Essay on Marketing Strategy
Tropicana Juice is one of the main players in the orange juice market that operates internationally, although the US is the major market for the company. The company attempts to enhance its position in the US and international markets. However, the recent economic recession has had a considerable impact on the business development of the company as the consumption has dropped, while customers have started to save their money refusing from products they used to be accustomed to, including orange juice supplied by Tropicana Juice. Nevertheless, the company has a long history and a considerable potential for the further business development. As the company operates internationally, the situation in the US market, being very important for the business development of the company, still cannot fully stop the further progress of the company. In addition, Tropicana Juice attempts to improve its business in the US and to expand its operations further internationally. Today, the company focuses on the market expansion and enhancement of its position on its traditional markets, especially the market of the US, and for this purpose the company introduces the new product, Tropicana Juice Premium, which the company expects to attract customers with.
Segmentation, targeting and positioning
At the present moment, the company operates in the medium segment of the orange juice market but the introduction of the new product, Tropicana Juice Premium, can allow the company to enter the upper segment of the market because the new product is manufactured of oranges cultivated in Florida, the US. Taking into consideration the current physical conditions of Florida and the threat of the poor crops of oranges, the costs of manufacturing of the new product may be high. Hence, the company is likely to increase the price. Consequently, the company is likely to shift the new product to the upper segment of the market. The introduction of the new product implies that the company focuses on multiple segments of the juice market. Tropicana Juice offers products that meet expectations of average customers, who prefer orange juice sold at affordable price, and the premium orange juice made of Florida’s oranges.
The target customer group of the company traditionally was and will be customers, who are concerned with their health. Orange juice is useful for health and consumers naturally choose orange juice instead of other drinks, which may be potentially dangerous for their health. Consequently, the company focuses on customers, who are concerned with their health and want to purchase healthy drinks, such as orange juice. Today, the share of such customers increases due to the growing popularity of the healthy lifestyle and the growing threat of obesity and other health problems provoked by poor nutrition and unhealthy food culture.
Hence, customers grow more and more concerned with the origin of oranges used by Tropicana Juice for manufacturing of its orange juice. As the major suppliers are Brazilian and Latin American farmers, customers grow concerned with the quality of orange juice manufactured by the company. American customers feel uncertain about the quality and safety of Brazilian oranges but Brazilian farmers can supply oranges to Tropicana Juice, while the decreased productivity of Florida’s orange crops raises the problem of stable and sufficient supply of oranges to meet needs of the company.
This is why the new product will enhance the positioning of Tropicana Juice as the company manufacturing original healthy orange juice of the high quality. At any rate, customers are confident of the high quality and safety of oranges supplied by Florida’s farmers. At the same time, the high costs of the production are likely to increase the price of the new product but the company expects to attract the customer attention due to the positive image of Florida’s oranges and the strong belief of customers in their high quality and safety.
Product considerations
The product manufactured by the company is orange juice. Traditionally, the company manufactures orange juice using oranges cultivated in Florida and supplied by Florida’s farmers. However, series of poor crops forced the company to start importing oranges from Brazil and other countries. In such a way, the company changed suppliers to ensure the stable supply of oranges to keep the production process stable.
Today, the company considers the introduction of the new product, Tropicana Juice Premium, which uses Florida’s oranges solely. In such a way, the company attempts to enhance the public image of its product and to regain the confidence of customers in safety and usefulness of its products for their health. Customers will perceive the new product as being safer and probably healthier but the company cannot fully replace Brazilian oranges to meet the current demand of the orange juice. Florida’s oranges are not enough to provide sufficient amount of oranges to maintain the production lines of the company busy.
Price considerations
Taking into consideration the large share of imported oranges, the company could have considered the possibility of decrease the price of its products. At this point, it is important to place emphasis on the fact that the price of oranges in Brazil and Latin America are basically lower compared to the US due to the lower costs of the labour force and other factors. Even if the company adds transportation costs, buying oranges in Brazil is cheaper than buying oranges in Florida. Hence, the company could have decreased the price of its products but Tropicana Juice has not decreased the price so far.
The main reason for the maintenance of the price of Tropicana Juice products unchanged is the economic recession and certain decline in the consumption of orange juice. The economic recession is the main cause of the drop of consumption since customers prefer saving costs and buy cheaper products. The decrease of the consumption naturally forces the company to look for options to minimize its financial losses and to increase revenues to maintain the high productivity and to enhance its marketing position.
In order to regain possible financial losses, the company has decreased the volume of juice cartons and preserved the price unchanged. In fact, this step was quite controversial since the decrease of the carton meant the rise of the price, even though a carton of Tropicana Juice’s price has not changed. In fact, the decrease of the carton size is just another way of increasing the price of the product. The rise of the price, direct or indirect, as is the case of Tropicana Juice, is a regular step undertaken by companies, who want to preserve their revenues high, regardless of the crisis in the economy.
Moreover, the introduction of Tropicana Juice Premium will increase the price of the new product. In this regard, several factors provoke the rise of the price. First, the new product is manufactured of oranges cultivated in Florida, which are more expensive than Brazilian oranges, for instance. Hence, the costs of production of Tropicana Juice Premium are higher compared to the conventional orange juice manufactured by Tropicana Juice. Second, the new product is positioned as the product of the upper segment of the market. Hence, the company has to set the higher price to cover costs and to meet the average upper segment price level.
Distribution considerations
Tropicana Juice has an extensive distribution network. As a rule, the company uses large retailers, such as Target or Wal-Mart, to distribute its products. At the same time, the company uses its own shipping to deliver its products directly to customers. The company has refrigerators that deliver Tropicana Juice to customers directly. However, today, the use of such shipping becomes costly for the company, while the use of large retailers allows the company to maintain its sale rates high with relatively low costs on shipping. On the other hand, the direct shipping to customers improves the public image of the company and increases the customer loyalty to the brand. The latter is very important today, because the customer loyalty can help the company to maintain its competitive position in the market.
The introduction of the new product is unlikely to change the distribution chain of the company since Tropicana Juice relies heavily on large retailers, who are capable to maintain the high level of sale rates and large volumes of products being sold in the market. On the other hand, the company can use intensively its shipping to deliver the new product to customers. Taking into consideration the positioning of the new product and its belongingness to the upper segment, the company can include the transportation costs into the price of Tropicana Juice Premium, which is higher compared to the conventional orange juice supplied by the company.
In addition, the company considers the further international market expansion that requires the expansion of the distribution network of the company internationally. At the moment, the company operates in North and Latin America, Europe and Asia. As the company keeps growing, the further expansion of the distribution network becomes essential. Basically, the new product may be sold successfully in international markets as well but the company should be aware of the fact that the new product is likely to be popular in the markets, where customers have the high level of health concerns. For instance, the new product may attract customers’ attention in European market, while it may be not very popular in Latin America, where the price is often more important than quality or health concerns.
Promotion considerations
The company pays a lot of attention to the promotion of its products. The major promotion consideration of Tropicana Juice is to attract customers. For this purpose the company attempts to regain the confidence of customers in the high quality and safety of its products. This is why the promotional campaign of the company and its new product, Tropicana Juice Premium, focuses on stressing the authenticity of the orange juice and its Florida’s origin. The emphasis on the origin and the high level of quality and safety of the new product should become milestones of the promotional campaign for the new product. At the same time, the company can exploit its positive brand image and customers’ confidence in the quality of its products. Nevertheless, the major concern of the company still refers to the return of the company to its original suppliers from Florida that will attract customers and increase their certainty in the safety of the company’s new product. At any rate, the new product will become an alternative compared to other products which are made of imported oranges.
People considerations
The target customer group of the company includes customers concerned with their health. Therefore, the company attempts to meet their expectations and focuses on the customer satisfaction. In this regard, the introduction of the new product aims at meeting customers’ expectations. In fact, American consumers are more inclined to buy orange juice made of oranges supplied by Florida’s farmers. They are more confident in those oranges and they are uncertain in the quality and safety of Brazilian oranges. Hence, they grow very concerned with the supplier of oranges for Tropicana Juice. As a result, the introduction of Tropicana Juice Premium can help the company to regain the confidence of customers, mainly American ones, and to eliminate their concerns and doubts concerning the quality and safety of the company’s products.
In addition, the company attempts to maintain positive organizational culture and breed employees’ loyalty to the brand. The staff turnover in the company is relatively low that proves that employees remain loyal to the company. Employees’ loyalty helps Tropicana Juice to maintain the high level of productivity and increase the efficiency of employees’ performance.
Process considerations
The production process tends to the higher automation. In the course of time, the automation level of the production process has increased consistently. In such a way, the company attempts to increase the productivity and efficiency of the organizational performance. The high productivity and efficiency of employees’ and organizational performance is crucial for the positive marketing performance of the company because the company can outpace its rivals without raising costs of production but relying on the increase of productivity.
In addition, the company develops logistics, as one of the strategic directions in its business development, because the company operates internationally. Moreover, the supply of oranges from Brazil requires the efficient logistics since oranges from Brazil should be delivered to the production facilities in the US fast before they are spoiled. The company has well-developed logistics at the moment. Moreover, the company has not only a well-developed supply chain but also a well-developed shipping service because the company delivers its products directly to customers along with large retailers.
Physical evidence considerations
At the moment, the company maintains its position in the market, in spite of some controversies. In this regard, the major controversy is the decrease of the size of orange juice cartons which allows the company to sell less juice for the same price as the larger amount of juice. In addition, the company uses oranges from Brazil and Florida. Customers consider oranges from Brazil less safe compared to those from Florida. Hence, the company uses oranges from Florida for the new product, Tropicana Juice Premium. However, economically Brazilian oranges are more beneficial for the company.
Conclusion
Thus, Tropicana Juice maintains a strong position in the orange juice market. The company focuses on customers, who are concerned with their health. Today, the company introduces the new product, Tropicana Juice Premium, which contains oranges from Florida, in contrast to conventional Tropicana Juice’ products containing oranges from Brazil. The company continues the strategy of the international market expansion and its distribution network to take a better position in the market.
