SID Number: 1319302/1 1.0 INTRODUCTION
S.M Jaleel is part of the Beverage Manufacturing Industry in Trinidad and Tobago for over eighty nine (89) years. It was established in 1924 and is deemed to be the oldest and largest manufacturer of nonalcoholic drinks in the English-speaking Caribbean. The main headquarter for this enterprise is currently located in Otaheite Industrial Estate, South Oropouche, Fyzabad in Trinidad. Their operations extend beyond local markets, to include regional in the Caribbean and international such as United States of America, Canada, Latin America and Europe. A variety of products from water to carbonated drinks to fruit juices exists. Water is one of their top sellers.
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2.0 ANALYSIS OF COMPANY SITUATION SM Jaleel’s Vision Statement “To strive towards being leaders in the non-alcoholic market, making our people the cornerstone of our success, as we work together in a globally-focused, dynamic environment based on trust and sound values, providing all-encompassing beverage solutions that meet the ever changing, evolving needs of our customers.” (SMJ, 2010.) This statement is deemed suitable for the company since it clearly states their drive to be the foremost producer of non-alcoholic beverages. Furthermore, it explains their work ethic which is based on sound morals and trust that will promote an environment suitable for success and can meet the constant changing needs of clients. Financial Summary There were no financial figures available. Sales are high and continuously increasing. The cost of sales is high because of high running cots of transportation, manufacturing, exporting and overall factory operations. Profit margins are continuously rising in spite of competitors existing in local and foreign markets. SM Jaleel’s Present Marketing Mix 1. Product
2. Price 3. Place
Water products range from brands such Viva, Oasis, Island Mist, Cool Runnings and Mr. Pelier. Soft drinks such as Chubby Fruit Juices e such as Fruta and Kool Kidz Energy drink produced is Turbo. Packaging - plastic bottles Cost-plus price strategy used. Indirect channels of distribution : Distributors, wholesalers and retailers purchase to resell the products. Deliver the products to target markets via supermarkets, pharmacies, vendors, school cafeterias and restaurants. 2
SID Number: 1319302/1 4. Promotion
5. People
6. Process
7. Physical Evidence
Target markets are differentiated and more than one target markets are selected. Television and radio adverts range from targeting kids in relation to chubby to targeting adults such as fruta. Billboards and newspaper adverts are used as well. Use of social media such as Facebook exists. Transport trucks with logos and pictures products. Competitions. Free gifts with purchase are also used. Family days such as Caribbean Cool Fun day Sponsorships of national events. The “S.M Jaleel Foundation” is charitable venture that allocates a portion of the company’s profit to pre-approved causes. This does not apply since consumers do not purchase directly from the company, only through intermediaries. Not applicable since consumers do not purchase directly from them. Not applicable since this is a manufacturing company and mainly sells to businesses and does not have a sales building.
Table 2.1 - The Present Marketing Mix for SM Jaleel. Source: SM Jaleel, 2010. The table above shows the present status of the company. Products range from soft drinks to juices. Water products include 5 major brands. Viva is flavoured water offered by SM Jaleel. Pricing is reasonable and well within the going rate of non-alcoholic beverages. Intermediaries are used since many wholesalers, distributors and retailers purchase from SM Jaleel and resell products through different avenues. Different promotions are used to attract target markets existing within the general public.
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3.0 ANALYSIS OF MARKET SITUATION Analysis of Current Market Situation using PESTLE Political Factors
Economic Factors
Socio-economic Factors
Technological Factors
Legal Factors
Trinidad and Tobago's trade agreements : Bilateral Investment Treaties Economic Partnership Agreement (EPA) CARICOM Trade Benefits Bilateral Trade Agreements Source: Ministry of Trade, Industry and Investment Inflation rate at 5.9% Food price inflation rate at 10.6% 7.5% prime Lending rates Labor force comprising of 616,500 people Estimated annual growth rate of GDP at 0.7% Source: Ministry of Finance and the Economy, 2012. 75% of people employed in the food and beverage sector are full time employees. Unemployment rate 4.9% Rise in obesity rates Source: Ministry of Finance and the Economy, 2012. Highly innovative bottling equipment Fully automated production lines Electronic media such as television, radio and internet accessed through digital devices Source: Student research, 2013. Bottles’ labels on packaging enforced. Must include: Be in country’s language. Country’s origin. Expiration date Ingredient list Net contents 4
SID Number: 1319302/1 Preservatives Colourings Additives Flavorings Name and address or the manufacturer or distributor. Beverage Container Bill law enforced: Recycling of waste plastic bottles Source: Trinidad Express Newspaper, 2013
Environmental Factors
Increase of recycling of plastic bottles. Source: Student research, 2013.
Table 3.2 - Analysis of External Market Situation using PESTLE model Table 3.2 shows the factors that exist within Trinidad and Tobago that externally affects the Beverage manufacturing industry. Political factors such as being a member of CARICOM allows member states to conduct business within each other’s’ countries with benefits such as right of establishment without restrictions. Economic factors such as high inflation rates affect the prices of supplies needed and finished products. Socio-economic factors such as rise in obesity rates affect sales of the beverage industry. There are high technological avenues being used to help manufacture effectively and sell products to wide target markets. Legal factors include strict reinforcement of packaging and labeling on pre-packaged products. Also, the Government is implementing a bill for recycling and waste infrastructure to ensure people dispose properly of plastic bottles. Environment factor such as increase of recycling plastic bottles is evident. Analysis of Current Market Situation using SPICC Suppliers Raw materials for drinks are bought from local, regional and international suppliers. For example oranges and grapefruits for the fresh fruit drinks are bought from local farmers and other estates throughout the Caribbean. Publics
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SID Number: 1319302/1 Media publics promote the issue of unhealthy drinks such as soft drinks which indirectly affects SM Jaleel. The general public’s attitude to SM Jaleel products is positive since people enjoy their products. Intermediaries This exists since wholesalers, distributors and retailers purchase from SM Jaleel and resell the products in different locations.
Customers Customers are more business companies. Hence this is described as “B2B” which is Business to Business model. Target markets are segmented for each product and there are more than one target markets aimed at. Competitors Direct competitors of water products; exist locally for example: Blue Waters, Coca Cola, Solo, and Blue Mountain. Indirect competitors in the beverage industry include Carib and Angostura.
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4.0 COMPETITOR ANALYSIS AND SWOT Competitor Analysis Two main competitors of SM Jaleel that sell water products that exist locally are 1. Blue Waters 2. Solo Blue Waters Present Marketing Mix Blue Waters mainly produces water products and also distributes the monster brand of energy drinks. Indirect channels are used for the distribution which includes retailers, wholesalers, distributors and vending machines who purchase their products to sell. SWOT for Blue Waters Strengths Weaknesses Quality Testing is done by Variety of products manufactured is not CARIRI(Caribbean Industrial Research great Negative comments about the use of plastic Institute) on a weekly basis High brand recognition bottles by the media. Brand is established Aggressively marketed both locally and regionally Opportunities Flavored water can be introduced to the product line participation in more sporting events
Threats intense competition from other manufacturers there is a rise in the importation of bottled 7
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water
Can be aligned with public institutions where the workforce is highly populated through the use of vending machines
Table 4.3 - The SWOT analysis for Blue Waters.
Solo Present Marketing Mix Solo products include apple J and pear drinks, natural juices, RC cola and upper 10, bentley, mango, aqua pur, fruit flavors, drink mixers and diet flavors. Their products are distributed locally and internationally. . SWOT FOR Solo Strengths
High brand recognition Winning gold medals for taste quality Wide variety of products
Opportunities
Can have vending machines in all schools Increased international marketing for the water product
Weaknesses
Water product(Aqua Pur) not marketed at full scale Seldom introduction of new innovative products
Threats
Competitive market Bad publicity of plastic bottles
Table 4.4 - The SWOT analysis for Solo.
Analysis of Beverage Industry using Porters 5 forces
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SID Number: 1319302/1 Threat of New Entrants
Bargaining Power of Suppliers
Bargaining Power of Customers
Availability of Substitutes
Rivalry within Industry
Low
Low
High High
High
Requires high investment costs for equipment, resources and skilled workforce. There are many suppliers of raw materials for beverage industries locally, regionally and internationally. Many suppliers with similar products, hence customers have many choices. Many competitors exist locally, regionally and internationally. Local competitors include Coca Cola(Dasani) and Solo (Aqua Pur) Many competitors vie for sales for their products.
Table 4.5 - Analysis of the Beverage Industry in Trinidad and Tobago Source: Student research, 2013. Table 4.5 shows all the factors that culminate to form an attractive but hard hitting industry to be in. Threat of new entrance is low because of the high running costs that exist. Suppliers; power is low because many exist that companies such as SM Jaleel can purchase from. Customers have the ability to choose from many choices on the market hence their power is high. Many products similar to SM Jaleel products exist on the market. There is high competition among manufacturers of products.
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SID Number: 1319302/1 SM Jaleel’s SWOT Analysis – Short term Strengths 1. Brand equity is high since products are well known locally and abroad. 2. Product brands are easy to recognize since they are promoted extensively. 3. Existing is customer loyalty toward products. For example kids enjoy the taste of Chubby. 4. Beverages are halal and this appeal to Muslim community. 5. Currently, recycling initiatives are present. Plastic bottles, metal cans and pallets are sold to recycling companies. Moreover, ten percent of rejected bottles are reused. Furthermore, wasted water in special pipelines is reused for cooling equipment. 6. SM Jaleel is a member of International Bottled Water Association. This way they are monitored externally by an independent third party and ensure maintenance of quality standards. Opportunities 1. Training sessions and seminars can be implemented for sales departments and those who come into contact with customers. 2. There can be improvements to products with respect to fruit juices and soft drinks and the amount of sugar added.
Weaknesses 1. There is negative publicity since soft drinks are not beneficial to health. 2. There are also negative views on usage of plastic bottles and metal cans. Environmental concerns are developing rapidly.
Threats 1. There is intense competition in the beverage industry that exists locally, regionally and internationally. 2. There is a rising concern for health. 3. Currency fluctuations can affect SM Jaleel since they purchase raw materials regionally and internationally. 4. Diseases can spread through orchards and this can affect acquiring resources for fruit juices.
Table 4.6 – SWOT Analysis for SM Jaleel over 1 year. Source: Student research, 2013.
SM Jaleel’s SWOT Analysis – Long term Strengths
Weaknesses 10
SID Number: 1319302/1 1. There is increased awareness of brand due to constant marketing. 2. SM Jaleel is in the local, regional and international markets. 3. There is more training sessions for employees to know how to deal with customers. Opportunities 1. Brand image can be improved to promote more sales. 2. Promotions are updated to keep customers’ interest. 3. Less use of resin in plastic bottles to help promote more “environmental friendly” image.
1. Undesirable views about using plastic bottles and metal cans.
Threats 1. There is intense competition in the beverage industry existing locally, regionally and internationally. 2. Health issues are prominent with respect to increase diabetes due to sugar content in soft drinks and fruit juices,
Table 4.7 – SWOT Analysis for SM Jaleel for 3 years Source: Student researcher, 2013.
5.0 NEW PRODUCT Overview of New Product A new product will be introduced to their Oasis water product line. The new product is a mint flavored water in an environment friendly packaging. The name of this is MINTON. It can be introduced in a small size for kids and a bigger bottle can be used for teen and adult consumption. Marketing Objectives 1. Short Term: To increase sales by 10% of existing water products’ sales in introducing the new product Minton at end of 2014. 2. Long Term: To increase sales by 30% of existing water products using promotional activities at the end of 2016. Marketing Strategies
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SID Number: 1319302/1 Ansoff's Matrix will be used since this is a growth tool that will help enhance the company's profits. Existing Products Existing Markets
Market Penetration
Market New Development
New Products
Product Development
Diversification
Markets Figure 5.1: Ansoff's Matrix Source: Adapted from Kotler, 2008.
Marketing Strategies that will be used by SM Jaleel are :1. Short Term: Product Development Introducing a new product to the line will benefit the company in reaching the existing clients and increase profits quickly 2. Long Term: Marketing Penetration Promotional activities will be used to market existing products to existing clients which will generate profits.
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6.0 FUTURE MARKETING STRATEGIES Short Term: Product Development Strategy Product New product that will be introduced is mint flavoured water called "MINTON". The ingredient, mint extract can be sourced locally and regionally. The packaging for this product will be available in to two (2) sizes, 12 fluid ounces will be for the kids and 24 fluid ounces, for the adults. The bottle will be produced with 35% less plastic and 15% plant based. The two sizes of bottles will have the same design. The mouth of the bottle will have a flip type cover rather than conventional screw type caps so the flip type will make it easier to open. The packaging will have conical rings shaped into it that spans from the top and finishes at the bottom. When the product is consumed the customer can easily compact the bottle with minimal force into a flat disc shaped object. This is possible due to the conical rings within the packaging however when the bottle is filled with the contents the packaging holds its structural integrity and this is important when being transported or stored. Price Price skimming strategy will be used. The price will range from $5 - $5.50 for the 24fl. oz. and $3- $3.50 for the 12fl. oz. This price will accommodate for new packaging of the product. Place
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SID Number: 1319302/1 Indirect distribution will continue to be used since intermediaries are already used. This also keeps costs down and investment return will be faster since products can be sold in bulk and money gained can be used to re-invest. A wider target market is reached since middle men have more strategic location set up for customers to easily get the product. Promotion Mass Media will be used to attract general public. Television advertisements can be aired twice per day for two times per week on popular local channels such as TV6 and CNC3, during the day will be focused on kids while at night can be targeted to adults. Radio advertisements can be aired two or three times per week at peak times such as evenings between the hours for 4pm and 7pm. Newspaper advertisements will be used in promoting new product and can be published three times a week in popular newspaper such as Trinidad Express or Trinidad Guardian. Internet marketing will be used on social networking sites such as Facebook and Twitter and on company's home page. Billboards will be used throughout the year for different occasions. For example: during Christmas advertisements with a theme such as Santa Claus drinking the product. Sales Promotion will also be used in form of a competition to win elite prizes. To enter this competition, customers will have to buy the product to get the proof of purchase. Also, free gifts, such as cooler bags, back packs, t-shirts and novelty items with purchase of two(2) cases and over of the product. Public Relations will be used in the form of sponsoring community sporting events such as cricket training programs and football matches. A Press release of new product can be sent to media about overview of the product and how environmentally friendly it is.
Process This is not applicable since consumers do not purchase directly from SM Jaleel. People This does not apply since consumers purchase from retailers, wholesalers and distributors. Physical Evidence This does not apply since it is a manufacturing company.
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SID Number: 1319302/1 Long Term: Marketing Penetration Strategy Product Existing products of water will remain the same. However packaging will be improved with 35% less plastic and an increase percentage to 25% plant based to have the packaging even more environmentally friendly.
Price Current price will be maintained at the range $3-$3.50 for the 12fl. oz and $5for the 24fl oz.
Place Indirect distribution channels will be continued to be used. This ensures that product turnover is fast and generates faster profits. Promotion Mass Media will be used. Television advertisements will be aired on popular stations such as CNC3 and Gayelle. Radio advertisement for existing products can be aired during the hours of 4pm to 7pm three days per week. Online marketing can also be used via channels such as social networking sites which include Facebook and Twitter. Sales Promotion will be used in the form of selling bonded packs of Oasis and Viva which will increase revenues. Public Relations strategies can be used such as family days like "Oasis Fun Day." This will include activities for the entire family such as water slides and bouncy castle for the kids. Process This is not applicable because consumers do not directly buy from SM Jaleel. People This is not applicable because consumers buy from retailers, wholesalers and distributors. 15
SID Number: 1319302/1 Physical Evidence This is not applicable since SM Jaleel being a manufacturing company.
7.0 FINANCIAL FORECAST. Budget: Activities Television
2014 $(000) 960
2015 $(000) 720
2016 $(000) 480
advertisements Radio Advertisements Newspaper
300 480
300 350
200 250
advertisements Billboard
320
240
160
Advertisements Competitions Sponsorship of sporting
100 100
100 100
100 100
events Family Day Banded packs Free gifts Total
200 85 50 2595
200 85
200 85
2095
1575
Table 7.8 - Budget for 3 year plan. Source: Student Research, 2013. Footnotes: Year 2014 will be high in cost to due investment costs for launching new product MINTON as well as increases in promotional strategies. 16
SID Number: 1319302/1 Year 2015 will still be high in cost because of continuous promotional strategies. Year 2016 will be a bit lower because the brand is established and not much use of promotional advertisements.
Matrix 2014 ($000) Sales 60000 Cost of Sales 32000 Profit 28000 Table 7.9: 3x3 Matrix for over 3 year plan. Source: Student Research, 2013
2015 ($000) 65000 35000 30000
2016 ($000) 78000 36500 41500
Footnotes: Cost of sales is readjusted to include running costs and other expenditure. Profits lowest in 2014 because of high investment costs and extensive promotional advertising. Profit highest in 2016 because SM Jaleel products are more established and known.
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Time Schedule of Activities 201 4 Activities Television advertisements Radio advertisements Newspaper advertisements Billboard advertisements Competitions Sponsorship of sporting events Family Day Banded Packs Free gifts
Q 1
Q2
201 5 Q 3
Q 4
Q 1
Q2
201 6 Q 3
Q 4
Q 1
Q2
Q 3
Q 4
Ke y Twice per week Three times per week Everyday One day Once per month
Table 7.10: Time schedule of activities Source: Student research, 2013.
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Monitor and Control SM Jaleel can compare yearly financial statements to projected budget. SM Jaleel can monitor customer markets’ reaction to products. SM Jaleel can measure market share on an annual basis.
8.0 CONCLUSION This report proposes two key Marketing strategies that can be applied to SM Jaleel’s operations. Introducing a new product to their Oasis line will increase sales and profits. Using more promotions will also help increase reaching more consumers. SM Jaleel is guaranteed to see growth in profits using this marketing plan.
Word Count: 2989
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Reference List Kotler, P., Armstrong, G., 2006. Principles of Marketing. 11th ed. New Jersey: Pearson Prentice Hall. Ministry of Finance and the Economy, 2012. Budget Statement 2013. [pdf] Available at[Accessed 29 April 2013]. SM Jaleel, 2010. Our Company. [online] Available at < http://www.smjaleel.net/>[Accessed 29 April 2013]. Trinidad Express Newspaper, 2013. New Bill coming to improve T&T's recycling and waste management. [online] Available at [Accessed 29 April 2013].
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Bibliography List Kotler, P., Armstrong, G., 2006. Principles of Marketing. 11th ed. New Jersey: Pearson Prentice Hall. Ministry of Finance and the Economy, 2012. Budget Statement 2013. [pdf] Available at[Accessed 29 April 2013]. SM Jaleel, 2010. Our Company. [online] Available at < http://www.smjaleel.net/>[Accessed 29 April 2013]. Trinidad Express Newspaper, 2013. New Bill coming to improve T&T's recycling and waste management. [online] Available at [Accessed 29 April 2013].
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