1. Marketing Plan
1.1 Description of the Company
Wimm-Bill-Dann is the is the largest producer in dairy products and one of the leader children’s food in Russia. WBD has more than 35 production facilities in Russia, Ukraine and Central Asia. The Company distribution network covers 100% of the Russian territory and also includes the CIS. Serving needs more than 280 mln. consumers[1].
More than 17,000 people work at WBD’s production facilities and trading affiliates.
Wimm-Bill-Dann is the one of the first Russian company who start to produce packaged juice products. Before WBD, no one in Russia produce packaged juice. Imported juice products in modern packaging were virtually non-existent[2].
The most recognized brands include: Domik v Derevne (Little House in the Village), Chudo (Wonder), Vesely Molochnik (Happy Milkman), Imunele and Lamber. We also have Russia’s best-known juice brand, J7. Another less popular brands are Lyubimy Sad (Favorite Garden), Chudo-Yagoda (Wonder-Berry), and Essentuki. The most recognized baby-food brand in Russia is the trademark Agusha[3].
The Company's revenue has grown from $ 1,189.3 million for 2004 to $ 2,181 million for 2009 (IFRS). Revenues for 2009 decreased by 22% compared to 2008.
The mission of the company is to help the entire family live healthier lives by enjoying the nutritious and delicious food and beverage products every day throughout their lives.
Highlights for the first quarter 2010[4].
Group revenue increased 19.1% year-on-year to US$615.3 million driven by solid volume growth across all segments and helped by a stronger ruble
Group gross profit increased 2.3% year-on-year to US$172.0 million
Group gross margin declined to 28.0% from 32.5% compared to prior year as a result of sharp increases in raw milk costs in the first quarter of 2010
Group net income almost tripled to US$33.7 million from US$12.6 million a year ago
Net income as a percentage of sales increased to 5.5% in the first quarter of 2010 from 2.4% in the same period last year.
1.2 Products and Services
o Traditional products, such as sterilized milk, cream and butter, as well as traditional sour-milk products such as kefir, cottage cheese, soft cottage cheese and sour cream.
o Yogurts and dairy desserts, such as drinking yogurt, mousse, fruit-flavored milk and kefir, puddings and flavored cottage cheese.
o Cheese products, including hard and processed cheese.
The beverage products include:
o juice and nectars produced from juice concentrate,
o enriched juice-based drinks,
o traditional berry-juice-based drinks,
o mineral water.
The baby food products include:
o Liquid dairy products for infants under the age of three;
o Juices for infants under the age of three;
o Meat, fish, chicken, fruit and dairy purees for infants under the age of three;
o Products for pregnant women and nursing mothers.
1.3 SWOT analysis
A SWOT analysis is a tool, used in management and strategy formulation. It can help to identify the Strengths, Weaknesses, Opportunities and Threats for our company.
This is a summary of the business’s most important strengths, weaknesses, opportunities and threats.
Strengths
Good management skills (will run business)
Deep knowledge and understanding of both Russian market and foreign benchmarks.
Effective organizational structure – efficient and fast decision making.
Excellent quality product (adds to reputation)
Weakness
The struggle to build brand equity
Opportunities
More offerings in economy segment
More price segmentation
Expanding market share
Threats
High price (Price is the major threat. If the price goes certain beyond the exact price at the market it will affects the consumption of the juice. Because when the price goes higher customers go for the substitute).
Consumers become more prudent
Increasing supplier prices (resulting in reduced profitability)
Effective cost management is crucial to survival
Tougher monetary environment, many companies forced to cut advertising, headcount, salaries
More stringent financial and borrowing environment
Competitors could harm by getting aggressive in their promotional activities.
1.4 PEST Analysis
· Political analysis
- Government is becoming really conscious about the healthy nation and healthy food
· Economical analysis
- Economic factors are the main factors in any industry who affect to the industry in many ways
- Inflation impacts highly negative
· Social analysis
- Social programs
- WBD sponsors various socially significant projects, donates funds to orphanages, hostels, churches and cultural establishments.
· Environment
- Central government is going to be seriously concerns about environmental issues
· Technological analysis
- Through modern equipment WBD increases efficiency of its business and can has up-to-date data about their products
1.5 MarketAnalysis
According to the Russian Union of Manufacturers of Juice by the end 2008 manufacture has concentrated in hands of four companies of giants[5]. there is a unique opportunity at the Russian market of juices. There are a lot of different players at the market, but there is no the strongly pronounced leader. The main players control 80% of the market
«Lebedyanskii» (market share 32%),
«Multun» (market share 22%),
«Nidan» (market share 17%)
«WBD» (market share 16%).
Appendix 1 shows us the structure of the market of juices in Russia.
According to the report «RosBusinessKonsulting» (Russian market of juices. RBK. Market research, 2008) the premium segment of the market is chosen by more prosperous part of consumers. In connection with growing incomes of the population the class share premium, about 2006–2008 has grown from 0,4% to 2,7%.
Drinks of an average price segment are in demand at working modern young people. The share of this segment practically has not changed in comparison with 2007 (12%). Now there is a rapid development of the bottom average and bottom price segments of the juice market. According to experts of the company in 2009 together these segments occupied more than 50% of the market.
1.6 MarketGrowth
According to the researchers from «RosBusinessKonsulting» (Russian market of juices. RBK. Market research, 2008) growth rate are going to be about 8% during 2009–2012.
As predicted production volume of the market of juice by the year 2012 will be 3,5 bln. liters a year. (Appendix 2)
2. Marketing Strategy
WBD will launch the highest quality of fruit juice «Seila». The strategy is to position «Seila» as a natural and healthy juice; the strategy will seek to create customer awareness regarding product.
2.1 Mission
WBD’s mission is as follows:
- Quality: Our fruit juices are the highest quality, most nutritious food products…because we will accept nothing less.
- Innovative: Our products have always been in the forefront of the health and nutrition wave. Innovative products, state of the art manufacturing, quality assurance and industry expertise are the bases for our past and future successes.
- Integrity: Our customers depend on the quality of our juice products. Our commitment to the highest standard is the foundation of our customer's trust in WBD. Delivering freshly made juice to consumers depends on extensive cooperation and mutual reliance between supplier and retailer. We stand behind our product, our service and our word.
- Reputation: Our juices have a reputation on offering the most delicious, nutritious, 100% natural with no artificial flavors, colors and preservatives.
2.2 Marketing objectives
· Market Share Objectives:
· To gain 40% of the market for soft drink industry by August 2011.
· Profitability Objectives:
· To achieve a 10% return on capital employed by January 2010.
· Promotional Objectives:
· To increase awareness of the product on the market.
· Objectives for Survival:
· To survive the current market war between competitors.
2.3 Key success factors
Key to success for «WBD» will include:
- Providing the highest quality product
- Competitive pricing
- State of the art production and packaging technology is a must in this industry
- A strong distribution network
2.4 The demographics of customers
- Young professional, ages 25 – 45;
- Average income of $40,000+ a year;
- Involved in athletic activity;
- Shop in upscale health/natural food stores.
2.5 Product
Products sold as fruit juices may be sweetened if the label states the presence of the added sugar or other wholesome, nutritive sweetening agent (saccharin is not a nutritive sweetening agent), but they should not contain added water.
Fruit juices should be manufactured only from clean, sound fruit in clean equipment. Proper preparation involves thorough washing, sorting to remove wormy or spoiled fruit, and trimming. Flies should not come in contact with the fruit or equipment.
WBD will offer a broad range of juices to suit the customer, down to the smallest detail.
The company will offer a range of innovative juices, including
- 100% pure carrot juice, nothing added
- Carrot and celery juice
- Beet and apple juice blend
- A lovely combo of beet, carrot, pear and ginger
- Tomato, beet and ginger
- Kiwi, apple, pear and some greens
- An invigorating mix of apple, pear and orange
- Carrot and orange
WBD will use organic ingredients so that consumers will get even more goodness from the drinks. For a reasonably healthy person there is therefore no need for vitamin pills nor dietary supplements: a raw juice from WBD contains the richest natural source of minerals, vitamins, enzymes and other vital trace elements that will guarantee plenty of energy and vitality to help your body neutralise toxins, boost its immune system and generally help you go through your busy day.
All drinks are freshly juiced to order and to enjoy them at their best we will recommend to consume them within 8 hours after open the bottle. Remember also that by consuming organic produce, you help preserve our planet's natural balance and protect its biodiversity.
2.6 Price
Different price in different seasons
Summer is a good season for fresh juices in Russia. The average temperature in Moscow during the summer is 24–28C. (The summer of 2010 is extremely hot it’s about 30–34C). The company can change their product prices according to the season. So in winter the prices might be slightly less than in summer.
Price Level
Maintain price level in all segments at 15% higher than competitors to reinforce the quality image.
2.7 Place
Distribute direct to the client where possible.
Distribution channels
· Direct channels
Selling the products in the different departmental stores by using own transport. In this case the company will have more profit margin.
· Indirect channels
Selling the products through whole sellers and agencies to cover all area.
Intensive distribution:
· Retail outlets, Hyper Mall, Supermarkets
· Small shops
· Entertainment zone: Restaurants, Cinemas, Parks, Theaters
· Petrol station
· Newsagents
· Schools
· Sports, Health clubs, Gym
· Entertainment venues
Getting shelves
In order to display products more clearly and attractive for the customers in the big departmental stores – the company should get central shelves – in eye-catching positions. Normally we should keep our products freezers near the entrance of the stores.
2.8 Promotion
WBD will promote products in several ways.
WBD will do sponsorships with different exhibitions, presentations, shows and events.
Examples:
· Festivals and shows: «Seila» commissions and facilitates cutting edge artists, musicians, designers, film-makers, etc to curate and create events and happenings. During any event a mix of multimedia: music, video, advanced technologies in entertainment and show, should be present. «Seila» Entertainment element by no means should be limited to laser shows and trendy DJs. (the sample of advertisement see Appendix 3).
· Interactive entertainment with content creation by consumers: Like in Web 2.0. and 3.0, «Seila» enables consumers to input into entertainment and show by sharing/creating content. For example, screens with live puzzle of pictures made from consumers’ content (images, videos, photographs), or music and light shows made of consumers’ content (voices, music, ringtones, etc); interactive 3D games and simulations.
· Purposeful technologies for entertaining and educating: «Seila» stations with content transmission, powered by QR codes, Bluetooth, etc. Content can be various, e.g. music, useful instant information, videos, pictures and photos.
a) Word-of-mouth
Creating awareness among consumers: the main objective for this phase is to create awareness about the product among consumers who will turn into potential customers. The word-of-mouth effect is the goal here – it will give a kick to boost initial sales.
b) World Wide Web
The web site will be tool to get closer our customers and understand them better and will serve an utility value.
c) Online Advertising:
· Internet Advertising
· Affiliate Program
d) Radio & Television Advertising:
· Comcast Spotlight
· Commercial Radio
· TV commercial
e) Promotional Campaigns:
· Club Events
· Billboards and holdings
f) Print Advertising:
· Print media
- Advertise monthly in magazines that are specifically targeted to production managers in the automotive, marine and heavy industrial segments.
- Advertise monthly in magazines that are aimed at production managers in the general industry.
- Advertise quarterly in magazines that are aimed at purchasing officers.
· Newspapers
· Sunday Advertisements
g) PR:
· PR release to be initiated each month to various trade journals and magazines.
Lost Customers
- Contact monthly all past customers that have not re-ordered to ask why not and see whether we can win back their business.
Existing Customers
- Follow up all new customers two weeks after they purchase to ensure they are satisfied with the product.
- Send quarterly newsletter to existing customers to keep them informed of our other products.
- Try and up-sell all enquiries for our standard range to our premium range.
The purpose of WBD' marketing plan is to serve as a guide for the company. The following areas will be monitored to gauge performance:
· Sales:quarterly and annual.
· Production Costs: quarterly and annual.
· Customer satisfaction.
· Market share analysis.
Competitor profile – Keep updated competitor profile.
Marketing information system – Document on every enquiry «How did you hear about us?»
Produce monthly sales reports by product, by market segment, by territory and sales representative.
4. Strategy and Implementation Summary
Large soft drinks companies advertise direct to consumers, sponsor sporting events, concerts, radio programs, etc. Competing with such large campaigns is obviously unrealistic for a small soft drinks producer. A branded product will benefit from publicity rather than advertising. This is easier to achieve if the product is unusual.
The strategy of «WBD» is to focus on our niche market which is health/natural food stores that serve the young active professional.
Marketing Strategy
«WBD» will introduce its products at 20% off regular price during the first month. In addition, «WBD» will co-sponsor local athletic charitable events to raise the visibility of the brand name.
Sales Strategy
The sales strategy is to build customer loyalty in the new markets. «WBD» will increase its sales force to focus on the new markets.
5. Individual Critical Reflection on Learning Outcomes
• The specific sources of value offered by my chosen company Evaluation the extent to which my advertisement has contributed to the value offered by the company to its customers.
Wimm-Bill-Dann has some specific sources of value for its customers. The first one is quality. Its fruit juices are the highest quality, most nutritious food products…because it will accept nothing less. The second one is innovations. Its products have always been in the forefront of the health and nutrition wave. Innovative products, state of the art manufacturing, quality assurance and industry expertise are the bases for Wimm-Bill-Dann past and future successes. The third one is integrity. Its customers depend on the quality of its juice products. Its commitment to the highest standard is the foundation of its customer's trust in WBD. Delivering freshly made juice to consumers depends on extensive cooperation and mutual reliance between supplier and retailer. Wimm-Bill-Dann stands behind its product, its service and its word.