Marketing Plan Part 2 — Marketing Mix Strategy including my situation analysis Essay Example
Marketing Plan 5
Table of Contents
Industry overview 2
SWOT analysis of Glelato organization 2
Uncontrollable Environment 3
Competitor analysis 4
Customer client analysis 5
Gelato Amore marketing mix 5
Marketing objectives 5
Gelato’s Target Market 7
Product strategy 7
Promotional strategy 9
Pricing strategy 10
Placement strategy 12
Introduction to Marketing
The marketing plan is a small part of entire organizational plan. It consists of various types of marketing strategies which assist company to improve its performance hence providing opportunities to earn more profit. It is a forecasting factor which every organization has to opt for maintaining its performance. With the help of the marketing plan, companies are able to reduce future conflicts which may or may not arise in future time. The present report is based on Gelato firm which is engaged in the business of producing cream, sugar, ice cream and other milk related items. The company provides high quality ice creams at reasonable prices which have high demand in the international market. The biggest strength of Gelato is that it provides unique and differentiated flavoured milk products with its greatest weakness being that it has employed people with little education (Peter and Donnelly, 2011).
Gelato is an Italian company engaged in the business of making ice creams. It offers various types of flavoured ice creams at reasonable prices thus attracting a large number of people. Gelato uses milk, sugar, creams as well as adding flavour from nut purees and fruits as their ingredients for ice-cream production. The company provides large number of ice-cream varieties compared to its competitors while holding a large market share in Italy. Further, leaders and managers of company frame various types of plans and strategies in order to increase its sale and increase the number of customers. Flavouring ice creams is the biggest strength of this company which assists it to increase profit margin. There are no legal hurdles to this company operating in the United States. The company’s ice-creams contain approximately 15% butterfat. As such, billions of people across the globe enjoy its products with many people continually being attracted to its ice-creams. Since the company sells its products in many places, it uses many methods and approaches in promoting its products (Hollensen, 2015).
SWOT analysis of Glelato organization
Strengths- The biggest strength of company is that it offers a variety of ice cream with different flavours. The organization is located in the huge traffic area which attract a large number of people which helps increase its market and hence earning potential. Further, the company’s ice cream contains less fact which helps maintain good health for its customers while helping increase sales.
The Company needs professionals in its operations but its current employees are less educated and this is its greatest weakness. The company’s workers also lack experience which drags the organizational performance. The seasonality of consumption behaviour for ice-cream also affects its sales during the rainy season and cold seasons. In addition, its brand name is not much famous compared to its competitors thus reducing its sales potential (Terpstra and Sarathy, 2012).
Opportunities- If a company only sells its goods and services in local market only, then it’s not able to enhance its performance and improve its market presence. If an organization opted for the opportunity to expand its business across the boundary then it is able to earn more profits and hence improve its market presence (Ferrell and Hartline, 2012).
Threats- Usually, threats reduce the performance of a company as well as its work quality. The biggest threat for the company is the increasing competition from other ice cream producing organization. The company needs to enhance its brand recognition in a bid to attract more customers. In this regard, the company should reduce the threat by adopting different marketing methods and using various types of methods in order to improve performance and revenue margin as well (Grant, 2016).
The uncontrollable environments are the factors which effect on the targets of Gelato Amore. The manager has to take decisions while considering these factors of PESTLE analysis.
Political factors – The government can ban some of the items which are used in ice cream products. There are no red-tape and bureaucratic delays.
Economic factors – This business type earns a high profits and the country is one of the most business friendly economies in the world. Ice-cream is also consumed throughout the year regardless of the season while it does not significantly affect people’s income (2012).
Social factors — Nowadays the customers are not giving preferences to ice cream because it includes so many chemicals and it indirectly harm the consumer life. The food standards should be followed so that it does not affect consumers’ health negatively. It is also difficult for the company to provide the ice cream to different customers depending on their differing tastes and preferences.
Technological factors – In this sector, there is not so much technological development which makes it difficult for the company to do online business properly (Easton, 2010).
Legal factors – The company has to follow the proper regulations and standards if the business is to survive and achieve its goals and objectives (Piercy, 2014).
Environmental factors – The materials which are used by the company in production of ice creams, the wastage of material should not harm to environment. The recycling of the products must be done properly.
The competitors of this company are TUTTOVO SRL, BYANCA S.R.L., Basking Robin and many more. This company has to use right standard of materials used in packaging the ice cream products and employ new and latest technologies to enable them store ice cream for a long period of time. These companies are located in Italy and providing the same items to satisfy the needs of customers. The manager of this company has to properly use the marketing mix elements in conducting its business to enable it to successfully compete across the world. Amore Gelato is a franchisee company which operates across the world. Through the franchisee the company has opened more outlets in many countries and it attracted a large number of customers to beat their competitors. Gelato Amore is value based business that aims at satisfying the needs of different customers (Helms and Nixon, 2010).
Customer client analysis
To analyse the customers of this company is very difficult (Pike and Page, 2014). This company has opened many outlets in different countries as well as from different cultures. For example, if this company has opened its outlets in India then it has to provide the different menus depending on the customers taste. This produces the high quality of services and serves the authentic Italian frozen desert in the world and so many customers are attracted towards it. This company has maintained the commitment with their customers which has supported in the growth of the company. Most of the customers of this company are teenagers like; friends, students etc. The customer customers have relatively high relatively high purchasing power and are able to purchase different flavours of ice-cream (Hudson, 2010). The company has to target those markets where it the demand for its products is very high. The company should also aim at targeting its competitor’s customers through offering them different flavours as well as high quality services. To attract large number of customers the company must first target the market according to the needs of customers. The customers are located in different places and have to open its outlets or stores in every country.
Gelato Amore marketing mix
The following is the marketing mix for the new Gelato business in the USA
The following are the marketing objectives of the new Gelato business
For the business to remain afloat, we must sell Ice cream for that is the business we are in. our short-term sales objectives will be achieving sales amounting to $3,000,000 for our first year in operation. We also aim at maintaining a positive cash flow and achieve profitability within our first two years in operation.
We aim at enhancing our brand awareness which at the moment is relatively lower compared to our competitors Basking Robin, BYANCA and TUTTOVO and given that the market is generally highly competitive especially during summer. In this regard, we aim at improving market awareness to 50% in our target market within twenty kilometre radius of our store. Our sales locations and marketers will establish specific objectives including increasing awareness in events such as birthday parties (Ritcher, 2012). We aim at increasing awareness of our new organic ice cream by 100 percent.
We aim at making our ice-cream shops a place for people to treat themselves and have a good time. As such, we aim at exceling at customer service to ensure repeat customers. As such, we aim at answering every customer service query within the first day online and in our shops. Customers will also be requested to fill out comment cards rating their experience where we aim at achieving excellent ratings above 80% while achieving at least 90% repeat customers.
Gelato aims at being known for having innovative ice-cream flavors by inventing and distributing five new flavours annually. In addition, we aim at introducing and doubling our Gelato ice-cream book clubs in the next year.
Gelato’s Target Market
Factors that affect ice-cream consumption as stated above include age, household characteristics, and gender and income levels. Research indicates that females prefer high calorie sweet foods including ice-cream as opposed to male who prefer protein rich food such as meat. Families with children are more likely to purchase ice-cream than those without while those with higher disposable incomes are likely to spend more on luxury items like ice-cream than those with lower income levels. In this regard, we aim to target three groups as follows;
Families – This will be composed of young families who are likely to exhibit high demand but also demand value for their money (Varadarajan, 2010).
Gourmet – This will include the young singles or couples who are mainly students. To them, ice-cream is about ego and celebration with friends in their numerous social events. Thus, their demand is likely to be high but also demand high quality ice-cream.
Lifestyle- In this regard, we will target the young women and older people who may be keen on their diet and whose lifestyle habits favor ice-cream consumption.
In this regard, our products will be strategically located in large supermarkets, social places and around schools where the above three groups are more likely to frequent.
We aim at selling our ice-cream by the scoop in selected locations in New York where we aim at starting. This will be freshly made in stores with high quality ingredients including milk, fresh cream, eggs and natural flavourings. After measuring the ingredients by our employees, they will be mixed by our ice-cream making machine and the product stored in visual display where it will be cooled to between 10 and 15 degree Celsius. The display will enable customers to see the displayed flavours and thus choose their favourite flavours. Our ice-cream will take less than ten minutes to make with our machines meaning that it will always be fresh and hence no need to store the fresh flavours elsewhere except in our displays (Berk and Mela, 2010) It is also worth noting that we will also have a packaged type of ice-creams that will be packed and refrigerated in various shops and supermarkets within twenty kilometre radius of our main shop having entered into contractual agreements with various shop owners. Regardless of the type, our ice-cream will be made available all year round and will be served in 4 and 6oz. white paper bowls that have a unique Gelato logo. Customers will be given plastic spoons with lids available for those wishing to take away. The packaged type will come in 100g, 500g, 1kg and 2 kg plastic cans and even 10kg for those buying for social functions or for storage at home. The bowls and cans will come in different colours including pink, white and cream depending on the product type and flavor.
At first, we aim to introduce six product lines including;
Gelato super premium ice cream which will be low fat for those conscious of their health and weight.
Gelato premium ice cream will also be of high quality. This is the type that will be mainly available in the supermarkets.
Gelato Frozen yoghurt (curd)
Gelato Sorbet which will include frozen dessert prepared from fruit juices
Gelato Concoctions which will be a special cone ice-cream and
Gelato gifts- Which will be include specially packed ice-cream for those who want to give ice-cream as gifts.
All the above products will be available in freshly made or pre-packaged options as described above. Furthermore, they will initially come in a number of flavours including strawberry, vanilla, coffee and chocolate. There will also be two seasonal favours that will be changed every three months. The seasonal flavours will only be availed for the three months season every year (Hashem, 2015). All in all, we aim at introducing more than fifty flavours into the market in the long run as our products gain popularity in the market. In this regard, our products we be differentiated from those of our competitors in terms of quality of product as well as the product of customer service which is aimed at ensuring repeat purchases and high new customer rates to enable us hit our sales objectives outlined above. at all stages of the product lifecycle, we will ensure we obtain adequate sales and customer survey data to ensure that only well performing flavours and product lines are maintained.
There are various tools and elements available for promotion that firms adopt in carrying out promotional activities. An organizational promotional mix may thus contain a number of tools including advertising, sales promotion, personal selling, holding promotional events, sales and public relations among others. Some of this tools will be used by the company to promote our ice-creams.
After we introduce our product to the market at the beginning of the spring season, we will employ various promotional tools in a bid to increase awareness for Gelato products. All these channels are estimated to cost $200,000. One of the channels to be used is advertising where the company will use pamphlets and in store displays. We will also make use of experiential marketing whereby we will give out free samples to the potential customers in order to allow them to experience how good our products are (Shaw, 2012). We will also employ sales promotions whereby we will employ use of in-store coupons. The company will also employ personal selling through face to face interaction with our marketing assistants while we will use online interactive surveys for public relations. At the counters, we will place pamphlets for customers to take and hence get more information about our products including their nutritional value. We will also use $1.50 off coupon rate in a bid to catch customer’s attention and promote sales (Mahajan, 2013). The promotional samples will include offering 40 4 oz. bowls every week per store where each sample will be 0.5 oz amounting to 320 samples every day for every sale location throughout the 1 month promotional period. All our employees located at our selling points will be responsible for promoting the product as well as the coupon offerings through the word of mouth where they will strive to make the customer aware of our online presence as well as other promotional activities. When a customer buys our product, they will be given a coupon which will enable them to buy at a reduced price to encourage repeat purchases while allowing us to understand how the customer would like us to improve the product. One week before we launch our products, we will run advertisements in the radio and put bill boards at strategic locations in order to increase awareness. Furthermore, we will also use the social media to advertise and this is what will differentiate us from our competitors. The effectiveness of our promotion efforts will be measured through the sales we make and the number of repeat purchases we attain at all our selling points.
We have determined that considering such operating costs as rent, salaries, raw materials among other operating costs, we can break even if we sell our products at $6 per unit with costs averaging $4 per unit. Thus at the introductory phase, we will use cost plus pricing with an aim of covering production costs and some profits which can be used to recover establishment costs. This will ensure that our products are competitively priced in comparison to our competitors to ensure that we gain a substantial market share within a short time.
Considering the above factors, Gelato products will employ both competitive and segment based pricing in arriving at the selling price for its different product lines. This will ensure that our target market described above will be willing to pay the price we offer them while taking the prices our competitors offer into account (Shapiro, 2017). This will ensure we don’t price our ice-cream too high such that people opt for our competitors’ products as opposed to ours. On the other hand, our products will not be priced too low sine we don’t want to create an impression that our products are of low quality. Given that our competitors’ prices average $7 per unit, we are going to price ours at $6 per unit which is appropriate pricing as it is competitive compared to industry pricing while research indicates that people are willing to pay $6 for our products.
Despite our pricing being less than average industry pricing, our variable cost for making our products is just $2 which would give us a high contribution margin. Variable costs are composed of the ingredients mentioned above, the packaging and the spoons which would give us $4 profit margin per 40z of ice-cream. The fixed costs which includes the machines, the displays, the serving spoons and other capital items including research and development costs are estimated to amount to $1,700,000 in total. Thus, we will need to sell 425,000 4oz units in order to break even. Setting our target profit at $450,000 for the first year, we will need to sell an average of 1,370 units of 4oz cans every day. Since our scope of operation is wide, we are optimistic that gain just 2% of the market will enable us hit this target. We are optimistic that with aggressive marketing, we will be able to hit this target.
Our placement strategy will be two fold. Our head office will also serve as the central store from where we will make sales to customers who would want to retail our products. We have also established strategic alliances with Starbuck and certain supermarkets which has given us twenty locations in which our products will initially be offered to our three target markets above. In this regard, our customer service employees will be physically located in the locations to offer the products directly to the customer with Starbuck and the supermarket earning a 5% commission for our using their facilities and their names to market our products (opentextbooks.org.hk, 2017). These locations and our store will be our test market for our ice-cream offerings and once the success of the product in the market is established within the locations, we will be ready to branch into other areas such as universities, colleges and related learning institutions while possibly considering using other channels of distribution. Thus, we will directly distribute our products to our customers or retailers but we are ready to go online should the demand increase. However, the distribution intensity is initially exclusive to the locations and no other channels will be used initially. Our central store will serve as our warehouse and all products will be invoiced from the store before ingredients are sent to the twenty locations. Our products will be strategically positioned in the stores where they will be clearly displayed to the customers with our employees stationed at each display point to serve the customers.
On the basis of above report it has been concluded that, Gelato is an Italian company which produce different flavoured ice creams and deliver in various places. Product consists less fat which maintain health of people and never harm for body as well. Large of competition present in the market which reduce performance of this company. Most of the external factors are having impact on the existence of the company. Given the intensive competition in the industry, the above marketing mix has been proposed. It is hoped that if we strictly adhere to the marketing mix, we will achieve and even exceed our marketing objectives.
Books and Journals
Donohoe, H. M., 2012. Sustainable heritage tourism marketing and Canada’s Rideau Canal world heritage site. Journal of Sustainable Tourism. 20(1). pp.121-142.
Easton, G., 2010. Critical realism in case study research. Industrial marketing management. 39(1). pp.118-128.
Ferrell, O. C and Hartline, M., 2012. Marketing strategy, text and cases. Nelson Education.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Helms, M. M and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management. 3(3). pp.215-251.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Hudson, R., 2010. Marketing situation analysis and strategic planning for NHS clinical services. Journal of Management & Marketing in Healthcare. 3(3). pp.224-238.
Peter, J. P and Donnelly, J. H., 2011. Marketing management: knowledge and skills: text, analysis, cases, plans. Plano: Business pub., INC.
Piercy, N., 2014. Export Strategy: Markets and Competition (RLE Marketing). Routledge.
Pike, S and Page, S. J., 2014. Destination Marketing Organizations and destination marketing: A narrative analysis of the literature. Tourism Management. 41. pp.202-227.
Terpstra, V., Foley, J and Sarathy, R., 2012. International marketing. Naper Press.
Ritcher, T2012, International marketing mix management: The theoretical framework, Contingency factors and empirical findings from world-marketers, Logos Verlag Berlin GmbH.
Varadarajan, R2010, Strategic marketing and marketing strategy: Domain, definition, fundamental issues and foundational premises, Journal of the Academy of Marketing Science, vol. 38, no. 2, pp. 119-140.
Berk, M&, Mela, F2010, The long-term effect of marketing strategy on brand sales, Journal of Marketing Research, vol. 47, no. 5, pp. 866-882.
Hashem, A2015, Strategic marketing management: Achieving superior business performance through intelligent marketing strategy, Social and Behavioural Sciences, vol. 2017, pp. 25-134.
Shaw,H2012, Marketing strategy: From the origin of the concept to the development of a conceptual framework, Journal of Historical Research in Marketing, vol. 4, no. 1, pp. 30-55.
AMORE ITALIAN GELATO FRANCHISE. 2017. [Online]. Available through: <http://www.franchisezing.com/food-beverages-franchise/amore-italian-gelato-franchise/>. [Accessed on 25th March 2017].
Shapiro, B2017, Rejuvenating the marketing mix, Retrieved on 5th March 2017, from;
Mahajan, N2013, The thinker interview with Philip Kotler, the father of marketing, Retrieved on 5th May 2017, from;
opentextbooks.org.hk, The marketing mix, Retrieved on 5th May 2017, from;
More Important Things