Submit Mip
Submit Mip
EXECUTIVE SUMMARY
The following report was prepared for Country Style Foods (P) Ltd, which is a leading fruit based products manufacturers in Sri Lanka since 1981. The marketing team has identified a new product range in the name of SMAK Fruitees which is fresh fruit product range. This product launch would be a viable investment for the company as it is expected to increase the market share of SMAK and would increase the current competitive advantage over rivals. Sri Lanka is one of the countries which would host ICC cricket world cup 2011. At this time period launching product would increase the reach of the product to the potential customers. The management appointed a launch team to investigate on the possible environmental conditions and target groups. Based on the extensive research carried out the following report has been prepared. The following report has been divided into the following main sections: 1) Situation Analysis 2) Marketing Objectives 3) Marketing Strategies 4) Marketing Mix Tools 5) Implementation and Control Marketing team hereby reports to the senior management of SMAK on the key finding gathered based on statistical data and through research findings. Key recommendations were given at the end of the report to make the project effective.
ACKNOWLEDGEMENT
The author is heart fully thankful to her practical Marketing In Practice lecturer Mr. Rajitha Silva, whose encouragement, guidance, and support from the initial to the final level enabled the author to develop and understanding of the subject. Also the author is also thankful to Dr. Mahesha Samarathunga, the mentor, for directing them in the correct path regarding citation and references. The author wishes to thanks Mr Sarath Alahakoon for allocated time for the interview even during his busy schedule. The author also wishes to thank the library, and her family and colleagues for their help and support. The author is responsible for any errors that remain in this assignment.
TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................................................................... 1 ACKNOWLEDGEMENT ............................................................................................................................ 2 LIST OF FIGURES ...................................................................................................................................... 5 LIST OF TABLES ........................................................................................................................................ 5 LIST OF ABBREVIATIONS ....................................................................................................................... 5 1) SITUATION ANALYSIS..................................................................................................................... 6 1.1 BACKGROUND OF THE COMPANY....................................................................................... 6
1.1.1 INTRODUCTION TO THE COMPANY ................................................................................... 6 1.1.2 MARKETING PHILOSOPHY .................................................................................................... 7 1.1.3 PRODUCT PORTFOLIO OF SMAK ......................................................................................... 7 1.2 SWOT ANALYSIS ...................................................................................................................... 9 STRENGTHS ....................................................................................................................... 9 WEAKNESSES .................................................................................................................. 10 OPPORTUNITIES .............................................................................................................. 10 THREATS........................................................................................................................... 11
3)
MARKETING STRATEGIES ............................................................................................................ 14 3.1 SEGMENTATION ........................................................................................................................... 14 3.2 TARGETING .................................................................................................................................... 16 3.3 POSITIONING ................................................................................................................................. 16 3.4 BRANDING ..................................................................................................................................... 17
4)
4.1.1 Introduction to the product range ............................................................................................... 18 4.1.2 Total Product Classification ....................................................................................................... 19 4.1.3 Brand .......................................................................................................................................... 20 4.1.4 Product Classification ......................................................................................................... 20
4.1.6 Product Line Decision ................................................................................................................ 21 4.1.7 Labeling ..................................................................................................................................... 21 4.1.8 Packaging ................................................................................................................................... 22 3
4.2.1 Objective .................................................................................................................................... 24 4.2.2 Level of Consumer Marketing Channel ..................................................................................... 24 4.2.3 Possible Outlets and Middlemen................................................................................................ 24 4.2.4 Distribution Strategy .................................................................................................................. 24 4.2.5 Time of launch ........................................................................................................................... 24 4.3 PROMOTION ............................................................................................................................. 25
4.3.1 Communication Platform ........................................................................................................... 25 4.3.2 Market Communication Process ................................................................................................ 26 4.3.3 Promotion Strategy .................................................................................................................... 27 4.4 PRICE ............................................................................................................................................... 28 4.4.1 Factors Affecting Price .............................................................................................................. 28 4.4.2 Pricing Process ........................................................................................................................... 28 5) 6) IMPLEMETNTATION ...................................................................................................................... 30 CONTROL .......................................................................................................................................... 31 6.1 BUDGETORY CONTROL .............................................................................................................. 31 6.2 STANDARD REVIEW AND CONTROL ....................................................................................... 31 6.3 R & D AND TESTING ..................................................................................................................... 31 6.4 HEALTH AND SAFETY AT WORK PLACE ................................................................................ 32 CONCLUSION ........................................................................................................................................... 32 APPENDICES ............................................................................................................................................ 33 REFERENCES ........................................................................................................................................... 38
LIST OF FIGURES
Figure 1 CSR of SMAK ............................................................................................................................. 7 Figure 2 Product Portfolio of SMAK ......................................................................................................... 7 Figure 3 Product Range of SMAK ............................................................................................................. 8 Figure 4 SWOT Analysis of SMAK .......................................................................................................... 9 Figure 5 - Production and Testing at SMAK ................................................................................................ 9 Figure 6 - Distribution vehicles of SMAK .................................................................................................. 10 Figure 7 Positioning Statement of SMAK Fruitees ................................................................................. 17 Figure 8 SMAK Fruitees Brand Logo...................................................................................................... 17 Figure 9 PLC Stage of SMAK ................................................................................................................. 18 Figure 10 Total Product Concept ............................................................................................................. 19 Figure 11 SMAK Fruitees Logo .............................................................................................................. 20 Figure 12 Line Stretching of SMAK portfolio......................................................................................... 21 Figure 13 Sample of Label ....................................................................................................................... 21 Figure 14 - 220 ml triple laminated stand-up pouches................................................................................ 22 Figure 16 200 ml Glass Bottles ................................................................................................................ 23 Figure 15 - 1000 ml Tetra Packs for all three flavours ............................................................................... 23 Figure 17 Supply Chain ........................................................................................................................... 24 Figure 18 - Communication Platform for SMAK Fruitees ......................................................................... 25 Figure 19 - Market Communication Process .............................................................................................. 26 Figure 20 - Pricing process of SMAK Fruitees........................................................................................... 28
LIST OF TABLES
Table 1 Demographic Segmentation ........................................................................................................ 14 Table 2 Geographic Segmentation ........................................................................................................... 14 Table 3 Psychographic Segmentation ...................................................................................................... 15 Table 4 Behavioural Segmentation .......................................................................................................... 15 Table 5 - Promotion Budget ........................................................................................................................ 27 Table 6 Estimated costs associated with launch ...................................................................................... 29 Table 7 Budgetary Control....................................................................................................................... 31
LIST OF ABBREVIATIONS
GMP Good Manufacturing Practices GEP Good Ethical Practices ITI Industrial Training Institute R & D Research and Development USP Unique Selling Proposition SL Sri Lanka
1) SITUATION ANALYSIS
1.1 BACKGROUND OF THE COMPANY
1.1.1 INTRODUCTION TO THE COMPANY Country Style Foods (Pvt) Limited was formed in 1981 to manufacture and market a range of food products under the brand name of SMAK to meet the needs of Sri Lankan and export markets (Athukorala, 2010). Initially the founders of SMAK purchased a plant sold by Maliban in Jaffna and overtime they have shifted it to Kadawatha where their current factory is located (Athukorala, 2010). The company gained market strength over time due to high quality standards they adhered to in their production and distribution (Alahakoon, 2011). Due to extensive market research SMAK started capturing niche markets in foreign countries and stepped into export sector as well (SMAK, 1999). Currently they export their range of products to more than 10 countries (Alahakoon, 2011).
Marketing In Practice Individual Assignment 1.1.2 MARKETING PHILOSOPHY In authors perspective SMAK follows Societal Marketing concept. Athukorala (2010), explains that SMAK sets another example as it practices Green causing minimal; in fact zero harm to the countrys environment . It produces hygienic fruit drinks without any harmful preservatives or colorings. By using only the locally grown fruits and purchasing over several million rupees worth of produce cultivated SMAK provides a ready market for local fruit and vegetable producers of rural Sri Lanka (SMAK, 2010).
SMAK
Fruit Drinks
Herbal Drinks
Other Products
Mango
Eramasu
Vanilla
Water
Pine Apple Passion Fruit Tamarind Lime Wood Apple Mixed Fruit Anoda
Ginger
Fruit Chunks
STRENGTHS
Brand Name Quality Assurance Usage of hybrid technology Island wide distribution Importance given to HR and Training Financial Stability Relationship with local farmers Storage Capacity
WEAKNESSES
Low Promotional Efforts Environmental Pollution No awards received to date
OPPORTUNITES
Reduction in Synthetic Drink consumption rate Expansion in scope of business End of war in Sri Lanka More access to raw materials
THREATS
Low quality drinks with similar names Reputed hotels and restaurants offering other fruit drinks Seasonal impact on fruit cultivation New fruit drink flavours entering the market
1.2.1 STRENGTHS SMAK is a reputed brand in SL since 1981 (Alahakoon, 2011), with HACCP, GMP, GEP, ISO 22000, SLS (SLSI corporate website and Alahakoon, 2011).
Marketing In Practice Individual Assignment SMAK uses state of the art technologies in production and has a very good distribution strategy with corporation with Alahakoon distributors (SMAK, 2010).
450 employees at SMAK are been trained accordingly by ITI (Alahakoon, 2011). Open door policy makes their employees feel free to express their views (Alahakoon, 2011). SMAK is financially stable in terms of annual revenue which has grown since 1981 2010 from LKR 1M LKR 600M (Alahakoon, 2011). Due to seasonal impact on fruit cultivation SMAK developed an integrated storage system to save 2.5M 3M tons of fruit pulp (Alahakoon, 2011 and SMAK 2010). 1.2.2 WEAKNESSES Comparing to competitors SMAK do very few promotions for their products. SMAK use of plastic bottles is going against its societal marketing philosophy by polluting the environment. Directors of SMAK do not believe in getting awards so till to date the brand didnt receive any rewards. 1.2.3 OPPORTUNITIES Stumptuous corporate website (2011) says, that synthetic drinks like carbonated soft drinks consist of carcinogenic which is cause for cancer. More awareness has been created regarding this issue and people started to choose natural fruit drinks. Directors plan to expand the business into hotel industry is a good plan to promote SMAK drinks (Alahakoon, 2011). End of war in Northern region has created good demand and this has removed the barriers to reach raw materials like karathakolumban mango in Jaffna.
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Marketing In Practice Individual Assignment 1.2.4 THREATS Fruit drinks with similar brand names like SMACK, SNAK has created issues for cutomers which is threat to the reputation of SMAK (Alahakoon, 2011). KFC provides Cargills kist nectar drinks whereas hotels provide sunquick which is a threat to SMAK. Seasonal impact on fruit cultivation is a threat to SMAK as they had to spend a lot in R & D to enhance storage facilities. New brands are coming into the market which creates a immense competition.
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2) MARKETING OBJECTIVES
2.1 QUANTITATIVE MARKETING OBJECTIVES
Attracting young kids segment from 5-15 years with next 3 years
Alahakoon (2011) says, SMAK is very popular among adolescents. Kids fall into this category is about 3 million which is 18% of the total population (Department of census and statistics corporate website, 2011). Fruitees contain fruit calories which is necessary for the kids fall into the age category. SMAK has 49% (Alahakoon, 2011) market share so this is reachable within next 3 years. Capturing the market share 1-2% by next 2 years
SMAK occupies 49% of market share in market for fruit drinks (Alahakoon,2011). Launch of this 3 new flavours. As it would satisfy 2 segment groups of kids and diabetes patients, it is possible to reach that target. Giving more opportunities to mango producers in Jaffna by purchasing 600 tons of mango pulp each year After the end of war SMAK has a potential of reaching the farmers in Jaffna to purchase karatha kolumban mango which was an ingredient in the original recipe. Because of the seasonality SMAK needs to preserve about 600 tons of mango pulp on average each year (Alahakoon, 2011). This mango can be purchased from Jaffna to create an opportunity for local farmers. Reducing the synthetic drink consumption rate by 2-3% within 2-3 years
Carbonated drinks such as soft drinks and as well as alcoholic drinks has cancer causing ingredients in it. SMAK fruitees expect to reduce the consumption rate of these types of beverages by 2-3% as SMAK is made out of natural fruit pulp without any harmful preservatives. Through promotion this can be reached.
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Marketing In Practice Individual Assignment Reaching the 10% of diabetes population in Sri Lanka by launching low sugar and no sugar fruit drinks within 3 years As stated by Daniel (2011) diabetes range in Sri Lanka is at increasing phase. 10% of the population has diabetes (Daniel, 2011). Fruitees are expected to be launched in 3 flavours which only have fruit sugar so it would be healthier choice for diabetes patients.
SMAKs social responsibility will be aligned with the above objective as it would reduce synthetic drink consumption rate among Sri Lankans. Increasing brand awareness within next 2 years
During the world cup SMAK has planned to launch this new variety which would create more brand awareness. SMAK is expecting to spend LKR 1 million only on promotion to create awareness. Combating the increasing competition in fruit based natural drinks for next 3 years
Increasing competition from brands like minute maid should be combated by launching this new variety. This product would add more value to the price paid by the consumers and it is fresh so would be different from other fruit drinks. SMAK has to 51% of competition in the fruit beverage industry and expects to keep the market leadership by this launch. Decreasing the harm done to the environment by new packaging in the years to come Even though SMAK thinks about social responsibility it is giving a huge burden to the environment by plastic bottle packaging. Fruitees will be launched in new packaging which is environmentally friendly and would set example to other fruit drink manufacturers.
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3) MARKETING STRATEGIES
3.1 SEGMENTATION
Demographic
Age: Special recognition to the kids between 5-15 years who love fruit drinks with some differentiation. Life Cycle Stage: Low and no sugar variety in Mango drink is approaching people above 40 years to control health issues. Income: People who earn more than Rs 35465 per month which is the mean Sri Lankan income per month (Dept of census & statistics, 2011). Family Size: 1 ltr, 500 ml and 220 ml bottles are going to be launched to match the family size.
Table 1 Demographic Segmentation
Geographic
Tropical Region: SMAK can be sold island wide but there are certain areas in which the weather is always hot. Population density of tropical region is about 13.07 m (Dept of census and statistics, 2011).
Table 2 Geographic Segmentation
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Marketing In Practice Individual Assignment Psychographic: Interests: Young adults & middle aged people started changing to healthy food consumption. Non carbonated and natural fruit drinks would be their first preference. Life Style: Fast food trend is popular now days. So ready to drink fruit beverages would be welcomed among households without preparing them.
Beahvioural:
Usage Rate: As explained in medin corporate website (2011), the usage rate of fruit drinks has increased from 10% to 20%. Benefits: Low & no sugar drink would give the exact taste of fruit pulp while helping to keep away from health issues and would also help to maintain the perfect figure.
(Refer Appendix 3)
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3.2 TARGETING
Author has chosen the segments of kids who fall into the age of 5-15 and above 40 years old people who has diabetes and who expects to get rid of health issues in future through synthetic drink consumption. In order to target kids SMAK should target their parents. Purchasing power of the age group of 5-15 years is very low and they are dependent on their parents. American academy of pediatrics (2001) says that per day kids from 5-18 years needs 2800 kilo calories which can be provided by 4 fruit drink servings. Calorie requirements can be satisfied by this fruit drinks. Considering about the diabetes patients in Sri Lanka which is about 10% of the population (Daniel, 2011) needs to consider about their consumption of sugar free drinks and foods. SMAKs no sugar and low sugar categories in fruitees would be a choice for people above 40 years. Purchasing power of SL people is in average range. So, different sizes of packages can be targeted towards low income groups and large family households. Present pattern in fruit drink consumption is towards purchasing ready to drink fruit drinks.
3.3 POSITIONING
Special attributes of Fruitees are as follows: Another launch from the market leader of fresh fruit drinks in SL. Healthier than carbonated drinks. Low / no sugar varieties available to people have diabetes and health issues. Consumer can have the fun of drinking new flavours which are new to the market. Suitable for kids as it would provide more calories to give more energy. The strategy is USP as SMAKs product is differentiated through launching of new flavours which are not available in the market and they are fresh. Positioning Statement of Fruitees is Fascination of Fruits, in the sense customers are going to get delighted with the taste of fruits.
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Fascination of Fruits.
3.4 BRANDING
SMAKs as a brand name has gained popularity in Sri Lankan fresh fruit drink industry for more than 30 years. SMAK is known for natural goodness which contains in fresh fruits. SMAKs new product variety Fruitees can be made popular through the launch during world cup period. SMAK can change its promotional strategy to make the new product range more popular by advertising on big scale.
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It has two varieties. One is for kids who need more energy through calories and other variety is for people above the age of 40 years who are concern about dieting, who wants to keep away diabetes and other health issues. This variety is 100% fruit based drink. According to the product life cycle SMAK is in the stage of Maturity so that it is important to increase the product range to exist in the market for long term rather than reaching the declining stage.
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Core Product
Core Product This is a healthy drink to quench the thirst. Basic Product This will be a thirst quencher coming in 3 flavours with the brand name of SMAK Fruitees in environmentally friendly packaging. Expected Product A healthy drink variety made out of fresh fruits from local farms, made in a recommended manner of production to improvise the healthy lifestyle of consumers without any added preservatives and colorings. Augmented Product SMAK Fruitees will have ISO 22000, SLS, HACCP, GMP and GEP certifications which assures quality of it. Drinks are loaded with calories and the diet range would have very low sugar and no sugar varieties to achieve competitive advantage. Potential Product SMAK will be added more nourishing flavors to this Fruitees range to satisfy customer needs.
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Marketing In Practice Individual Assignment 4.1.3 Brand The brand name will comprise of SMAKs corporate logo and Fruitees Name on it with the caption statement.
4.1.4 Product Classification It is an FMCG good which is convenient and variety seeking product. 4.1.5 Product Attributes Consists of 3 flavours Normal variety comes with high calories which are essential for kids from 5-15 years. Diet pack comes without calories / sugar which are suitable for diabetes patients and health conscious people. Product will come in 220ml juice pouch, 200ml glass bottle and 1ltr pack. Product will be in line with SMAKs marketing concept of societal marketing. Will expire earlier than other fruit drinks of SMAK as it is fresh.
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Marketing In Practice Individual Assignment 4.1.6 Product Line Decision Introduction of SMAK Fruitees is a decision of Line Stretching with an increase in SBU.
Fruit Drinks
Herbal Drinks
Milk Added
Fruit Chunks
Water
FRUITEES
4.1.7 Labeling
Nutritional Information
Manufactured by: Country Style Foods, Kadawatte. Must keep refrigerated. Use within 1 day. Ingredients - Water, Mango pulp, sugar, citric acid-E330 Manufactured Date: 1/2/2011 Expiry Date: 1/5/2011
Typical values for 100ml Energy 53.6kcal/287 Sucrose 0.49g Glucose 8.24g Calcium 4.3mg Iron - 0.004mg Vitamin C 2.9mg Vitamin A 0.28mg
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Marketing In Practice Individual Assignment 4.1.8 Packaging SMAK Fruitees will be launched in diverse choice of packages representing 3 different quantities (Refer figure 14, 15 and 16). The packaging for Fruitees is different from existing range as more concern is given on environmental impact of using plastic bottles. Packs will also be available with the caption of Light which is suitable for diabetes patients and dieting people.
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4.2 PLACE
4.2.1 Objective The placing objective is to make Fruitees available in all possible outlets or locations to reach the customers much as possible. 4.2.2 Level of Consumer Marketing Channel
Raw material suppliers
Manufacturer
Retail Outlets
Customer
Local fruit producers will supply fruit pulp to country style foods to manufacture fruitees and it will be sent to retail outlets all over SL by Alahakoon distributors and then it will be sold to the end user. It is the 2nd level of supply chain strategy. 4.2.3 Possible Outlets and Middlemen Super Markets Schools Hospitals As Fruitees will be delivered through 2nd level of supply chain possible partner relationship management strategies should be planned to create possible and effective relationship with intermediaries. 4.2.4 Distribution Strategy Intensive Distribution as it is a convenient good.
4.2.5 Time of launch
Fruitees can be launched during February as it is usually high money circulation time due to cultivation. As world cup is going to occur in SL it would create much awareness.
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4.3 PROMOTION
4.3.1 Communication Platform Fruitees would be promoted mainly through advertisements. The following mediums are going to be used for this activity: TV Advertisements (repetitive) POS displays Sponsoring events Face book advertisement Bill Boards Advertising in health magazines
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A. Indentify Target Market Fruitees is targeted towards young kids from 5-15 years of age and also targeted towards elder people who are above 40 years and healthy conscious people. B. Determine Communication Objectives SMAK focuses on AIDA model of communication in order to determine the objectives (Mind tools corporate website, 2011). The main objective is to create knowledge to the target group about the differentiation which would suit their consumption pattern. C. Designing the Communication Message The communication message of Fruitees is Fascination of Fruits. D. Selection of Communication Channel Refer 4.3.1
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Marketing In Practice Individual Assignment E. Establishing Marketing Budget Promotion Medium TV Advertisements -Shakthi TV -Sirasa TV POS Displays Sponsoring -World Cup 2011 tickets -School sports events Face Book Advertisement Bill Boards -Near schools and hospitals Printed Media -News Paper health corner -Leaflets and Bulletins Total Budget
Table 5 - Promotion Budget
20000.00
200000.00
F. Measure Results Feedback can be through customers. Measurement can be done by using the awareness created, no of bottles purchased and also by customer preferences after the launch of the product. 4.3.3 Promotion Strategy Fruitees should be promoted by using pull strategy as the company invests on promotional activities to create demand in return from customers.
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4.4 PRICE
4.4.1 Factors Affecting Price A. Internal Factors Production Cost Promotion Cost R & D Cost B. External Factors Competitor activities on pricing Governments changes in tax systems, incentive schemes etc. Due to weather patterns storage quantity and related activities should be updated. Demand conditions
4.4.2 Pricing Process Selecting the Pricing Objective Determing demand Estimating costs Analyzing competitors' costs, price, & offers Selecting the pricing strategy & Set the Final price
Figure 20 - Pricing process of SMAK Fruitees
A. Selection of pricing objective Objective is to present the product to the target customers at an affordable price while, achieving a competitive position among competitors to retain the market leadership.
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Marketing In Practice Individual Assignment B. Determining demand Fruit beverages come into the monopolistic market condition. The demand is elastic. As Fruitees is an impulse good demand condition needs to be considered more. C. Estimation of Costs
D. Analysis of competitor prices Direct Competitors of SMAK drinks would be, MD Real Nectar Cargills Kist Nectar Cecil Organic Minute Maid Sun Top
The prices and offers of the competitors are more or less the same as there is a heavy competition among the brand names. E. Selection of pricing strategy and finalizing the price SMAK Fruitees will be launched by using penetration pricing by giving discount. The price will be as same as the usual prices in the markets but the additional value will be more. 220 ml - Rs 38.00 200 ml Rs 33.00 1 liter - Rs 150.00
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5) IMPLEMETNTATION
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6) CONTROL
6.1 BUDGETORY CONTROL
200 ml Bottles Year Sales Price Quantity Total Revenue 2011 33/= 31200 bottles LKR 1029000/= 2012 36/= (est.) 40000 bottles LKR 1440000/= 2013 37/= (est.) 48000 bottles LKR 1776000/=
220 ml Packets Year Sales Price Quantity Total Revenue 2011 38/= 35000 packets LKR 1330000/= 2012 40/= (est.) 38000 packets LKR 1520000/= 2013 42/= (est.) 40000 packets LKR 1680000/=
1 Liter Home Packs Year Sales Price Quantity Total Revenue 2011 150/= 20000 packs LKR 3000000/= 2012 160/= 30000 packs LKR 4800000/= 2013 165/= 40000 packs LKR 6600000/=
Production managers and sales managers have to focus on the above planned budget annually. If there is any variation necessary action needs to be made to increase the revenue.
CONCLUSION
The SMAK Fruitees is a new product range from SMAK to reach the market of kids and diabetes patients. This launch would increase the market share of SMAK and also would combat the emerging competition from the fruit drink market. Launching the product in 3 new flavours to the market would create competitive advantage for the company in future. During the world cup season, company would be able to generate more awareness for the product. The author suggests the company to launch the product on time as it is viable.
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APPENDICES
1) SWOT Analysis
STRENGTHS
Brand Name
SMAK was introduced to Sri Lankan beverage industry in 1981 and built a strong relationship with fruit lovers (Alahakoon, 2011). Brand recognition is an asset for the company which differentiates their product from others in the similar field (Athukorala, 2010). Quality Assurance All SMAK drinks are tested at the factory to comply with all world food safety standards. SMAK has obtained SLS (SLSI corporate website, 2011), ISO 22000 (Alahakoon, 2011), HACCP, GMP, GEP certificates (Alahakoon, 2011).
Marketing In Practice Individual Assignment Long term relationship with local farmers and storage capacity
SMAK has created long term relationship with local fruit producers to have access to their main raw material (SMAK, 1999). SMAK is the largest buyer of locally grown fruit on average about 2.5M 3M tons of fruit pulp (Alahakoon, 2011). SMAK has also developed integrated fruit procurement and storage system to supply full range of products throughout the year (Alahakoon, 2011). WEAKNESSES Low promotional efforts
SMAK only does point of sales promotions. Comparing to Cargills Nectar, Minute maid and MD they are lacking behind in promotion. Environmental Pollution
SMAK uses plastic bottles as packages. This is harmful to the environment and it is going against their marketing philosophy of going green. No awards received to date
SMAK hasnt received any quality or performance related awards as the directors are not showing any interest (Alahakoon, 2011). Companies like Cocacola and Ceylon cold stores are been recognized as superbrands (Superbrands corporate website, 2011). This will promote minute maid instead of SMAK. OPPORTUNITIES Reduction in synthetic drink consumption rate
Synthetic drinks consist of carcinogenic which is a cancer causing element. Health reports on this issue brought in awareness among healthy conscious people. This has made them to consume fruit drinks instead of carbonated drinks (stumptuous corporate website, 2011).
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SMAK founders started working on moving into home marketing and hotel & catering industry (Alahakoon, 2011). This would enable the company to attract more customer base to earn more revenue in future by making SMAK products more famous. High time establish in Northern and Northern East region
As war in SL came to an end there is a high chance for SMAK to establish their products in those areas. More access to raw material
Jaffna is famous for karathakolumban variety in mango. After the end of war there are more suppliers willing to supply SMAK with mango pulp (Alahakoon, 2011). SMAK expanded by 40% in 2010 and was able to meet the exceeded demand due to willing and able fruit producers (Alahakoon, 2011). THREATS
According to Alhakoon (2011), Sunquick is most recognized drink at hotels. In KFC Cargills KIST nectar is given more preferences in seasons. Seasonal impact on fruit cultivation
Due to weather patterns in SL continuous supply of fruit pulp gets affected. SMAK has to do massive R & D activities to identify solutions to store fruit pulp in a natural way without any preservatives.
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Marketing In Practice Individual Assignment New entrance of fruit drinks from reputed brands
MD Real Nectar, Cargills KIST Nectar and Minute maid fruit drinks come up with new fruit drink flavors to the fruit drink market. Increasing competition is a challenge to SMAK. 2) PEST Analysis Political Factors Political move to stop the civil war in SL has created many business opportunities in Northern region. Thithata Matha campaign by the government has almost discouraging the alcoholic drinks in SL. Under uthure vasanthaya scheme government started developing the northern region which would increase the infrastructural developments which would benefit SMAK in return. Economical Factors The economy of SL is expected to grow by 6.9% in 2010 (CIA corporate website, 2011). This is about 2 times higher than last years growth. That means this would increase the household income and per capita income. Increase in per capita income creates more opportunities for SMAK. Inflation is at 5.6% which is higher than last year (CIA corporate website, 2011). This would have an impact on discretionary income and would reduce the demand for goods. SMAK doesnt receive any tax benefits from government (Alahakoon, 2011). Social Factors SL teenagers are so fond of foreign brands where as rural people prefer SL goods. Old generation only seek for healthy foods but teenagers mostly go for fast foods kind of foods or beverages which are aligned with current trend. Technological Factors Utility services are almost available in all over the areas. Infrastructure is developing under his Excellency president Mahinda Rajapakses patronage.
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3) Segmentation
Out of the above classification age classification from 5-15 can be selected as viable segment as they are dependent on their parents and parents would wish to give the best to their kids. The population falls into this category is 18% of the total population (Dept of census and statistics, 2011). Medin corporate website (2011) says usage rate in fruit drink consumption has increased 10% to 20% so which would increase the demand for SMAK fruitees. Average family size in SL is 4 members per household (Dept of census and statistics, 2011) which again can be viable due to the 1 ltr and 500 ml package that going to be launched. Tropical region of SL consists of 13.07 million people which are about 70% of the whole population (Dept of census and statistics, 2011). All of these districts fall into dry zone so that cool drinks which are nutritious would reach the segment easily. As mentioned by Daniel (2011), diabetes rate in SL is about 10% out of total population which is another viable segment.
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REFERENCES
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