1. Marketing Plan
1.1 Descriptionof the Company
Wimm-Bill-Dann is the is the largest producer indairy products and one of the leader children’s food in Russia. WBD has morethan 35 production facilities in Russia, Ukraine and Central Asia. The Companydistribution network covers 100% of the Russian territory and also includes theCIS. Serving needs more than 280 mln. consumers[1].
More than 17,000 people work at WBD’s production facilities andtrading affiliates.
Wimm-Bill-Dann is the one of the first Russian company who startto produce packaged juice products. Before WBD, no one in Russia producepackaged juice. Imported juice products in modern packaging were virtuallynon-existent[2].
The most recognized brands include: Domik v Derevne (Little Housein the Village), Chudo (Wonder), Vesely Molochnik (Happy Milkman), Imunele andLamber. We also have Russia’s best-known juice brand, J7. Another less popularbrands are Lyubimy Sad (Favorite Garden), Chudo-Yagoda (Wonder-Berry), andEssentuki. The most recognized baby-food brand in Russia is the trademark Agusha[3].
The Company's revenue has grown from $ 1,189.3million for 2004 to $ 2,181 million for 2009 (IFRS). Revenues for 2009decreased by 22% compared to 2008.
The mission of the company is to help the entire family livehealthier lives by enjoying the nutritious and delicious food and beverageproducts every day throughout their lives.
Highlights for the first quarter 2010[4].
Group revenue increased 19.1% year-on-year to US$615.3 milliondriven by solid volume growth across all segments and helped by a strongerruble
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 prioryear as a result of sharp increases in raw milk costs in the first quarter of2010
Group net income almost tripled to US$33.7 million from US$12.6million a year ago
Net income as a percentage of sales increased to 5.5% in the firstquarter of 2010 from 2.4% in the same period last year.
1.2Products and ServicesThe principal dairy products include:
o Traditional products, suchas sterilized milk, cream and butter, as well as traditional sour-milk productssuch 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 andflavored cottage cheese.
o Cheese products, includinghard and processed cheese.
The beverage products include:
o juice and nectars producedfrom juice concentrate,
o enriched juice-based drinks,
o traditionalberry-juice-based drinks,
o mineral water.
The baby food products include:
o Liquid dairy products forinfants under the age of three;
o Juices for infants under theage of three;
o Meat, fish, chicken, fruitand dairy purees for infants under the age of three;
o Products for pregnant womenand nursing mothers.
1.3 SWOTanalysis
A SWOT analysis is a tool, used in management and strategyformulation. It can help to identify the Strengths, Weaknesses, Opportunitiesand 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 Russianmarket and foreign benchmarks.
Effective organizational structure – efficient andfast 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 pricegoes certain beyond the exact price at the market it will affects theconsumption of the juice. Because when the price goes higher customers go forthe 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 cutadvertising, headcount, salaries
More stringent financial and borrowing environment
Competitors could harm by getting aggressive in their promotionalactivities.
1.4 PESTAnalysis
· Political analysis
- Government is becomingreally conscious about the healthy nation and healthy food
· Economical analysis
- Economic factors are themain factors in any industry who affect to the industry in many ways
- Inflation impacts highlynegative
· Social analysis
- Social programs
- WBD sponsors varioussocially significant projects, donates funds to orphanages, hostels,churches and cultural establishments.
· Environment
- Central government is goingto be seriously concerns about environmental issues
· Technological analysis
- Through modern equipment WBDincreases efficiency of its business and can has up-to-date data about theirproducts
1.5 MarketAnalysis
According to the Russian Union of Manufacturers of Juice by theend 2008 manufacture has concentrated in hands of four companies of giants[5]. there is a unique opportunityat the Russian market of juices. There are a lot of different players at themarket, but there is no the stronglypronounced leader. The main players control 80% of the market
«Lebedyanskii» (market share32%),
«Multun» (market share 22%),
«Nidan» (market share 17%)
«WBD» (market share 16%).
Appendix 1 shows us the structure of the market of juices inRussia.
According to the report «RosBusinessKonsulting» (Russian market ofjuices. RBK. Market research, 2008) the premium segment of the market is chosenby more prosperous part of consumers. In connection with growing incomes of thepopulation 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 modernyoung people. The share of this segment practically has not changed incomparison with 2007 (12%). Now there is a rapid development of the bottomaverage and bottom price segments of the juice market. According to experts ofthe company in 2009 together these segments occupied more than 50% of themarket.
1.6 MarketGrowth
According to the researchers from «RosBusinessKonsulting» (Russianmarket of juices. RBK. Market research, 2008) growth rate are going to be about8% during 2009–2012.
As predicted productionvolume of the market of juice by theyear 2012 will be 3,5 bln. liters a year. (Appendix 2)
2. Marketing Strategy
WBD will launch the highest quality of fruit juice «Seila». Thestrategy is to position «Seila» as a natural and healthy juice; the strategywill seek to create customer awareness regarding product.
2.1 Mission
WBD’s mission is as follows:
§ Quality: Our fruit juicesare the highest quality, most nutritious food products…because we will acceptnothing less.
§ Innovative: Our productshave always been in the forefront of the health and nutrition wave. Innovativeproducts, state of the art manufacturing, quality assurance and industryexpertise are the bases for our past and future successes.
§ Integrity: Our customersdepend on the quality of our juice products. Our commitment to the higheststandard is the foundation of our customer's trust in WBD. Delivering freshlymade juice to consumers depends on extensive cooperation and mutual reliancebetween supplier and retailer. We stand behind our product, our service and ourword.
§ Reputation: Our juices havea reputation on offering the most delicious, nutritious, 100% natural with noartificial flavors, colors and preservatives.
2.2 Marketingobjectives
· Market Share Objectives:
· To gain 40% of the marketfor soft drink industry by August 2011.
· Profitability Objectives:
· To achieve a 10% return oncapital employed by January 2010.
· Promotional Objectives:
· To increase awareness of theproduct on the market.
· Objectives for Survival:
· To survive the currentmarket war between competitors.
2.3 Key successfactors
Key to success for «WBD» will include:
- Providing the highestquality product
- Competitive pricing
- State of the art productionand packaging technology is a must in this industry
- A strong distributionnetwork
2.4 Thedemographics of customers
§ Young professional, ages 25 – 45;
§ Average income of $40,000+ ayear;
§ Involved in athletic activity;
§ Shop in upscalehealth/natural food stores.
2.5 Product
Products sold as fruit juices may be sweetened if the label statesthe presence of the added sugar or other wholesome, nutritive sweetening agent(saccharin is not a nutritive sweetening agent), but they should not containadded water.
Fruit juices should be manufactured only from clean, sound fruitin clean equipment. Proper preparation involves thorough washing, sorting toremove wormy or spoiled fruit, and trimming. Flies should not come in contactwith the fruit or equipment.
WBD will offer a broad range of juices to suit the customer, downto 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 somegreens
§ An invigorating mix ofapple, pear and orange
§ Carrot and orange
WBD will use organic ingredients so that consumers will get evenmore goodness from the drinks. For a reasonably healthy person there istherefore no need for vitamin pills nor dietary supplements: a raw juice fromWBD contains the richest natural source of minerals, vitamins, enzymes andother vital trace elements that will guarantee plenty of energy and vitality tohelp your body neutralise toxins, boost its immune system and generally helpyou go through your busy day.
All drinks are freshly juiced to order and to enjoy them at theirbest 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'snatural balance and protect its biodiversity.
2.6 Price
Different price in different seasons
Summer is a good season for fresh juices in Russia. The averagetemperature in Moscow during the summer is 24–28C. (The summer of 2010 isextremely hot it’s about 30–34C). The company can change their product pricesaccording to the season. So in winter the prices might be slightly less than insummer.
Price Level
Maintain price level in all segments at 15% higher thancompetitors 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 usingown transport. In this case the company will have more profit margin.
· Indirect channels
Selling the products through whole sellers and agencies to coverall 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 thecustomers in the big departmental stores – the company should get centralshelves – in eye-catching positions. Normally we should keep our productsfreezers 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. Duringany event a mix of multimedia: music, video, advanced technologies inentertainment and show, should be present. «Seila» Entertainmentelement by no means should be limited to laser shows and trendy DJs. (thesample of advertisement see Appendix 3).
· Interactive entertainmentwith content creation by consumers:Like in Web 2.0. and 3.0, «Seila» enables consumers to input into entertainment and show bysharing/creating content. For example, screens with live puzzle of picturesmade from consumers’ content (images, videos, photographs), or music and lightshows made of consumers’ content (voices, music, ringtones, etc); interactive3D games and simulations.
· Purposeful technologies forentertaining and educating: «Seila» stationswith content transmission, powered by QR codes, Bluetooth, etc. Content can bevarious, e.g. music, useful instant information, videos, pictures and photos.
a) Word-of-mouth
Creating awareness among consumers: the main objective for thisphase is to create awareness about the product among consumers who will turninto potential customers. The word-of-mouth effect is the goal here – it willgive a kick to boost initial sales.
b) World Wide Web
The web site will be tool to get closer our customers andunderstand 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 inmagazines that are specifically targeted to production managers in theautomotive, marine and heavy industrial segments.
- Advertise monthly inmagazines that are aimed at production managers in the general industry.
- Advertise quarterly inmagazines that are aimed at purchasing officers.
· Newspapers
· Sunday Advertisements
g) PR:
· PR release to be initiatedeach month to various trade journals and magazines.
Lost Customers
ü Contact monthly all past customers that have not re-ordered to askwhy not and see whether we can win back their business.
Existing Customers
ü Follow up all new customers two weeks after they purchase toensure they are satisfied with the product.
ü Send quarterly newsletter to existing customers to keep theminformed of our other products.
ü Try and up-sell all enquiries for our standard range to ourpremium range.
/>3. Control of Performance
The purpose of WBD' marketing plan is to serve as a guide for thecompany. The following areas will be monitored to gauge performance:
· Sales: quarterly and annual.
· Production Costs: quarterlyand annual.
· Customer satisfaction.
· Market share analysis.
Competitor profile – Keep updated competitor profile.
Marketing information system – Document on every enquiry «How didyou hear about us?»
Produce monthly sales reports by product, by market segment, byterritory and sales representative.
4. Strategy and Implementation Summary
Large soft drinks companies advertise direct to consumers, sponsorsporting events, concerts, radio programs, etc. Competing with such largecampaigns is obviously unrealistic for a small soft drinks producer. A brandedproduct will benefit from publicity rather than advertising. This is easier toachieve if the product is unusual.
The strategy of «WBD» is to focus on our niche market which ishealth/natural food stores that serve the young active professional.
Marketing Strategy
«WBD» will introduce its products at 20% off regular price duringthe first month. In addition, «WBD» will co-sponsor local athletic charitableevents to raise the visibility of the brand name.
Sales Strategy
The sales strategy is to build customer loyalty in the newmarkets. «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 companyEvaluation the extent to which my advertisement has contributed to the valueoffered by the company to its customers.
Wimm-Bill-Dann has some specific sources of value for itscustomers. The first one is quality. Its fruit juices are the highest quality,most nutritious food products…because it will accept nothing less. The secondone is innovations. Its products have always been in the forefront of thehealth and nutrition wave. Innovative products, state of the art manufacturing,quality assurance and industry expertise are the bases for Wimm-Bill-Dann pastand future successes. The third one is integrity. Its customers depend on thequality of its juice products. Its commitment to the highest standard is thefoundation of its customer's trust in WBD. Delivering freshly made juice toconsumers depends on extensive cooperation and mutual reliance between supplierand retailer. Wimm-Bill-Dann stands behind its product, its service and itsword.
• The reflection of my achievement of up to three of the modulelearning outcomes
I think the most important learning outcomeI gained from themaking marketing plan is putting together its different parts. I went throughall the stages of composing a plan for Wimm-Bill-Dann, from market analysis torevenue/cost spreadsheet calculations. This experience is of the practical usefor me. With this knowledge it will be easier for me to start my own businessand to feel more comfortable in developing other marketing plans. Especiallyuseful was making market analysis, which involves a lot of efforts and whichhelps to understand the process of building the business step by step.
The next important learning outcome I gained is absolute necessityto find a way of effective communication with customers. I am sure that therole of communication in marketing strategy is absolutely necessary. Itprovides transferring information, ideas, and plans among multiple customers.It is a vascular system of any marketing strategy. Communication process isinevitable for marketing process and defines how a product or services wouldexist. All possible marketing functions and roles such as product placement,promotion could not be properly performed without effective marketingcommunication.
Another good learning outcome worth mentioning I’ve learned fromthe process of making marketing plan is identifying which marketing ideas havereal commercial potential.
There are three very good tools that can help to make a successfulmarketing plan. The first one is to create exceptional utility – to identifywhere and how the new product or service will change the lives of itscustomers. The second one is setting a marketing strategic price – it must notonly attract customers in large numbers but also help to retain them. And thethird tool is building a profitable business model – a good business model isitself a powerful defense against imitation.
• My expectations at the start of the module
At the start of the module I expected that there are three optionsto fight the rivals: attack, coexist, or become low-cost players. None of theseoptions is easy, but the right marketing plan can help learn which strategy ismost likely to work. It is recommended not to launch the price war with yourcompetitors. Instead companies should increase the differentiation of theirproducts by using a combination of tactics, intensify differentiation byoffering more benefits to consumers.
• The experience I bringto the module in the context of the learning outcomes
In the context of the learning outcomes I brought to the module alot of experiences. First of all, breakthrough pricing strategy can destroycompetitors and shake up industries. By offering lower prices and betterservices than its rivals Wimm-Bill-Dann simply took their customers away. Theinvention and deployment of new ways of doing work enabled Wimm-Bill-Dann to buildcustomer loyalty.
Wimm-Bill-Dann faced a number of operational challenges from thefirst days of its creation, but it overcame each of them one by one. By usingthe models of the most successful Internet retailers of that time, theyidentified characteristics that are mostly appealing to customers: value,convenience and selection. These three characteristics are the main pillarsthat create a stable base for the company.
The initial pricing model that Wimm-Bill-Dann deployed was similarto that offered by traditional drinks producers – charging for a movie,shipping costs and extended rental fees. But facing a frustration from theirearly customers regarding the prices Wimm-Bill-Dann shifted to its popularorganic drinks, which became Wimm-Bill-Dann’s key insight value.
Soon after that Wimm-Bill-Dann adjusted its pricing system ithelped to significantly simplify the program and made it easier to explain theprogram. This compelling market proposition added a new group of fans for whomdrinks were a regular part of their daily life.
In order to better balance customer demand, Wimm-Bill-Danndeveloped a proprietary recommendation system that increased the utilization ofWimm-Bill-Dann’s product line by satisfying customers.
• The experience has been used to achieve the learning outcome
I used this experience through the process of creating themarketing plan and realized that usually the barriers are low and there is nosingle competitor that controls significant market share. But at the same timeenvironment is likely to get tougher and tougher due to raising amount ofpossible competitors and increasing set of features and applications withconvenient and also disruptive services that can be used in order to lower thecost structure and prices accordingly. To be successful a company shouldincrease the differentiation of their products and services.
• My comment on the views on the process
The process of making marketing plan is very challenging. On myopinion marketing strategy is must be deemed as the best one. Buildingmarketing plan from the ground (customers’ needs) is a hard work. The processhelped me to realize that Wimm-Bill-Dann marketing plan should be based on theright strategy steps and tactics, such as: a) strategy focus (delivering drinksis a service that needs to be focused on definite market demand backed byappropriate product, strongly targeted customers and becoming pricing model),b) adjusted product strategy, c) justified pricing model (to target long-termcustomer relationships and d) right target market.
• Assess the prior knowledge and skill the learning outcome
I had prior knowledge and skill the learning outcome how to createa practical business plan. I spent hours tailoring all the ideas and goingthrough all the stages of composing a business plan including introduction ofbusiness idea and why it is attractive to start it, overall market appeal, customervalue proposition, profit formula, key resources and processes, and financialstatements. This experience was very practical for me in the future to start myown business or even to work with other people in developing their businessideas.
Another prior knowledge I had was that diversity of ways tocommunicate with customers can be a key driver in achieving marketing goals andtargets. Through a series of cases, practical applications, presentations andinteractive dialogues I understood both the importance and the power ofdiversity and how to communicate and manage it in real life. I developed anunderstanding of diversity as a competitive advantage in marketing environment.
The meaning of innovation in creating potentially interesting anduseful marketing plan is another prior knowledge I had before. Innovativemarketing model or idea may change any industry completely providingcompetitive advantages and benefits. Invention and deployment of new ways ofdoing work is all about marketing innovation, but managers usually ignore anduninterested innovations. It is very important to be innovative especially inour days when new ideas get shorter life period.
• My comments about the changes as a result of this learning
I understood that marketing plan is very important in order tosucceed in any business. Usually the barriers are low and there is no singlecompetitor that controls significant market share. But at the same timemarketing environment is likely to get tougher and tougher due to raisingamount of possible competitors and increasing set of features and applicationswith convenient and also disruptive services that can be used in order to lowerthe cost structure and prices accordingly. To be successful a company shouldincrease the differentiation of their products and services.
• My comment about the process of learning
When I was undergoing the process of learning I felt that thereare some very important marketing bases to succeed. The first one is thephilosophy «Grow and divide». Such philosophy is rather beneficial. It doesn’tpermit the company to become a large mechanistic structure unsuitable forfostering innovation. The next one is innovation culture and managementsupport.
• The questions that I have been concerning the learning outcomeand the actions that I am going to take to address them
Concerning the learning outcome I have the next questions. How to increasethe amount of practical examples, games and cases in creating marketing plans.It provides a class additional to theory practical understanding of how toimplement all those thriving marketing ideas. Inviting special guest which areable to share their experience is all very helpful for educational process. Allthis can be students interested in the class and attract their additionalattention to practical issues.
I would also suggest increasing team working as a very practicaland absolutely necessary experience in any marketing field. It also helps tobuild the network with other students. Working in a team helps to gain anability to create a dialogue while communicating and improve communicationskills. Possessing this skill helps to identify real problems, developsolutions, and reach common understandings. It is also important to be able toput yourself in «other’s shoes» to virtually transfer yourself to the place ofyour communicator in order seeing yourself from the other person’s perspective.Being a part of a team gives students a chance to share their ideas and havemore opportunities in their unpredictable future.
Another concerning for improving the learning outcomes in the MBAprogram is creating Marketing Incubator. The purpose of this incubator is toprovide the students an opportunity to put their marketing ideas in practice,to make them work in reality. It is may be organized as competition withrewarding a team with the best business plan financial funding to put this ideain practice. This would definitely encourage students to bring and develop themost practical and reliable marketing ideas.
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