PGBM15 Strategies of Marketing for Business Promotion: Minute Maid Case Study Assessment Answer
CRITICAL EVALUATION OF THE CONTRIBUTION OF CURRENT MARKETING MANAGEMENT THEORY AND PRACTICE
Minute Maid is a product line and a brand of the giant company Coca-Cola which was established in the year 1945. The company is associated with the production of different kinds of juices like lemonade and oranges. Apart from this, the company also extended its business towards different kinds of soft drinks that also include Hi-C, which is a flavoured drink of different types of fruit juices (Minutemaid, 2020). The company is planning to launch a new product which is called Jiànkāng drink. This product was chosen, based on the drinking habits of the residents of China. As per the report, the Chinese people are more inclined towards consuming fruit juices rather than consuming soft drinks. The people of china have a change in their mind because they have become more health-conscious and they feel that consuming soft will harm their health as they contain lots of calories. Considering these facts, Minute Maid has decided to launch their new product which will be fruit juice with a combination of orange, apple, watermelon, carrot, ginger and little quantity of water. The rest of the article deals with all the different types of strategies that the company has adopted to launch their new products in China.
The purpose of this study is to explore the strategies of marketing for business promotion in a country. The report will highlight the marketing research, through different marketing management theories like PESTEL analysis, Porter’s five forces analysis and others and thus will explain how through these marketing theories different opportunities and threats are identified to consider for business promotion. The entire report will be discussed through an example of business promotion of the reputed company, ‘Minute Maid’. Introduction of a Jiànkāng drink by the company in China will be highlighted. The SWOT analysis will signify the strengths, weaknesses, opportunities and threats of the company. The customer value proposition map will discuss how the customers' needs can be met most effectively to gain a competitive advantage in the Chinese market. Strategies to promote the business of the company will be highlighted through the STP model, brand building strategy, marketing mix and holistic marketing approaches for the business promotion.
SWOT of Minute Maid:
A SWOT analysis will help for a better understanding of the organisation strengths (Gürel and Tat, 2017). The SWOT analysis mainly focuses on two categories. The Internal resources of the company, which consists of its strengths and weaknesses, and the external part, which consists of the external factors like the target market and the competition where opportunities and threats are described (Phadermrod et al. 2019).
Fig 1: SWOT analysis
Source: (Coschedule, 2020)
- This brand has a very good image in the market.
- The brand is associated with the production of different kinds of juices like lemonade and oranges which the Chinese people favour a lot.
- The company is also backed up by a very strong distribution channel which helps them to deliver the products at the right time (Minutemaid, 2020).
- The company also maintains a very strong cost and effective process of supply chain management.
- The prices of the products of Minute Maid are very much affordable and can be easily consumed by all classes of society (Minutemaid, 2020).
- The company’s advertising was unique because the strategy of their advertising was global but was portrayed in such a way that the customers had the feel of being a local product.
- The policy of Minute Maid is that they are more concentrated into the pulpy feel of the product than the actual flavour of the fruit. This causes the flavour to be watered down
- Since minute Maid is a brand of Coca Cola and Coca-Cola has many types of brands like Maaza, Sprite, Fanta and Coca Cola, for this reason, Minute Maid faces a lot of competition in internally amongst these other brands
- The online approach of advertising through social media or any other medium of internet is weak.
- There is a great demand for fresh juices and the demand is increasing day by day. This is because the people are getting more conscious because of their health which makes them inclined towards consuming more fruit juices (Foodnavigator-asia, 2020)
- Nowadays in many modern families people, instead of tea or coffee, are consuming fruit juices as their beverages while having breakfast.
- Minute Maid also have pet bottles available in all different sizes which are very easy to carry (Minutemaid, 2020). This makes another good choice for the people when they are on the move
- Minute Maid also has tie-up with all different kinds of local cafes and bars where it is sold as a part of different types of combos
- The category of juice is one of the most competitive product segment in the market. There is a heavy rivalry between Coca Cola and Pepsi where both the companies are struggling hard for their survival as well as for their existence in the market (Foodnavigator-asia, 2020).
- It has been seen that the store-bought juices are having negative thoughts as people think that these juices contain very high amounts of sugar and calories. There are many chances that these perceptions may make people opt in to eat fruits rather than consuming juices and can be a major threat to the company.
Description of SWOT analysis
Supply-chain management is one of the core aspects of a business unit. The SWOT analysis signifies that an effective supply-chain process can help Minute Maid reduce the cost of the company and it is favourable for a lower price and competitive advantage. Attractive advertising policy of the company is one of the strengths of its business. On the other hand low coverage of shelf in Minute Maid's outlet indicates its weakness that is to be modified for customer’s satisfaction. The social media platform and company web pages are to be modified and developed for the more scientific use of the customers.
Huge demand for fruit juice in China can be considered as a future opportunity for the business of the company. The opportunity could be grabbed with tie-ups of local cafes and bars for long-lasting business in China. The SWOT analysis also has explored that trend of drinking of fruit juice instead of tea and coffee opens new scope for the business of the company. The SWOT analysis also indicates that the rivalry in the existing market of China is one of the severe threats for the pioneers of Minute Maid. On the other hand, the trend of avoiding the high amount of sugar and calorie in fruit juice among the people could be a threat for the company’s business and strategies are to be taken to mitigate the threats
Value Proposition Canvas
The Value Proposition Canvas is a kind of tool that enables the organisation to know the products or the services which they offer, whether it suits the customers in terms of fulfilling their needs and values (B2binternational, 2020).
The value proposition Canvas model is based on the concept that how is the value of the product or other services are positioned in the market and whether it is positioned as per the need of the customers or not.
Fid 2: Value proposition canvas
(Source: B2binternational 2020)
The purpose of the value proposition model is to identify the opportunity that the business will have and for the development of a product.
Internal Policy: The opportunity of any business depends on how much the customer experience has increased. The lack of proper customer service may decrease the level of customer satisfaction. Since the opportunity of business lies in the deliverables of the company (Dixon 2018). Minute Maid needs to have a proper supply chain management system in place which needs to be cost-effective and at the same time maintain the quality of the product as per the market demands along with a very competitive price. This will build proper customer service and create a value of its product towards the customer.
Customer Service: In order to enhance the customer service the company can use different kinds of social media channels like Facebook, Instagram, Twitter, and even YouTube. Media channels will help Minute Maid to establish their brand and will make the customers aware of the new brand coming in. Direct interaction with customers will help the company to get instant feedback and understand the customers' needs and expectations from the company and also about its product (Moreira 2017). With the help of these feedbacks, the company can further improve its product or services.
Creating Brand Image: Since Minute Maid is a subsidiary of Coca-Cola Company this image may help the brand to create a positive image amongst the people which may result in building trust on the brand and the product.
Meeting Customer’s Need: The new product that Minute Maid which is going to launch will be purely based on the current trend and demand that the people of China are looking for. The product contains a combination of orange, apple, watermelon, carrot, ginger and little quantity of water which is preferred by most of the customers in the Chinese market. By looking at the current market trend the price of the product is also considered in such a way that it will compete with all the competitors who are currently operating in the Chinese market. By considering all the features the product will likely have a great demand in the market and meet the expectations of all the Chinese customers present in the country.
Potential target market analysis with the help of porters and PESTLE analysis
This part of the paper has followed the secondary research to identify potential markets for the fruit and vegetable drink. To identify the potential target market for the company Porters and PESTLE has been chosen to provide depth insight. Based on the SWOT analysis done for the company it will be easy to identify the potential market in which the new product could be launched. The analysis has been shown below:
Porter five forces analysis is a marketing strategy that helps a business organization to identify different threats and mitigate them through different strategies (Bruijl 2018). This introduced frame is used to identify mainly five major threats – bargaining power of buyers, bargaining power of suppliers, threats from substitute products, threats from the rivalry of existing products and threats from new entrants in the market. The following is Porter's Five forces analysis of Minute Maid that will analyse its opportunities and to enter the Chinese market:
Threats from new entrants: Beverage manufacturing industry in China showed a high profit in the past few years and the Chinese beverage manufacturing industry is attracting lots of new players to invest in (Koe 2018). Governmental policy is also supporting the emergence of new business. Although the threats from new entrants in China are high, Minute Maid’s product differentiation and price leadership strategy can meet the satisfaction of Chinese customers.
Threats from the bargaining power of buyers: Living standards have developed in China and with this, the taste in the beverage industry has changed. Chinese customers are demanding diversity of products now and if customers are dissatisfied they can switch to other players leaving a high threat. Minute Maid has its experience in a diversity of beverage products, retains existing buyers and acquires new customers in the China market which acts as a positive outcome for the company.
Threats from the bargaining power of suppliers: There are lots of suppliers in the Chinese market to supply raw materials, fruits to the national entities that deal in beverages. So the threat from the suppliers is low because the company can switch to any supplier available in the market if they want. Chinese people look for a relationship of trust (Marketingtochina 2018). Long-term relationship building with suppliers can make them loyal to Minute Maid and thus, the business in China can be sustainable.
Threats from substitute products: Chances of substitute products are high in the beverage industry (Akter 2019). Countless competitors in the Chinese market can produce and serve new substitute beverages for the existing one. The threat is high here. Minute Maid should have to be service oriented rather than just product oriented to outperform the Chinese customers. Substitute products from Minute Maid and good customer relationships can outperform the competitors’ substitute products and thus, the company can be viable in China.
Threats from the rivalry of existing products: The present market of beverage products is very competitive in China. There are many national beverage companies in China whose products are different from that of the Western companies to satisfy customers (Marketingtochina 2018). Hence, the threat from existing rivals is high here. Differentiation in products of Minute Maid could be effective for the large market and gain competitive benefit.
The following PESTEL analysis will identify and describe different external threats for Minute Maid to enter the China market:
Political: Amid the economic slowdown in 2019, China's government has given top priority in a tax cut, creation of jobs and financial support to the private organizations (Harris 2019). It is a stable step from the government of China that will support the business of Maiden Maid in the future.
Economic: Although China is one of the fastest-growing GDP in China, the GDP in 2019 has been slowed down a little but they recovered it gradually (Santandertrade 2020). The recent outbreak of COVID 19 is expected to decrease the buying capacity to a large extent. This will affect the business of Maiden Maid.
Social: With globalization, Chinese people have been socially developed with their high social culture. Most of the young people in China use social media platforms for online marketing and due to this purpose, various social media platforms are used in China for marketing (DeGennaro 2020). Social development can increase the demand for products of Minute Maid.
Technological: China is going to do its big research and development with its technological growth and it is quite evident that china is advanced in technology. China is also investing in high tech pram, digital technology with artificial intelligence, big data and robotics (Charlton 2019). The technological support from China government can help develop the business of Minute Maid.
Environmental: In china, businesses are facing mounting pressure to meet environmental compliance according to the regulations of the Government of China (Wong 2018). Soil pollution, air pollution and others are being highlighted by the Chinese government. The strict regulations of the Chinese government will make a boundary in Minute Maid’s business.
Legal: A set of new laws like corporate income tax, e-commerce rules and regulations, labour law and sine other laws have been revised in China from 2019 (Wong 2018). These laws will make a limitation on the business of Minute Maid. The company has to abide by these regulations for sound business.
Proposed market research strategy
Porter's analysis has proved that the beverage market in China is rising and competitive enough. Chinese customers have a huge demand for differentiated beverage products and this will open the opportunities to Minute Maid for new products. The analysis has further revealed that suppliers in China can be made liable through a strong relationship. The substitute product demand is the new opportunity to Minute Maid or market expansion. On the other hand, threats from rivals are severe for Minute Maid. PESTEL analysis has revealed that China government's support for business could be a substantial opportunity for the Pioneers of Minute Maid. The social development and the technological support from the Chinese government can support Minute Maid in its future business. To do the market research it is essential to take the customer feedback and it is most valuable in conducting the market research side by side competitors analysis could be futile here to gain the knowledge about the competitor’s strategy and product.
Objectives, Product rationale and overview
The objective of Minute Maid is to launch their new product called Jiànkāng drink which will be prepared with a combination of orange, apple, watermelon, carrot, ginger and little quantity of water. As this type of combination is favourite amongst the people of China, the company is planning to market this product across China maintaining its highest quality at an unmatched price.
Due to health consciousness, the people of China now prefer to have fruit drinks. After the change in the trend of consumption of drinks in the Chinese market where the Chinese people are preferring exotic flavours of fruits like the pomegranate, grapes orient carrots or maybe a mixture of them. As per the date based on the customer's demand the company will also manufacture a product that will also contain the ingredients which the Chinese people prefer to have. The ingredients of this product are a combination of orange, apple, watermelon, carrot, ginger and little quantity of water (Minutemaid 2020).
In order to meet the needs of the Chinese people, Minute Maid has planned to come up with their new product. The name of the product is called Jiànkāng drink. The ingredients of this product are a combination of orange, apple, watermelon, carrot, ginger and little quantity of water. This combination of the new product will meet the expectations of the people of china and will help the company to enter into the market of China. Reason for the launch of the product: The reason for launching this product is because the Chines people have become more health-conscious nowadays and they prefer to have juices rather than soft drinks. The ingredients of this new product also will match as per the need of the customers of the Chinese Market. This will help the company to launch its product easily with a proper strategy of marketing.
Segmentation targeting and positioning (STP)
The STP Model:
STP model is very much useful as it helps the organization to identify the valuable customer which in turn help the company to develop their products or services. The STP model also helps the organisation in terms of their marketing process which in turn can create more database of customers and increase the business (Schlegelmilch 2016).
Figure 3: STP model
(Source: Schlegelmilch 2016)
The market is segmented based on:
Demographic: Minute Maid will target all ages of customers that includes both males and females, married as well as unmarried along with all ethnicity and all types of occupation
Geographic: Minute Maid will target the entire country of China to market its product
Psychographic: The Company will target all types of personalities of people with all types of values living with any kind of lifestyle or any kind of attitude and interests
Behavioural: This involves the buying behaviour of the customer (Schlegelmilch 2016). As an example, how similar kinds of products are being used, whether the customers are already loyal to any product, even what kind of benefits they are looking from these kinds of products
The company can target the demographic segment for attracting the people because targeting all the age group will be beneficial for the company to launch the product in the Chinese market.
Targeting: Minute Maid will target across China to all ages of customers that includes both males and females. Fruit drink is one of the products which have good food value and healthy as well. Targeting all the age group will provide a desirable profit for the company.
Positioning: The customers of China are in the favour of drinking fruit juices and Minute Maid will launch their product, named Jiànkāng drink which is based on the needs of the Chinese customers which are a combination of orange, apple, watermelon, carrot, ginger and little quantity of water. Many other companies also provide the same type of drinks like COFCO, China Haisheng Juice Holdings Co., Ltd, Coconut Palm Group Co. Ltd, JDB group and many more.
Fig 4: Positioning map
Source: Developed by author
Brand building strategy
The definition of brand consistency:
The practice of constantly delivering messages which are in line with the values of the core brand and are always in the same tone which represents the brand logo of the company and repeating the same flavour by maintaining the consistency (Liu et al. 2017). The consistency of the brand also ensures that it can be easily recognised within all kinds of marketing channels and all the touchpoints that are being used. Consistency is also considered to be the key factor in unlocking brand success.
Fig 5: Brand consistency
Source: (Liu et al. 2017)
Product: The product that will be launched is Jiànkāng drink and will have all the features that the customer demands.
Essence: Customer experience will be immense as the product that will be launched will be as per the choice of the customers. Apart from that, the product will be unique in terms of its unmatched price and quality.
Attribute: In order to meet the cost-effectiveness the company will use its supply chain management system effectively so that it does not affect and contribute to any kind of rise in the price of the final product (Hugos 2018). The company will also use the best raw material to ensure that the taste of the product is unmatched. The packaging of the product will also ensure that they are attractive and yet no such materials are being used that are hazardous for health.
Positioning: The communication to the customers and the promises that the company will make to its customer will be aligned and there will not be any kind of differences or any kind of contradictions when different types of promotional channels are used to communicate with the customers. This consistency and seamless communication will help to create a positive image of the brand and help in positioning
After the target is well defined the company has to now reach the targeted market which is the customers. In order to do so, the approach of the marketing mix will be helpful to reach their customers in different kinds of marketing ways.
Product: The product has been defined and is Jiànkāng drink. The product will have the composition of a combination of orange, apple, watermelon, carrot, ginger and little quantity of water (Minutemaid, 2020). It has been designed as per the current consuming trend of the people of China.
Price: The price will be most competitive to meet the rivalries’ of Minute Maid. Ther will be of 4 different types of sizes available starting from 1 Chinese Yuan to 4 Chinese Yuan.
Promotion: The promotion will be done using different types of promotional channels as per the targeted groups. Description of the promotional channels are:
1. Mass marketing: This is a kind of marketing approach where the mass of people are targeted and similar kinds of messages are sent to the entire mass. This kind of marketing helps to reach the maximum number of people living in the society
2. Differentiated marketing: This kind of marketing strategy is based on the type of audience. The messages along with the offers and promotions differ from segment to segment. As an example, there may be different offer for females or males or a student and a person who is on job
3. Niche Marketing: This kind of marketing is done to a specific segment of people or class (Soegoto & Rahmansyah 2018). As an example, the elite class might get a different offer from the middle class or the lower class.
4. Micromarketing: This kind of marketing involves even narrowing of niche marketing. As an example, from the elite class, there may be a difference in offers from the people who are the businessmen and different offers to the people who are executives who are service holders and are working in big companies
5. Local marketing: This type of marketing strategy is based within a small place or a small geographical location. This kind of marketing generates a very strong presence in the local market. The targets in this kind of marketing include a person or a small organisation within that area.
From the above discussion, it can be said that minute maid can use all these channels to promote their product efficiently and social media could be the viable one to target the consumers.
Place: Since is heavily populated people across the country, for this reason, the company has decided to launch the product across China and will target all types of people. The product will be available in different stores and also the online services will be provided.
Holistic marketing management approaches
Holistic marketing defines the entire activities that Run 1n the entire course of business within the company. For this reason, holistic marketing provides a common aim and a common purpose for every activity that is done within the business along with whoever is concerned and related to it (Smallbiztrends, 2020). It is an analysis of the viability of the business compared to the location and the type of people.
Internal marketing: This refers to the management system within the organisation and is considered internally like the marketing department. Minute Maid will have a very strong marketing team who will manage the entire Marketing System to market and brand the product.
Integrated Marketing: Integrated Marketing consists of the strategy of pricing, the strategy of the product that will be launched, and the strategy of its placing and at the same time the strategy of promotion and the strategy of communication (Soliman 2016). The company has decided to price the product in 4 variants and will range from 1 Chinese Yuan to 4 Chinese Yuan and will be promoted across the nation by using all types of marketing channels
Socially Responsible or Performance marketing: This focuses on all the types of business activities that are done which includes how the product will be sold, equality between the customer and the brand and all the business, legal and ethical responsibilities along with the product of holes. Minute Maid will have joint ventures with the shopping malls and other stalls who sell similar items and will work on a commission basis. The company will also comply with all the legal regularities of the food safety system of China
Relationship marketing: This defines the relationship of the company with its customers, employees working in the organisation, the channel partners of the company and also the competitors who are present in the market (Gummesson 2017). The company will be well concerned about the wellbeing of their employees and their satisfaction at the workplace. The company will also use online and offline channels to collect feedback from the customers which will help them to modify marketing strategies and upgrading the product as per demand
Implementation and control techniques
This process keeps a check and makes sure that all types of achievements of the objectives that the company has planned.
Execution or Launch
The product is planned to be launched in December 2020
Evaluation and Control / Success Metrics
|Product||200 ml pet bottle||500 ml pet bottle||1 lit||Time|
|Revenue Expected||75,000 Chinese Yuan||50,000 Chinese Yuan||50,000 1 Chinese Yuan||6 months starting from 1st August|
|Customer Satisfaction||100%||100%||100%||3 months starting from 1st August|
|Visibility to customers of the promotions||85% of the customers||85% of the customers||85% of the customers||3 months starting from 1st August|
Table 1: Evaluation and Control / Success Metrics
Source: Created by author
To control the overall initiative for the projected outcome, the following measures were adopted as shown in the table below:
|Channel Used||Control/Responsible Person||Expected Result||Expected Revenue|
|The integrated Billing System to monitor Revenue||The Finance Head||To attain overall sales of 175,00 Chinese Yuan||250,000 Chinese Yuan at the end of 6 months|
|Customer Satisfaction||The Quality Head||To reach 100% of the customers||100% of the customers are satisfied with the product at the end of the 3rd month |
|Visibility to customers of the promotions||The Marketing Head||To reach 85% of the total customer base in China||75% of the customers have viewed the product as per reports generated from social media and website visits at the end of 3rd month |
Table 2: Control method
Source: Created by author
The overall KPIs across all the parameters have been met, except the visibility of the products. The visibility can be increased by being more active in digital media platforms and also providing ads on the most popular TV channels especially in between the favourite Chinese shows.
It has been noticed in the past that Tesco has maintained its brand consistency while they started their launch in China by maintaining its brand's image long with a wide range of products at all their stores. The company had also positioned its presence with the unmatched quality and price of products which no other local companies could provide them.
Quite similar was also the case of Smoothies where they started with tasty drinks that will be available with the fastest service along with the facility of sitting on the stores and enjoying the drink. The company also produced small and large package sizes at a very low price. The company also provided a wide range of flavours of juices which overwhelmed the customers. The company has made a value proposition by providing the highest quality of freshly prepared smoothies at the lowest price.
In conclusion from the above facts, it can be very well concluded that Minute Maid has lots of opportunities if they follow the right marketing strategies and launch the new product with the best price in the market. Apart from price, the quality and the taste need to be as promised by the company. Maintaining these things will result in a proper and successful launch of the new product and will be able to sustain in the market for a longer time.
Strong marketing strategies are required to introduce a new business idea in a new market. Several marketing theories help in this regard. For example, SWOT analysis can identify the internal strengths, weaknesses, opportunities and threats for a company and take future marketing strategies. Porter's five forces analysis signifies the external threats for business t be considered for a new business. PESTEL analysis discusses the different external factors like political, economic or social factors and their impacts on the business. Customer value proposition maps depict customers' demands through different factors in it. After making all these analyses, different strategies are taken by a business unit for further business promotion. Segmentation, targeting and positioning are the strategies through which customer segmentation is made, targeted and finally, the products are put to the market with proper pricing and other policies. The marketing mix is a marketing theory through which a product price is fixed and placed in the market with different product and service promotion options. Business pioneers are suggested to utilize social media platforms for business promotion as it is a cost-effective way.