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Running head: Brand Extension Marketing Plan 1. 0 Executive Summary The Recipe Modifier is Lakelands most recent innovation that has great potential to generate revenue for Lakeland, “the home of creative kitchenware. ” Lakeland products have developed strong demand and this will be the driving force behind this particular product. Lakeland was initially a kitchenware provider but has extended its brand to offer a wide range of products that fulfill consumers entertaining, storage, cleaning and gifting needs. The Recipe Modifier appeals to virtually any individual that cooks at home using recipes.
This product eliminates one of the major challenges of cooking with a recipe. It removes all the guessing out of cooking where measurements are concerned when dealing with a variation of serving sizes or guests. This product will require the user to enter the existing recipe and the desired number of servings. The Recipe Modifier will then make the needed calculations and modify the measurements to meet the identified serving size without changing the taste of the resulting dish. Other benefits of the Recipe Modifier can be found in its innovative features which tightly integrate the technology in the form of a mobile hand held device.
It’s easy accessibility to information/recipes either via the handheld or remotely through the individual’s customized web page. As a bonus the handheld and the website are available as a bundle package for a fixed cost which also serves to enhance products appeal. Exceptional customer service delivered from the initial acquisition process through the technical support services. All equipment is strong and durable to withstand rapid wear and tear to aid a long life span. Market research indicates that a great demand exists for the Recipe Modifier. The target consumer for this product is creative and ambitious.
There is a growing market for this product which can be attributed to the negative effects from the economy, multi cultural cooking and the need for healthier eating. There is very little direct competition for this product since they do not offer the fully comparable functions contained in the Recipe Modifier. Competitors do offer some of the features, such as nutritional calculations and measurement calculations but not the convenience of being in a single product. This product will also be capable of competing with software and websites that offer recipe creation, storage, and calculation features.
If more competition enters the market, the product is still expected to maintain its market share with the wide range of innovative and convenience features. Key marketing objectives are to sustain positive and stable quarterly growth. This is inclusive of a quarterly increase in market penetration. The established marketing mix will also produce an increase in brand awareness. A quarterly increase of . 5 percent in profit margins and control of customer acquisitions costs will be monitored to ensure the budget is not exceeded.
A primary financial objective is to achieve sales revenues of $559,920, with a breakeven point being achieved at $420,149. There is a projected increase in sales for the months of November and December. 2. 0 SITUATION ANALYSIS Lakeland is in the introductory stages on implementing the newest brand extension product, the Recipe Modifier. Lakeland products have developed a strong demand and household name since opening in 1963. Effective marketing of this new product is essential to continuing in the tradition of demand that is seen for other Lakeland products.
There is a wide consumer market for this product and establishing product awareness to build brand equity is crucial to its success. 2. 1 Market The target customer groups are males and females that cook their own meals and are open to eating a variety of cuisine. Reason being, these consumers have the need to conserve money and dining at home is the most cost efficient way of achieving this goal. It also allows them to eat healthier. There is a large potential for growth in this market as a result of the economic down turn and emphasis placed on the need for healthier eating.
In addition, there is very little competition in this market, thus it leaves room for Lakeland to command the market share with the introduction of this new product. 2. 1. 1 Market Demographics The average Recipe Modifier consumer is comprised of the following demographic geographic and behavioral factors: Demographics ??? Individuals who cook at home ??? The “traditional household” families, single parents, and singles. ??? Individuals with strict diets. ??? The educational background needed for this product is not extensive. ??? Low to high household income. Consumer market that is interested in making amendments to recipes to feed their target amount. Geographics ??? Countries where at least 90% of the homes have kitchens worldwide. Behavioral Factors (Psychographics and Lifestyle considerations) ??? Cooks using recipes ??? Internet savvy to be able to use the internet version and features of the product ??? The target consumers like trying new and/or a variety of cuisine and recipes ??? Individuals who are frustrated with making recipe adjustments that result in the food not tasting the way it should. . 1. 2 Market Needs Lakeland’s Recipe Modifier will provide its consumers with an intuitive product that will take all the guessing out of cooking using recipes. Following recipes have been known to present challenges because households are comprised of a variety of sizes and a recipe is generated to meet the needs of a specific size. Most individuals who use recipes have a need to modify their selected meal and end up with more or less of the amount they actually needed and not tasting as it should if the original recipe had been followed.
By using the Recipe Modifier consumers will be equipped to enter the needed amount of servings or persons dining and have the necessary amendments made to the quantity of the ingredients. Hence the Recipe Modifier meets the market need of accurate recipe modification to meet any serving size. This product will strive to satisfy the following benefits that are important to its consumers: ??? Innovative Features: With technology being a major product driver towards gaining the competitive edge, this product offers nothing less. Accessibility: This product is accessible through the device or on the internet. Information stored on the handheld device can also be uploaded to the user’s customizable cookbook. ??? Product Appeal: Expand the mainstream appeal of the product by bundling the device and the website access at a fixed price. ??? Customer Service: Customers will be impressed with the level of attention that they receive which will help to establish consumer loyalty. ??? Quality products: Equipment is of good quality and website server has ample space with trained IT personnel to effectively handle any down time. . 1. 3 Market Trends The market trend for the Recipe Modifier addresses the consumer that would rather save money on restaurant meals and create the same dishes at home for half the price. This has become even more prudent with the continuous population growth rates increasing yearly. Over the years there has been an increase in the awareness of a healthier lifestyle and Recipe Modifier is taking the necessary steps to capitalize on these trends. With a wider range of cultural diversity an increase in the multi-cultural trend in the US.
The Recipe Modifier consumer is creative and ambitious and this is displayed in the following areas: ??? Innovation: Distinguishes itself as a market leader by marketing a product that is not yet available by other suppliers. ??? Food quality: Growth in individuals who are not preferential to fast food and seek nutritional value of real ingredients. ??? Creative meals: More cooking shows are being aired on television that suits everyone’s lifestyle, which is stimulating the creativity of individuals. People are now realizing that meals don’t have to be boring.
This has increased the number of individuals that eat at home and the need for modification of recipes to suit any size family or number of guests. ??? Economic Downturn: Based on the increase in unemployment it is less costly to cook meals at home rather than dine out as a result of the economic downturn that has been experienced these past few years. 2. 1. 4 Market Growth The market for this product is growing at a rapid rate as a direct result of the negative effects from the economy and the need for eating healthier despite an individual’s lifestyle.
This can also be attributed to a non work ??? life balance that affects many individuals and trickles down on their family eating habit as well. In addition, individuals are demanding more choices since they have identified having the ability to choose as a viable option. This is where cooking at home and following recipes has opened a plentiful market. Over the last 5 years more emphasis has been placed on healthier eating and an increase in obesity among children and adults alike. The Recipe Modifier will have the needed tools to disclose the nutritional value of each meal and its contents.
This market will be addressed by ensuring that the Recipe Modifier is well marketed on a variety of recipe related websites at different levels and cultures. For example the Food Network would be a perfect site for marketing. 2. 2 SWOT Analysis The following SWOT analysis captures key strengths and weaknesses within the company and describes the opportunities and threats facing Lakeland where the Recipe Modifier product is concerned: 2. 2. 1 Strengths ??? Extensive industry experience ??? Trained customer service and technical support staff ??? Quality product that is user friendly and mobile . Weaknesses ??? Excessive marketing costs to appeal to global consumers through various mediums. ??? Being based in the UK shipping prices will be costly to the other global locations ??? Returns and warranty claims on the device will take long to process because distributor is located in the UK. ??? Product can only convert measurements in the US and UK measurement system. 2. 2. 3 Opportunities ??? Becoming part of a growing market since a considerable fraction of the target market is still not aware that the Recipe Modifier product exists. The economic down turn will stimulate the need for eating at home which in turn will enhance the need for creative meals. This will provide a greater need for recipes serving size to be modified. ??? Utilize data mining information and marketing measures from competition in the industry as leverage for further growth ??? Joining causes that fight against obesity and having and major gyms to help promote the product for monitoring calories. 2. 2. 4 Threats ??? Competition from similar products with a stronger brand loyalty. ??? Excessive use increases downtime of the web server. ??? Significant decrease in concern for eating healthy. Eating out becomes cheaper and healthier than eating at home. 2. 3 Competition One competitor that stems from a brand name that is not as well known as the Lakeland brand is the website “Fruit from Washington. com ??? Recipe Calculator”. It offers this conversion free of charge through the use of a web based recipe adjuster program. However, this service is limiting to the consumer because it requires internet connection and does not offer a physical device. As for the marketing mix for this website it does not appear to be present with the exception of being able to be found via a Google search.
Other software that addresses recipe issues such as storage or recipe creation can also be considered a form of competition. Lakeland is confident that consumers will prefer our product because of its user friendliness, good quality, mobility and premium customer service. Our product will use a competitive strategy of executing a frontal attack since our resources are extensive. 2. Product Offering Product/features/benefits ??? The Recipe Modifier is available as a handheld unit and a web based program. ??? Information can be uploaded from the handheld device to the web based application for storage. Has the ability to convert recipes to suit any number of servings ??? Calculates the nutritional value of a meal or ingredient. ??? Information is accessible through the physical handheld device or the internet. ??? Capable of storing unlimited recipes. ??? Website has customizable cook book area to store recipes. ??? Mobility of the device allows it to be used in a variety of places. ??? Product is durable to wear and tear. Brand equity for this product will be developed by introducing it as a dynamic new addition to the Lakeland family of products.
The name of the product will be reiterated throughout all ads and the established name is easy to remember since it is similar to the function the product executes. Since Lakeland is primarily known for its household products the Recipe Modifier will fit in line nicely with the consumer’s perception of Lakeland’s product offerings. These areas will serve to build brand awareness and emotional connections with current and potential consumers. Brand awareness will be further executed through a mixture of persuasive communication ventures such as website banners and magazine ads. . 5 Keys to Success The key to the success of this product lies in the programmers ensuring that there are no glitches in the software that makes the calculations. Marketing opportunities should be capitalized on within budget while consistently reaching the target market and increasing product awareness. There should also be limited down time of the web based version of the product. Consumer should be satisfied with the service provided to them at all times to ensure that revenues keep increasing with active global sales. 2. 6 Critical Issues
The brand extension project for the Recipe Modifier is still in the introduction stage of the product life cycle. This is because the company is still ensuring that there are no technical problems and coordinate possible promotional avenues through our popular other kitchen products. The SWOT strengths will be leveraged as follows: ??? Regular monitoring of customer satisfaction to make any amendments to services being offered to meet an increase in consumers and to aid in increased customer loyalty. ??? Modestly investing financial resources at a rational rate to avoid instances where expenses of the brand expansion exceed its revenue. Industry knowledge that was used to establish the other successful product lines to meet market needs will be executed to ensure that this product is effectively launched and maintained. A competitive points-of-parity is present and a point of difference in the innovation and quality that is possessed by Lakeland products to meet a variety of household needs. 3. 0 MARKETING STRATEGY The market strategy highlights the strong points of the Recipe Modifier product will bring to the Lakeland product line.
The company conveys to its consumers that we are an inventive and continuously provide the market with innovative and quality products. Lakeland currently ensures that our products are highlighted at trade shows, various publications and on the internet. These efforts will aid in emphasizing this market strategy and enhance brand awareness. 3. 1 Mission Lakelands mission is to be the market leader in producing innovative, quality kitchenware and household accessories. Through the execution of efficient customer service and fostering good relationships with our stakeholders the company will meet consumer needs.
Lakelands operating activities is expected to generate 20% annual sales growth to maintain the products stability and provide financing for expansion. In addition, the product is user friendly and adds value to a variety of family types by providing further cooking assistance to a wide age range while increasing work life balance. 3. 2 Marketing 3. 2 Objectives ??? Sustain $1. 00 or more positive and stable quarterly growth. ??? Quarterly increase in market penetration. ??? Control quarterly customer acquisition costs to ensure budget is not exceeded. Produce greater brand awareness based on quantified measurement of feedback from consumer surveys. ??? Quarterly increases of . 5 percent in profit margins 3. 4 Target Markets Lakeland will market the Recipe Modifier to the following market segment: End Users: Individuals that cook at home that may wish to try a variety of different cuisines. They do not necessarily have to possess extensive cooking skills since the device and website are both user friendly. Persons wishing to use the website version of this product will be required to be familiar with using the internet.
The primary target market is anyone who cooks at home. The target market for this product entails countries where eating at home is the dominant form of dining and majority of the homes have kitchens. 3. 5 Positioning Lakeland will position the company as a manufacturer and distributor of high quality innovative household products and accessories. Lakeland will leverage its competitive edge to accomplish this positioning. Lakeland will use its traditional advantage of being the market innovator. The Lakeland brand is a solid brand and is widely known for their products of convenience.
Our attentiveness and flexibility for meeting consumer needs will be further leveraged to maintain the competitive edge. All of Lakeland products are designed with features and pricing that enhances their competitiveness in their markets. This includes being user friendly, cost efficient and innovative. The Recipe Modifier carries the unique capability of being able to modify recipes and calculate nutritional values. The competition has only been able to deliver either function but not both in a single product. Lakeland offers this flexibility in a portable handheld and a website. . 7 Marketing Mix Lakelands marketing mix consists of the following approaches to product, pricing, place and promotion. Product The Recipe Modifier stands out from the competition since it is offered as a hand held device and access via the website. The information from the hand held is uploaded to the website and stored on the customer’s personal recipe book page. Recipe information can also be made public so that it can be accessed by other customers that use the site. If the hand held is misplaced the information can be retrieved from the website, once it was lready uploaded. Consumers will also be given the opportunity to purchase a license to use the website at a slightly lower price if they prefer not to purchase the handheld. The target market will benefit from the Recipe Modifier features because it offers convenience, mobility, flexible accessibility to information and saves time. All these benefits make the task of cooking much easier. By offering the package deal of the handheld and website access at a slightly lower price consumers would be encouraged to purchase the handheld product for accessibility to both options.
Price The pricing scheme will be based on individual product retail price. Our objective is to maintain product quality leadership while providing an affordable product. Estimated total cost to produce the Recipe Modifier is $50. 00 per unit. This is inclusive of website services as the coding is similar to that used on the device. Competitors are offering a free website but it does not carry all the functionality of our product and it is also not user friendly. The price for this product will be $69. 99. Place This product will use a pull strategy.
Lakeland has developed strong brand awareness over the year which has delivered strong brand loyalty from our consumers. Lakeland will use a direct to consumer distribution model and at the initial launch of the product there will be no other retailers. Customers will be limited to purchasing one device per household. Delivery of the device will be made within 2 -3 weeks and access to the website will be automatic upon payment. Ecommerce will be conducted via Lakeland company website. Promotion Promotional efforts will include a series of informative and persuasive advertising campaigns.
The marketing message conveyed is that the Recipe Modifier is an indispensable cooking tool that any individual preparing a meal should not be without. All mediums used will be cost efficient strategies, primarily E-marketing. Copy testing will be carried out prior to the advertising campaigns and after they are launched to assess their effectiveness. The feedback can also be used to aid in providing efficient customer service which is essential in making this product line successful. 3. 8 Marketing Research
The goal of the research is to solicit essential information from perspective consumers that will assist in implementing the most needed features into the product. Dry testing will be utilized and online surveys will be used to obtain valuable feedback from a sample of the target market. The research will be executed during the initial stages and after the product has been launched. After the product is launched, it will be in the form of quarterly customer satisfaction surveys. This will be carried out to aid in ensuring utmost customer relationship marketing initiatives. 4. FINANCIALS 4. 1 Break-even Analysis The sales revenue for 2010 is estimated at $559,920 from the projected sale volume of 8000 units. The average cost per unit is $69. 99 carrying the variable cost per unit of $50 which results in a $20 contribution margin on each unit. Estimated fixed costs are $120,000 with a net operating income of $39,920. The following graph outlines net operating income for the first year: |?? |Total |Per Unit | |Sales (8000 units) |$559,920 |$69. 9 | |Less variable expenses |$400,000 |$50 | |Contribution Margin |$159,920 |$20 | |Less fixed expenses |$120,000 |?? | |Net operating income |$39,920 |?? | |?? |?? |?? |
The company will reach the breakeven point with the sale of 6003 units. Based on our projections this will occur during the first year of sales under the assumption that sale price and variable costs remain the same. 4. 2 Sales Forecast: 1st year by month with the 2nd and 3rd years by quarter The sales forecast for the next 3 years is outlined below: Lakeland Sales Forecast for 3 Years – Recipe Modifier | |Year |Quarter 1 |Quarter 2 |Quarter 3 |Quarter 4 |Total | | |Jan |Feb |Mar |Apr |May | |3 |2767 |2905 |3050 |3203 |11925 |
It is anticipated that the product will increase sales which in turn will yield a quarterly increase of at . 5% in the profit margin. It is noted that in sales are expected to rise during the months of November and December as there is an increase in cooking during that time. That would make the product partially seasonal as it would be highly beneficial to its target market during those months. The product has a physical life cycle of 25 years as the materials are durable and the website aspect of the product is indefinite.
With continuous improvements to the product to meet consumer needs, if more competition enters the market the product is still expected to maintain its market share. 5. 0 CONTROLS The purpose of Lakeland’s marketing plan is to serve as a guide for the organization and achieving its overall objectives. The following areas will be monitored to gauge performance through the IT logistics system: ??? Revenue: monthly and annual, based on planned compared to actual. ??? Expenses: monthly and annual, based on planned compared to actual. Customer satisfaction will be assessed to generate repeat business, marketing effectiveness and referral activity. ??? Website: activity/usage monthly and annually. ??? New Product development ??? Product enhancements 5. 2 Marketing Organization The Marketing Officer, Shaheda Christopher will be responsible for all of the marketing activities. She will conduct assessments on the performance at events such as trade shows or dry testing efforts. All advertising campaigns will be evaluated based on return on investment.
The IT section will be responsible for providing the Marketing Officer with the needed feedback from the website. 5. 3 Contingency Planning Risks ??? Exporting issues that may arise with shipping companies. To combat matters of this nature an alliance will be formed with UPS to devise a strategic method to offer timely and cost effective shipping options. ??? Entry into the market that adopts similar free products. Competitors will be continuously monitored to ensure that Lakeland products are competitive and superior in quality and features. Determining that the business cannot support itself on an ongoing basis. Revenues will be assessed monthly to ensure that it is being generated according to projections. ??? Having to liquidate inventory to cover liabilities. Inventory levels will be monitored along with sales to ensure that they do not surpass the demand for the product. In the event that the economy does not allow for revenues to meet the projected demand for the product, physical inventory will be reduced significantly.
If this still leaves revenues below projections, the website will replace the physical product at half the cost until sales increase to resume production of the handhelds. References D. R. Eberhart & Associates, Inc, (October, 2007) Fruit From Washington. com – Recipe Quantity Calculator, Retrieved from http://www. fruitfromwashington. com/Recipes/scale/recipeconversions. php on October 20, 2009 Keller, K. L. & Kotler, P. , (2009). Marketing Management (13th ed. ). Upper Saddle River, NJ: Pearson Prentice Hall. Lakeland, (2008). About Us. Retrieved from http://www. lakeland. co. uk/L? content=about_us. htm on October 11, 2009.