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viktoryia_parris_unit_9_assignment.docx
By: { Viktoryia Parris}
AB/MT219: Marketing
DATE 02/11/2013
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KAPConsultants Marketing Plan
SECTION I. THE BUSINESS
Company Description
Goya is the largest Hispanic-owned food company in the USA. It was founded by Don Prudencio Unanue and his wife in 1936. Goya started in a small town in New York by selling produce to Spanish families. It was very small at the beginning, but continued to grow. Goya Foods now stretches from New Jersey to California and from Mexico, Central America, and South America to Spain. In 2005 Goya added 400 new produce and reached more than 1,500 product offerings and distributed brands. The company is selling in North and South America and regions in between including the Caribbean Islands. Some areas of Central and South America are poor with many living in poverty. The fact they need good nutrition is important. Goya provides quality foods. Creating a pricing structure that allows for this will help the company meet costs and provide a profit.
Business Mission
Goya is continuing commitment to providing quality Hispanic food, under the motto,
“If it’s Goya, it has to be good”.
Company Values
The company's commitment is quality and fresh ingredients. The message of Goya will continue to be one of quality and service to the community. The company will provide internal support for the brand and the efforts of employees to give back to the community. The company will continue its efforts to provide food for those who are in need. Giving to community food banks and other efforts help to feed populations that cannot feed themselves will continue as well.
Unique Selling Proposition
The pricing of the product is dependent on the region, the ability to price for consumption, and the price of providing a quality product. While quality is an important aspect of the pricing strategy, there are issues of regional prosperity. In areas where Goya is established and popular, pricing should reflect the quality of the product and availability. Popular items should carry volume pricing and specialized products should be priced based on the market. Market penetration is the goal and using the information gathered through information technology, pricing can be set to appeal and target as needed the populations served. Providing the foods with the appropriate variations demanded by the populations served in different areas is the most important aspect of the distribution strategy. As an indication of this fact, Goya recently built new warehouses to accommodate the vast distribution to markets. The product availability to the appropriate audience helps Goya remain a company with the ability to serve any taste market for Latin foods, whether they are in different countries or just neighborhoods in a single city.
The company should continue to promote and distribute the product selections through grocery stores that specialize in Hispanic populations, supermarkets, convenience stores, and super stores such as Wal-Mart. The SKU system is easily adjusted to add products and should be carried through from warehouse stocking to shipment for sale at the counter. The logistics of distribution should follow the best possible technology to keep information flowing. Sales and sales forecasting are important to the success of the company, allowing it to ready shipments as products are sold and reordered.
Global Vision
“Goya is very proud of its approach to marketing and distribution because it does reflect our company ethos of being an integral part of the community. “The customization of our product offerings in a given area is the result of our sales force being in tune with changes in neighborhood demographics because they know the people, the business owners on a first name basis. Our customers know that they have access to a sales force that is responsive to their immediate requests and who have access to an extensive product line.”
SECTION II. THE MARKETING ENVIRONMENT
Social Environment:
The social factors are in favor since globalization has led to the creation of high levels of awareness and growth in cross cultural factors. Goya turning some of their products into organic gives opportunities for the company to branch out into a healthier way of preparing foods. Another opportunity will be that it will bring in new consumers who are looking for ways to spice their foods up without the extra preservatives. Threats that Goya may face is to figure out how to make these food healthier without adding preservatives. Another threat would be the shelf life of the food since it’s organic it must be shipped and sent to the markets for purchase.
Demographic Environment:
Factors including the demographics being baby boom, and a large number of children as well as adults liking Goya products, it leads to improvement in the revenue and exposure in the industry. Hence the social factors as well as favorable.
The customers I will perceive into Goya food would be more or less on everyone who
enjoys great and healthy organic food. I think that more of the generation x, generation y, and generation z are more likely to enjoy the great quality food and beverages from Goya. I think that all generations, ranging from different ages are involved in snacks, fresh fruits, vegetables and sweets. Having customers throughout the whole world is a big plus for the economy.
Economic Environment:
In areas where Goya is established and popular, pricing should reflect the quality of the product and availability. Popular items should carry volume pricing and specialized products should be priced based on the market. Market penetration is the goal and using the information gathered through information technology, pricing can
be set to appeal and target as needed the populations served. The objective is to increase market share by at least 12%, if not more throughout the entire region.
In spite of the dreaded global financial crisis and recession, yet it has been seen that the trends of the food industry have been positive. This gives a new ray of hope to the food sector that the economic factors in the long run shall be extremely favorable for the firm.
Technological Environment:
The technological factors in the industry are not really favorable. Though there are several supportive technologies, there is rapid change and these results in quick obsolete technologies. Hence, keeping up with the dynamism of technologies becomes difficult. I think social media will be great advertising for the company and will help Goya food announce new products and promote their business in general. Goya Foods uses lots of internet advertising. Their website showcases their products and also provides much information about them. On the website, a customer can find out all of the nutrition facts about Goya products as well as learning about choosing the right foods to keep a good balanced diet. The website advertises Goya products as a healthy choice as is active in helping the consumer find what product they are looking for.
Political and Legal Environment:
The political factors for the Goya products are quite favorable. The reason for this is that Canada is a progressive nation and technology is favored. Hence, in case of Canada, the industry regulations in the industry are not very stringent when compared to other industries. Moreover, as it is gaining rapid popularity, the political factors all around the world are extremely favorable.
Competitive Environment:
This can also be positive as there are masses in the country who believe in social awareness and using only natural and organic products, so the consumers having this taste of products would anytime relish to use the products and services provided by them and so though the competition is high they have a fair chance. Some competitors that will be marketing the same type of organic products will be D’Rouco Foods and Knorr, who also creates and distributes similar spices and food products like Goya. D’Rouco foods and Knorr are well known in many communities for their recipes and Latin cuisines.
Customers
With the increasing demand of organic food market, the number of options for the consumers is increasing day by day. In the current scenario the supply of these products is increasing every day, thereby creating competition among the companies. Competition is rife, especially in the FMCG sector where an item can be “here today” and “gone tomorrow”. Companies have to fight for shelf space with retailers, especially when their products are generic. Goya places a huge emphasis on the authenticity of their cuisine and the fact that their Latino customers like buying goods that they consider their own. The non-Latino community forms a majority of the US population. In order to please them Goya could be tempted to drastically change some of their product offerings to suit their needs. In their quest to attract more non-Latino consumers Goya’s products may become diluted and no longer as authentic as they should be. This could alienate their existing Latino customer base. Cultural factor is definitely playing a big role. The force I believe affects Goya's strategy is the sociocultural force. This is due to one of Goya's main strategies, which is pushing its product specifically to the Latin community. One of its greatest advantages it has over competitors (Cambells) is its long-standing name among the history of the Latin community. A greater percentage of demographics that grow up eating a certain thing brand will generally continue this when then become adults. Researching continuous growth of the Latin community in America will allow Goya to further push their product in the American market by not only providing their outstanding customers with their quality product, but will also introduce the non-Latin community to their items.
Market Segmentation
Markets consist of customers, and each customer has their unique characteristics different from others. The differences elements can be identified in a series of categories, such as buyers’ wants, resources, buying attitudes and buying practices. Goya Food would use market segmentation to categorize markets by customers’ specific needs, characteristics and behavior. Goya Foods is a U.S. food company that sells different ethnic products to grocery stores, depending on the demographic groups the stores serve—Hispanic, Mexican, or Spanish. Likewise, B2B sellers often divide their customers by geographic areas and tailor their products to them accordingly. Segmenting by behavior is common as well. B2B sellers frequently divide their customers based on their product usage rates.
Goya Foods segment their products geographically; country wide, Demographic; targeting families and adults, Psychographic; interest in healthy food, and Behavioral Segmentation; can be used in any occasion.
Geography: Country wide
People living in parts of the country where there are proper shops so that Goya foods can have a distribution means.
Psychographic: Healthy food
Goya Foods make pre-packaged food. Thus, people are more attuned to the idea of consuming healthy and clean foods are targeted.
Behavioral Segmentation: Western
The behavior of consumers is changing; they prefer a ready-made and easy to use food product which involves less hassle.
Highest yielding segmented:
The highest yielding segment will be geography as this is the segment that has the highest number of consumers, it is easily reachable, has the distribution channels and competitors are few.
Target Market
Goya needs to watch its competitors carefully and monitor any inroads that they are making into the Latino food market. They must not readily assume that because they have succeeded in producing high-quality, most authentic products than their competitors; that none of them will eventually succeed at producing quality, authentic products which are similar to or could even be better than theirs. ConAgra, Campbell’s and MegaMex are all focused on penetrating and growing their sales within the Latino cuisine market. They know that Goya is one of their main competitors and they have the resources to implement successful strategies to steal some of Goya’s market share.
Positioning Strategy
A significant marketing budget should go to sales promotion of products. This is because of decreasing brand loyalty among customers for single brand, increased consumer sensitivity to varied deals offered by the companies and rising demand for more trade promotion support by the powerful retailers. The advertising done for the above promotion should keep in mind variables associated with it like control, costs, frequency, reach and credibility. With the increasing demand of organic food market, the number of options for the consumers is increasing day by day. In the current scenario the supply of these products is increasing every day, thereby creating competition among the companies. So in this scenario, the best way to promote a product is through Advertising. This is because with the increasing competition in the existing market, the biggest challenge for the Goya Food is creating awareness for their product among their target customers. Advertising of organic foods could be done through different types, which include: Retail/Local Advertising, Selective demand advertising, business to business advertising and trade advertising, and social media.
SECTION IV. MARKETING STRATEGY
Place
Marketing channels
Distribution strategy is one of the most important aspects of marketing strategy; it is a means through which a product reaches its consumers. Distribution channel can be referred as the chain through which a product reaches its consumers. A marketing channel system is important for a firm as it helps in analyzing and stating that how a product reaches its end users. (Kotler, 2002). We will use both push as well as a pull strategy for our product so as to attract customers to our products.
The company will make different franchisee, departmental stores as well as different convenience stores where the company will be selling different cuisine and products across the market. The company will also have a strong focus on e-commerce by selling its products online by collaborating with the different e-commerce websites. This is pull strategy which will be adopted by the company so as to attract mass market. The channel organizations of the Goya food distribution will be vertical as the company will focus following a chain of distributors, wholesalers and retailers so as to cater more and more market. The company will focus on intensive distribution so as to capture the maximum market.
Channel structure
The company will follow a vertical retail structure, where the company will manufacture the products and will appoint different distributors for different regions so as to cater to the mass market, the distributor will make different regional whole sellers and retailers so as to capture the mass market.
Distribution intensity
The company will focus on intensive distribution of the product as the product is a low priced product and the consumer, preferably goes to the departmental and convenience stores, and the company focuses on intensive distribution channel and reach the end users through these outlets.
Supply chain management
The company should focus on establishing its own logistics infrastructure to which caters to all the retail outlets across the United States. The company should focus on a proper purchasing, procurement procedure which ensures that the product that is being purchased by the company is not available at a lower cost anywhere else; this is done by focusing on proper supply chain management which is built on strong relationship with vendors and understanding the cost structure of the company. This is done by focusing on building a transparent supply chain process. The company also focused on technological advancement in the procurement of supplies, which was linked with the computer system of the suppliers. The company adopted EDI for this; this helped the suppliers to record the purchase orders along with the sales information of the products sold in different stores. As per the details of the products sold the suppliers supply the required products to the distribution centers of the company. Goya foods should also focus on maintaining high inventory turnover.
Managing logistics
The company focuses on a managed distribution system; the goods which are distributed within United States arrive on pallets whereas all the imported goods arrive in re-usable boxes or cases. The distribution center focuses on providing a steady and consistent flow of products which helps in supporting the supply system of Wal-Mart. The company focused on using sophisticated barcode technology as well as the computer system which helped in managing the distribution center easily. This facility was accessible by all the employees of the organization. The company focused on using different barcodes for different products, shelves as well as bin which helped in making the handling of inventory much easier. Once the inventory is selected by the employee, the same is entered in the computer system which automatically updates the inventory on the server. The handheld computer system also helps the packing department to know the details of the products that are packed. This helps them to know about the product which helps them in catering to the needs a demand of the consumers easily.
Logistics plays an important role in proper functioning of the supply chain management. The company relies on a well-developed logistics infrastructure which focuses on serving the distribution centers of the company.
SECTION IV. MARKETING STRATEGY
Promotion
Promotional Strategy:
With the increasing demand of Goya foods, the number of options for the consumers is increasing day by day. In the current scenario the supply of these products is increasing every day, thereby creating competition among the companies. So in this scenario, the best way to promote a product is through Advertising. This is because with the increasing competition in the existing market, the biggest challenge for the companies is creating awareness for their product among their target customers. The company, whose navy blue label has for decades been at home in Latino households, is going after a broader, general market with a new advertising campaign. And for the first time in its 75-year history, Goya is using mobile technology in its efforts.
Goya Foods’ biggest general market effort runs counter to those of many other food companies, which are focusing their efforts on the growing Latino population in the United States. To help draw wider attention to its products, Goya is participating with the Stop and Shop supermarket chain and the Food Network in a test of a new shopping system that employs in-store scanners. If a shopper scans a box of rice, for example, the device could suggest a can of Goya beans to complement the dish.
Promotional Goals:
Advertising of Goya foods could be done through different types, which include: Retail/Local Advertising, Selective demand advertising, business to business advertising and trade advertising.
The two marketing communication tools used in the marketing of the Goya food market are Advertising and Sales Promotion. As the demand of the Goya food market is increasing day by day, it is no longer perceived to be a Niche market. So Advertising and Sales promoting would be the best tools for promotion of Goya food markets. “We realized that we were talking to general market consumers like they were Latinos,” said Alain Groenendaal, Wing’s president and chief executive. “Instead of teaching people to cook Latino, we needed to think about how we can use Goya ingredients in their cooking.”
That cooking, the agency found, included dishes like casseroles, salads and meatloaf. One goal of the campaign was to encourage general market consumers to include Goya products in their everyday cooking and not just for the occasional taco night. Goya’s new marketing campaign will include mobile, radio, print and online ads. Goya worked with Quattro Wireless to create a custom mobile site, m.goya.com, which will offer coupons, how-to videos and recipes like black bean salsa and creamy olive dip.
Factors Affecting the Promotion Mix:
The key characteristics of the growth of Goya markets worldwide are as follows:
· Strong Market Growth
· Consumer behavior and premium prices paid for products
· Growth in global exports of Goya food products from the tropical regions
· Effective distribution channels.
The distribution channel of Goya products will also play a major role in the promotion of these products in domestic markets.
Product Lifecycle.
The marketing tools are required to be effectively used majorly in domestic markets. Both advertising and Sales promotion should be integrated in a way that creates awareness of products along with inspiring customers to buy those. A significant part of the marketing budget should go to sales promotion of products. This is because of decreasing brand loyalty among customers for single brand, increased consumer sensitivity to varied deals offered by the companies and rising demand for more trade promotion support by the powerful retailers. The advertising done for the above promotion should keep in mind variables associated with it like control, costs, frequency, reach and credibility. Goya anticipates a quick payback on its investment based on its ability to target and anticipate demand, and to plan the entire supply chain on a single-number forecast. "A 3 percent incremental increase in sales translates into a very quick ROI on our new supply chain capabilities," said Unanue. "We're happy where we are, but we're never going to rest on our laurels. There's always room for improvement."
Currently, Goya is using JDA solutions to pilot a vendor managed inventory program at its manufacturing facility in Puerto Rico. "Our next goal is to shift ordering responsibility from our warehouses and distribution centers directly to our production facilities. Today our Puerto Rican manufacturing facility has visibility into all of its 'customers,' which are Goya's warehouses around the world," said Unanue. "Based on customer inventory levels and targeted demand forecasts, the manufacturing facility can generate forward-looking production requirements and ensure that warehouses are replenished as needed." According to Unanue, the pilot project is already realizing impressive fill rates of 99.96 percent.
As Goya celebrates its 75th anniversary in 2011, it's clear that the company has come a long way from its roots as a small food brokerage in Lower Manhattan. By combining its rich heritage with advanced supply chain processes and solutions, Goya is poised for another 75 years of growth and success.
Target Market Characteristics.
Goya needs to watch its competitors carefully and monitor any inroads that they are making into the Latino food market. They must not readily assume that because they have succeeded in producing high-quality, most authentic products than their competitors; that none of them will eventually succeed at producing quality, authentic products which are similar to or could even be better than theirs. ConAgra, Campbell’s and MegaMex are all focused on penetrating and growing their sales within the Latino cuisine market. They know that Goya is one of their main competitors and they have the resources to implement successful strategies to steal some of Goya’s market share. In the U.S., Latinos are the predominant group to cater to – but elsewhere in the world, Asians are looking to see more variety.
Reports in the last five years have repeatedly shown that the Hispanic population is younger than the general population (average age is 27, compared to 37 for the general population), is more family focused and has demonstrated that they’ve been able to sustain their culture over generations, more than other ethnic groups.
Hispanics’ wealth and their disposable income have also been skyrocketing, according to the Selig Center for Economic Growth. The result is a ripe market for baby-related categories, such as baby food.
Push or Pull strategy.
Goya Foods will follow push and pull strategies to promote their product. Push to create customer demand through constantly developing new products and offering these products in stores; and pull customers towards these products through advertising and promotion deals. In Goyas food market there is no single correct combination of push and pull. The amount spent on each type of strategy will depend on factors such as budget, the type of product, the target audience and competition.
Integrated Marketing Communications:
With the increasing demand of Goya foods, the number of options for the consumers is increasing day by day. In the current scenario the supply of these products is increasing day by day, thereby creating competition among the companies. Goya Foods, Inc., the largest Hispanic-owned food company in the United States, this week launches an extensive new brand advertising effort; part of an integrated marketing campaign represents the largest single investment in the history of the company.
Leveraging the huge popularity of Latino cuisine in mainstream American culture, the new advertising positions Goya as the ultimate provider of “authentic" Latino ingredients and foods for various generations of Hispanic consumers as well as a new segment in the general market of cooks with a passion to create experience and share authentic ethnic foods at the family table.
The multi-channel campaign includes national, local and cable TV ads in 11 key markets, both general and Hispanic, as well as an online component. Robert Unanue, President of Goya, said, "We see a historic opportunity to accelerate Goya's growth in the mainstream U.S. market by capitalizing on today's mega-trend toward Latin food preferences and the resurgence of in-home cooking, which plays to our core brand equity as the premier purveyor of 'authentic' Latino foods."
Advertising:
With the increasing demand of the Goya food market, the number of options for the consumers is increasing day by day. In the current scenario the supply of these products is increasing day by day, thereby creating competition among the companies. So in this scenario, the best way to promote a product is through Advertising. This is because with the increasing competition in the existing market, the biggest challenge for the companies is creating awareness for their product among their target customers.
Public Relations:
Public Relations of Goya foods could be done through different types, which include: Retail/Local Advertising, Selective demand advertising, business to business advertising and trade advertising. Taking place on the 75th day of Goya’s 75th year, the one million pound donation is part of a series of initiatives the company has developed to celebrate its milestone anniversary in 2011 and is the largest ever single-day food donation by a food company. The historic donation serves as a reminder of Goya’s service to its communities and is the next step in Goya’s longstanding commitment of supporting the fight against hunger. Throughout its seventy-five year history, Goya has donated extensively to local and national organizations, and in 2010 alone, the company donated more than 1.5 million pounds of food internationally.
Additionally, Goya announced that it will be donating more than 100,000 cans of Goya coconut water to aid the victims of the recent earthquake and tsunami in Japan. This donation will quickly help provide the victims with necessary nutrients during these difficult times. Goya has a long history of providing aid to those impacted by natural disasters and has made significant donations both at home, including those impacted by Hurricane Katrina as well as abroad in Mexico, Haiti, Chile, Peru and El Salvador, among others.
This is the second most important tool to be used to promote Goya food products in this increasingly competitive market. Sales promotion has always been an effective marketing communication tool in a situation where too many goods are facing limited customers in a target market. Sales promotion in general, can be both Consumer oriented and trade oriented. The primary focus of Personal Selling in Goya food market would be consumer oriented. This would be a dome through offering coupons and samples, introducing rebates, bonus packs and loyalty programs into the sales of Goya products. The www.goya.com website will offer Goya’s 75th Birthday Bash, an online interactive party featuring the Goya’s Greatest Fan Contest, party food recipes, games, music and more. The company will back the promotion with strong marketing support across multiple consumer touch points, including unprecedented levels of in-store point-of-purchase advertising.
--Several “Blue Carpet” receptions have already taken place in Los Angeles; Chicago; Houston; San Juan, P.R.; and New York last year, with additional events scheduled for Washington and Miami in 2011. The receptions aim to give customers, community partners and the media a preview of the company’s initiatives for the coming year. Guests can also sample Latin American cuisine, and each attendee will receive copies of the 75th anniversary commemorative edition of Goya’s signature recipe books
Personal Selling:
Goya Foods utilizes the technique of personal selling when they hold such events as Fiesta Goya. At Fiesta Goya there were kiosks offering samples of Latin American food. Goya is helping to sell its product by getting Americans in touch with their Latin roots. Because it is not possible to constantly have events all over the country, this is where the grocery stores come in. In large grocery stores such as Wegmans there will often be workers showing recipes using specific products that are being currently featured in the store. Because they are being shown to the customers and they are able to taste the finished product, the customers are very likely to purchase Goya products.
The E-store on the Goya website is a perfect example of direct marketing communications. Customers are able to go online, search for exactly what they want and then make their purchases. Their orders go straight through to the company and then the customers receive their products delivered to their door in a timely fashion. Goya also has ways in which customers can directly contact them, offering phone and fax numbers to specific stores, as well as their locations. On the website, customers can leave comments via email and they can check the status of their orders every step of the way.
SECTION IV. MARKETING STRATEGY
Pricing
For this assignment the new product idea in concern is to launch a new energy drink from Goya Foods. This new product is an energy drink from the company and it is indented to enlarge the customer base. Some of the basic elements of the product are that it is nonalcoholic and it provides energy to the users. This product is likely to attract early adopters because they like to try new things. Some of the product features that distinguish it from the rest in the market are that it is made of natural flavor fruits and its test is exotic. It comes in various packages, which differ in size. They also favor take away customers and they are biodegradable. They are conspicuously labeled and some service characteristics include direct selling while some of the best relationship marketing strategies are network selling and introductions to potential customers.
Pricing objectives:
The primary objective of the pricing strategy is to penetrate the market and capture market share. So sales oriented pricing objective is mainly used for pricing the new product (Segall 2000). The objective of the company is to capture 20% of the market share in the first year of launch. The profit oriented objective is to generate an ROI of 10 percent over the next one year. Though it is important to gain profits, it is not the primary motive in the short term. Status quo pricing objective includes meeting competitors’ price. In case of this product, it is priced little lower than the competition to capture market share.
Determinants of Pricing:
The key determinants of pricing the energy drink of Goya foods are the pricing objectives, organizational objectives, marketing objectives, other components of the marketing mix, legal aspects regulating pricing, customers’ perception about the product and consideration of the intermediaries or retailers (Kotler & Keller 2011).
The cost of inputs influences the pricing of the beverage as an increase in the cost of the organic fruits would increase the price of the product. The distribution channel of the product includes wholesalers and retailers. So final pricing has to be done, including the overhead and mark up the price of wholesalers and retailers (Segall 2000). Perceived quality impacts the pricing of the beverage. If customers feel that the perceived value of a beverage is high, they will be willing to pay more to buy the product. Product life cycle stages also influence the pricing of the beverage.
Pricing strategy:
The pricing strategy to be used to set the price of the new product is value based pricing as the beverage will be positioned as a healthy beverage and the price will be based on customers’ perception of value (Kotler & Keller 2011). The pricing will also be based on competitor’s price. Competition in energy drinks is very high and the competitor’s beverages are expensive. Price of this beverage will be slightly cheaper than its competitor. (Brushett & Franklin 2000).
In the product Lifecycle, first the product is developed. Then it goes to the market and introduced to the customer. At this stage, penetration or skimming price is used. Once the product becomes known to the customer, it grows. At growth stage, the penetration pricing will be continued. Then the product establishes a strong position in the market, it matures. At maturity stage, the product would be priced to match the competitors’ pricing. After a period of time the product declines due to the introduction and development of superior competitors. Price will be cut during this stage. And finally the product will be withdrawn from the market (Kotler & Keller 2011).
Ethical and legal considerations related to price:
The ethical issues that are related to the price are social equity, potential exploitation, full disclosure of ingredients and fair pricing. Social equity includes fixed versus sliding scale fees. Potential exploitation involves exploiting of the labor in the manufacturing process. Full disclosure of ingredients requires the company to explicitly mention the ingredients and nutrition value of the product (Brushett & Franklin 2000). In the sales process of the product wholesalers and retailers are involved extensively. Both wholesalers and retailers add overhead costs and considerable profit margin to arrive at the mark up price. At times, retailers curtail their price to boost sales. So it is important to have fair pricing (Kotler & Keller 2011).
Base Price:
The base price of the product is the cost of the inputs for producing the energy drink (Segall 2000). This cost includes the cost of the organic fruits and other raw materials, cost of machineries and technology, labor and overhead cost. It does not include markup profit, taxes or shipping expenses.
We will use some sales promotional activity to immediately attract the customers towards the product. We will use ‘magic point’ pricing strategy by launching a differently packaged product for a lower price for a short period of time. We will provide cooler and menu to restaurants and retailers with the branding of the new healthy energy drink. We will also run an in-store sampling program and use sampling pricing strategy for that. (Kotler & Keller 2011)
We will introduce new recyclable cans of 250 ml, which will stay cooler longer to capture market share. Celebrities to endorse the product can raise customer brand awareness and recall exponentially.
Pricing Contingency Plan:
To counter inflation, the company would shrink its 350ml, 500ml containers rather than increasing the price outright. Though this will increase the price of beverage per ml, it would not affect the grocery bills of customers much. The price of core inputs, including organic fruits, would also rise due to inflation. This plan will also help the company as it will not have to increase its expenses on the core inputs. The company would also withdraw the smaller packages and promotional packages from the market.
References
Lamb, C. W., Hair, J. F., & McDaniel, C. (2012). MKTG5. Mason, OH: South-Western, Cengage.
Goya. (2012). Goya Foods. Retrieved from http://www.goya.com/english/about.html
B. De Lollis. (2008). CEO Profile: At Goya, it's all in la familia. Retrieved from http://www.usatoday.com/money/companies/management/2008-03-23-bob-unanue-goya-foods_N.htm
C. Martens. (2010). Goya Reaching Out Beyond Latino Segment with Market Push
for Sides and Seasonings. Retrieved from
http://www.foodchannel.com/articles/article/goya-reaching-out-beyond-latino
segment-market-pus/
Kotler, P & Keller, K (2011). Marketing Management.14th ed, Prentice Hall
Brushett, L & Franklin, G 2000, ‘Marketing planning for value added agricultural products’, paper presented at Marketing U Seminar on Market Planning For Value-Added Agricultural Products, East Hill Farm in Troy NH. Retrieved from. <http://agmarketing.extension.psu.edu/Business/PDFs/market_planning.pdf>
Segall, S. (2000) New Food Products: Technical Development. Retrieved from.
http://www.enq.ufsc.br/disci/eqa5216/material_didatico/DEVELOPINGNEWFOOD/
Manufacturer
Distributor
Whole seller
Retailer
Customer
KapConsultants Disclaimer:This exercise may include actual
companies and brand names solely for instructional purposes;
this exercise is not associated with any such actual company
or brand name. All trademarks remain the property of their
respective owners.
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