whether the promotion will be standardized or adapted and then justify
3. Keller’s Brand Equity Model: implications for Bulgarian Yogurt
The Keller’s Brand Equity Model is suggested as a way of understanding customers and implementing appropriate strategies for strengthening brand relationship (Keller, 2013). The framework consists of four stages, as shown on the chart. There are specific considerations which have to be taken into account at each respective level in order to eventually achieve high brand equity.
Figure 1 – Keller’s Brand Equity Model
Source: Keller (2013)
The initial step considers the creation of strong brand salience, or awareness, be effectively distinguishing the brand from the competing alternatives. Typically, a massive marketing campaign is necessary in order to establish a distinctive identity (Keller, 2013). In the case of Bulgarian Yogurt, TV, radio, printed, online and social media ads will be applied as a way of identification, which is discussed in more details later in the analysis.
The second level requires appropriate communication of the brand meaning which takes place through performance and imagery (Keller, 2013). Performance aims at defining how well customer needs are addressed by the brand, whereas imagery predominantly satisfies social and psychological needs (Mind Tools, 2018). At performance level, Bulgarian Yogurt should emphasize its core advantages in terms of attractive pricing and product qualities. In terms of imagery, the product has to demonstrate its ability to meet customers’ needs for healthier lifestyle, identity, differentiation, etc.
The third level – brand response – explores customers’ feelings and judgments after consuming the product. This is the time when certain emotional attachments and expectations about the brand are formed. In general, customers tend to respond based on four key performance characteristics – product quality, credibility, consideration and superiority (Mind Tools, 2018). In order to achieve a more favorable brand response, the producers of Bulgarian Yogurt have to engage in effective post-sale behavior and improved responsiveness to the relevant market developments.
The top of the pyramid is occupied by brand resonance – the most difficult level to be reached by a brand. This is the case because brand resonance is associated with the creation of deep psychological connection between the brand and customers. Typically, high brand resonance is manifested through high loyalty, customer attachment and engagement, sense of community, very high levels of customer loyalty, etc. (Mind Tools, 2018). Bulgarian Yogurt can improve the degree of brand resonance through active social responsibility actions, such as developing charitable causes, promotional campaigns for healthier eating, etc. These initiatives are likely to improve the sense of community. In addition, repeat purchase has to be awarded with appropriate customer loyalty programs. They will provide stimuli for repeat purchase in the future and establish a closer psychological connection with customers through recognition of the loyal behavior. Cite your sources
4. The role of Integrated Communication Methods
The integrated communication mix (ICM) aims at supporting the achievement of the goals from the marketing campaign. This is possible through the coordinated utilization of a variety of communication methods, such as advertising, public relations (PR), personal sales, events, sponsorships, etc., which deliver clarity, consistency of message and optimal communication impact (Business Dictionary, 2018).
The ICM suggests the implementation of three communication methods in order to achieve maximum impact.
Advertising – This is the most widely applied element of the communication mix. Advertising includes various messages which are delivered to the targeted audience through a medium. Advertising effectiveness largely depends on the allocation of sufficient budget, as well as, the application of various advertising tools over a consistent period of time (Kokemuller, 2018). As previously mentioned, the new product will be advertised by Tesco through several distinct channels. The traditional advertising medium includes TV and radio commercials, print publications, etc. Furthermore, the targeted customer groups will be reached through website advertising (Tesco’s website and other online shopping websites) and extensive social media presence, such as Facebook advertising, Instagram publications, etc. Consider evaluating (Strengths and limitations) of advertising on the chosen organisation
Sales promotions – This communication method is quite similar to advertising as the former is promoted through paid communication. Sales promotions include a variety of options for discount price – coupons, rebates, percent-off deals. Customers learn about discounts and promotions through ads, exterior signs and in-store signage (Kokemuller, 2018). In the case of Bulgarian Yogurt, sales promotions are considered as an important communication tool for attracting new customers and generating new cash flow. Sales promotions are very necessary at the early stages of the product existence in the UK when the overall consumer awareness about the product is still quite low. Thus, this communication method can facilitate the process of building brand awareness. It is important to note that Bulgarian Yogurt aims at attracting loyal customers through cost leadership strategy. In this context, offering sales promotions should be considered as a communication method which fits with the proposed generic strategy. Furthermore, sales promotions can be considered as tactical solutions when there is excess inventory of yogurt.
Consider evaluating (Strengths and limitations) of sales promotion on the chosen organisation
Sponsorship – This is another plausible alternative to be taken into consideration as a way of targeting the more niche customer groups – organic and low-fat eaters. Through event management, Bulgarian Yogurt will have presence at special events, such as community, sports, non-profit and other events. In addition, the audience at the respective events will receive gifts, free sample and specialized literature which increases the awareness about the new product (Kokemuller, 2018). While advertising, discounts and promotions aim at establishing communication with the broad customer base, events aim at targeting the above-mentioned niches of healthy-oriented customers. Thus, event management can be seen as a way of popularizing the Bulgarian Yogurt brand and raising the awareness about the new product.
Consider evaluating (Strengths and limitations) of sponsorship on the chosen organisation
5. Measurement of success
There are different financial, market-oriented and customer-centric ways of measuring the success of Bulgarian Yogurt. Irrespectively of the applied method, it is necessary to consistently pursue the proposed marketing and strategic directions for a continuous period of time in order to achieve desirable outcomes. In the case of Bulgarian Yogurt, there are several main performance metrics to be considered, as follows:
Sales analysis – This is one of the key market-related indicators for success. Data show that the total volume of the yogurt and sour milk industry reaches almost $3 billion in the UK. Capturing a 5% share ($150 million) in annual sales should be considered as a very good indication for success. This goal has to be achieved after two years of operations because some time is necessary in order to create a dense distribution network, brand awareness and loyalty. The desired 5% market share also fits fit the strategy of being broadly presented (cost leadership).
Figure 2 – Sales volume (in British pounds) of yogurt and sour milk products in the UK
Source: Statista (2018b)
Profitability – The measurement of success has to be multi-dimensional. Hence, simply referring to achieving a high market share is not a sufficient indicator of success. The high sales volume has to be accomplished with solid profitability, as well. Maintaining 10% in profit margin is considered as a desirable level of profitability. Given the expected $150 million in revenue, achieving $15 million in annual profits (10%) will demonstrate a very efficient use of the available resources. Such a level of profitability will indicate that the joint venture between Tesco and DANON is successful.
Customer satisfaction and loyalty – Finally, some customer-centered metrics have to be applied. It is very important for Bulgarian Yogurt to achieve high levels of customer satisfaction. Customer surveys will regularly analyze customer satisfaction scores. Successful performance is associated with at least 75% satisfied customers. The number of loyal customers, who engage in repetitive purchase, has to reach a minimum threshold of 60%.
Consider analyzing (strengths and limitations of the market measurements concepts on the chosen organisation
The analysis clearly demonstrates the need for consistent and comprehensive actions in order to achieve success at the UK market. Attracting and sustaining a reasonably large customer base requires a significant adaptation in the elements of the marketing mix. Furthermore, Bulgarian Yogurt has to establish effective communication channels which provide information and engage with customers. The success of these efforts requires creativity, extensive social media communication and engagement in relevant events. Respectively, sufficient time and monetary resources are also necessary for effectively interacting with customers. The desired goals are quite ambitious, as stated in the list of key performance indicators. Alternations in goals are possible depending on the current developments and changes in the organizations’ strategic objectives regarding the Bulgarian Yogurt product.
Akgün, A., Keskin, H. and Ayar, H., 2014. Standardization and Adaptation of International Marketing Mix Activities: A Case Study, Procedia – Social and Behavioral Sciences, Vol. 150, pp. 609 – 618.
Business Dictionary, 2018. Integrated Marketing Communications (IMC), [online], Available from: http://www.businessdictionary.com/definition/integrated-marketing-communications-IMC.html [Accessed: 12 June 2018]
Cuellar-Healey, S. and Gomez, M., 2013. Marketing modules series. Cornell University: Ithaca NY
Hollensen, S., 2001. Global marketing. 2nd edition, London: Hallice
Keller, K., 2013. Strategic Brand Management: Building, Measuring, and Managing Brand Equity. Pearson Education Limited
Kokemuller, N., 2018. What Is a Marketing Communication Mix? [online], Available from: http://smallbusiness.chron.com/marketing-communication-mix-63541.html [Accessed: 12 June 2018]
McCarthy, E., 1964. Basic Marketing. IL: Richard D. Irwin
Mind Tools, 2018. Keller’s Brand Equity Model: Building a Powerful Brand, [online], Available from: https://www.mindtools.com/pages/article/keller-brand-equity-model.htm [Accessed: 12 June 2018]
Montague, B., 2018. Organic market in UK now worth £2.2 billion after sixth year of growth, [online], Available from: https://theecologist.org/2018/feb/07/organic-market-uk-now-worth-ps22-billion-after-sixth-year-growth-ecomontague [Accessed: 12 June 2018]
Onkvisit, S. and Shaw, J., 2009. International marketing: Strategy and theory. 4th edition, London: Routledge
Statista, 2018a. Percentage change in monthly internet food sales value in the United Kingdom (UK) from January 2013 to December 2017*, [online], Available from: https://www.statista.com/statistics/286361/internet-food-sales-value-trend-monthly-in-the-united-kingdom-uk/ [Accessed: 12 June 2018]
Statista, 2018b. Sales value of yogurt and sour milk products in the United Kingdom (UK) from 2009 to 2018* (in million U.S. dollars), [online] Available from: https://www.statista.com/statistics/460273/yogurt-sour-milk-products-retail-sales-value-in-the-united-kingdom-uk/ [Accessed: 12 June 2018]