Table of Contents Executive Summary2 1Introduction3 2Segmentation and Targeting3 2. 1Segmentation3 2. 1. 1Table 1 Market segmentation4 2. 2Targeting5 3SWOT Analysis6 3. 1Strengths7 3. 2Weaknesses7 3. 3Opportunities7 3. 4Threats8 4Conclusion and recommendations8 4. 1Marketing and communication objectives8 4. 1. 1Marketing objectives8 4. 1. 2Communication objectives9 4. 2Recommendations9 5References10 Executive Summary The purpose of this report is to develop a zero-based marketing communication plan for Dasilver Inc, a company that is about to launch a new herbal tea based beverage in the South African market.
The name of the brand is called Silver chamomile and honey bush tea. This will be new to the market because it is a blend of the two most popular herbs in the herbal tea market. This tea has benefits which include mental agility and alertness, general health booster, immune booster, reduces skin irritation and other medicinal advantages. This market will be segmented into three segments using demographics, psychographics, benefit sough and user rated segmentation bases. Then the target audience will include customers within the 21 to 35 age group, whom are open to new experiences and are innovators.
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These consumers are medium to heavy users of tea and are looking to reduce their weight, drink the tea for enjoyment and just for relaxation. The major SWOT analysis finding include that the herbal tea market still has some untapped segments such as the blended herbal tea. No such blend as the one being launched on the market exist with any competitors so this will be a competitive advantage for the brand. One of the major threats that exists is that there are major competitors that have been in the market for some time.
The main marketing communications objectives are to gain a 10% market share from the 27% that remains untapped within the first year of the product being launched. Also have 65% of the target market made aware about the premium product being launched and the benefits of the product are made aware at the same time. ? 1Introduction The purpose of this report is to outline the zero-based marketing communication plan for a new brand entering the Tea market, and specifically the herbal tea based beverage market.
The company called Dasilver Inc is launching a new brand into the market and the brand is called Silver chamomile and honey bush herbal tea. This product has the qualities of chamomile which has distinct taste, and a sweet scented aroma with many various health benefits such as strengthening the immune system, relaxation and eases skin rashes. At the same time, it has accompanying taste of honey bush with the health benefits which are related to high mental alertness and weight loss and boosting the immune system for better vitality. This brand will be launched in the South African market.
The South African market has seen major growth from the year 2000 with the highest percentage growth seen in 2006-07. According to Euromonitor, (2008) this changed the outlook of the tea sector considerably and in 2007 manufacturers became increasingly focused as they sought to gain a competitive edge in this burgeoning sector. Consumers sustained this renewed interest in tea in 2007, particularly outside black standard tea. The Product by Dasilver Inc will face competition from the main market leaders which include National brands Ltd, which had 35. 17% of the total market share, the followed by Nestle’ which had 28. 6% in the year 2007. There is potential in this market because the other 27% constituted products that did not do very well hence ended up sharing the little market share. The South Africa political conditions are very favourable as it is a democratic state and the economic conditions continuously keep flourishing with continuous local and foreign investment hence making the country a power house of southern Africa. For a product like tea, the social conditions are suitable with ever increasing technological advances. 2Segmentation and Targeting 2. 1Segmentation
In order for marketers clearly focuses on the required market it is essential that the market they are entering in segmented so as to target the existing and potential customer appropriately and without waste. According to Duncan (2005), segmentation is the grouping of existing and potential customers according to wants, needs and characteristics. There are about nine different segmentation bases, but only for will be used and these are Demographics, which refers to the “external measurable characteristics of people such as gender, age and occupation, income, family status, education, race and nationality”, (Widing et al, 2003).
The second one is Psychographic, and this refers to the “characteristics of individuals that describe them in terms of their psychological and behavioral make-up”, (Widing et al, 2003). This segmentation entails one to look at variables such as motivation, needs, personality, perception, memory and learning, Benefit segmentation requires finding out the major benefits that people look for in the product class ,the kinds of people who look for each benefit and the major brands that deliver each benefit”, (McDaniel et al. , 2006).
According to Schiffman and Kanuk (2000), User-related segmentation is based on the usage of a product by consumers. This will take effect in forms brand awareness, usage rate and brand loyalty. 2. 1. 1Table 1 Market segmentation Segmentation baseSegment 1Segment2Segment 3 Demographics Gender Age Occupation Male and Female 15-20 Student or working Male and Female 21-35 Working Male and Female 35-50 Working or retired Psychographics Personality Openness to new experiences Open to new experiences Out going Extrovert Open to new experiences Benefit sought Healthy living Medicinal purposesWeight loss
Mental alertness Immune boosting General health EnjoymentRelaxation Mental agility Enjoyment User-related Usage rate Awareness Brand loyalty None Interested None Medium to heavy Interested to enthusiastic Little(switch purchase Medium to heavy Enthusiastic Strong brand loyalty The people that exist in segment 1 are not very particular about there choices in which type of tea they drink, and they are willing to experiment with different products. One of the main reasons for seeking herbal tea would be to fit in the world of healthy living which is very apparent in today’s world.
In segment 2, the people are much more vibrant and have outgoing and extrovert personalities. These people seek aspects such as weight loss, improved immune system, and good health and for enjoyment. Segment 3, consists of people of an older age, and they are either still working or they are retired. They are willing to try out new things and can also be very conservative at times and they are loyal to brands that satisfy their needs, wants and desires. The geographic location that the target market segments will exist in is the city of metropolitan city of Johannesburg.
This location is very suitable due to the fact that it is a mixture of diverse cultures and races. It also incorporates different nationalities and people of all classes. One important factor is that since it is the business city of South Africa, it has a large number of people in the working class or a working occupation hence the existing and prospective customers have income to spend on the product. 2. 2Targeting There are three criteria that can be used to decide which segment to target, these are demand and growth related attractiveness, competition related attractiveness and resource related attractiveness.
The primary target segment chosen will be segment 2. This is because it applies to two of the three criteria for choosing a target market. The two criteria that will be used in are demand and growth related attractiveness and resource related attractiveness. Demand and growth related attractiveness focuses on the demand of the product by a segment of the market to see how often they are likely to need the product and estimate the period of time they will be willing to purchase it according to Gabott, (2004). In this case, segment 2 has high demand and high growth.
This will allow the Silver tea brand to grow steadily due to the fact that the growth in the market has continuously risen over the years. At the same time, the number of new consumers of herbal tea has continued to increase. The table below, according Euromonitor, (2008) shows the increase in tea sells over the last 6 years. 2. 2. 1. 1. 1Table 2Sales of Tea by Subsector: Volume 2002-2007 tonnes 200220032004200520062007 Green tea23. 628. 336. 245. 254. 060. 3 Fruit/herbal tea–54. 576. 485. 693. 8 Instant tea92. 895. 598. 0100. 101. 1101. 9 Other tea5,974. 16,055. 36,125. 76,236. 06,610. 26,907. 6 Tea25,811. 425,523. 025,606. 625,985. 527,517. 828,395. 9 Black tea19,720. 919,343. 919,292. 119,527. 920,666. 921,232. 3 The black tea market is still very strong, but the herbal tea based market is an emerging and fast growing market. Another aspect as to why this segment would be suitable is that major competitors in the market have not made any herbal tea with both chamomile and honey bush, hence this product would be new to the consumers in the market.
It would give them a chance to experience the qualities and benefits of chamomile and honey bush all at the same time. Dasilver Inc, will be able to find all the necessary Competition related attractiveness basically analyses the market of the product or service and tries to evaluate whether it is worth pursuing with reference to the competitors in the market. “Segments that have a high degree of competitive activity may not be attractive, especially if the are characterised by low rates of growth in sales”, (Gabott, 2004).
With reference to Silver chamomile and honey bush tea, it is a new entrant in the market and is has a great chance to flourish with time, plus it would also pose as a threat to competitors as a new entrant. The product will enter the market as an entry level product due to the high market shares held by competitors that have been in the industry for a long time. Hence the customers in the segments will be able to pay for the product 3SWOT Analysis According to Duncan (2005), a SWOT analysis is a “structured evaluation of internal strengths and weaknesses and external opportunities and threats. The strengths and weakness are factors that have a direct effect on the company and these can be controlled by the company, while opportunities and threats are external factors that exist and are not under the control of the company. 3. 1Strengths ???New and different product; this will give the company an advantage over existing products and brands. This will be an advantage when dealing with customers that are switch purchasers. ???New entrant; the customer are willing to try out new products in the market to see if it will satisfy their needs, hence the product stands a better chance at consumers that like chamomile and honey bush. Different herbal combination; the product has a different combination that the usual herbal tea drinks, hence two segments based on preference are being targeted. ???Resources; all the resources needed for the manufacturing of the product are found locally, hence reduces the cost of acquiring the raw materials. 3. 2Weaknesses ???No established name; the fact that the name of the brand is unknown to the consumers, this poses as a major threat to the existence of the product. Inexperience; lack of experience as compared to the market leaders in the herbal tea industry 3. 3Opportunities ???Untapped segments; some segments have not been taken by existing companies, hence there is room for the company to take advantage to get a larger market share ???Product diversification; this will allow the market to have diverse product rather that having a saturated market with one product. ???Consumer choice; the product will now allow consumers to have a wide choice of selection, even those customer that felt they had no choice ???Explored market.
There is room for the company to introduce other herbal tea products based on the consumer response to the chamomile and honey bush herbal tea. 3. 4Threats ???Established firms; consumers perceive products produced by well established firms to be of high quality, hence this would be a major threat to a new entrant. ???Major competitors; have the ability to push out new entrants in the market because they established rules and regulation ???Other ready to drink products; these pose as another huge threat due to their popularity, such as soft drinks and flavored or sparkling water. Distribution channels; the distributors might not be willing to distribute an unknown product as it might cost the major losses. 4Conclusion and recommendations After the market has been segmented and the most profitable segment has been chosen, prioritizing the SWOT analysis is very important as it lets a company pursue the right marketing and communication objectives. Duncan (2005) suggests that prioritizing the findings of the SWOT analysis leads to decisions about which marketing communication tools to use so as to achieve the main objectives of the marketing communication plan.
Since the chamomile and honey bush herbal tea combination will be new to the market, it will be the companies greatest strengths and an opportunity that will prove very important and critical to the existence of the brand, is that market for blended herbal teas’ is still untapped, hence with the right marketing communication tools, the brand may become a great success. The greatest weakness faces by the brand is that it lacks an established name, hence it might be hard to compete against well established brands that have been in the market for years. But this weakness might removed by increased marketing efforts by the company.
The finding that poses a major threat to the brand is that there are many herbal and ready to drink product on the market. (Duncan, 2005) 4. 1Marketing and communication objectives 4. 1. 1Marketing objectives To get a 10% market share in the first year from the 27% that exists which includes brands that have not been successful within the South African market. This is because that market has had any herbal teas with a blend of two herbs. To get 5% of the consumers that are loyal to competing brands and purchase chamomile or honey bush tea with the first year of the lunch of the brand. . 1. 2Communication objectives Make the market aware of Silver chamomile and honey bush tea that has entered the market as a premium product. Create awareness of the health benefits that come with Silver chamomile and honey bush tea to 65% of the target audience. 4. 2Recommendations In order for the company to achieve the 10% market that will ensure it existence in the market, it is recommended that marketing efforts such as advertising, promotion and distribution channels be put as a priority. It will be these efforts that will also lead to the reaching the 65% audience awareness.
Secondly, it is recommended that aspects that as buying shelf space be considered of great importance than any further product developed so as to get the product out there to the target market. 5References Schiffman, L. , Bednall, D. , O’Cass, A. , Paladino, A. , Ward, S. , & Kanuk, L. (2007). Consumer behaviour (4th Ed. ). Frenchs Forest, NSW: Pearson Education Australia. Schiffman, L. , & Kanuk, L. (2000). Consumer Behaviour. New Jersey: Prentice Hall. Widing, R. , Sheth, J. , Puledran, S. , Mittal, B. , & Newman. B. I. (2003).
Consumer Behaviour:Consumer Behaviour and Beyond (Pacific Rim Edition ed. ). Victoria: Thompson. McDaniel, C. , Lamb Jr, C. , & Hair Jr, J. (2006). Introduction to Marketing (8th Edition ed. ). Ohio: Thompson South Western. Gabbott, M. (2004). Introduction to Marketing . Australia: Pearson Education. Duncan, T. (2005). Principles of Advertising & IMC. New York: McGraw/Irwin. Raaiji, W. , & Verhallen, M. (1994). Domain Specific Market Segmentation. Journal of European Marketing , 49-66. www. portal. euromonitor. com. Accessed 07-08-2008