They also hope to achieve national distribution and increase brand awareness through national advertising in the long-term, by 2017 and beyond.
2.3 Summary of overall strategic position and organisational strategy
S. Luca of Musselburgh is a family orientated business and has been manufacturing fresh ice cream since 1908. The company comprises of two shops (in Musselburgh and Morningside), both of which sell ice cream, café food and confectionery. The S. Luca mission is to treat all customers like family, and deliver high quality goods in a friendly atmosphere. By doing this, the company hopes to achieve financial gain and become sustainable in the long-term by expanding both in Edinburgh and out with this area.
By aiming their products at the right customers, S. Luca wants to become the leader of its kind by differentiating itself from other ice cream producers and providing their customers with value that exceed any preconceived expectations. The small business encourages family values by incorporating their cafés with family-friendly menus with an array of goodies for the kids to take home, such as balloons and novelty ice dishes.
The company regards its customers as an integral part of its expansion both financially and through its reputation as having the best ice cream in Edinburgh. For that reason, the organization trains their staff to be welcoming, friendly and efficient while dealing with these visitors in order to advance beyond any local competition.
S. Luca provides many other stores and restaurants with wholesale ice cream in and around Edinburgh and as far as the borders between Scotland and England.
3.0 Situational Analysis: Marketing Audit
3.1 External Audit
The ice cream market in the UK is developing at a fast pace to catch up with other more “ice cream advanced” countries, by heightening the impact of consumption. The market is exploring in to new products such as frozen yoghurt, ice cream snack pots and even environmentally-friendly thermostatic freezers.
3.1.1 Customer analysis
Because there are two separate shops in different areas of Edinburgh, the demographics are slightly different for each one, however, an overlook of the demographics can be seen in are broken down in 5.1.
According to the 2001 Scottish Census, it states that the population of Edinburgh has increased between 1991 and 2001 (See appendix 7.1.1). It also declares that the over 32% of Edinburgh’s residents are between the ages of 25 and 44, and generally live in the surrounding area (Marchmont, Dalry and Fountain Park) of the Morningside branch. This is a target audience in which S. Luca could target directly to in order to increase sales.
Social grade does not particularly matter in the consumption of ice cream, however, the area in which the Morningside branch resides, it is suggested that ABC1 (Wealthy Executives, Affluent Greys and Flourishing Families) social classes are the primary consumer of this particular brand (see appendix 7.1.2).
3.1.2 Industry, competitor and intermediary analysis
- The ice cream industry is a highly dominated industry (See appendix 7.1.3)
- Major retailers are taking over the industry (See appendix 7.1.4).
- There are major ice cream retailers which S. Luca have to compete with, as seen appendix 7.2.
Distribution of ice cream is concentrated through several major supermarkets, through ice cream vans, newsagents, cafés and restaurants and even through dispenser machines. A huge proportion of ice cream is sold through wholesalers as oppose to ice cream shops.
3.1.3 Market drivers and trends
There are four main drivers of the ice cream consumption industries. These are:
- Effects of weather
- Impact of the recession
Please see appendix 7.3 for more information on these main drivers.
3.2 Internal Audit
3.2.1 Marketing organisational structure and systems
Because the company is a small business, there are only a total of 90 employees. The organisation uses a hierarchical structure (as seen in appendix 7.4) as this structure is highly efficient, each role understands their responsibilities, and there is always a figurehead in which an employee can go to if there are any issues.
3.2.2 Brands, product ranges, lines and items
The S. Luca brand can be spotted all over Edinburgh in different forms. While the logo is still the same, passers by can see signs, stickers and notices making them aware that the availability of buying S. Luca ice cream is common in newsagents, restaurants, cafés and even Queen Margaret University Students’ Union. In appendix 7.5, there is a breakdown of the branks, product ranges, lines and items that are sold from the company.
Currently the products are in the “growth” stage of the product life cycle (see appendix 7.6), but want to be in the maturity stage in order to achieve competitive advantage. By complying to this market plan, the products will be one step closer to the maturity stage.
3.3 SWOT Analysis
Please see appendix 7.7 for a detailed report on the SWOT Analysis.
3.3.1 Strengths analysis
- Family business.
- Small but established company.
- Established supplier.
- Loyal, family workforce.
- Flexible business.
- Age of business.
- Clear market positioning.
3.3.2 Weaknesses analysis
- Small business.
- Limited knowledge and understanding of marketing and business environment.
- Limited funding.
- Underdeveloped marketing scheme.
- Change in Ownership.
3.3.3 Opportunities analysis
- Expansion of business.
- Growing and aging population.
- Technological developments.
- Government grants.
3.3.4 Threats analysis
- Unpredictable weather patterns.
- Short-term seasonal demand.
- Pressure on price points.
- Increasing VAT.
4.0 Marketing objectives
4.1 Strategic marketing objectives
S. Luca plans to develop their products whilst leading through to the top of the competitor scale by having a leadership on cost for quality products (See appendix 7.8). The main objectives are as follow:
- To develop and maintain a clear brand positioning by third quarter of the year (end of October 2011) based on quality products sold at a cheap price.
- To successfully launch the new menu by the end of November 2011.
- To gain 40% new wholesale buyers by end of January 2012.
- To build 80% brand awareness nationally in consumer markets on top of current brand awareness by the end of the second quarter of 2012.
4.2 Financial based objectives
- To achieve increase in sales for existing products by at least 25% by the fourth quarter (December 2011) and by 50% by February 2012.
- To achieve 25% increase in take-away ice creams during the winter months (the 4th quarter of 2011 and the 1st quarter of 2012).
- To maintain and develop local market share.
- Develop current operation to ensure maximum profitability by 2017.
5.0 Marketing strategy
5.1 Market segmentation analysis
The current market for S. Luca is targeted towards young families, which have the ability to eat out for meals at least once a week. The age range is 25-40 with younger children; however, there are a reasonable amount of customers that consume within the premises out with this age range. There is a huge proportion of older generations, mainly regular customers. In the future, it is expected that S. Luca will target the older generation due to the aging population and also expand nationally. There are four main consumer areas (See appendix
7.9) that S. Luca has identified as it’s main customers.
5.2 Basis of competitive advantage
S. Luca is lucky to have such a substantiated and established background, and have been around for over 100 years. It is unfortunate that the brand has not been developed further as their goods have the quality that could effectively compete with their major competitors (see appendix 2). By being family orientated, this allows the company to set themselves apart from companies such as Ben and Jerry’s and Haagen-Dazs, as they have the consumers values at heart. Although the company is not able to develop high-end marketing and delve in to the advancement of any new technologies, the organisation can say that their products are served with loyalty and value.
5.3 Target market(s) profile(s)
S. Luca’s ice cream range will continue to strive to meet expectations of their current target market: younger families, who have the ability to comfortably eat out at least once a week. (See appendix 7.10.1).These new products that will become available will encourage sales with a more family orientated feel, as the deals made will be made for sharing.
5.4 Alternative target market(s) strategy specification(s)
There are other markets that consume ice cream from S. Luca. There are a vast range, however, mainly the older generation (50+) and young adults (18-25). They mostly consume drinks and desserts – whereas families tend to consume food, drink and desserts. In the future, the company would be wise to market to the older generation as it is suggested by Malthus (1959) that the population is become of the older generation, which could potentially arise in over-crowding issues (See appendix 7.10.2).
5.5 Marketing programme positioning and tactical /operational objectives
See appendix 7.12 for the full marketing mix.
If the company were to ignore the decrease in sales throughout the colder months, it might start to have an impact on the summer months, with non-returning customers.
S. Luca will be focussing on developing the product at hand. Because of the downturn in sales, it is important to address the reason why ice cream is not selling as well as during the summer months. The main market driver is the weather – ice cream is in less demand because it is cold. Therefore, introduced will be new items on the menu that include hot puddings with ice cream.
There are currently a couple of hot puddings, however, by adding to this and marketing the ideas will increase sales.
A couple of pricing strategies will be used: promotional and penetration pricing.
By having two different pricing strategies, this will push sales and promotion of ice cream by making aware the opportunities to purchase new products.
The deals put in place will encourage groups of customers through the door. Buy having the “Buy a dessert and tea/coffee for £4” targets the older audience during the day, which frees up more space in the evening for families, and the atmosphere, will change accordingly depending on the time of day.
S. Luca want to provide customers with value products at a reasonable price, therefore want to adhere to Porter’s cost leadership principals, which is described by Blythe and Megicks (2010) as an organisations that achieves minimisation of production and distribution costs and has, therefore, a competitive advantage above competition without losing any profit, (See appendix 7.13).
Promotion will be dispersed through wholesale as well as through public marketing. By advertising throughout Edinburgh and pushing awareness through media communication, trade promotions and point-of-purchase marketing (Buy one get one half price), sales will increase and encourage further sales.
5.5.4 Place/channel distribution
Online communications will be increased by 200% by making a Facebook page which people can view and order cakes, ask questions, and query about the hiring of ice cream vans and purchasing wholesale goods.
5.5.5 Physical evidence
Physical evidence can be found in appendix 7.12, and is reasonably straight forward.
Staff training will be taking place within the first couple of months in to the implementation of the plan. Training will be given on the new menus, improving the customer experience and team building.
The process will stay exactly the same as it is sitting at currently.
6.0 Implementation and control
6.1 Timing, responsibilities and budgets
The budget comes to a total of £8500, which is realistic based on the company size, and promotion needed at this time. (See appendix 7.15).
See appendix 7.15 for responsibility and activity tables.
6.2 Monitoring and control
The monitoring of the successes of the implementation of this plan will be carried out throughout the 12 months, allowing for any changes that need to be inputted in to the plan. The plan will be analysed throughout by the director of retail (Yolanda Luca) and the director of wholesale (Michael Luca), each inspecting their areas of control – the café and wholesale units respectively. The plan will also be overlooked by the office-based employees, by monitoring financial and non-financial objectives, and ensuring that all activities are being carried out effectively. In particular, un-planned events must be dealt with accordingly, with the examination of external influences, however these are mostly undetectable, therefore contingency planning must be adhered to in case of unforeseen events.
Because there are two separate shops in different areas of Edinburgh, the demographics are slightly different for each one, however, an overlook of the demographics can be seen in are broken down in section 5.3.
According to the 2001 Scottish Census, it states that the population of Edinburgh has increased between 1991 and 2001. By assuming that this is a trend, it could be argued that this amount is still increasing. The census states that the number of school children in Edinburgh is rising, giving S. Luca a chance to increase awareness and sales. It also declares that the over 32% of Edinburgh’s residents are between the ages of 25 and 44, and generally live in the surrounding area (Marchmont, Dalry and Fountain Park) of the Morningside branch. This is a target audience in which S. Luca could target directly to in order to increase sales.
Social grade does not particularly matter in the consumption of ice cream, however, the area in which the Morningside branch resides, it is suggested that ABC1 (Wealthy Executives, Affluent Greys and Flourishing Families) social classes are the primary consumer of this particular brand. In Musselburgh, the lower end of the social class scale is assumed to be the primary consumers. According to the Acorn Consumer Classification guide (2010), the ABC1 groups spend a higher proportion of their income on food and non-alcoholic beverages.
The ice cream selling industry is a surprisingly highly dominated industry with a few major names at the top of the competitor scale. See appendix 1 for a break down of the main competitors of S. Luca.
Appendix 7.2 - Competitior analysis
Appendix 7.3 – Market Drivers
Effects of UK weather.
Poor weather conditions, in Scotland in particular, affect the sales of ice cream. However, the café department of S. Luca becomes busier.
Marketing of ice cream and companies associated push sales and increase profits due to successful campaigns.
Because of the economic downturn, families and UK residents are opting for “staycations” where they travel to other parts of the country for holidays instead of holidaying abroad, increasing likelihood of sales.
Impact of recession.
The current economic recession has an impact on sales; however, people are still willing to spend money in return on value and experience. Because the prices of food and ice cream in S. Luca are reasonably cheap (Burger, chips and salad for £5.95) this should not have a huge impact on consumer patterns, although they might buy takeaway ice creams instead of paying VAT for sit-ins.
Appendix 7.4 – Hierarchical Structure
Below is the hierarchical structure of S. Luca of Musselburgh. In brackets are the number of employees employed in that role.
Appendix 7.5 – Brand, Product, Lines, Items
Appendix 7.6 – Product Life Cycle
Appendix 7.7 - SWOT Analysis
Appendix 7.8 - Ansoff Matrix
This marketing plan intends to develop the products that S. Luca sells in order to provide customers with a product to see them through the winter months, and increase sales of ice cream.
Appendix 7.9 – S. Luca Main Target Markets
Appendix 7.10.1 – Current Target Profile
Appendix 7.10.2 – Future Target Profile
Appendix 7.12 – Marketing Mix
Appendix 7.13 – Porter’s Cost Leadership
Appendix 7.14 – Activity Timeline
This Gantt chart shows the timings in which activities will be carried out. The Gantt chart starts with 2012, but all marketing processes start in July 2012, and run through to the second quarter of 2012.
Appendix 7.15 – Activity Table
The budget overall is £8500, which is realistic because of the size of the company, and the funds available for any marketing at present. There will be a £2000 contingency budget in case anything goes wrong, or there is further funding needed in order to carry out certain tasks.
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Matriculation number: 08001190
This essay provides an insight in to the current thoughts on marketing planning’s strategic and operational adaption and contribution to modern marketing in contemporary times which are subject to change frequently and uncontrollably.
It has become increasingly important in the past few decades for a firm to develop a marketing plan and the elements that are included in a marketing plan and they have become highly regarded as a major part of a business profile, (Day and Wensley, 1983). Firms must adapt to the environment in which they are a part of in order to survive against competitors, (Golden et al, 1995).
Different ideas of strategy have emerged over the past few decades and there are many academics that study the concept, one of the main being Porter, (1980) and in particular “competitive strategy” in which Megicks and Blythe agree that many marketers can lose focus as to what they want to achieve through marketing planning . In general, the reason for marketing planning is to gain competitive advantage by giving and exceeding customer’s expectations through value.
Heiens (2000) shares his knowledge of marketing planning as a customer focussed strategy and, along with many other researchers, centres his ideas that surround long-term business sustainability through market orientation and believes that a business that is customer-focussed is more interested in the future of the business as a long-term deal.
Traditional marketing planning is becoming outdated, and processes such as market segmentation are becoming old fashioned and not relevant in modern practices, (Bailey et al, 2009).
Business decisions have grown more sophisticated because of marketing planning practices that were understood firstly many years ago, (Michman, DATE). Michman states that strategic planning before the 1960s was not highly regarded as a structure used by businesses, however since then, businesses have started to adapt and now identify strategic alternatives and business back-up plans. This is because of the constantly changing surrounding environment, (Ibid).
By looking in to contemporary marketing, it is suggested through literature that market orientation and business performance have no direct link, however Mehdi (2010) has proved through studying no less than 200 companies and their link between market orientation and marketing planning , and if used within a business, show an increase in business performance which leads to business sustainability. This is hugely important in a country which has a current economic recession, such as the UK.
Kyriakopoulos discusses the idea that modern practices are being influenced by different forces under the PESTEL framework: policies are adapting, technology is advancing, and major competitors are creeping up from dust in order to gain competitive advantage over many smaller businesses.
Compton (2000) believes it is highly important to connect with your customers by planning ahead and marketing directly to your target profile. It is especially imperative during the current economic downfall to plan ahead and look in to the future to decide what is best for your company, (Italy Country Report, 2009) as it is becoming increasingly difficult when it comes to things like loan-repayments, (ibid). In this world of sometimes overwhelming change, it is essential for businesses to plan ahead.
Although many authors and academics agree that marketing planning in the modern world, it is suggested by Constantinides, (2005) that although marketing can be beneficial on a company, he states that it is the other aspects of a company that really keep the business sustainable, and the chief of marketing within an organisation cannot be relied upon to keep the business going. It is therefore hugely important for a business to excel on other departments and units in the organisation in order to become a long-term business that generates high profits.
In conclusion, this essay provides a basic insight in to the modern marketing practices and how important they are in a world that is full on continuous change. Many authors such as Porter are constantly developing ideas to help businesses understand their environment and give information on how to adapt to these changes. Marketing is hugely beneficial to businesses in order to make the business sustainable, can provide competitive advantage and allows for the identification of goals and aims, and gives direction for a company.
Bailey, C. Baines, P. Wilson, H. and Clark, M. 2009. Segmentation and Customer Insight in Contemporary Services Marketing Practice: Why Grouping Customers is no Longer Enough. Journal of Marketing Management. 25 (3/4) pp227-252.
Compton, J. 2000. Reach out to Customers Instantly. PC Computing. 13 (2), February, pp152.
Constantinides, E. 2005. New Rules and Challenged in the Networked Market Place. Virtual Marketing. 1 (3) March, pp325-372.
Day, P. and Wensley, R. 1983. Strategic Orientation. In: Strategic Orientation and Marketing Strategies in Transition Economies: A Study of Russian Firms. Journal of Marketing.3 (1) PP 1-22.
Golden, P. Johnson, D. and Smith, J. 1995. Strategic Orientation and Marketing Strategies in Transition Economies: A Study of Russian Firms. Journal of Strategic Marketing. 3 (1) pp 1-22.
Heiens, R. 2000. Market Orientation: Toward an Integrated Framework. Academy of Marketing Science. pp 1-5.
Italy Country Report. 2009. Economic Policy. Country Report. 8, pp11-14.
Megicks, P. and and Blythe, J. 2010. Marketing Planning. England: Pearson Education Ltd.
Mehdi, T. 2010. Marketing Planning: Operationalising the Market Orientation Strategy. Journal of Marketing Management. 26 (9/10), August, pp 825-841.
Michman, D. 1984. Linking Futuristics with Marketing Planning, Forecasting, and Strategy.Journal of Consumer Marketing.1 (3) pp17-23.
Porter, M. 1980. Competitive Stratgy: Techniques for Analyzing Industries and Competitors. USA: The Free Press.