Introduction____________________________________________________________________ Cynthia Morrison, the CFO of Sunshine Juice Company, is scavenging for a perfect pricing strategy for its orange juice; however, this is not the company’s only problem. It is vital for Sunshine to define its target market before developing its marketing strategy, including the pricing strategy of the product. In the following analysis, we will first identify the key issues that Sunshine needs to tackle. We will then evaluate the current market conditions of the manufactured juice industry, Sunshine, and its competitors. To find a suitable market match for Sunshine, we will look into the behavior and characteristics of orange juice consumers. Afterwards, we will list a series of objectives that Sunshine should achieve upon adopting our recommendations. Finally, after detailed qualitative and quantitative assessment of our recommendations, we will use one of our suggested alternatives as the basis to develop a marketing strategy for Sunshine Juice Company.
Problem Identification___________________________________________________________ Upon review of Sunshine Juice Company’s goals and history, it is clear the company is striving to accomplish a great amount in a short period of time. In order to develop the company, there are several issues it must address. The key problems identified in this case are the following: a target market must be defined, a reasonable price for the product must be determined to maximize profits, and a decision must be made regarding the plausibility of expanding the company for further growth.
The most important problem is defining a target market segment while considering company goals, capabilities, and advantages. Currently, Sunshine Juice Company is targeting multiple segments – grocery and club store shoppers – and is considering to expand to the US and elsewhere. A specific segment should be chosen in order to concentrate marketing efforts. Once a target market is defined, it will become clear on how the product should be priced and what the company should do to grow and develop. Increased profits and growth will follow once the best segment is targeted; without this, the company lacks a concrete strategy.
Current Marketing Situation_______________________________________________________ Industry, Market, Environment
The market is composed of two general areas: grocery stores and club stores. Grocery stores carry a large variety of orange juice products requiring a 25% margin on the wholesale price. Alternatively, club stores carry a limited number of orange juice products at only 10% margin on the wholesale price, which significantly yields higher volumes than grocery stores. This information strongly affects the main issue in this case – the lack of definition in the company’s target market. Individuals that shop at either grocery or club stores belong to entirely different market segments. This information influences Sunshine’s decision of which market segment to target and where to distribute its product. Furthermore, the current US market presents a similar club store opportunity for Sunshine Juice Company. Company
Sunshine Juice Company is a fairly new company that is currently trying to establish a growth strategy. Ideas that are under consideration include changes to place, price, and product. Changes in the location involve expanding to club stores and distributing its product to the US. These decisions are strongly influenced by Sunshine’s location in Oakville as it limits its distribution options due to the high turnover rate of the product. Both of these alternatives will allow Sunshine Juice Company to grow, but depending on the target market, it may not increase profitability. If the company expands, there will be a possible need for increased production as its current capacity is only 100,000 units per month. Expansion could require costly investments of up to $195,473.33* which...
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