marketing

Contents

Executive Summary ................................................................................................................................. 2 1. Background ................................................................................................................................ 4

1.1. Company ................................................................................................................................. 4

1.2. Product Benefits and Features ................................................................................................ 4

1.3. Product Range ........................................................................................................................ 4

1.4. Distribution Channels .............................................................................................................. 5

1.5. Marketing Activities ................................................................................................................. 6

1.6. Mission and Vision .................................................................................................................. 6

1.7. Marketing Objectives ............................................................................................................... 6

2. Situation Analysis ....................................................................................................................... 6 2.1. Market Demography and Demand Analysis............................................................................. 7

2.2. SWOT Analysis ....................................................................................................................... 8

2.3. Competitor Analysis .............................................................................................................. 10

2.4. Pricing Analysis ..................................................................................................................... 13

2.5. Target Market ........................................................................................................................ 13

2.6. Market Positioning Analysis ................................................................................................... 14

3. Marketing Promotion Objectives and Strategies ....................................................................... 14 4. Media and Budget Allocation .................................................................................................... 18 5. Conclusion ............................................................................................................................... 21 References ............................................................................................................................................ 22

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Executive Summary

Camel Milk Victoria (CMV) is planning to expand its capacity to market its products in Australia and

overseas. CMV’s primary product is camel milk, which is moving from the introductory phase to the growth

phase in the product life cycle. Secondary products include camel milk soap, laundry powder and lip balm.

Over the next five years, CMV plans to increase the number of milking camel to 50 head, which will lead to

an increase in production.

CMV targets specific niche segments of the health industry market, including those consumers with health

conditions such as autism and diabetes, which may be improved by the regular consumption of camel milk,

or the application of camel milk products.

The Australian market is continuing to grow slowly and average income remains high, which means that

consumers will be more willing and able to pay a premium price for this niche product. There are several

similar sized competitors within the Australian market, however none has successfully expanded across all

states to date.

In the first year, the primary objective is to raise awareness of the products and brand. As a relatively new

company to the market with a limited media budget, CMV will aim to identify and use a range of low cost

advertising and promotional activities, as well as establishing a research and development process. The

second year will focus on creating buyer intent through increased spend on advertising and the use of

samples and promotional pricing to increase market penetration. The third year will see expansion into

new markets in the nearby states of Tasmania and South Australia as well as investment into product

development and differentiation. CMV will also begin to build a presence overseas, initially offering

international shipping via its website. The fourth year will see CMV expand into geographically more distant

states of Queensland and the Northern Territory. In the fifth year CMV will trial moving into one or two

overseas countries, for example New Zealand or a country in Asia, based on previous international sales

and extensive market research, using the services of an agent.

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The main risk to the success of CMV’s marketing plan is the negative media attention that could arise as a

result of a lack of credible research to substantiate the purported health benefits of camel milk.

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1. Background

1.1. Company

Camel Milk Victoria (CMV) is a camel dairy which was established in November 2014 by owner-

operators, Megan and Chris Williams. The Williams’ share farm a 100 acre property in Victoria, Australia

and sell camel milk and products containing camel milk.

1.2. Product Benefits and Features

Camel Milk purportedly has many health benefits due to it having more protein, vitamin C, B6, iron,

calcium, magnesium and potassium and less lactose than bovine dairy milk. It is easier to digest than

bovine milk and lower in fat and calories. It also naturally contains high levels of insulin.

1.3. Product Range

CMV’s primary product range includes:

Product Image Quantity Cost

Camel Milk

500ml or 1 litre $21 per litre

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CMV’s secondary product range includes:

Product Image Quantity Cost

Laundry Powder

1.25kg $24.95

Camel Milk Soap

150g $10.25

Lip Balm

10g $9.95

Camel Milk Victoria cap

1 $15.00

CMV is in the process of developing new products including camel milk chocolate.

1.4. Distribution Channels

CMV’s products are sold via two distribution channels:

1. Products are currently sold direct to consumers via an online shop on CMV’s website.

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2. CMV also sells products wholesale to health food stores within Australia (in Victoria, New South

Wales, South Australia and Australian Capital Territory) as well as to one store within New

Zealand (Wellington).

1.5. Marketing Activities

CMV currently has a website (www.camelmilkvictoria.com.au) and a social media presence, with an

Instagram account and two Facebook pages, Camel Milk Victoria and Camel Milk New Zealand. To date,

CMV has held farm open days, attended exhibitions and trade shows and appeared in various Australian

media including television and radio interviews and newspaper and magazine articles.

1.6. Mission and Vision

CMV’s mission is to promote the health benefits of drinking Camel Milk regularly within the Australian and

overseas markets, promoting camel milk as a healthy alternative to other milk.

CMV’s vision is to be the leading camel milk producer within Australia, with a large geographic spread

spanning all states and a growing presence overseas.

1.7. Marketing Objectives

 Grow milking herd to 50 head of camel

 Expand further in the Australian market

 Expand into overseas markets

2. Situation Analysis

Camel milk is a relatively new product for the Australian market and CMV is also a new entrant to the

camel milk market, operating for less than two years. The product is moving from the introductory phase

to the growth phase in the product life cycle.

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There are a number of competitors within the market, of similar size. As CMV expands geographically in

the Australian Market, it needs to focus on initially raising awareness of its brand and products and then

maximising market share.

2.1. Market Demography and Demand Analysis

CMV’s market consists of consumers within Australia who have health conditions such as autism,

diabetes and eczema, which may be improved by the regular consumption of camel milk or the

application of products containing camel milk.

The population of Australia is currently over 24 million people. It grew at a rate of 1.4 per cent in the 12

months prior to March 2016

(http://www.abs.gov.au/ausstats/[email protected]/Web+Pages/Population+Clock?opendocument).

From May 2015 to May 2016, the full-time adult average weekly total earnings in Australia increased by

1.9% to $1,575. (http://www.abs.gov.au/ausstats/[email protected]/mf/6302.0).

From June 2015 to June 2016 Gross Domestic Product in Australia grew by 3.3% in seasonally adjusted

chain volume terms (http://www.abs.gov.au/ausstats/[email protected]/mf/5206.0).

These increases show that there is likely to be a growing demand for food products in general and that

consumers will have increased purchasing ability.

There are an estimated 115,400 Australians (0.5%) with autism

(http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/4428.0Main%20Features32012?opendocume

nt&tabname=Summary&prodno=4428.0&issue=2012&num=&view).

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5.1% of the Australian population (1.2 million people) have some type of diabetes.

(http://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/4364.0.55.001~2014-

15~Main%20Features~Diabetes%20mellitus~12)

According to the Eczema Association of Australia, one in three Australian’s will develop eczema at some

stage of their life (http://eczema.org.au/eczema-facts/).

The Dieticians Association of Australia states that 1 in 20 Caucasians suffer from some degree of lactose

intolerance. (http://daa.asn.au/for-the-public/smart-eating-for-you/nutrition-a-z/lactose-intolerance/)

This means that well over 2 million people in Australia may benefit from drinking camel milk on a regular

basis.

If 40% of the total market drink one glass of camel milk every day (0.25 litres), then the total market per

year would be:

0.25 litres x 800,000 people x 365 days = 73,000,000 million litres of camel milk a year

2.2. SWOT Analysis

The below is a SWOT analysis of CMV:

Main Strengths  Health Benefits of Product – Camel Milk purportedly has the ability to improve

the health of those suffering from a range of health issues including autism,

diabetes, eczema and those with a lactose intolerance.

 Ability to increase production - With an estimated one million wild camels in

outback Australia, there is an amply supply of animals which can be

purchased and trained by CMV in order to quickly grow the herd.

 Premium price - Camel milk sells at a much higher price than other milk, at

approximately $20-25 per litre, compared with approximately $1.50 to $5.00

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per litre for other milk such as bovine milk, soy milk, coconut milk, goat milk,

etc. This means that substantial revenue could be generated from the camel

milk market. (This may also be a weakness - see below).

 Experience - Owner (Megan) has a family background and over 5 years of

experience working in the bovine dairy industry, which has some similarities to

camel dairy farming. Owner (Chris) has recently obtained a Diploma in

Agriculture.

Main

Weaknesses

 Lack of research - There is currently a lack of credible research to substantiate

the claim that camel milk has health benefits. Future research conducted may

disprove some or all of the beliefs that camel milk has said health benefits.

 Lack of brand and product awareness – As both the product and company are

so new to the Australian market, there is a low awareness of the product and

its potential health benefits.

 Low yield of milk per animal - Camels yield a lower quantity of milk than

bovines (at most 6 litres compared with approximately 24 litres, per animal per

day), meaning that milking camels is quite labour intensive.

 Product storage and transport - Like other milk, camel milk has a short shelf

life of approximately two to three weeks. Therefore exporting significant

distances to other countries and remote areas may be difficult. Camel milk

must also be refrigerated at all times, during and after transit to avoid spoilage.

Main

Opportunities

 Opportunity for expansion - CMV could expand distribution within Australia to

sell to more stores in Victoria and New South Wales and also expand into new

areas including Tasmania, Western Australia, Queensland and the Northern

Territory. There is also the opportunity to expand into international markets

including New Zealand and Asian countries.

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 Partnerships with health organisations - CMV could partner with health

organisations such supporting consumers with diabetes or autism or those

who are lactose intolerant.

 Distribution channels - Opportunity to partner with an Australia wide health

food shop chain, to increase distribution across the country.

 Product diversification - CMV could diversify its product range and develop

flavoured camel milk to target young children, or powdered milk to increase

the shelf life of the product. The latter could be useful for international

expansion with slower distribution networks and limited ability for the end

consumer to refrigerate the product.

Main

Threats

 Media - Negative media attention may arise as a due to health benefit claims

not yet being proven by research. This could have a significant negative

impact on the company and camel milk market as a whole.

 Premium Price - Consumers may not be willing or able to pay a premium price

for camel milk on an ongoing basis.

 Lack of ability to differentiate – Due to milk being a commodity, there is a limit

to how much CMV can differentiate itself from its competitors. This may result

in price being the major factor for consumers when choosing which company

to purchase the products from.

 Threat from competition - One or more competitors may grow rapidly and

dominate the industry, particularly if they have the ability to produce camel

milk on a large/commercial scale.

2.3. Competitor Analysis

Key competitors are:

Company Bindanoon Camel Milk - www.camelmilkaustralia.com.au/

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Background Located in Queensland. Established in 2005, owners also have a bovine dairy

background. Product range includes camel milk soap, lotions and creams. They do

not currently sell camel milk. Products can be ordered online via the website and are

shipped within and outside Australia.

Strengths  Company is well established, being in business for over 11 years.

Weaknesses  They do not have a profile in selling camel milk, only products containing camel

milk.

Company QCamel – www.qcamel.com.au

Background Based in Queensland, this is a family owned business which started developing its herd

in 2009. Stockists are mainly based in Queensland, Australian Capital Territory and

New South Wales with one stockist in the Northern Territory. Online ordering is also

available, with the company stating that they can offer same day delivery to anywhere

in Australia near an airport. QCamel has Safe Food Queensland Accreditation.

Strengths  One of the longest running camel milk companies in Australia, operating since

2009.

 Strong industry links due to past research, involvement in a camel conference

and the establishment of the Australian Camel Industry Association.

 Well established marketing channel structure, offering same day delivery to any

area in Australia near to an airport.

Weaknesses  Online ordering system is not fully automated. This needs to be improved in

order to make it more user friendly for the consumer.

Company Muswellbrook Camel Milk / Piercefield Pastures - www.camelmilknsw.com

Background Based in New South Wales. Sells milk via stockists in New South Wales and also

online via its website and www.finefoodwholesalers.com.au. Camel milk is sold in

300ml and 1 litre bottles as well as flavoured milk (chocolate, iced coffee, caramel,

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strawberry, vanilla) and unpasteurised camel milk for bathing. They plan to develop

camel cheese and camel yoghurt in the future.

Strengths  The flavoured camel milk may appeal more to younger children.

Weaknesses  The company appears to operate under several names, which may be

confusing for consumers and may weaken their brand.

 The website ordering system is not fully automated.

 Limited stockists and distribution channels at present.

Company Good Earth Dairy - http://www.goodearthdairy.com.au/

Background Based in Western Australia on 793 hectares of land. Company is made up of a team of

workers and financial investors.

Strengths  Land size available is significantly larger and therefore has a greater capacity for

growth of the herd.

 Already has secured at least three financial investors which will help raise funds

easily.

Weaknesses  Geographical distance from the eastern seaboard of Australia will lead to increased

distribution costs to reach these markets.

Company Humpalicious Camel Milk – www.humpalicious.com

Background Established in 2013 in South Australia. Current herd size is 60 head of camel. Sells

raw and pasteurised camel milk, fermented camel milk, powdered milk, iced coffee with

camel milk. They plan to launch a camel milk soap in the near future. Stockists are

located in South Australia. Online orders available via the website. Milk sold in

multipacks containing 240ml up to 940ml bottles.

Strengths  Promotion - offering a free trial of camel milk to families in South Australia with

Autistic children which will help them gain a greater market share.

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 In the future the farm plans to open to the public as well as offering cottage style

holiday accommodation.

Weaknesses  Stockists are only found in South Australia presently.

Company Desert Farms – www.desertfarms.com

Background Based in America but ships worldwide

Strengths  Overseas shipping already established.

Weaknesses  No physical presence in Australia

2.4. Pricing Analysis

The comparative pricing of camel milk is as follows:

Company Price per litre of camel milk

Camel Milk Victoria $21.00

Muswellbrook Camel Milk $25.00*

QCamel $26.25

Good Earth Dairy $25.00

Humpalicious Camel Milk $28.00

Desert Farms $50.22

* Source: hypothetically prepared for this assignment task only

CMV’s pricing is currently the lowest out of all of its competitors. There may be downward pricing

pressure from consumers due to the relatively high cost of the product, particularly as consumers are

able to check prices of products from several competitors relatively quickly online.

2.5. Target Market

CMV’s primary target market includes males and females who suffer from health conditions including, but

not limited to autism, diabetes, eczema or are lactose intolerant. Consumers vary in age from young

children to teens and adults (depending on the medical condition).

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2.6. Market Positioning Analysis

CMV’s products will be positioned as a healthy alternative to other milks. CMV has a limited ability to

differentiate its products from its competitors, however it will attempt to offer a wider range of milk

products in the future, for example flavoured or powdered milk. CMV will attempt to gain a competitive

advantage by making its products widely available to its consumers, through marketing channels across

all states within Australia within the next five years.

3. Marketing Promotion Objectives and Strategies

Over the 5 year period, CMV will aim to grow the number of milking camel to 50 head, based on an

increase of approximately 10 head per year. As production increases however, demand for the product

must also increase. The below 5 year plan aims to increase that demand gradually, in line with the

planned increased production. Further, CMV will aim to raise brand and product awareness and

subsequently purchase intent through various strategies, outlined below, as well as expanding

geographically to make its products widely available to consumers throughout all states within Australia

during the five year period.

Year 1

Objectives Strategies / Action Items

Build brand and product awareness

with innovators and early adopters

 Distribute regular media releases about the company and

products to both local and national media groups.

 Establish regular branded email newsletters/communication

to provide existing and potential customers and stakeholders

with information about the company and product range.

 Use free or inexpensive online software to manage the mass

email communication e.g. Media Chimp.

 Give away promotional items.

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Increase knowledge of the

customer and market

 Analyse existing data through data mining of customer

database and previous consumer and stockist orders.

 Establish system for conducting regular survey market

research with existing and potential customers regarding the

brand, products, promotions, service, pricing, promotions,

etc. Use free or inexpensive survey software e.g. Survey

Monkey.

 Gather feedback from stockists.

 Gather information from social media channels.

Grow social media following  Build social media following by running promotions to gain

followers.

 Post regular updates regarding the company and the product

offering.

 Use paid advertising on social media to increase the reach of

selected content.

Increase distribution channels  As production increases, accept additional stockists

particularly in areas with established distribution channels

e.g. Victoria and New South Wales as these states are

located in close geographic proximity to the production site

and have the highest populations.

Year 2

Objectives Strategies / Action Items

Identify and build relationships with

influencers

 Search for credible industry groups and organisations e.g.

Autism Australia who may influence buyer behaviour and

develop relationship.

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Run consumer promotions  Offer small free samples of camel milk to consumers at

exhibitions, industry events, farmers markets, etc.

 Offer promotional pricing based on research obtained in year

1 and 2 to increase market penetration.

 Evaluate effectiveness of promotions e.g. did demand

fluctuate with price variation, did consumers repeat

purchased after receiving a sample?

Run advertising campaign  Advertising on a range of medium including the internet,

newsletters and search engine advertising, radio, etc. to

ensure maximum reach.

 Evaluate marketing campaigns and their effectiveness for

use in future campaigns.

Year 3

Objectives Strategies/Action Items

Expand geographically  Review strategies from year 1 and 2 and adjust if necessary.

 Use successful strategies from expansion within Victoria and

New South Wales and roll out same in nearby states of

Tasmania and South Australia to minimise distribution costs.

Become a market leader within

Australia

 Nominate CMV and its products for farming and

entrepreneurial awards.

 Target national media publications for media releases and

advertising.

 Continue with successful advertising campaigns in each

state.

Expansion overseas  Offer and promote international shipping via website orders.

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Experiment with pricing  CMV will experimenting with the price of its product and

measure how this affects demand, repeat purchases, etc. It

will do this using a small sample size, for example one

geographical area, rather than rolling out across the whole

market.

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Year 4

Objectives Strategies

Further geographical expansion

within Australia

 Review expansion strategies and success from earlier years

and consider expanding into Western Australia, Queensland

and Northern Territory.

Expand Product line  Based on research obtained in years 1 and 2, begin to

develop product range based on consumer needs/wants and

market conditions e.g. develop a range of flavoured camel

milk to appeal to children’s tastes.

 Consider developing a product with a longer shelf life to

assist with long distribution channels e.g. powdered milk.

Year 5

Objectives Strategies

Geographical expansion into

international market

 Analyse international shipping orders to determine potential

countries to move into.

 Select one or two sample countries to move into.

 Use an agent to market products overseas in selected

countries.

 Evaluate effectiveness of overseas expansion.

4. Media and Budget Allocation

The following table shows an estimate of litres of milk produced and revenue generated as the milking

herd increases (using the current price of $21 per litre):

Head of milking

camels

Low Estimate i.e. 4

litres per camel per day

Average Estimate i.e. 5

litres per camel per day

High Estimate i.e. 6

litres per camel per

day

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(Litres per year / Gross

revenue generated)

(Litres per year / Gross

revenue generated)

(Litres per year /

Gross revenue

generated)

10 14,600 / $306,600 18,250 / $383,250 21,900 / $459,900

20 36,500 / $766,500 45,625 / $958,125 54,750 / $1,149,750

30 43,800 / $919,800 54,750 / $1,149,750 65,700 / $1,379,700

40 58,400 / $1,226,400 73,000 / $1,533,000 87,600 / $1,839,600

50 73,000 / $1,533,000 91,250 / $1,916,250 109,500 / $2,299,500

Source: hypothetically prepared for this assignment task only

For the first year of the marketing plan, while the main objective is to raise awareness of the product and

brand, the media budget will be modest. The media budget will be approximately 10% of the expected

gross revenue, based on average expected production as outlined in the above table.

In Year 2, as the marketing objectives will aim to increase the buyer intention to purchase through

increased advertising, the media budget will increase to 15% of the total revenue.

Year 3, 4 and 5’s media budget will increase to 18% and 20% of the total gross revenue. This will allow

for costs of continued expansion into new markets, while continuing to strengthen the brand image and

product awareness throughout all areas of Australia and also begin expansion overseas.

Year Calculation Media Budget Allocation of Budget

1 $383,250 /100 x 10 $38,325  $8,000 - social media

advertising/promotions

 $10,000 - promotional items e.g.

pens, hats, toys.

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 $18,325 - research and

development

 $2,000 – outsourcing of graphic

design work

2 $958,125 / 100 x 15 $143,718  $60,000 - advertising

 $30,000 - product samples

 $30,000 - promotional pricing

 $13,718 - market research

 $10,000 - promotional items

3 $1,149,750 / 100 x 18 $206,955  $90,000 - geographical

expansion e.g. distribution costs

 $90,000 – advertising

 $26,955 – ongoing marketing

initiatives such as promotional

products, pricing, market

research

4 $1,533,000 / 100 x 20 $306,600  $80,000 geographical expansion

 $146,600 ongoing advertising,

promotions, market research,

etc.

 $80,000 – product development

5 $1,916,250 / 100 x 20 $383,250  200,000 – geographical

expansion

 $183,250 – ongoing marketing

activities

Source: hypothetically prepared for this assignment task only

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5. Conclusion

The Australian marketplace and economy is growing at a slow, but steady rate, which is encouraging for

a company hoping to expand its production in that market. The high average income of Australians

means that consumers are more likely to be able to pay a premium price for a niche product such as

camel milk, compared with those living in developing countries with lower incomes.

The demand for camel milk is increasing and, although there are several similar sized competitors, no

one company is currently dominating the market.

The main risk for CMV is the lack of credible research to confirm the purported health benefits of camel

milk. Negative media attention as a result could be very damaging for CMV and the camel milk industry

as a whole.

Should credible research emerge in the very near future, then CMV is well placed to capitalise on this

and subsequently expand geographically within the Australian market and eventually overseas.

Due to the short shelf life and refrigeration requirements of camel milk however, storage and distribution

costs may be high and geographic expansion over long distances, for example overseas, may be difficult,

particularly in developing countries, where distribution channels are not well established and consumers

may not have access to refrigerators. For that reason, should CMV successfully expand within the

Australian market in the coming years, then it should look to other countries with similar characteristics to

potentially move into initially, for example, developed nations with good distribution channels and high

average income such as New Zealand, or Singapore.

In order to expand successfully within the next five years, CMV needs to carefully evaluate each of its

marketing strategies throughout the period, adjusting where necessary, to ensure that its limited

resources are not unnecessarily wasted.

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References