Threats
Squench faces two major threats:
- Increased competition. More companies have entered the flavored drinking water market and some of these companies had already built an image .Also, small companies are entering this industry which gives the consumers various flavors to choose from. Therefore, Squench must develop the quality of its product to be at par with competitors.
- Poor economy. The increase of inflation rate would create a discretionary on spending. This would decrease the demand of the products. To avoid this threat, Squench would make its price as flexible.
Marketing Objectives
- Increase product consciousness and popularity within the targeted market while consequently reducing marketing and advertising expenses.
- Maintain a constant enhancement of the product’s reputation in the market at the same time increase market share.
- Realize a higher return on initial capital as projected by sales after the first months of operations.
Critical Issues
The following are the critical issues for SQUENCH with their explanations:
- Current Barriers to Entry (Patronized Brands)
The present market holds a very rigorous competition among beverage companies. Since SQUENCH is just beginning to make its mark in this industry, it would be very hard to compete with established names for these companies have already been patronized by a lot of customers.
To aid this, SQUENCH is willing to make amends through allocating most of its initial capital in advertising and marketing strategies.
Because of the previously said reasons, SQUENCH may experience a very
low rate of return when it comes to contrasting sales with the initial capital. This is inevitable given that SQUENCH has to establish a name for itself yet. However, marketing strategies should be used so as to reverse these negative results after the first six months of operations.
To compete in the market, SQUENCH has to advertize and promote the
product to boost sales in the long-term. However, its effort in advertising would at
least be double that of an already established brandname to be known by the
target market’s eye. However, despite all strategies employed the possibility of a low public acceptance is still unavoidable. Because of this possibility, it is very eminent that the firm could incur irreversible losses due to the accumulation of non-profit bearing expenses. That is why the firm has to steadily monitor sales and contrast it to the expenses incurred during the period.
Action Programs
I. LOCAL-Provinces in Visayas and Mindanao
(January to June 2008)
II. National- Provinces in Visayas and Mindanao as well as the regions in Luzon
(July to December 2008)
In the first six months of operations (January to June), the company would focus on the LOCAL portals of the business by managing the product programs (advertising campaign, web development and sales promotion) and sales strategy in the different provinces of Visayas and Mindanao. With this, local advertising tools are to be used like in the newspapers, Negros Daily Bulletin and Visayan Daily star. The caravans in the local region that would last for a month would depend in the local government’s declaration of holidays.
For the next 6 months (July to December), the company’s scope would go national and thus it would require a lot of budget to perform the stated product marketing programs. Upon entering the national level, the company will be now using strategic tools that would be helpful to capture the attention of the national consumers. This would be possible by using national advertising tools. Like in television, having commercial with powerful stations like ABS-CBN and GMA would be helpful for the product to be known. To support this action, press conferences are needed. For the programs with no specific month, it is still to be filled up but the month will depend on the declaration of the government for example in sponsorship and caravans.
Budget
This section will offer a financial overview of SQUENCH as it related to the marketing activities. This will address Break-even analysis, sales forecasts, expense forecasts, and how they link to the marketing strategy.
Sales Forecast
The following is the forecasted sales for (company name).
Sales 4 000 000
End Users 2 000 000
Distributors 5 000 000
Total Sales 11000 000
Expense Forecast
The expense forecast will be used as a tool to keep the organization on target.
Advertisements 4 000 000
Direct Labor 1 200 000
Factory Overhead 2 000 000
Raw Materials 2 300 000
Others 500 000
Total 10 000 000
Break-even analysis
The break-even analysis indicates that the company needs (amount) in a semi-annual revenue to match total expenses.
Break-even (Total Sales Forecast – Total Expenses) 5 000 000
Control System
The company’s way of making sure that everything is going as planned is first evaluating the effectiveness and efficiency of the management. Making sure that every important information is disseminated and implemented. In managing a company, monitoring system is also essential. In this way we can see that everybody is doing their part. Not only do we monitor the management but the production as well. We must see to it that the quantity and quality is maintained for consumer satisfaction and of course to live up to the company’s name/image. Lastly, Feed backing system is also important because through feedbacks from customers, we can improve the quality of our products and all that needs improvements including the management.
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