MIB Marketing Management: Group Assignment Brief Essay

1 INTRODUCTION
Today, the beverage industry faces a strong competition but the introduction of the new juice product, called Fresh Juice, may open better marketing opportunities for the company introducing the product. In fact, Fresh Juice is the healthy product, which contains a mixed juice of different fruits. The introduction of Fresh Juice should take into consideration the competitive environment and to overcome the resistance of rivals and barriers to entry.
2 ANALYSIS OF POST-MODERN AND RETRO-MARKETING
The contemporary business environment is post-modern and customers are interested in totally new products, which are different from conventional ones. Customers are growing more and more concerned with their health. Therefore, the introduction of Fresh Juice will offer customers a healthy product that meets their interests and needs. The product is different from conventional drinks because it contains natural juice of different fruits. In such a way, the product will take a strong position and attract customers in the post-modern marketing environment.
On the other hand, a part of target customers of Fresh Juice are inclined to retro-marketing that means that they prefer products that are rare but that they used to consume in the past, for instance, in their childhood. In such a situation, Fresh Juice could attract such customers through positioning the product as traditional, original, and natural juice that people consumed in the past and which become so exceptional because an old recipe of the juice was uncovered by the company to create juice consisting of a mix of fruits.
3 SEGMENTATION AND POSITION FOR TARGET CUSTOMER
Fresh Juice holds its unique niche of the market. Unlike conventional drinks, Fresh Juice is positioned as healthy drink that have a positive impact on health of consumers. At the same time, the product holds the premium segment of the market because of its high quality and positive effect of the product on the customer health. The target customer group of Fresh Juice is customers concerned with their health.
Naturally, the introduction of the new product will definitely face serious problems, among which the problem of the competition from the part of companies producing and selling conventional juices and fast food is particularly important. In this respect, it should be said that nowadays juices and fast food are extremely popular and customers get used to their consumption. On the one hand, this may be viewed as a serious problem. Obviously, the consumption of juices and fast food is an important part of the contemporary food culture (Volti, 2005). As a result, companies operating in this market have very positions, especially such companies as McDonalds or Kentucky Fried Chicken, and others. These companies are so strong that entering barriers for fast food and conventional juices are practically unsurpassable, especially, if the company does not have a significant experience of the work on this market. Basically, large corporations will easily cope with any new competitor as long as the competitor offers a product that these companies get used to offer to their customers.
On the other hand, it is possible to estimate that the introduction of the new, healthy juice may transform the strength of competitors in their weakness. What is meant here is the fact that companies operating in the fast food and juice industry have already acquired certain reputation, but nowadays their reputation is far from perfect. The quality of juices and fast food is the subject of numerous discussions because many specialists (Newel, 2001) estimate that fast food and conventional juices produce a negative impact on human health. Consequently, competitors that operate on the market nowadays will hardly be able to offer a better product that could compete with a healthy juice (Howard, 2007). The fact that the new juice is not only nutritious but also healthy may be determinant for the success of the product since it gives the new juice a strategic advantage over its major competitors. In actuality, it is possible to view the new, healthy juice as the only alternative to potentially dangerous fast food and conventional juices.
4 MISSION STATEMENT
The mission of the company is to produce Fresh Juice, healthy drink that is useful for consumer health. At the same time, the company should serve interests of the community and to offer products of the high quality that are useful for human health. In addition, the company should focus on the environment protection to meet needs and expectations of customers.
5 INDUSTRY ANALYSIS – AGGREGATE MARKET FACTOR ANALYSIS
5.1 Category Size
The category size of Fresh Juice’s target market is relatively small because the beverage market is overwhelmed with conventional drinks, whereas juices of the high quality that have a positive impact on human health and that are created on the ground of old receipts is relatively low. In this regard, it is worth mentioning the fact that the company developing Fresh Juice will position its product as unique combination of juice of different fruits that has special blend and unique receipt.
5.2 Market growth rate
The company will focus on the growth of sale rates of the new product. In fact, the production of Fresh Juice should be sold internationally but for the stable growth and business development, the company has to increase sale rates of Fresh Juice. In this regard, the forecast for the growth rate is 2-5% annually. Within the first year of operations, the new product’s market share will increase by 5%, where as the second year the growth will be 3% and the third 2%, while in the years to follow the growth may vary from 3% to 5%.
5.3 The Stage of the Product Life Cycle
At the moment, the product is at the stage of introduction but this stage will be followed by the stage of the rapid growth because the new product will have aggressive promotional campaign. In such a way, the company will attract customers’ attention to its new product and accelerate the growth of sale rates to reach the maximum profitability in possibly shorter terms.
5.4 The Current Stage of Economic Development
However, the current stage of the economic development may raise certain difficulties in the course of the introduction of the new product. In fact, the current stage of the economic development is the stage of the economic recession. However, the economic recession has almost reached its bottom line that means that the growth stage is about to come. Therefore, when the product will be introduced, Fresh Juice will have positive economic environment because the economy will start growing. The economic growth will facilitate the introduction of the new product as consumption will increase and customers will be able to buy products of the premium segment of the market.
5.5 Product’s Implications
The product will be sold all the year round. In this regard, the product will not be seasonal because fruits used for the production of Fresh Juice will be supplied to the production facilities on the annual basis. The company will produce Fresh Juice annually and will not decrease its production seasonally. As the company operates internationally and plans to sell Fresh Juice internationally too, the consumption of the new product will not be seasonal (Peters, 2006). Even if the consumption of juice in winter may decrease in some European countries and the US and Canada, as the major target markets of the new product, the company can increase sale rates in other regions of the world, including Australia and Asia, the Middle East and Latin America, as well as other countries.
6. INDUSTRY ANALYSIS – PORTER’S FIVE FORCES
6.1 Bargaining Power of Suppliers
Basically, the company will rely on the suppliers of fruits that are used in the production of Fresh Juice. In fact, suppliers will be farmers from countries, where the fruits are cultivated on the annual basis. As a result, the supply of the fruits will be stable and reliable. The costs of these fruits will be low because they will be supplied from developing countries of Latin America mainly (Pine and Gilmore, 2009). Alternatively, the company can use supplies from North Africa to supply the fruits to European production facilities. North African suppliers will decrease costs of the production due to lower transportation expenses.
In addition, the company will need the supply of the water that will be used for the preparation of fruits used for Fresh Juice. The water should be conditioned specifically to minimize its impact on the fruits and to preserve their natural characteristics. The high quality of water will contribute to the high quality of Fresh Juice. The company can choose suppliers carefully because they should be local suppliers, i.e. suppliers located close to the production facilities of the company.
6.2 Bargaining Power of Buyers
The current bargaining power of buyers has dropped under the impact of the economic recession. In fact, consumers focus on saving and they are not ready to buy Fresh Juice en masse because the product is positioned as a premium segment product and has the high price. In fact, customers are just more concerned with saving than spending. However, the economic recession is likely to end in the nearest future and the economic growth will stimulate the rise of the bargaining power of buyers that will facilitate Fresh Juice’s entering the market. The company can count on stable sales and the steady growth of sale rates of the new product.
6.3 Threat of New Entrants
The threat of new entrants persists, although the beverage market seems to be saturated. However, Fresh Juice holds a new niche in the market, the niche of healthy drinks. Therefore, the company aims at taking a new niche in the market but there is a risk of new entrants since other companies may also consider the possibility of entering this niche of the market and introduce new products.
6.4 Threat of Existing Rivalry
In actuality, the existing competition is high in the beverage industry. However, the main pressure on Fresh Juice will occur from the part of conventional drinks. The company will need to promote its new product and to position it in a different niche of the market compared to conventional drinks. In fact, unlike conventional drinks, which have no positive effect on human health or, in some cases, may be dangerous for human health, Fresh Juice can be useful for human health. This is the major competitive advantage of the new product along with the fruits, which are cultivated using organic farming principles. Therefore, the quality of Fresh Juice and its positive effect on human health are strategic competitive advantages of the new product that will allow the company to take the lead in the industry and take its own niche of the market.
6.5 Threat of Substitutes
In actuality, the threat of substitutes is high, although substitutes are positioned in the different niche of the market. The major threat of substitutes for Fresh Juice is conventional drinks manufactured by such behemoths as Coca Cola or Pepsi. However, companies producing conventional drinks hold the different niche of the market compared to Fresh Juice oriented on the supply of healthy juice to customers. Moreover, customers grow more and more concerned with their health. Therefore, they are ready to pay more for drinks of the high quality that may have positive impact on their health. This means that customers will buy Fresh Juice, if they are concerned with their health. Today, customers tend to prefer healthy food and drinks instead of fast food and fuzzy or conventional drinks, which have either no positive effect on their health or may be dangerous for their health. The company producing Fresh Juice should just communicate to its target customers the idea that Fresh Juice is useful for their health and the treat of substitutes will decrease substantially. If the company manages to introduce Fresh Juice fast and accelerate its international production and sales, the company may take the lead in its niche of the market that will minimize the risk of new entrants and substitutes.
7 Competitor Analysis
7.1 Levels of Competition
In actuality, the level of competition in the beverage industry is high but Fresh Juice is positioned as healthy drink that makes the product different from the overwhelming majority of its potential competitors. The company can take a competitive advantage due to taking the unique niche in the market.
7.2 Competitor Product Feature Matrix
The major features of the product are the high quality; ingredients are products of organic farming; positive impact of the product on human health; environment friendly packaging.
7.3 Simple Conjoint Analysis
Customers value healthy products extremely high, especially today, when the quality of food and drinks has dropped consistently. Therefore, the company can attract customers to its Fresh Juice due to the positive effect of the juice on customers’ health (Robbins and Finley, 2005). The taste of the drink is also important for customers. Therefore, they will appreciate the original blend of Fresh Juice. All these factors will contribute to the popularity of Fresh Juice among customers.
7.4 Competitive Advantages of Competitors
The price is the major competitive advantage of rivals of the company producing Fresh Juice because the price of the Fresh Juice will be higher compared to its rivals. In addition, rivals have well-developed distribution network and recognition of their products by customers.
7.5 GE Matrix
Business Unit Strength

Market attractiveness

High
Medium
Low
High

x

Medium
X
Low

8 Marketing Mix Strategies
8.1 Product Strategy and Brand Architecture
The product strategy should focus on the use of organic ingredients and the high quality of the product. The brand should mirror the concern of the company producing the new product on customers’ health and environment. The company should stress the positive impact of Fresh Juice on customer health. In addition, Fresh Juice should be the flagman product of the company’s brand. Customers should grow aware of the responsibility of the company and its concerns of customers’ health and the high quality of its products.
8.2 Pricing Strategy
As Fresh Juice enters the premium segment of the market, the pricing strategy will be based on the value of the product. This means that the company should take into consideration not only costs of the production of Fresh Juice, which may be high due to the use of organic ingredients. The high price of the product will also take into consideration the value of products in terms of the quality of the product and its impact on customer health.
8.3 Distribution Strategy
The company should use the international distribution network of the company. In addition, the company should cooperate with large retailers in target markets, focusing on the market of the EU, the US, Canada, Australia, New Zealand, and the SAR. The company can use franchises to provide local companies with its products and brands as well as standards of company-customer relationships.
8.4 Marketing Communication Strategy
The company should communicate the high quality of the product and its impact on customer health. The company should stress that the product is unique and different from conventional drinks. Therefore, the company can take the unique niche in the market.
9 CONCLUSION
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that Fresh Juice is the new, original product that can take the relatively free niche of the beverage market. The new product will be positioned as a premium product that contains natural, organic ingredients only. The new product will be produced internationally. The company will use both international and local suppliers. The current economic situation is difficult but it is likely to improve in the nearest future that will facilitate the introduction of the new product and its overall success. In addition, the company should focus on the promotion of its product and stress competitive advantage of Fresh Juice. The company will have to attract the attention of customers to the new product, which is better for their health compared to conventional drinks. Therefore, the company will be able to compete successfully with its new product and outpace its major rivals due to the high quality of the product and its positive impact on customer health.