- June 18, 2020
Guarana Marketing Plan
Blick(2011) has defined marketing as the set of activities, institutions,and processes that create, communicate, and deliver exchange offersthat add value to potential customers, partners, clients,stakeholders and the society at large. It is the field of study thatdeals with the management of exchange relationships. According toHiebing, Cooper, & Wehrenberg (2012), a marketing plan is adocument or a blueprint that seeks to comprehensively outline thefirm`s advertising and marketing strategies for a particular year. Amarketing plan describes the activities that the business will employto enable them to accomplish specific marketing objectives in a givenperiod.It forms part of a business plan. In its outline, itdescribes the company`s current marketing position, the target marketand marketing objectives, and outlines the marketing mix that thegiven company will employ. It also includes some historical data andfuture predictions as Hiebing et al. (2012) illustrate. From thesedefinitions, a marketing plan can be said to be a technique that willassist the business in making decisions on how to best put theirresources to use to achieve their set corporate objectives. Theobjective of this paper is to develop a marketing plan for an energydrink called Guarana in the United Arab Emirates.
Thisenergy drink was introduced in Brazil in 1921 by Pedro Baptista deAndrade. It was then manufactured and distributed by the companyAnheuser-Busch InBev. It has since become popular in Serbia,Portugal, Argentina, and Japan. It is made from the guarana plantextracts containing guaranine (caffeine), theophylline andtheobromine (Cetkovic et al., 2012). We identified a market need inthe United Arab Emirates (UAE) for the demand of an energy drink thatis top quality and at relatively fair prices. It has a caffeinecontent that is either equivalent to or more than the content in mostenergy drinks. The customers will mostly be those in need of quickenergy boost. Initially, there will be stiff competition, so the mainchallenge will be convincing the potential clients of the benefits ofthis drink over the others.
Justlike all the companies in the energy drinks sector, which falls underthe food and beverage industry, the Guarana Company is subject to thelegislations and regulations laid down by the food and beverageregulatory bodies. In the United Arab Emirates, the EmiratesAuthority for Standardization and Metrology (ESMA) is tasked with theissuance of conformity certificates to energy drink productsaccording to the required health and safety standards (Al-Kandari, &Jukes, 2011). Fortunately, the political and legal environment inthe UAE is conducive for business as access to the requiredcertifications and clearances to start operations is easy and quick.In fact, if the Guarana Company is successful in its proposedexpansion into the UAE, it will reduce the level of alcoholconsumption in the country and increase the productivity of the humanresource. This might induce the country`s lawmakers and legislatorsto approve incentives and subsidies to the company hence influencingthe political and legal environment to Guarana’s advantage.
TheUAE has a culture of busy lifestyles and sporting trends that makethe demand for energy drinks to increase. The drinks are mostlyconsumed by the youth and young adults. The drinks are also regardedas highly fashionable, an aspect that further increases itspopularity.
Beforethe advancements in technology regarding the use of naturalingredients in the manufacture of energy drinks, most people wereskeptical about the health issues associated with the chemicallyloaded drinks like the Guarana as illustrated Gunja & Brown,(2012). However, the advent of technology in extracting naturalresources has improved the general view of health standards of theGuarana energy drink and consequently driven the demand to higherlevels. Sugar-free and low to zero calorie products are beinglaunched today. The technology of canning drinks has made the energydrinks more appealing and convenient to the consumers. The Guaranadrink will be packaged in attractive cans. We shall employ top-notchtechnology in assessing and maintaining the quality and healthstandards in conformity with the requirements.
Theoverall economic environment of the United Arab Emirates will hugelyimpact the success of the Guarana project in the country. In the caseof an economic upturn, sales will be boosted while inflation coulddrive the operation costs upwards thus decreasing profitability.Since the UAE is a world leader in oil production, the price andavailability of oil will be a factor to consider. High oil priceswill mean boost the purchasing power of the citizenry, thusincreasing profits. Shortages of oil may impact the businessnegatively, and it may even stall production. At present, accordingto the UAE Central Bank Report (2016), the economy of the UAE isperforming at healthy levels that can adequately support the GuaranaCompany business.
Threatof New Entrants
Asalready pointed out earlier, the United Arab Emirates is a hugeconsumer of energy products. Guarana will face competition from RedBull energy drink which is the most popular. The project will alsoface stiff competition from Monster energy drink which hadestablished itself earlier. The success of Guarana could yet attractnew entrants into the market, further increasing the competition.However, the strategies that Guarana will employ will ensure that itis highly competitive against the earlier arrivals while the capitalrequirements will deter entry by many. The standards the GuaranaCompany will set will be unassailable, ensuring maximum customerretention even if new entrants come in.
RivalryAmong Existing Firms
TheGuarana project will face some business rivalry from the existingfirms namely Monster and the Red Bull energy drinks. The rivalrywill be over marketing and market share. The company will developeffective strategies to ensure its survival in this business, such asextensive advertising and maintaining a good corporate image.
Threatof Substitute Products
Energydrinks do not have many substitute products, though Guarana willstill face threats from fruit juices and smoothies, green tea andprotein shakes which are considered healthier than energy drinks andstill contain a substantial amount of energy-boosting caffeine. Thebiggest threat, however, will be from the world`s leadingbest-selling soft drink, Coke.
BargainingPower of Buyers
Guaranawill be serving a large number of customers especially the youth inthe major sporting events like football and those in demandingprofessions. This means that any single customer`s preference to useGuarana will still have an impact but the company will be addressingthe customers in large numbers or batches. However, the customerswill not be in a position to bargain or demand changes in price,since this will depend on the market forces. However, a largecorporate may negotiate for discounts since the sales volumes to sucha customer are high.
BargainingPower of Suppliers
Guaranawill contract multiple suppliers for cans and transport. In addition,the company will partner with other soft drinks depots to enhance thedistribution channels. As such, the level of dependency on thesuppliers is low, hence a reduced ability of them dictating the termsor sabotaging business.
Beinga new entrant into the market, the company is relatively smaller,with fewer employees. This makes communication, decision-makingprocess, and management easier. The company CEO, Hassan Al Fardan,and General Manager, Mohammed Rustam, will head the operations. Regarding corporate development, the company is in theentrepreneurial stage. The company is owned privately and funded byHassan Al Fardan`s partners, investors, and shareholders.
Thecompany is founded on its primary objective of delivering betterservices to consumers. Creativity and innovation are encouraged, andmarket demands are the main focus. Recognizing and rewarding successis part of the company culture as it motivates the employees andincreases productivity (Lăzăroiu, 2015).
Thecompany has access to the following resources
1.Strong, experienced and well-networked marketing team
2.Adequate financing through investors and further funding fromcompany partners.
3.Advanced technology in production, manufacturing, distribution,and management.
4.Strong operation capabilities with the capacity to serve the majorcities coupled with strong communication and logistics systems.
5.A capable, committed, skilled and motivated workforce of about 200employees with a goal of employing more as the business grows.
6.Highly advanced information system capabilities boosted by equallyadvanced information security infrastructure.
Focus,market knowledge, efficient marketing strategies, skilled workforce,creativity and innovation, competent management and good customerrelations.
Anuntested market, high operation costs.
Thehigh demand in the UAE market, large youth population, fewcompetitors.
Competitors(Monster and Red Bull drinks), substitute products (e.g. Coke),political and economic environment, fluctuating oil prices,terrorism.
Indetermining its location, pricing and other operational strategies,the company collected secondary data from the media and marketperformance publications from banks. The data collected was on theprojected market performances, demand schedules, competitor details,legal requirements and customer preferences. Primary data on marketneeds, pricing expectations, and best locations was collected fromindividual potential clients who were sampled from various places.These focus groups answered interviews and filled questionnaires.
Thecollected data was then analyzed and interpreted to give a clearimage of the current energy drinks market in UAE and the projectedfuture. The data will be used to determine the best location andpricing strategies to employ. The market research revealed there wasa huge demand for energy drinks especially among sporting fans andthe youth. It also showed that the competitors were taking advantageof this demand to overprice their products. It also exhibited theneed for an energy drink with higher energy content.
Marketinggoals and objectives
Theprimary aim is to be the leading market provider of the preferredenergy drink in the UAE and acquire a significant market share. Thespecific objectives are to
1.Register sales of about 800,000 units of Guarana in the firstmonth of operation.
2.Be highly rated in terms of customer satisfaction.
3.Have a constant increase in sales throughout.
4.Expand into more cities of the UAE.
5.Be an example of great professionalism and business ethics of thehighest standards.
Theproduct development that will be employed by Guarana will involvefirst introducing the product in Dubai and Abu Dhabi, the majorcities. Then gradually, other cities like the Al Ain, Sharjah, andAjman will follow depending on the initial success in Dubai and AbuDhabi. The company will continue to add more service locations untilit gains a firm foothold throughout the region.
MARKETSEGMENTATION, TARGET MARKETING, POSITIONING
Marketsegmentation involves dividing the market into sub-groups (McDonald,2015). The market has been fragmented between individual customers inneed of retail services and other distributors who are wholesalepurchasers. The wholesale customers who will purchase the product inbulks can further be divided according to their locations.
Eachof the segments above was independently viewed to determine initialinvestment according to the projected income. The first segment, theindividual consumer, is highly preferable since they will ensure moreprofitability. Hence, more investment will be directed to thissegment. The distributors may interfere with the pricing of the drinksince they will resell the Guarana at higher prices consequentlydestabilizing the market prices. However, to penetrate and reach theindividual customers, we need the distributors. The bulk purchases bydistributors boost revenues, even if marginal profits are thin inrelation to retail sales. In addition, we shall have recommendedretail price inscribed on our drinks to guard againstoverexploitation of customers by unscrupulous wholesalers.
Atone end of the spectrum, the low-income earners prefer the lowerpriced drinks such as water, regular tea, and coffee. At the otherend, there exist high-benefit groups who import their customizedenergy drinks or make them in their private companies. At the centerof this pack, is the vast market of the average people. Guarana seeksto tap into this market group.
TheGuarana products are based on high quality, attractive image,dependable service, and convenience. The company will focus on highlyactive populations like the students in the major cities, e.g. Dubai.To access the product, the customers can acquire it from nominatedstores and outlets, purchase online or request for delivery at adesignated location. The company name and logo will communicate theexpected level of satisfaction that the customer expects.
Customerservice attendants and representatives will demonstrate a highstandard of professionalism at all times. The company will providepersonalized services to boost its customer relations. Customerprofiles will be taken note of to ensure customer satisfaction everytime they access Guarana products. No customer complaint will beignored or shelved they will all be promptly addressedappropriately.
Marketpenetration strategy is more advisable to employ in this market. Thishelps in exposing the customers to the new product, building a clientbase and enhancing customer loyalty. This strategy, however, has tobe employed according to the objectives intended by the GuaranaCompany. Once the company has gained a substantial marketpenetration, price increase strategies can be used.
Supplychain companies and outsourcing firms will partner with GuaranaCompany to keep track of all operations and ensure all orders areaddressed. They will also ensure supplies are received on time asthis is significant in avoiding production delays as illustrated byUsha, (2014).
IntegratedMarketing Communications (IMC) Strategies
IMCwill be employed by Guarana to create awareness of its existence andto develop and maintain interest in the products and services itoffers. This is one of the primary objectives of IMC (Belch, &Belch, 2012). The strategy will help communicate a clear and uniqueselling proposition that Guarana is a high content energy drink thatis relatively affordable. Direct advertising (through email and theweb), target marketing (publications), buzz marketing (through publicrelations), and personal selling (contracting other firms) will beemployed under the IMC strategies. The more customers that Guaranaserves, the more that translates to more brand ambassadors.
Theresources required for the launch of Guarana in the UAE areavailable. Below is the marketing action plan that will be put intouse.
Action duration cost
Targetedprint advertisement 4 months $200000
Directmarketing 3 months $100000
Personalsales 2 months $150000
Mediacoverage to boost awareness 1 week $60000
Marketingcontrol is essential in evaluating the performance of a company.These marketing strategies have to be regularly monitored to ensureall set objectives are met within the scheduled time frame.
Contingencyplanning involves taking a possible future occurrence into account.In Guarana`s perspective, if the market response is not according toplan, it would be easier to adjust the product to fit the productrather than changing or altering the market to fit the product. Thecitizens in UAE are conservative, hence it will be upon Guarana tocustomize the drink to appeal to the market.
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