Marketing strategies case study Essay
For selecting marketing strategy we have to analyze the main factors. They are identify the company situation and characterized last marketing strategy.
First of all we analyzed every strategy step by step. Focusing the company efforts on the Prarie provinces can restrain the opportunities of Lucas Foods Company. To my mind Lucas Foods have bigger potential and the one province market quite small for it. Besides that the product has wide range of assortment. Production of taste of scones, English muffins, and biscuits, besides that in four flavors-pains, rising, cheese and onion needs a lot of good technologies and innovations.
So, such products have to have a wide range of products distribution channels. However, with comparison in other competitors, Lucas Foods haven’t a large warehouse to store the production. So, it will be too hard to involve strategy of rapid expansion. According into account that the products could be store frozen the company can faced with the problem of transportation.
The involving companies product in both countries will be very expensive and non profitable. The process developing an international market is quite difficult for non-huge companies.
A lot of companies identify it as an Achilles’ heel. Entering a new country-market the same as entering a new county or region in general is very like a start-up situation. When the company begin to develop new market segment its always with no sales, no marketing infrastructure in place, and little or no knowledge of the market. But despite all these disadvantages, companies usually treat this situation as if it were an extension of their business, a source of incremental revenues for existing products and services. Researching of international biscuits market shows that there are a lot of international producers on the biscuits market.
High Profile Brands
Keebler, Famous Amos
Various Butter Cookie brands
Dare (Canada), Hellema (Holland)
Asian-style higher quality products *
The most of these brands have the part of market both in Canada and North America biscuits market. So, the experienced of big companies shows that for becoming far more capable of modular design in their products or services, they stated a core platform from which local variations can be more easily and economically developed. At the earlier development of products such platforms is tailored to local market conditions, which can be expected to accelerate market penetration. In such way, the time at which products are customized is regional rather than country-by-country. This allows company to retain some economies of scale while still adapting to local demand characteristics. After a company international marketing network is well developed, such regional products may then be available at the time of market entry for other country-markets in the region.
Despite worldwide interest in healthy eating choices, Canadians still enjoy their desserts and the more selfish, the better. According to a 1997 F.A.S. analyzes, consumers ate US$354 million of frozen cakes, pies and other desserts. The frozen dessert sector still presents great opportunity for manufacturers, with consumers willing to pay top dollar for connoisseur and indulgent products from their favorite brands.
So, taking a lot of different methods our decision is phased expansion. The choosing of this strategy explains by such factors of company development:
1. Company has quite definite policy of development and involving new product onto the market. Lucas Foods have plans to add free more flavors, including pizza.
2. Not very long product life cycle, so the company has acceptance in the market place
3. Concentration on the one or two main products (frozen eggs and biscuits)
4. Good reputation and promotion strategy in its market segment.
For entering to the new counties Lucas Foods needs to study business environment in this segment. The comparison analyses of main competitors we find in the table.
Good differentiation according to consumer demand
Professional marketing research
Profitability higher than average
Image of reliable partner
For entering to market state by state using the phased expansion, Lucas Foods have distinction between market knowledge and marketing knowledge. Market knowledge is needed for doing business in any country or state: it includes a study of local regulation and requirements, business process, styles of negotiations, norms of culture, and a lot of other details that add up to “the way people do business in a given country.”
After marketing researching we see that cakes and biscuits are favorite Canadian foods. That’s why the biscuit market makes a great effort with its reputation for featuring unhealthy foods. Such reputation has decrease sales in recent years. The biscuits market has a greater variety, aggressive marketing and widespread availability that are why the category grew a modest 3.3% in value terms in 2003, reaching US$635 million. As for Euromonitor dates volume growth was just 1.7%, the sweet biscuit sub-sector grew 2% during 2003, and the volume sales trailing behind at 1.5%.
In contrast, the savory biscuit and cracker sub-sector jumped 6.5% in value terms between 1999-00, fueled by an increase in snacking and renewed interest in healthy foods.
Lucas Foods have to make some research and development. It is a vital part of the business process. Consumer eating habits and dietary changing all the times and research and development needs to keep pace with such changes. Pre-baked and frozen specialty cakes answer consumer demand for feasibility, while unpackaged cakes from the local bakery satisfy demand for freshness and healthier eating. The company has to take into account the packaged products. Lucas Food has to use organic products for its production, because packaged cakes often contain some additives and preservatives, and some people view them as non-useful. Such kind of people prefers unpackaged cakes.
Lukas Foods have to realize that there was enormous potential to increase the consumption of fresh biscuits products among Canadian consumers. It set about fulfilling this goal with a phased expansion market entry strategy that involved a number of activities:
Developing an understanding of market segmentation in the biscuits market in every county
Identifying gaps in the market by identifying unfulfilled consumer’s needs
Introducing Lucas Foods unique range products of healthy and tasty brands to deliver new benefits to Canadian consumers
In order to maximize their ability to satisfy consumers, marketers divide up or segment the market for their products according to different consumer needs and preferences.
Geographic Segmentation: Segmenting consumers according to their geographic location. Canadian consumers were found to consume less biscuits produce than their American counterparts.
Demographic Segmentation: Marketers frequently segment their market according to some demographic criteria such as age, gender, occupation, religion or even marital status.
Lucas Foods can use such segmentation in follows aspects:
– Schoolchildren – can use biscuits as fresh breakfast or lunch
– Businessman – fast and non so harmful food
– Old people – taste of youth and light-hearted life
Psychographics Segmentation: Consumers are segmented according to the different lifestyles or according to their social class groupings or different personality types. In Canada for example, research into young consumers between the ages of 18 and 24 years of age found that they could be segmented according to different lifestyle groups.
Behavioral Segmentation: This involves segmenting consumers according to their knowledge of a product or the way in which they react towards a product. One such way is by grouping consumers according to the benefits that they look for or the occasion on which they use a product. By looking at the breakfast and lunch market Lucas Foods could see a gap for its brand. I think, the company has, through its advertising, highlighted the benefits of a light biscuits each morning, thus changing some traditional perceptions of biscuits as only for dessert.
Lucas Foods also adapted advertising messages to suit different market expectations. In one county, biscuits are typically sold as an added for usual food, in the as a symbol of good health. Raising and cheese come later as advertising emphasizes the health logic. They add to the pleasure of eating biscuits. Advertising messages are therefore adjusted accordingly to reflect theses preferences.
Alternative courses of action in the strategy of phased expansion could be the following:
1. Developed the promotional plan for new regions. This plan can be divided to some categories and its budget will be make as follows one:
The primary goals of advertising program are to build awareness and to generate traffic for the retail operations. While the advertising will list website address, it will not be a primary focus of the advertisements. During the first six months of the year, awareness advertising will be a primary focus. During the second half of the year more emphasis will be placed on generating traffic. A secondary goal of advertising will be to promote the public relations events and sponsorships. While public relations will be used to get world out to the consumers about special events and sponsorships, advertising will be used as a supplement to this effort.
The 50 000 $ of advertising budget will be broken down as follows:
With these funds, the Lucas Foods will be creating two initial broadcast advertisements. One newspaper advertising and one Internet banner add will be created. Following these initial advertisements, the company will generate two new broadcast advertisements that can be added to the sequence during each of the second and thirds quarter of the year. Thus, a total of four television ads, four radio ads, two newspapers and two Internet ads will be created. The ads will focus on developing awareness and encouraging viewers to visit a retail store or website.
Additional advertisement will be created to support the consumer promotions, sponsorships, and public relations efforts. This advertisement will be very specific and will run just prior to each event. Since Lucas Food will also handle the public relations efforts, it will be relatively easy for them to develop ads that can be integrated with this public relations message. The month by month advertising budget is illustrate in the chart bellow. The advertising expenditures will be the lowest in November and December. Starting with January, the advertising spending will increase each month until it reaches its peak in May and June.
Future advertising expenditures are provided in the following table. The largest increase, 25% per year will be in the area of Internet advertising with the goal of increasing Internet sales by 50% per year. Newspaper advertising will increase only 5% per year and be used primary to advertise special events. Television and radio advertising will be increase by 15% and 10% respectively. As Lucas Foods gains name recognition, it will be important to expand its television advertising outside of the immediate area.
Advertising Budget By Consumer
2. Involving a new taste into the new market.
3. Involving ecological and light biscuits.
4. Create and improve warehouses.
5. Develop a new distribution channels.
For current and potential creators, marketers, and manufacturers of packaged Lucas Foods products, consider taking our products to market through the following distribution channels:
Department / Gourmet Foods Distributors: Mainly dry groceries. These types of distribution include specialty, gourmet, health, natural, and supermarkets. According to its service type they include a lot of pre-sales, drop-off. Some of them have merchandising system.
Health and natural foods distributors as usual include dry foods, sometimes ref. and frozen.
Wholesalers. Such supply supermarkets has most of their inventory. Wide range of groceries, dry, frozen, refrigerated, frozen and sundries. Such supply offer drop at back door and sometimes merchandising in various degrees
Food Service Distributors. These channels include anything and everything a food service operation uses. It can be restaurants and hotels, supermarkets and delis, schools and hospitals.
Strategic development of the distribution is the main questions in ensuring long-term success and profitability of any food product. Reliable relationships with main distributors of your products is way to success. Lucas Foods have to create mutually profitable partnerships, which ensure that his distributors will want to do business with it. When the company we’ll improve all these parameters phased expansion strategy will be next:
Sales & Traffic
Recognize & Appreciation
Employees or Members
. Increase Trade Traffic
. Increase Sales Inquiries
. Increase Website Traffic
. Increase Dealers Orders
. New Product Promotion
. Open a Company Store
. Build Brand Recognition
. Trade Show Branding
. Improve Client Relationships
. Event & Party Gifts
. Thank Good Customers
. Promote Goodwill
. Celebrate Date
. Motivate Salespeople
. Welcome New Employees
. Safety Award Programs
. Stimulate Productivity
. Performance Incentives