Parts 4 to 7

Parts 4 to 7THE BRAND PLAN(Deadline Sept 10)Parts 8 onwards

(Deadline Sept 22)

Part 4Identified Market Opportunity

Product Definition

• Product– Features– Advantages– Benefits

• Needs and Wants being addressed

Findings from Industry Experts

• Findings, insights and input from credible industry experts to lend credibility to the chosen product concept

Findings from Consumer Reserach

• Findings, insights from consumer research about the product

– Acceptance– Purchase Frequency– Usage

Estimate of Existing Market Size and/or Potential of Product

• Based from existing data• Based from computations / estimates coming

from data and information from Consumer Research findings

• Based from product concept testing among consumers

Part 5General Marketing Strategy &

Objectives

Brand Plan MARKETING DEPARTMENT

Right to Left Planning

• Always begin with the end in mind• The “end” should be the goal / vision• These should be SPECIFIC & QUANTIFIED• The more exact the measures, the more you

can manage your resources & concentration of time, effort, & money

• “If you cannot measure it, you cannot really manage it”


VMOKRAPISPATRES


Brand Vision

• A futuristic picture of the brand, described in words or a vision statement

• It should be time bound (3 to 5 years)• Ambitious BUT realistic• May have a geographical and target market focus

that would help you plan strategically• The vision can also be in relation to the company• It is something to pursue


ADPIC Wine Department

• VISION– ADPIC will become the market leader in the

Philippine wine industry in 5 years. In pursuit of this, ADPIC’s wine division will have the highest contribution-to-sales percentage among all the product lines in the company


Brand Mission Statement• The basic “purpose of being” for the brand• Basic purpose includes earning a decent

return and getting a share of the market• Mission statements specify the product or

service to be rendered and the market.• Mission Statement = Something to achieve• Relate to mother company’s vision and

mission



• MISSION STATEMENTS– To market and distribute high quality wines at

reasonable prices for the typical Filipino Consumer– To generate sufficient profits for the company


Brand Objectives

• Measurable END results that translate the vision and mission

• Objectives usually center around 4 major ends:

1. Sales & Profits2. Expanding markets3. Satisfying customers with quality products4. Providing reasonable compensation / benefits to

employees



• OBJECTIVES:– To establish a dominant market presence in the

country– To satisfy the customers with quality wines at

reasonable prices– To earn good financial returns for the company


BRAND KRAs• The attainment of the objectives or

measurable end results could be described by Key Result Areas (KRA)

• KRAs are proofs that the objectives are being achieved!

• Qualitative measures that the objectives are being achieved

• Discuss each KRA, explain why it is a KRA in relation to insights from EA and/or IA


Objective 1: To establish a dominant market presence in the country

KRAs:

1a) Distribution in major off-premise outlets in all key cities

1b) Distribution in major on-premise outlets in all key cities

Objective 2: To satisfy the customers with quality wines at reasonable prices

KRAs:

2a) Growth in sales per outlet (off-premise)

2b) Growth in sales per outlet (on-premise)

2c) Market share

ADP Wine Department

Objectives Key Result Areas

1a. Distribution in major off-premise outlets in all key cities in the country1b. Distribution in major on-premise outlets in all key cities in the country1c. Presence in the direct selling segment1d. Market share in the country2a1. Growth in sales per outlet (off-premise)

2a2. Growth in sales per outlet (on-premise)2b. Market share

1) To establish a dominant market presence in the country

2) To satisfy the customers with quality wines at reasonable prices


ADP Wine DepartmentObjective 3: To earn good financial returns for the companyKRAs:3a) Gross Margin3b) Return on Sales

3a. Gross margin 3b. Return on Sales 3) To earn good financial returns for the company


ADPIC Wine DepartmentIV. KEY RESULT AREASObjective 1: To establish a dominant market presence in the countryKRAs:1a. The distribution in major off-premise outlets (i.e. supermarkets, hyper marts, and warehouse clubs) is necessary since these outlets contribute to 36% of the total volume sales of wines in the country. In addition, although Metro Manila accounts for 80% of this volume, there are key cities throughout the rest of the country that account for the remaining twenty.

1b. A strong presence in major HORECA outlets across the country is likewise important. The company should make its wines available in on-premise outlets for sales and marketing purposes. These outlets include five star hotels, restaurants, and bars located in cosmopolitan cities.


BRAND PERFROMANCE INDICATORS (PIs)

• PIs are the KRAs quantified!• Discuss each PI (at least for the first year PIs).

• Example:

1999 (now) 2000 20011) To establish strong Number of food outlets in Luzon 3 5 20market presence in Sales volume 7M 13M 60MLuzon Market share 2% 3% 12%2) To earn good ROE 30% 40% 60%financial ROI 14% 20% 30%returns ROS 14% 15% 16%

PIKRAOBJ



Key Result Areas 2004 2006 20081a. Distribution in major off-premise outlets in all key cities in the country 100 121 1461b. Distribution in major on-premise outlets in all key cities in the country 75 147 2881c. Presence in the direct selling segment 45 227 4461d. Market share in the country 1% 8% 15%2a1. Growth in sales per outlet (off-premise) 53 449 8852a2. Growth in sales per outlet (on-premise) 42 216 2622b. Market share 1% 8% 15%3a. Gross margin 40% 40% 40%3b. Return on Sales 8% 8% 8%

Performance Indicators



1) Presence in 100 off-premise outlets in 2004 and 146 in 2008

• Off-premise channel = 69% of the total volume sales• Dominated by the supermarkets at 52%. • Supermarkets account for 36% of the total wine • Euromonitor identifies seven major accounts controlling

70-80% of the total supermarket sub-segment• It is vital to cover these major supermarkets. As mentioned

in the industry analysis, these channels are fewer in number, but account for bulk of the sales.



1) Presence in 100 off-premise outlets in 2004 and 146 in 2008

• The 100 outlets being targeted will comprise of the aforementioned accounts that have 35 branches already.

• The remaining 65 will be comprised of other key accounts/outlets already being serviced by ADPIC (i.e. Landmark, Unimart, South (Makati) Supermarket, etc). According to the same Euromonitor study, the size of these major supermarkets range from 2,000 to 75,000 square meters. This will be used as criteria for choosing which off-premise outlets to target.


ADPIC Wine DepartmentRene Barbier Five Year Plan(in cases) 2004 2005 2006 2007 2008Total Market* 890,928 1,022,007 1,132,841 1,251,553 1,439,286 Projected sales 8,909 51,100 90,627 125,155 215,893 Projected share** 1% 5% 8% 10% 15%Total off-premise sales*** 5,346 30,660 54,376 75,093 129,536 Projected off premise outlets 100 110 121 133 146Sales per outlet 53 279 449 564 885 Total on-premise sales 3,118 17,885 31,720 43,804 75,563 Projected on premise outlets*** 75 105 147 206 288 Number of direct sellers**** 15 21 29 41 58 Sales per outlet 42 170 216 213 262 Total direct sales*** 445 2,555 4,531 6,258 10,795 Projected direct accounts 45 213 227 284 446 Number of direct sellers**** 9 43 45 57 89 Sales per account***** 10 12 20 22 24 *According to Euromonitor**By 2008, Rene Barbier will overtake Gato in market shares***Off-premise 60% of sales, on-premise is 35%, and direct selling 5%. ****Assumption = each direct seller will open at least 5 accounts. Currently, each seller opensan average of 2 within 3 months.This time, they will be selling throughout the year.*****Current red wine sales is 10 per account. Some of the sales is going to the cavas. After two years, the cavas will be phased out and the red wines will take all of the sales.

BUILD THE BRAND BUILD PORTFOLIO

Part 6OVERALL MARKETING STRATEGY


VMOKRAPISPATRES


BRAND STRATEGY

• The second half of the process starts after the PIs• Generate major alternatives/strategic options for

attaining each and all the PIs• The Strengths, Weaknesses of the Brand & the

opportunities and threats in the industry should be addressed.

• Using the modified SWOT Matrix, which includes the PIs, generate strategic options

• You may also use other strategy-formulation matrices if you wish!


Example: A Multi-Purpose Coop

1. Helping members set up & operate own enterprises. For members with existing enterprises, make them grow bigger.

2. Train members of the family in technical skills that would make them gainfully employed.

3. The coop should establish business ventures that yield substantial profits and dividends for its members & provide employment for members.

Performance Indicator:

P13,000 Monthly Income

STRATEGIC OPTIONS:


ADP WINE DEPARTMENTOPPORTUNITIES (O)

1) While the industry is projected to grow, there is still a large untapped market. 2) Although there are four brand leaders, majority of the market has no brand loyalty, let alone high brand awareness.3) The major players in the industry have yet to launch any major brand-building advertising and promotions like full-scale tri-media campaigns.4) Direct selling to end consumers or corporate buyers is an overlooked distribution channel.

STRENGTHS (S) Strategic options:Corporate Strengths Market and distribute a brand of wine rather than distribute wine as a generic product1) Extensive off-premise distribution set-up (breadth and depth) (S3,S8,O1,O2,O3,P5,P6,P7,P8,P10)2) Existing relationships with major off-trade accounts Penetrate off-premise outlets (S1,S2,O1,P1,P3,P5,P6)3) Integrated marketing set-up Sell to corporate accounts (S5, S3, O4,P5,P8,P10)4) Competent sales representatives Concentrate on still wines, rather than sparklings (S6,S7,O1,O2,P1,P2,P3,P4,5) Increase presence in direct selling to corporate accounts P4,P5,P6,P7,P8,P9,P10)due to the strong direct selling team of freelance sales people Build the Carta and Spumante Variants and drop Cordon Negro (W8)Wine Department / Brand Strengths6) The still wines of Freixenet fit the consumer’s taste7) Competitive costs of still wines8) The quality of Freixenet Cava Carta Nevada and Spumante have a fit with the largest consumer group’s taste

WEAKNESSES (W) Strategic options:Corporate Weaknesses Use the Y2K Direct Selling Group to penetrate HORECA (S5,W1,O1,P2,P5,P7,P8)1) Weak HORECA (On-premise) presence Support branded wine with marketing program (S1,W1,P1,P2,P5,P6,P7,P8,P10)Wine Department / Brand Weaknesses Discontinue Freixenet Cavas in on and off premise outlets (W3,W9,P3,P4,P5,P9,P10)2) Weak presence in key accounts Use ADPIC funds to develop brand of wine (W4,O1,O2,O3,P5,P8,P10)3) Unprofitable price structure for Freixenet Cavas Develop proper positioning strategies for wines (W5,O2,O3,P5,P6,P7,P8)4) Absence of marketing budget support necessary to develop Drop Mederano and Frexienet Wines (W6,P5,P6,P7,P10)brand equity of all Freixenet Wines Change Mederano packaging (W7)5) Freixenet S.A. wines have no properly guided positioning strategy Drop Freixenet Cordon Negro (O9,P3,P4,P5,P6,P7,P8,P10)6) “Freixenet” and “Mederano” brand names ring the consumer’s ears Launch brand building program for wines (W10, O1,O2,O3,P1,P2,P5,P6,P7,P8,P10)7) Mederano’s Worcestershire packaging Concentrate on developing Rene Barbier Brand of wines (S6,O1,O2,O3,W3,W6,W7,9) Freixenet Cordon Negro does not fit the consumers’ taste W8,P3,P4,P5,P9,P10)10) Low brand equity for all Freixenet S.A. wines

Performance Indicators (P)1) Presence in 200 off-premise outlets in 20042) Presence in 50 on-premise outlets in 20043) Provide off-premise outlets at least 20% mark-up over list price 4) Provide on-premise outlets at least 200% mark-up over list price 5) Attain 1% Market Share by 2004 ( 9,000 Cases)6) Achieve an average annual turnover of 50 cases per year per off-premise outlet7) Achieve an average annual turnover of 25 cases per year per on-premise outlet8) Achieve at least 40% brand awareness in 20049) Ensure a 40% gross margin from the wines10)Achieve a 10% minimum return on sales


ADP WINE DEPARTMENTTHREATS

1) The brand leaders all have low landed costs and high margins. 2) The “piggy back” wine importers might start focusing more time and financial resources on the wines.

STRENGTHS (S) Strategic options:Corporate Strengths Concentrate on still wines (S7,T1,P3,P4,P5,P6,P7,P9,P10)1) Extensive off-premise distribution set-up (breadth and depth) Become a first mover in aggressive intergrated marketing strategy 2) Existing relationships with major off-trade accounts (S1,S2,S3,S4,S5,S6,S7,S8,T2,P1,P2,P5,P6,P7,P8,P10)3) Integrated marketing set-up4) Competent sales representatives5) Increase presence in direct selling to corporate accounts due to the strong direct selling team of freelance sales peopleWine Department / Brand Strengths6) The still wines of Freixenet fit the consumer’s taste7) Competitive costs of still wines8) The quality of Freixenet Cava Carta Nevada and Spumante have a fit with the largest consumer group’s taste

WEAKNESSES (W) Strategic options:Corporate Weaknesses Drop Freixenet Cavas (W3,T1,P3,P4,P9,P10)1) Weak HORECA (On-premise) presenceWine Department / Brand Weaknesses 2) Weak presence in key accounts3) Unprofitable price structure for Freixenet Cavas4) Absence of marketing budget support necessary to develop brand equity of all Freixenet Wines5) Freixenet S.A. wines have no properly guided positioning strategy6) “Freixenet” and “Mederano” brand names ring the consumer’s ears7) Mederano’s Worcestershire packaging 9) Freixenet Cordon Negro does not fit the consumers’ taste10) Low brand equity for all Freixenet S.A. wines

Performance Indicators (P)1) Presence in 200 off-premise outlets in 20042) Presence in 50 on-premise outlets in 20043) Provide off-premise outlets at least 20% mark-up over list price 4) Provide on-premise outlets at least 200% mark-up over list price 5) Attain 1% Market Share by 2004 ( 9,000 Cases)6) Achieve an average annual turnover of 50 cases per year per off-premise outlet7) Achieve an average annual turnover of 25 cases per year per on-premise outlet8) Achieve at least 40% brand awareness in 20049) Ensure a 40% gross margin from the wines10)Achieve a 10% minimum return on sales



Summary of Strategic OptionsGeneral Strategic Options:• Market and distribute a brand of wine rather than

distribute wine as a generic product• Concentrate on still wines, rather than sparklings • Support branded wine with marketing program• Use ADPIC funds to develop brand of wine • Concentrate on developing Rene Barbier Brand of wines• Use the Y2K Direct Selling Group to penetrate HORECA• Penetrate off-premise outlets• Sell to corporate accounts• Drop Freixenet Cordon Negro • Launch brand building program for wines• Drop Freixenet Cavas and Mederano de Freixenet


Summary of Strategic Options• Brand-specific Options:• Discontinue Freixenet Cavas in on and off premise outlets • Develop proper positioning strategies for wines • Change Mederano packaging • Build the Carta and Spumante Variants and drop Cordon

Negro• Discontinue Freixenet Cavas in on and off premise outlets and

concentrate it in corporate accounts


STRATEGY FORMULATIONAFTER LISTING DOWN THE STRATEGIC OPTIONS, IDENTIFY WHAT MAJOR ALTERNATIVES CAN BE DEVELOPED FROM THE OPTIONS!!!

Discuss each alternative thoroughly. Explain the positive and negative points of each alternative. Relate to Industry KSFs, Industry Logic, Industry Opportunities & Threats, and Brand Strengths and Weaknesses.

Choose the best alternative! (duh)

If possible, develop a matrix that would help you determine which alternative is the best.


ADPIC Wine: Major Strategic Alternatives• Rene Barbier Option

– Concentrate on Rene Barbier Still Wines– Drop Freixenet Cavas – Advantages: taste, price, and heritage– Disadvantages: Freixenet’s neglect, no budget

• New Brand Option– Look for a new wine supplier– Advantages: corporate fit, marketing budget– Disadvantages: taste of wine not sure

• Own Brand Option– Develop own brand and look for supplier that will produce

own ADPIC brand– Advantages: own brand, CONTROL– Disadvantages: time, credible supplier

Marketing & Brand Equity Management Marketing Department

Product / Industry Life Cycle

• Introduction– Product launch– Monopoly

• Growth– Rapid climb in sales– Increase in competition

• Maturity– Sales growth rate decline, plateau, absolute sales declines– Fierce competition

• Decline– Complete decline of sales and profits


Product / Industry Life CycleCharacteristics, Objectives, & Strategies

STAGE INTRODUCTION GROWTH MATURITY DECLINE

CHARACTERISTICS

SALES Low Sales Rapidly rising sales Peak sales DecliningCOSTS High cost per customer Average cost per customer Low cost per customer Low cost per customerPROFITS Negative Rising profits High profits Declining profitsCUSTOMERS Innovators Early adopters Middle majority LaggardsCOMPETITORS Few Growing number Stable number beginning Declining number

to decline

MARKETING OBJECTIVES

Maximize profit & Reduce expenses &defend market share milk the brand

STRATEGIES

PRODUCT Offer basic product Product extensions, Diversify brands & models Phase out weak itemsservice, and warranty

PRICE Charge cost-plus Price to penetrate market Competitive pricing Cut priceDISTRIBUTION Selective Intensive More intensive SelectiveADVERTISING Awareness among early Awareness and interest Stress brand differences Reduce to level needed

adopters & dealers in the mass market and benefits to retain loyalistsSALES PROMOTION Use heavily to Reduce to take advantage Increase to encourage Reduce to minimal

generate trial (PUSH) of increasing demand brand switching level

Create product awareness Maximize market share


Portfolio Analysis & Strategic Market Plans


Offensive Strategies: Penetrate Markets

• Grow Market Share– New users (i.e. Red Bull)

• Grow Customer Purchase– New uses (i.e. Vaseline Petroleum Jelly)– More usage (i.e. Ph Care) – Line extensions

• Nike Shoes = Basketball, running, tennis, etc.

• Enter New Customer Segments– New demographics (i.e. Nike Woman)

• Grow Market Demand


Offensive Strategies: Enter New Markets

• Enter related market – Brand extensions

• Kodak = films, cameras• Sony = TV, radios, DVD Players

• Enter diversified market– Brand extensions

• Bic Lighters, Shavers, Pen

• Enter emerging market– i.e. Smart & Globe (piso loads)

• Develop untapped market– i.e. Apple (consumer computers)


Defensive Strategies: Protect Market Position

• Protect Market Share– In High-Growth Industries

• Introduce new products• More investment needed• In the FMCG industry, the rate of share change is -0.5%

per 1% market growth if there is no investment to protect share.

– Protecting a high-share position• Continuous improvement of competitive advantage *

mktg effort• New products, improve products and services,

marketing support



• Protect Market Share– Protecting a follower position

• Decide = fight leader or stay as a follower

– Protecting a niche share position• Build loyalty among consumers, “CULT”• Decide = fight leader or stay in the niche



• Build Customer Retention– Improve After-service – Reaffirm that your brand is the best choice (i.e. endorsers)

• Example: Green Cross and Zesto “historical” / “nostalgic” ads – Loyalty programs (i.e. frequent flyers program)– Make it hard for consumer to switch to a different product

• Reduced Focus– Isuzu abandoned passenger car market in favor of

trucks to focus on their strength


Defensive Strategies: Exit Market Position

• Harvest Price Strategy– Reduce and increase price and cost to achieve the

optimal price-cost structure to achieve profits

• Harvest Resource Strategy• Divest Market Position

Part 7Segmentation – Targeting -

Positioning


STP

• Develop the appropriate Segmentation – Targeting – Positioning strategy

• Use different matrices (i.e. consumer perception mapping) to develop positioning!

Segmentation & Profiling of Target Market

• Proposed Target Market Analysis– Demographics– Psychographics– Behavioral– Geographic– Lifestyle – Behavior– Motivation– Attitude– Attitude & Motivation toward the product

• Total Population• Breakdown: Primary Target Market, Secondary Target Market and if

necessary, Tertiary and Emerging Markets

Positioning Strategy• Proposed Target Market Analysis

– Demographics– Psychographics– Behavioral– Geographic– Lifestyle – Behavior– Motivation– Attitude– Attitude & Motivation toward the product

• Total Population• Breakdown: Primary Target Market, Secondary Target Market and if

necessary, Tertiary and Emerging Markets

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