Research-based Marketing Plan Initial Proposal - Product Development for: Biodegradable Plastic Bags
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TopicForMarketAnalysisReport.docxRunning head: MARKET ANALYSIS 1
MARKET ANALYSIS 6
Market Analysis Report: Biodegradable Plastic Bags
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Market Analysis Report: Biodegradable Plastic Bags
Positioning and Differentiation
Positioning involves a strategic process used by marketers in determining the market niche upon which an offering ought to fill in a particular market or a method of organizing for a product to occupy a distinctive place relative to competing for goods as regarded by target customers. Differentiation involves the process of making a product stand out from its competitors by ensuring it provides unique value to customers. Effective positioning for commodities in the market relies on the differentiating features that make such commodities better than the competitors' in the target customers' minds. The ultimate aim of the two is to create a market-focused value proposition.
Brief Description of the market
The market for biodegradable plastic bags has been expanding in recent years, and that has led to tremendous growth in the industry as the governments are consistent in prohibiting the use of non-biodegradable plastics while the awareness is increasing among the public concerning the adverse effects of plastic wastes. Factors such as the ability of many governments to ban single-use plastics and call for the use of biodegradable ones and the willingness of consumers to pay more for biodegradable plastic bags offer a significant boost to the industry's market growth (Markowicz et al., 2019). JGJ Inc. wants to enter an industry that deals in biodegradable plastic bags. The market currently has a large number of players due to the increasing demand for the products. Thus it is upon the entering or existing firms to invest heavily towards producing novel, robust, and environmentally friendly products.
Analysis of the Current Positioning in the Market
Current annual sales volume in dollars and/or units sold in the market
Currently, the sales volume or the value of the biodegradable plastic market is $4.7 billion. Being a better alternative to conventional plastics, biodegradable plastic packaging will likely grow in terms of sales volume as soon as forecasted. The global markets are increasingly adopting biodegradable plastic bags as most governments issue directives, and concerned bodies create awareness of its environmentally friendly nature.
Current competitors and their offerings
Key players or competitors in this competitive market include BASF, Biome Technologies, and Mondi. Biome Technologies provides a bioplastic solution to growing coffee cup waste by designing takeaway beverage cups using plant-based sources. Through a partnership with Futamura, the company also plans compostable multilayer packaging, which, compared to oil-based packaging, offers a competitive advantage. BASF used high-quality bioplastic materials consisting of polymer eco flex and polylactic acid derived from renewable components used in making coffee capsules, organic waste bags, and aroma-tight outer packaging. The compostable plastic ecovio developed by BASF offers significant aid in production, packaging, and transport as it limits food and nutrient wastage and plastic accumulation in soil (Markowicz et al., 2019). On the other hand, Mondi produces sustainable extrusion-coated and laminated packaging materials that apply biopolymers that are purely made of renewable resources rather than PE. The materials have good sealability, gas, grease, and moisture barrier, and varied usability.
Current price points of competitors
The price of biodegradable plastic bags varies per the company producing them since they use different materials, technologies, and specifications whose costs are not the same. BASF has slightly higher pricing than Biome Technologies, whose price for biodegradable plastic bags is slighter higher than that of Mondi. However, their prices are more likely to be sticky.
Projections for the Market
The projected overall market growth rate for the next five years
Currently, the market for biodegradable plastic bags is valued at $4.7 billion. The anticipated market value for the next five years is $12.06 billion, registering a growth rate of 17.04% during the period 2020-2025. The expected positive growth in the market is attributable to the rising environmental concerns, which drives the use of biodegradable plastic packaging, and stringent regulations by different federal agencies whose aim is to minimize plastic waste and promote the usage of biodegradable plastic packaging, thus boosting its demand in the market (Ciriminna & Pagliaro, 2020). Food packaging and compostable bags are increasingly using biodegradable products to satisfy the shift in governmental regulations and consumer preference towards eco-friendly products.
Projected changes to overall pricing in the market for the next five years
Based on the market report on biodegradable plastic bags, it is projected that the overall pricing will increase by at least 35% for the next five years. The increase in the overall pricing results from the anticipated costly materials for making biodegradable polymers compared to thermoplastic materials. Certain kinds of polymers like PET are price-competitive, and due to their scarcity, they will be very costly as projected. Due to the expected expansion of the market size coupled with rising demand for biodegradable plastic bags, the price will likely increase as projected. Due to the competitive landscape, firms are also leveraging their application of eco-friendly and sophisticated technologies, which are costly, to produce plastic packaging products from readily existing natural resources.
Recommended Position for JGJ Inc.
Recommend position and points of differentiation for the JGJ Inc. offering
Because of the biodegradable plastic industry's competitive nature, JGJ Inc. should consider employing a mixture of pricing strategies such as penetrative and competitive pricing strategies while prioritizing quality as part of its brand. The penetrative approach will enable the company to gain quick access to market share, create brand loyalty, and generate significant demand by setting an appropriate price to get more customers. The penetrative strategy is suitable as the market has little product differentiation while the demand is price-elastic.
The company's recommended promotional strategies will include direct selling techniques, product giveaways, and allowing samples and online advertising. The strategy will assist in cost reduction and lead to the quick spreading of information concerning the company's products. The company should also use product differentiation through rigorous advertising and robust sales promotion mechanisms to establish the superiority of goods over competitors' competitors. The company should convince consumers that its products will provide more advantages and superior performance. The company's recommended place or distribution strategy includes the use of physical and online stores and the use of wholesalers and retailers to reach the customers.
Buyer profile of the target customer
The key target customers for the biodegradable plastic bags include food processing and packaging firms, hotels, groceries, other eateries, and individual shoppers. Consumers from emerging economies have rising incomes and are experiencing increased growth in agriculture, horticulture, and textile industries, thus driving the demand for biodegradable plastic bags (Ivonkovic et al., 2017). Their dependence on biodegradable plastic packaging leads to increased demand.
Reference
Ciriminna, R., & Pagliaro, M. (2020). Biodegradable and compostable plastics: A critical perspective on the dawn of their global adoption. ChemistryOpen, 9(1), 8-13.
Ivonkovic, A., Zeljko, K., Talic, S., & Lasic, M. (2017). Biodegradable packaging in the food industry. Journal of Food Safety and Food Quality, 68, 26-38.
