River Link Ltd.
River Link Ltd. (RLL) is a manufacturing company, producing hot drinks such as tea or coffee for big retailers. Our task is construct an appropriate marketing plan for entering on food beverages market.
Analysis of Interview
6 Interviews were conducted to investigate attitudes towards hot drinks and habits. Summary of respondents’ answers is presented below.
| Chocolate consumers
| Non-chocolate consumers
| <24 (female)
| 25-54 (male)
| >54 (female)
| Coffee - gives power
| Tea - refreshing, tasty
| corner shop
| Coffee - little coffee shop
| Tea - local health shop, corner shop, supermarket
| chocolate: thick and flavour with smooth texture
| Trying new flavours and brands
| personal taste and being loyal to favourite brand
| Coffee - good aromaTea - personal taste
Participants were divided into 2 groups based on response to the first question (Do you drink hot beverages?) to separate chocolate consumers from those who prefer other beverages (tea or coffee). Main reason of buying and drinking food beverages (FB) like chocolate was indulgence. Furthermore, older people are likely to drink in the evening to relax before sleep. Answers to Q3 (Where do you shop for your hot beverages?) lets us assume that participants buy chocolate during their usual shopping in supermarkets so it is necessary for RLL’s brand to develop good positioning in shelves so their products will attract the eyes of customers and they will buy RLL’s chocolate out of hand. As it goes to reason behind buying, situation is complicated because all of the respondents gave different answers. Based on the interviews we can draw conclusions that females value taste and quality and are loyal to their favourite brand. On the other hand, males are likely to change brands and try something new.
To focus on important information, 4Ps method is implemented, as a part of Marketing Mix strategy. It will be useful to give primary advices on future RLL’s strategy.
RLL’s 4Ps shows that future product needs to be outstanding in taste and quality even if price needs to be increased. As it is bought during usual shopping, it should be placed next to the top selling leader of the tea market – GP Tops. Customer will associate good quality of our tea with the new product. Marketing campaign should be designed in a way to distinguish the image from other products – tea and coffee – transforming it from a substitute good to a complementary good. Reaching this goal would influence customers to buy food beverages as a supplement of tea or coffee. That action would also protect us from cannibalizing RLL’s tea brands.
To understand macro-environmental factors, it is recommended to use PEST framework and additionally PEST priority grid – to understand how changes in environment could affect business.
| PEST analysis
| 1. No direct regulations to food’s beverages business2. Market structure: Oligopoly (3 major companies in Food’s drinks market).
| 1. Hot drinks market amounted to 1,52 B$ in 2011 and Food’s Beverages made up 8% of this market (125 M$). 2. Hot drinks market grew 16.7% since 2005 and 4% since 2010.3. Food’s Beverages market is growing almost as much as coffee (respectively 30% and 34% since 2005; 4% and 11 % since 2010).4. Forecasts for future are optimistic. Steady growth till 2018 (~2% a year).5. There are ten major direct buyers (Sainsbury, Tesco, Asda, Co-op, etc), which generate 75% of sales.
| 1. Annual growth of population since 2001 amounted to 0,7% in England (53M people)2. There were 4% more female than male in 2011.3. In 2011 most popular type of household was One family household and Couple households...
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