Market Plan For Dudu Natural Fruity Soap Product
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 3281 words||✅ Published: 3rd May 2017|
AFRICAN BEAUTY is an African herbal soap which contains camwood, honey and palm kernel extracts both known for its superior dermatologic properties. It is very popular in the African region. It is essentially manufactured few chemical processes and is easily obtainable in the African sub-region.
The UK marketing environment
In order to analyse the UK’s marketing environment, the following factors have been considered
The recent trend in consumer behaviour is tending towards going green and using organic products with more natural ingredient. A product such as African beauty can capitalize on these present consumer tendencies.
Over the years, the number of immigrants is on the increase. Thus, there is a change in the population structure of the UK. As the changes persist, there is equally a growing need for products/services which complement these emerging groups. Presently, there are approximately 736,000 black Africans in the uk to who this product is targeted at.
Environmental issues are also very prevalent in the UK, which must reflect both in constituents of the product, its packaging as well as elements n the marketing mix
With the economic recession in the UK, budget cuts and high unemployment rate, consumer spending power is reduced and spending habits of most consumers is mostly cautious. The economic factors can be divided into two. The macroeconomic influences generated by government economic policies and trade agreements. Taxation reduces the amount of disposable income available thus affecting consumer’s spending habit. However, FMCG goods such as soap are unlikely to be affected significantly. VAT rates and exchange rates also determine the final price of a product to an extent. Therefore, the proposed increase in the VAT rates will be of concern in the market mix decisions. Microeconomic influences concerned with market structures which influence the kind of competition present. Based on the number and size of competitors in the UK FMCG market can be said to be an oligopoly. The major soap brands are owned by procter and gamble or unilever which possess a huge market share. These companies are likely to create considerable barriers to entry and leave very little gap for a new product from a new competitor. For this product, a niche market strategy is most appropriate
The role/influence of government has a direct influence on the marketing mix. The 3 main forces within the political and legal environment. The local/national government and the various regulatory bodies. In order to ensure consumer and for a successful trouble free product, laws on product liability, privacy rights, unfair business practices, fraud and misrepresentation. As well as laws governing importation has to be considered. Promotion and advertising will have to standards and policies set by regulatory bodies such as Advertising Standards Authority and Ofcom. Fortunately the UK is quite liberal and thus there won’t be many constraints to the promotional strategies adopted within the mix
Technology has made cheap and powerful database management systems available for more efficient management and analysis of customer information. Also the internet has provided new ways of promoting products as well as improved technology in the production of adverts and promotional materials.
Dove, Imperial leather, Dettol soap, Delta soap.
Overview of the marketing mix
Using the 4Ps model
The product- DUDU soap comes in two bars with 2 different fragrances, orange & lemon.
Consists mainly of natural ingredients vastly found in Africa. BEAUTY is an African natural soap which contains camwood, honey and palm kernel extracts known for its superior dermatologic properties. It is very popular in the African region. It is essentially manufactured few chemical processes and is easily obtainable in the African sub-region. The two bars will contain orange and lemon concentrates in relatively high but safe quantities. Both are tropical ingredients with high vitamin A and C contents, as well as ascorbic acid which has antibacterial properties
General anatomy of product
Classified under consumer and non-durable goods, due to its relatively inexpensiveness and frequent purchase. Also convenience products as consumers are likely to put little effort into purchase decisions. This particular factor is of great significance in our marketing mix. Product must be made easily available to the target segment. Also, a good brand communication strategy must be present to get consumers involved as much as possible and create a good degree of brand loyalty. Market will be characterized by low margins; therefore we will seek profit through achieving high volume sales.
Design. The ergonomic properties, colour and attractive packaging have been taken into serious consideration. This is in order to enhance its visual appeal and feel of the product, as well as communicate the right brand image. These particular factors have a strong influence on consumer’s perceptions of the product’s quality.
Attributes. Product is made from purely organic ingredients. Ingredients such as camwood, rosemary, thyme, shea butter, honey and tropical fruits extracts. These are easily sourced locally in Africa, have a high vitamin content and are known for their natural dermatologic and healing properties. Being natural organic compounds, they are complementary to almost all skin types and won’t present skin reactions as most soap produced with artificial/chemical compounds usually do. With this product, consumers need not worry about their skin types when purchasing, and this is the brand image we shall seek to promote. The UK weather is harsh, therefore this will be a welcome product especially for newer immigrants
Features. Comes in an soft oval shape reinforcing the perception of mildness to skin. Also comes in 2 bars; dudu lemon and dudu orange. These are presented in their corresponding natural fruity fragrances still reinforcing the perception of naturalness and freshness
In launching this product in the UK, the following have been taken into account;
Brand name selection. Dudu is an African word hat connotes freshness/naturalness. It was seleted because it is
Distinctive from the competitive offerings, suits the product’s character and will appeal to the target market.
Recognisable, pronounceable and memorisable. Thus, it will most likely be acceptable
It is an already registered brand and is familiar amongst some consumers within the target segment.
This product wil follow a line extension strategy whereby an existing brand name is passed on to new forms of an existing product category. The dudu brand is quite popular in Africa and is associated with a known and trusted product- dudu osun- an established soap product in Africa. Thus, we will leverage on the brand equity that already exist with dudu particularly amongst the target segment.
The packaging chosen will serve both functional and promotional purposes. It plays a crucial role being the first point of contact between the consumer and the product. Proper packaging can even result in increased sales.
After considering the packaging demands of the UK, the choice of material is a light, durable and biodegradable material made from wood pulp. It is slightly porous allowing some fragrance to sip through. This will further serve to attract attention as wellas streghten perception of fresness.
Shape. Oval shaped pack, which evokes a sense of tenderness/coolness
Graphics/colour. Simple but attractive images and also different shades of just two basic colours- orange and lemon. This also helps to communicate the presence of just few natural ingredients.
Pack sizes. Comes in single packs for the single user, larger family-sized packs and clearly labelled trial- sized packs that encourage low risk product trials. The inclusion of different pack sizes will promote choice and also appeal to different consumers within the target segment.
Includes information required by law and best practice. These include weight/volume of product, barcode, name and address of the manufacturer. Also consumer demands require information such as ingredients as well as its environmental friendliness. The labelling will be done in such a way as to instruct and educate consumers on the value and quality of the product whilst also promoting the product
Product life cycle.
Introduction phase (1st 6 months)
At this stage, although product is new, there is some familiarity within the target segment. Thus, leveraging upon the existing brand equity, good sales volume is expected nonetheless with relatively low profit levels. Our main objective at this point is to generate widespread awareness of the product, to stimulate trial and move the target segment towards purchasing the product. We shall offer an introductory trial price (which would be clearly stated so as not to raise suspicion when the product is tagged at the decided price)
At this stage, sales and profit levels should be risin rapidly. Competitors response will be of major significance. Objective will be building brand loyalty as much as possible by encouraging repeat purchases. At this phase, product modification is planned so as to consolidate market share and open up opportunities for new segments. This is due to the fact that with time, experience will highlight unforeseen strengths to build on as well as inherent weaknesses to be fine tuned. Another area of focus will be building and strengthening relationships with distributors.
At this phase, a stable set of repeat buyers would have been established. Soap buyers are largely emotional, therefore loyal customers are unlikely to switch brands except in very rare circumstances. The objective here would be to further strengthen the customer loyalty through marketing communications to maintain brand loyalty while further strengthening distribution channels. Fierce competition is foreseeable and may drive down profit but the large sales volumes obtained will achieve acceptable profit levels.
Although not foreseeable for this product, changes in consumer trends, new technological breakthrough or competitive pressure may make this product increasingly inappropriate. In this case, trying to extend product life through product remodelling may be a good response. Finally, if this fails then harvesting or selling off the product may be the only solution.
The target segment is the black African population in the UK. Figures from the office of national statistics, puts this segment at 730,600 residents in the UK. Also the largest concentration is the south-eastern part of London. This is where the marketing focus and efforts will lie. Sales target is to gain 30% market share of the target population within a year. This translates to 220,000 consumers. Market research shows soap is purchased on a weekly basis. Therefore, a weekly sale of 200,000 units is the target sales figure.
Pricing concerns- 4Cs
In order to make pricing decisions, the following factors have to be considered
Prices range from £2-£5. Largely undifferentiated products in the market place.
Pricing policies include discounts on bulk purchases or BOGOF
Customers are price elastic but tend to make repeat purchases
Cost incurred from the factory to making the product available to the consumers. This include fixed and variable costs, distribution and handling costs etc. This will help in setting the unit cost at which profit is made
Marketing and Pricing objective
A short-term and long-term approached will be followed. As a new entrant, the main focus will be generating customer orders and establishing a foothold in the market. Low promotional prices will be used at the onset sacrificing profit margin for market share.
The long-term pricing strategy is chosen to reflect and establish a clearly differentiated niche. This will be consolidated through the other elements of our market mix. This would enable a profit-maximization strategy to be achieved
Product pricing strategy
At the onset, we will follow a good-value strategy. Thus, we shall pursue a premium strategy. Setting the initial price to achieve market penetration. Thus, low promotional prices will be used to attract a large number of buyers resulting in a large market share. This price will be clearly stated so as not to raise suspicion in event of increased price or create the perception of poor quality in the product. Also trial offers will be available to increase familiarity with the product while reducing risk. Ultimately, a premium strategy establishing the product as clearly differentiated is the long term objective.
Penetration pricing is most appropriate because though customers demand is expected to be price sensitive, it will increase significantly over time. The emergent economies of scale will result in large decreases in cost. As the product moves through its life cycle, pricing objectives will be re-examined.
In order to examine the cost-volume-profit relationship, a break even analysis is used. (See attached appendix) Cost based methods will be used to determine the unit price of the product. Analysis of production and marketing costs will help determine a set price that will produce sufficient profit while still considering other elements of the 4Cs. Cost-plus pricing will be the main method used extensively in setting the product’s unit price. This will be the production cost with a certain profit margin.
Price adjustment strategies
Quantity discounts and promotional discounts
To get the product from the point of production to consumers, intermediaries will be used. This is because using intermediary results in more efficiency in distribution costs. They have the contacts, experience and scale of operation which translates into greater sales being achieved. It would be simply uneconomical to run a dedicated sales operation.
A single, indirect channel of distribution will be used in order to minimize the risk of inter-channel conflict. It also best reflects the characteristics of the product and market concerned. This is represented by the diagram below
Figure . DISTRIBUTION CHANNEL FOR DUDU
The product will be made available to 2 main wholesalers (Bestway group and Bellevue) who break the bulk and assemble offers that are tailor made for their retailers. This is the most appropriate channel considering that a niche strategy has been. The choice of retailers best suits and effectively reaches the target market segment while, the chosen wholesalers have a strong business relationship with these retailers.
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In terms of market coverage, an intensive distribution strategy will be used. Market coverage is about reaching the end customer in the most efficient and cost effective manner possible (Stern et al., 1996). This increases the availability and convenience factor to the potential customer. The slight disadvantage here is that if unit orders are low, it may push up total distribution costs. To minimize the risk of internal competition within the channel, a contractual vertical marketing system will be agreed upon.
This will be outsourced to a third party. Star shipping international will be handling logistic operations. The company operates in UK through a network of subsidiaries, partnerships and joint ventures. It has expertise in shipping, port handling, warehousing, storage and distribution. It was chosen because though the company is relatively new, they are known to represent good value for money. And also trying to enter a new market, it will be beneficial using expertise available on ground. Shipping is an economic mode of transport and will be used considering the nature of the goods to be transported.
Promotional efforts will be concentrated within the specific geographical area of the target segment. In order to establish the balance of the promotional mix, the product and market must be analysed. Consumer markets and consumer products are characterized by a large number of customers making relatively low value, frequent purchases. They are most effectively reached through mass media such as advertising and sales promotions. This can be followed up by public relations. Personal selling won’t be very useful considering the large number of consumers.
A mix of push and pull strategies will be used. Given that this is a new product, a pull strategy will be used preferentially. This is because we might not be able to exert much influence within the distribution channel until a demand for the product is visible. Push strategies will be used though, but will function to create incentives and motivate channel members.
Product-comparism advertising will be used and will take the form of posters (to be displayed in retail shops), billboards and coupons. Print ads, brochures and booklets will also be used and will be mailed to selected household. TV ads will not be used initially, as it is not cost effective and may not reach the niche market effectively.
There will be consumer promotions in order to increase short-term sales while building long-term market share. This will be in the form of samples, premiums, price packs and patronage rewards. Also trade promotions such as discounts, allowances and free goods will be offered to incentivise retailers.
Direct marketing and public relations
Telephone marketing and direct mail marketing will be used to market directly to households in the targeted regions. Written materials which educate consumers on benefits of green products will also be used for public relational activities.
Two models can be used to determine a market strategy. These are the GE matrix and Porter’s generic strategy. Analysis of the UK FMCG market identifies it as an oligopoly with a few strong players. The most appropriate strategy is to following a focus strategy with the product designed to focus and meet customer’s needs in a few target segment thus creating a niche for pinnacle foods.
The product is to be launched into a niche segment, with medium market expectations and pinnacle foods has a high SBU strength. This places it in one of the 3 cells in the upper left corner of the GE/Mckinsey matrix. This position indicates a favourable position with relatively attractive growth opportunities. Therefore, pinnacle foods should invest to grow while still pursuing a focus strategy.
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