MARKETING PLAN OUTLINE
I. Executive Summary.
A one-to-three-page synopsis of the plan providing highlights of the current situation, objectives, strategies, principal actions programs, and financial expectations.
II. Situation Analysis
- Category/competitor definition PHILIPPINE FOOD AND BEVERAGE INDUSTRY Philippines have emerged as one of the rapidly growing food and drinks industries in the Asian region over the recent past. The country is characterized by various factors, such as its growing young affluent population, rising disposable income and rising consumer awareness regarding health and safety concerns.
With these factors, the demand for health food and drinks is surging high, says our new research report, “Philippines Food and Drinks Market: Emerging Opportunities”. The country exports foods to several countries, including the US, Europe and some Asian countries. However, the ongoing financial turmoil is forcing the country to look at alternative destinations such as the Middle East and Africa. In line with this, it is striving hard to get a share of highly lucrative global halal food industry. The major players in the Philippines food and drinks industry, including San Miguel Corporation, Jollibee Foods Corporation, Pancake House, Inc. and Pepsi-Cola Products Philippines Inc.
PHILIPPINE SOFT DRINK INDUSTRY
Softdrinks, also known as carbonated drinks, cola, soda or pop, is one of the most consumed beverages in the country. Prior to the introduction of bottled water, ready-to-drink teas, ready-to-drink fruit juices, and other functional drinks, it was the usual choice of Filipino consumers in many parts of the country. A pending bill in Congress (House Bill 5039) defined carbonated drinks as “aerated potable water, whether or not it contains added sugar or other flavor sweeteners, and non-alcoholic beverages hich are charged under pressure with carbon dioxide gas and are sold in bottles and other air-tight containers. ” Just like other beverages, softdrinks are a popular thirst quencher in the country
Category Analysis
Aggregate market factors
Category size / Category Growth Total household spending on non-alcoholic beverages reached P33. 3 billion in 2006 based on the latest Family Income and Expenditure Survey of the National Statistics Office. The figure was higher by 2. 9% per year from P30. 6 billion in 2003.
In inflation-adjusted terms, expenditure grew by 7. 4% per annum during the period. The bulk of the spending may be attributed to softdrinks. Meanwhile, the total size of the softdrinks market in the country was estimated at 8,591 million liters in 2007, with projected growth of 7. 6% in 2008 to 9,241 million liters (www. euromonitor. com) b. Stage in the product life cycle MATURITY The maturity stage is the most profitable. While sales continue to increase into this stage, they do so at a slower pace. Because brand awareness is strong, advertising expenditures will be reduced.
Competition may result in decreased market share and/or prices. The competing products may be very similar at this point, increasing the difficulty of differentiating the product. The firm places effort into encouraging competitors’ customers to switch, increasing usage per customer, and converting non-users into customers. Sales promotions may be offered to encourage retailers to give the product more shelf space over competing products. During the maturity stage, the primary goal is to maintain market share and extend the product life cycle.
Marketing mix decisions may include:
- Product – Modifications are made and features are added in order to differentiate the product from competing products that may have been introduced.
- Price – Possible price reductions in response to competition while avoiding a price war.
- Distribution – New distribution channels and incentives to resellers in order to avoid losing shelf space.
- Promotion – Emphasis on differentiation and building of brand loyalty. Incentives to get competitors’ customers to switch.
Sales cyclicity The industry does not respond to sales cyclicity.
Albeit the economic situation may not be stable, the industry experiences minimal changes or does not falter at all and thus, not affecting the whole industry itself.
Seasonality The industry is not subject to seasonality. Since we are in a tropical country, and Philippines in tradition celebrates many occasions and festivities, the market tends to be attracted to cold beverages such as carbonated drinks that hold a large percentage of sales in the beverage industry in the country.
Profits Total household spending on non-alcoholic beverages reached P33. billion in 2006 based on the latest Family Income and Expenditure Survey of the National Statistics Office. The figure was higher by 2. 9% per year from P30. 6 billion in 2003. 2.
Category factors
Threat of new entrants/exits
ECONOMIES OF SCALE
There is a mass production of bottled soft drinks in the beverage industry here in the country. Three big companies play in this field; they manufacture large numbers of soft drinks that are widely available to mass consumption. Coca-Cola Philippines, Pepsi Company and Zesto Cola dominate the market that entry of new competitors would yield low possibility.
PRODUCT DIFFERENTIATION
The product differentiation comes from established marketing campaigns that have created brand identification and loyalties. For a new entrant to compete effectively, they would have to be willing to expend the time and resources necessary to first convince the consumer to try the new product, and after trial, switch their loyalties.
CAPITAL REQUIREMENTS
Building a new cola brand will eat up big capital. From introduction stage to where you build your brand up to growth stage where it needs extensive promotional efforts and effective marketing strategies for competition.
SWITCHING COSTS
The threat of new entrants is partially increased by the low switching costs for customers.
DISTRIBUTION
There are only few soft drink brands here in the Philippines; they must further build brand loyalty in their core cola products so that customers will not be swayed by the cheaper, private label imitations products. Given the access to distribution channels is currently one of the largest barriers to entry, soft drink brands must maintain favorable relations with the large retailers so that this barrier remains strong.
- Bargaining power of buyers The bargaining power of the end consumer is low.
They are a fragmented group and no one individual’s purchases account for a significant portion of the manufacturer’s profits.
- Bargaining power of suppliers There are few suppliers for the carbonated soft drink industry. The end product is comprised of few ingredients, which are largely commodities.
Also, it is safe to assume that since there are few soda companies in the Philippines, these companies sales account for a large percentage of the suppliers’ total revenues. Thus, the importance of the soft drinks industry to the suppliers serves to contain whatever bargaining power they may have.
The overall bargaining power of the suppliers is considered to be low.
- Pressure from substitutes There are many substitutes to carbonated beverages. However, each company has a significant presence in substitute markets so that a decrease in cola consumption can conceivably be made up in increased consumption of bottled water, juices, teas, and energy drinks. The challenge lies in increasing brand loyalty within these substitute markets. Because substitute products are, for the most part, contained within each manufacturer’s portfolio, the threat of substitute is considered low.
- Category capacity The production of goods is enough considering that the major competing brands of soft drinks in the country are from big international companies. Also, knowing that there are numerous substitutes available, scarcity would be far acknowledged.
- Current category rivalry The softdrinks industry in the country consists of a handful of players. The market leader is Coca Cola, followed by Pepsi. The other smaller players include Virgin Cola, Zesto, and RC Cola. Coca Cola Bottlers Philippines Inc. (CCBPI) is now 100%-owned by The Coca Cola Company.
The latter bought the entire 65% stake of San Miguel Corporation (SMC) in CCBPI in 2007 for US$590 million. The acquisition includes low-end softdrinks manufacturer Cosmos Bottling Corporation (CBC), which was acquired by SMC back in 2002, as well as Philippine Beverage Partners, Inc. , the company which distributes the products. Today, the company’s carbonated brands in the market include Coke, Diet Coke, Coke Zero, Sprite, Sprite Light, and Royal, and CBC brands Pop Cola, Sarsi, Cheers, Lift, Jaz Cola, and Sparkle. Another player is Pepsi Cola Products Philippines, Inc. PCPPI) which is 32. 9% owned by PepsiCo. PCPPI’s brands in the market include Pepsi, Diet Pepsi, Pepsi Light, Pepsi Max, 7Up, Diet 7Up, Mountain Dew, Jazz, Mirinda, and Mug. The company went public early this year, the proceeds from which are intended mainly for expansion of its carbonated and non-carbonated beverages. Also in the softdrinks business is Interbev Corporation, a subsidiary of beer company Asia Brewery Inc. , which managed to secure a licensing agreement for Virgin Cola, a popular British brand, in 2004. Virgin Cola comes in four variants: regular, diet, lemon and lime.
It competes with lower-priced brands in the market like Pop Cola, RC Cola and Jazz. Juice company Zesto Corporation has also entered the softdrinks market via Zesto Cola in 1994. Its product “challenged the market leaders in terms of taste, refreshing qualities and price. ” Zesto has since diversified its carbonated drinks line to include Zesto Cola Zero Cal, Rootbeer, Rootbeer Light, Twist, Squiz Orange, Squiz Grape, Dalandan Fruit Soda, Calamansi Fruit Soda, and Pomelo Fruit Soda. Yet another player is Asiawide Refreshments Corporation, which is the Philippines’ licensed bottling manufacturer and distributor of US brand RC Cola.
The product is among the relatively low-priced brands in the local market. [pic] Market shares of Key Players Source: AC Nielsen as cited by 2TradeAsia, January 2008
Environmental factors
Economic The previous recession and economic slowdown have not given the industry a strong blow. During the previous years, in line with the recession, the industry was still able to grow by 2. 9%.
Regulatory Recently, a bill was filed in Congress for the imposition of 20% excise on soft drinks, energy drinks, and non-carbonated beverages.
House Bill 5039 actually seeks to amend section 150 of the National Internal Revenue Code of 1997 by expanding the coverage of goods levied with a 20% excise tax to include the said beverages. It seeks to curb the excessive intake of such beverages, and the same time, generate about 5 billion pesos a year in added revenues for the government. If this bill is passed, it will be another setback for the industry which is still grappling with difficult market conditions.
Social The drive for healthy living and lifestyle may affect the profit stability or decrease the income for this year. C. Company and competitor analysis
COMPETITOR A PEPSI CO. MISSION Our mission is to be the world’s premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.
VISION “PepsiCo’s responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today. ”
PRODUCT FEATURE SIZES AND TYPE OF PACKAGING
- 8oz Returnable Glass Bottle
- 12oz Returnable Glass Bottle
- 1Liter Returnable Glass Bottle
- 330mL Cans
- 500mL Plastic Bottle
- 1. 5Liter Plastic Bottle
OBJECTIVES,TARGET MARKET AND POSITIONING STRATEGY OBJECTIVES
Harvest Profit is paramount relative to market share
TARGET MARKET
Age 14-30 Female, male Target at schools,collages, universities, homes, restaurant, hotel and stores POSITIONING “Sarap ng may pinagpipilian”
To refresh the world… To inspire moments of optimism and happiness… To create value and make a difference. VISION Our vision serves as the framework for our roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.
- People: Be a great place to work where people are inspired to be the best they can be.
- Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people’s desires and needs.
- Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.
- Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.
- Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.
- Productivity: Be a highly effective, lean and fast-moving organization.
PRODUCT FEATURE SIZES AND TYPE OF PACKAGING
- 330 ml in can
- 200 ml glass bottle
- 237 ml glass bottle
- 240 ml glass bottle
- 500 ml glass bottle
- 500 ml plastic bottle
- 1000 ml glass bottle
- 1500 ml plastic bottle
- 2000 plastic bottle
OBJECTIVES,TARGET MARKET AND POSITIONING STRATEGY OBJECTIVES
Harvest Profit is paramount relative to market share ,
TARGET MARKET
Age of 15-25 and also reaches to 40 and above. Their targeting not based on gender but the results also show that both genders like this product and use it.
POSITIONING
“Open Happiness”
PREDICTION OF FUTURE STRATEGIES
Coke strives to be a good neighbor, consistently shaping our business decisions to improve the quality of life in the communities in which we do business. It’s a special thing to have billions of friends around the world, and we never forget it.
COMPETITOR C ZESTO COLA CO. MISSION
Our mission is to be the leading manufacturer and distributor of juices, dairy and related food products that best satisfy the growing needs of the customers. This, for us is the means by which we can effectively participate in the social and economic development of the communities we serve, promote professional growth and well-being of our employees, maintain mutually profitable relationship with our trade partners and achieve growth level equal to or better than the norms of the food industry.
VISION
To be the leading food and beverage Filipino company competing with the multinational companies. PRODUCT FEATURE SIZES AND TYPE OF PACKAGING
- Lift ring aluminum can.
- Polyethylene terephthalate (PET) Bottles.
OBJECTIVES,TARGET MARKET AND POSITIONING STRATEGY OBJECTIVES
Growth Increasing the brand’s units or market share with profits condition being secondary.
TARGET MARKET 16-30 Female, male, health conscious market. POSITIONING “zero-cal”
PREDICTION OF FUTURE STRATEGIES
Zest-O Cola in cans is the latest softdrink which challenges market leaders in terms of taste, refreshing qualities, convenience, value, and price.
OUR COMPANY RC COLA MISSION
We value relationships, we produce superior value, we uphold good values.
VISION
The seed that ARC planted when it started in 2003. Constantly cared for by relentless hardwork, refreshed by innovative ideas and nurtured with excellence.
The seedling emerged, blossomed and branched out. Now this seedling shows the promise of becoming a great and formidable tree.
PRODUCT FEATURE SIZES AND TYPE OF PACKAGING
- 240 ml glass bottle
- 800 ml glass bottle
- 1. 5 liters plastic bottle
Objectives
Corporate objectives To increase brand awareness and acquire new customers.
Marketing objectives RC Cola has been around the market for a while now in the Philippines but still has not made it to the top. Aiming to be the number one soft drink brand would not be to realistic, instead we aim to be in the consideration set of every Filipino household and thus be more competitive with the leading brands.
This year we will launch the new and improved RC Cola logo and RC Burst! The first ever fruity flavored RC Cola in the Philippine market. The objectives for the new product this year would be:
- Increase product and brand awareness through intensive marketing and advertising.
- Improve customer relationship
- Attract and acquire new customers
- Build brand loyalty among customers
MARKETING MIX PRODUCT PROPOSED LOGOS OLD LOGOPROPOSED LOGO RC BURST! PROPOSED LOGO
The RC Cola logo will be changed. It’s modern and catchier than the previous one. This will need intensive marketing and advertising to make the market knowledgeable to the said change of logo.
The proposed logo was designed for the teens which are the primary target market of RC Cola. The color scheme was maintained (red, white, blue) and the font was clear. The design was hip and trendy, more attractive to teens than the previous one. The RC Burst! Logo was made to describe what RC Burst! is. The tangy fruit flavors that is sure to quench your thirst. The colors were picked to describe the fruity flavors RC Burst! has to offer.
RC BURST! RC Burst! is the newest carbonated drink RC Cola has to offer. Made of real fruit juices, it is made to quench your thirst. RC Burst! has a variety of fruity flavors to offer that is sure to fit your every mood. Orange, Lemon, Strawberry and Grapes are the flavors of RC Burst!
The drink will be equipped with vitamins such as Vitamin C and B to boost immune system. Drinking made fun and healthier! RC Burst! will be available in can and pet bottles.
The most appropriate pricing strategy to use would be penetration pricing. Since the demand for carbonated drinks is elastic considering the availability of substitutes available in the market, this is the best method. RC Cola, since there would be logo modifications and RC Burst! will be launched, the product would gain mass appeal fairly quickly hence, there is no need to price the product high. The threat for impeding competition also gives us the reason to use the penetration pricing.
We are competing against large international companies, so RC Cola must maintain its differential advantage, which is its low price. PLACE Product will be placed at local supermarkets at large retailers like SM and Robinson’s. Also, we will make the product available to small retailers like sari-sari stores and small groceries near residential areas. The plan to tie up with Mang Inasal and Reyes Barbeque would increase brand awareness and brand loyalty.
Product/Brand Strategy
Customer target(s) We target ages 15-30, both male and female and focusing on teens.
Competitor target(s) PEPSI
- Age 14-30
- Female, male
- Target at schools, colleges, universities, homes, restaurant, hotel and stores COCA-COLA
- They targeted ages 15-25 and also reaches to 40 plus, as they are serving this age group also. Their targeting not based on gender but the results also show that both genders like this product and use it. ZESTO COLA
- Target ages 16-30, both male and female.
Product/service features 240 ml glass bottle, 800 ml glass bottle,1. 5 liters plastic bottle, RC cola in can.,
Core strategy
Value proposition
Most of our customers said that the best thing about RC cola was its price next its flavor and the model (endorser of the product) so it means that we gain consumers because of its affordable and cheap price. Unlike our competitors, our product was cheaper than their products and all our target market can afford it.
Product positioning “Great taste, Great Value” (RC ng Bayan) RC COLA is positioned as the cheapest soft drink brand in the Philippines.
Supporting Marketing Programs
Integrated marketing communications plans Magazine – Reading magazines and scanning for pages and pictures are one of Filipino hobbies. They usual browse for fashion and latest updates on the industry through print media. RC cola will post its best and new products on magazines for their customer to be updated in a easy way.
Event- Organizing events will help RC cola to expose their product and to keep customer more interested and curios about the product by offering more gimmicks and fun activities for the customer to enjoy with RC cola. Word of mouth – The most famous and effective advertising promotions. Words will be spread from person to person about the RC cola. B. Price *Magazine Expense – 6 issue (1year) —> 1/4 page 10,000 x 6 = P 60,000 6 issue (1year) —>inside front cover 55,000 x 6 = P330, 000 P390, 000 a year *Events – Potential Location Costs: Site rental fee 50,000 Permit(s)/license 10,000 Potential Rental Needs Furniture (tables and chairs) 2,000
Props 4,500 Stanchions/ropes 1,000 Potential Audio-Visual/Entertainment Costs Recorders/cameras/film 35,000 Overhead projector/cart/screen 2,500 Microphones 1,000 Sound System 25,000 Technical staff/labor 8,000 Talent fee 75,000 Potential Lighting Costs Special lighting (pictures/videos) 5,000 Generator/extension cords 1,500 Misc. Printing/Specialties Gift packs from RC cola 5,000 Prizes 10,000 Total :P685,500 P685,500– event marketing P390, 000-magazine P 1,075,100 total C. Channels (TVC, Radio, Internet, Media and Print Ad) is the famous channels in marketing.
We will be using Internet, Media and Print Ad as our channels in order to communicate with our customers. With the help of these channels we can easily reach our target customers and respond to their needs. INGREDIENTS: Carbonated water, caramel color, sucralose (Splenda® brand, a non-nutritive sweetener), phosphoric acid, potassium citrate, citric acid, gum acacia, potassium benzoate (preservative), caffeine, natural flavors. Sweetened with Splenda. No Aspartame. No Saccharin. No Calories. Very Low Sodium.
Contingency Plans
In cases of emergencies like storms, typhoons are coming; the budget allocated for billboard will be transferred to other forms of advertisements. And we think that these strategies will be able to help us gain profit. A. We are using the budget of billboard to our print advertisements. B. TVC C.
Outdoor ads (transit ads, street ads, etc).
Tying up with fast food outlets here in the Philippines will help us gain more customers. The target fast food outlets would be Mang Inasal, and Reyes Barbeque. Since these outlets are starting to grow, RC Cola would share the same customers these outlets would have. Thus the launch of RC Burst! would easily be known and publicized if we would tie up with these fast food chains.
DE LA SALLE UNIVERSITY DASMARINAS
- College of Business Administration
PRODUCT MANAGEMENT RC COLA MARKETING PLAN
- Submitted by: Mendoza, Annie Faye Pineda, Marie Ahlex Salonga, Bianca MKA 23
- Submitted to: Ms. Chona O. Bautista March 16, 2011
