Assignment 2: Marketing Plan

The non-alcoholic beverage targeted for production and sale is Tropical Max, a product developed by Twilight Organic Beverage Inc. Twilight Organic Beverage Inc. operates in the non-alcoholic beverage industry. The significance of this company name is that it reflects the type of product that the company aspires to introduce into the market. Because of concerns of increased incidence of chronic conditions such as obesity, diabetes mellitus, cardiovascular disease, and different types of cancers, many consumers are turning towards healthy, organic products in order to minimize their risks of contracting these life threatening, debilitating conditions (Olayanju, 2018). Twilight Organic Beverages Inc. will take advantage of this trend and introduce Tropical Max, an organic fruit Juice that will satisfy the needs and preferences of health-conscious consumers.

Revised Company Mission and Rationale

The revised company mission for Twilight Organic Beverage Inc. is “At Twilight Organic Beverage Inc, client wellbeing remains our main priority and we aspire to promote healthy, organic, and great tasting beverages with the ultimate goal of making a positive impact on the communities where we operate”. The rationale for coming up with this mission statement stems from the fact that it reflects the company’s core values of improving the health and wellbeing of customers from diverse backgrounds. With Twilight Organic Beverage Inc., we offer the best ingredients with no artificial flavoring. All our production processes also adhere to the best industry practices and ethical standards.

Trends in Non-Alcoholic Beverage Industry

The non-alcoholic beverage industry has witnessed tremendous growth in the recent past. Davis, Lockwood, Pantelidis, and Alcott (2013) assert that in this industry, sugar-free beverages have emerged as a viable substitute for sugar-based beverages. Many consumers consider the sugar-free beverages to be a healthier alternative for preventing weight gain and minimizing the incidence of chronic conditions. The main players in the sugar-free beverages industry include PepsiCo, The Coca-Cola Company, Nestle, Fresh Del Monte Produce, The Hershey Company, and The Kraft Heinz Company (Research and Markets, 2018). Fruit juices and juice drinks comprise approximately 20% of the non-alcoholic beverage industry.

According to statistics from Research and Markets (2018) the global fruit juice market in the period between 2010 and 2017 grew at a CAGR of around 1.6%, reaching a volume of 44.6 billion liters in 2017. Growth in the beverage category during this duration was 2.0%. Organic 100% juice, which contains no added preservatives, sugar, or color, accounted for the majority of organic fruit juice sales with a share of 41.6% to reach a market value of US$392.9 million (Research and Markets, 2018). Organic nectars followed closely behind, accounting for 18.1% of the organic fruit juice market in 2017. Shifting trends from carbonated drinks to organic beverages among health-conscious consumers is the major factor that has led to strong growth in the organic fruit juice market.

One rationale for choosing the 100% organic juice stems from the health benefits that this product endows to consumers. Since it is sugar free and with no added preservatives, Tropical Max substantially lowers the risk of developing chronic conditions. Market forecasts also indicate that the organic beverage market will continue to register an annual growth of about 2.1% in the coming years between 2019 and 2023 (Research and Markets, 2018). With the anticipated growth, companies in this industry have a higher likelihood of registering higher profits and revenues, which informs the decision to launch this product. The final rationale comes from fact that not many competitors have ventured into the 100% organic beverage market. This provides real opportunities for growth and expansion.

Strategic Position

An effective positioning strategy identified in the text that will find direct utility in Twilight Organic Beverages Inc. is convenience. Customers tend to gravitate towards services and products that make life easier. Kotler & Keller (2016) reiterate that this can include issues such as usability, location, and terms. In order to distinguish Tropical Max from other non-alcoholic beverages using this positioning strategy, Twilight Organic Beverages Inc. will locate the products in high-traffic areas and other appealing locations where consumers can have fast access whenever they have the desire to consume the product.

Company’s Distribution Channels

The distribution model that Twilight Organic Beverage Inc. will rely upon when introducing the product to the market is the Direct Store Delivery (DSD) model. Under this distribution model, the firm will move the product from the manufacturing plant to the retail outlet via a bin or a central distribution center. In this form of DSD, a Route Sales Representative (RSR) will be responsible for making sales at the outlet level directly. Kotler & Keller (2016) affirm that this approach can provide numerous benefits to the company including safe handling of the product while also ensuring that the product remains fresh for as long as possible. Furthermore, the Direct Store Delivery model utilized by Twilight Organic Beverage Inc. will ensure that the product is merchandized for maximum appeal and visibility. The company will ultimately settle for a distribution channel that offers extraordinary flexibility and strength. Priorities considered when deploying the aforementioned distribution network will include financial priorities and consumer priorities (Kotler & Keller, 2016).

Risks Faced by the Company and Mitigation Strategies

Risks are inevitable in any business operation. A major risk that the company may face is regulatory risk, particularly as it pertains to ingredient labeling and establishing quality control procedures. Improper labeling or failure to establish quality control procedures can subject the company to potential legal litigation and undermine its operations (Boone & Kurtz, 2014). Ensuring compliance with FDA regulations as well as state regulations governing the beverage industry will be essential in mitigating the regulatory risk. Another risk faced by the company is political risk (Boone & Kurtz, 2014). Since the company aspires to expand its operations to other jurisdictions, it may face some challenges especially when it ventures in areas that turn out to have political turbulence. This can ultimately undermine sales and profitability. To mitigate this risk, it will be critical to conduct extensive market research in order to identify the best locations with a good political climate where the company can invest. Getting enough outlets for introducing the product is yet another risk that the company can face. Twilight Organic Beverages Inc. can mitigate this risk through proper relationship building particularly with retailers and forging strategic alliances with partners (Kotler & Keller, 2016).

SWOT Analysis

Twilight Organic Beverages Inc. currently posses various strengths internally that it can rely on to boost its operational success. Nevertheless, it also has some internal weaknesses that it must address in order to be competitive and attain sustainability. Furthermore, a number of opportunities exist that the company can capitalize on to gain a competitive advantage, although it must also address threats in the external environment in order to be success. The matrix below highlights some of the strengths, weaknesses, opportunities, and threats that are inherent in Twilight Organic Beverages Inc.

Addressing the aforementioned weaknesses and threats will be necessary for providing Twilight Organic Beverages Inc with a competitive edge over other industry competitors and developing long-term sustainability. Leaders at the organization must lead the way in coming up with robust strategies for addressing these threats and weaknesses.

References

Boone, L. E., & Kurtz, D. L. (2014). Contemporary marketing (16 ed.). Mason, OH: Cengage Learning.

Davis, B., Lockwood, A., Pantelidis, I., & Alcott, P. (2013). Food and beverage management (5ed.). New York, NY: Routledge.

Kotler, P., & Keller, K. L. (2016). Marketing management (3 ed.). New York, NY: Pearson.

Olayanju, J. B. (2018, October 10). Perspectives on factors driving new trends in the food & drink industry. Forbes , p. A4.

Research and Markets. (2018, April). Fruit juice market: Global industry trends, share, size, growth, opportunity and forecast 2018-2023. Retrieved from https://www.researchandmarkets.com/research/6d29sh/global_fruit?w=5