Sumeet Hajare

Student ID: 5317305

Executive Summary










































Table of Contents.










































1.Situational Analysis

1.1 Internal (Overview of the company).

Organic valley is an American based agricultural co-operative
company. It has headquarters in La Farge, Wisconsin, United States. It
currently caters to United States, Canada, and Japan. It was founded in 1988
and was formerly under the name CROPP (Coulee Region Organic Produce
pool). The company is mainly into dairy and other organic produce. It sells its
range of beef, pork, turkey and chicken products under the brand Organic
Prairie. George Siemon who was one of the founding farmers of CROPP is
the current CEO of Organic valley.
Organic valley aims to create and operate a marketing cooperative,
which will promote regional farm diversity and economic growth through
selling organic products. The company has recently extended their brand
through coffee production. This has been highly successful in the United
States and Canada. Looking at the market trends of the British market the
company has further decided to expand its business and thereby enter the UK
market. Coffee chains in the UK are making huge profits as majority of the
working class have at least one cup of coffee in a day. Also these trends are
unlikely to decline in the near future providing a great opportunity for this new
idea of organic coffee.
Organic valley will keep introducing new products to the organic market
thereby trying to build a future for sustainable family farming. This marketing
plan outlines how the company shall extend its market to consumers to the
UK. Specifically this plan outlines how organic valley can use co branding
strategy with COSTA to extend their brand in the UK.


1.2 External.

Table 1: PEST analysis

PEST analysis (Political, Economic, Social and Technological analysis)
describes a framework of macro-environmental factors used in the scanning
component of strategic management.



Political/Legal
- Hierarchy Structure
- Type of government
eg.democratic, communist etc.
- Market regulations.

Economic
- Home economy situation and
trends
- Consumers purchasing power
- GDP, Currency rate.

Social
- Lifestyle trends
- Consumer attitudes and
opinions
- Brand/Company image.


Technological
- Competing technology
advancement
- Technology licensing, patents
- Consumer buying
mechanisms/ technology.



Political/Legal: Political factors have a great influence on the growth of any
industry. Political- Legal factors include laws on taxation, agricultural
regulations for instance EU (European Union) regulations on organic farming.
Any forthcoming piece of legislation could affect the business operations of
the company. These Political decisions are made at different levels depending
on the hierarchy structure the country has (one might have more levels). Such
as the municipal level, national level, international community level such as
the EU.

Economic: Companies highly depend on consumer purchasing power.
According to Keller and Kotler (2004) marketers of a company must pay
attention to the trends affecting the purchasing power of consumers as it
could have a strong effect on business. These economic factors are GDP,
currency rate, inflation etc. Consumers purchasing power further depends on
their income level, credit availability debts etc.

Social: Social factors include lifestyle trends, consumer attitudes and
opinions etc. For example are the people we target health conscious. Further
Brand/ Company image has a great impact on the business. Other social
factors include Fashion and role models. If you get a big celebrity to promote
your healthy organic drink, there is high chance of customers getting
attracted.

Technological: Technological factors include licensing, patents competing
technology development etc. Other technological factor Consumer buying
mechanism/ technology such as coffee vending machines also affects
business.









1.3 Competitive Environment.

1.3.1 Porters Five Forces

The Porter's five forces is a simple but highly effective model for knowing
where companies strength lies. This is useful, because it allows you
comprehend both the level of your present aggressive place, and the level
you're considering shifting into.














Table 2: Porters Forces


Forces

Description

Impact

Threat of substitute
products

Easy switch to
conventional non-
organic food items such
as non-organic coffee.


High

Bargaining power of
suppliers

-One of the largest food
processors acquiring
organic food producers.
-Also have our own
farmlands.


Medium

Bargaining Power of
Suppliers

-For most part, we quote
price for conventional
retailers.

Low




Intensity of Competition

-High competition from
other organic producers
but having an
established brand value
is an advantage.

-Competition from
conventional coffee
chains such as
Starbucks is high.





High

Threat of New Entrants

Entrants already there
like conventional
retailers, whole food etc.
Entry barriers are also
high.


Medium




















1.3.2 SWOT.

Table 3: SWOT analysis


Strength

- Healthy alternative for
conventional coffee
- Nutritious for your health
- Organic labels attract
customers
- Avoidance of synthetic
chemical inputs such as
fertilizers, pesticides, and
genetically modified
organisms.

Weakness

- Not all customers are
concerned with food quality
and nutrition
- Some synthetic substances
are still used allowable by the
National Organic Standards
Board.
- Costlier as cost of production
is high.

Opportunities

- Co- branding with other
competitive company that have
the same values and high
market share.
- E.g. we plan to tie up with
Costa.
- Consumer spending towards
health is increasing

Threats

- Lactose intolerant individuals
hesitant to eating dairy
products.
- Use of artificial hormones or
antibiotics to increase milk
production.
- Other competitors may not
have to follow the same
organic standards.




















2.Objectives.


Financial:
- Achieve a profit of 5 million pounds the December 31, 2014 in the UK.
- Encourage a farming future emphasizing economic sustainability and
increase organic farming in the UK by at least 5% by December 31,
2014.


Marketing:
- Market the best tasting organic coffee in the UK.
- Build a marketing team that makes organic coffee famous in UK and be
one of the pioneers of the same.
- Achieve a 5% Market share of total coffee and 30% of the total organic
coffee sold in the UK in the year 2014.

Societal:
- Establish farmer determined raw material prices to reflect a fair return
and use these prices to guide co-operative marketing.
- Practice and promote environmental awareness and cooperative
principles in all aspects of production, handling, marketing and selling
thereby making the same necessary for companies wanting to
compete.



























3. Segmenting, Targeting, Positioning.

3.1 Segmenting

According to Kotler and Keller A market segment consists of a group of
customers who share similar needs or wants. Segmentation is the process of
grouping consumers by some criteria, such that those within the group will
respond similarly to a marketing action and those in a different group will
respond differently.


Hot Beverage Market in UK Segment 1 Segment 2
(Coffee) (Tea, others)

In our case as we can see above we have segmented the market drinking hot
beverages at various joints such as Costa, Starbucks etc. into 2 groups
mainly coffee drinking and others. That will distinguish our market segment
from others. Moreover we will also segment this market with respect to the
loyalty status of the customers. Because when coffee is considered brand
loyalty is fundamental.

3.2 Targeting

This is the next necessary step after segmentation. In our case we would
target the coffee consuming market in the UK. Moreover we would try to
target those who are find a cup of coffee daily a necessity and provide them a
healthy alternative for traditional coffee.




People have this notion that coffee wakes you up. Research states that an
apple wakes you up 10 times better than coffee. All demographic levels in the
UK are highly fond of coffee. The coffee consuming market in the UK could be
further subdivided in the people who are health conscious and still drink
coffee knowing it is harmful and others who dont care about the health effects
of caffeine. We need to target the health conscious segment and try to
convert the people who dont care towards turning to a healthy alternative too.
This will be achieved mainly though adverts, and asking a role model celebrity
to promote our drink.

3.3 Positioning

According to Kotler and Keller Positioning is the act of designing a
companys offering and image to occupy a distinctive place in the minds of the
target market. The goal is to locate the rand in the minds of consumers to
maximize the potential benefit to the firm. In positioning it is primary to
determine what consumers currently think of our product with respect to
competing products. Then it can be decided what you want consumers to
think about our product. And final step is to figure how to reposition our
product.

(i) Firstly we will plot our product on a graph with health and taste as the
attributes.


+
Health


.O

.P

.C.S
- +
Price







-


C = Costa
O = Organic Valley
P = Pret a Manger (organic)
S = Starbucks
As seen in the position map we can clearly make out where we want our
product to be. Our pricing strategy would be such that our price should lie
between Costa and Starbucks and the be healthier than Pret who also make
organic coffee.



(ii) Taste is one thing no coffee lover would want to compromise on. So lets
see where we want to be in terms of taste and health.



Taste +






.CO
.P.S
- +
Price








-


C = Costa
O = Organic Valley
P = Pret a Manger (organic)
S = Starbucks

We plan to provide the best tasting quality coffee with our organic milk and
coffee production for a moderate premium price. We aim to level costa in
terms of taste. We want the customers to consider our product exclusive.




4. Marketing Strategy

4.1 Co-branding with COSTA.

Organic Valley has already tied up with Ben and Jerrys in US for selling
organic ice cream. Organic valley is a cooperative of farmers who organically
grow dairy, meat and soy products. Costa is a good match to co- brand with
because of their similar approach of providing wholesome tasty products.
Costas brand name and expertise in the coffee industry will help Organic
valleys new product class of organic coffee. Organic valley can definitely
capitalize on this already established brand name and make huge profits for
both companies by widening the market.



4.2 ANSOFF matrix.


Igor Ansoff introduced a matrix that focused on the firms current and
potential products and markets (customers).



Existing Products

New Products

Existing Markets

Market Penetration

Product Development

New Markets

Market Development

Diversification


Ansoffs matrix provides four different growth strategies:

Market penetration is when a firm seeks to achieve growth through
existing products in their present market segments, mainly by
increasing market share

Market development is a strategy where the firm plans to grow
through introducing its current products to new markets.

Product development is a strategy in which a firm develops new
products and introduces them to the current market segments.

Diversification is when a firm plans growth by diversifying into new
businesses through development of new products for new target
markets.
Organic Valley is an American organic foods company and is being
introduced in the UK so it would lie in the segment market development.
It will also be adopting product development since they were formerly into
producing only organic milk, poultry and meat, but now they are into
producing coffee.













































5. Market Program

We shall consider the marketing mix for the market program.

Product: The new product line of organic coffee will have two flavors vanilla
and the basic organic one but with a slightly different taste for it not to
compete within. These products will be made from organic milk and coffee
produced in the UK in accordance to the organic standards of the
government. Coffee jars would be sold in supermarkets like Nescaf and the
bottle would have both Costa and Organic valley brands on it.

Price (Pricing Strategy): Organic Valleys pricing strategy is to keep the
price around 15% higher that the normal coffee. Initial discounts would be
given if a consumer buys more than one. Profit and costs shall be equally
shared for the initial 5 years. All the marketing costs would belong to Organic
Valley.

Promotion: Online and in-pack coupons will be offered with the view to entice
consumers to this new product class. To increase awareness and trial
purchases Organic Valley would conduct in store demonstrations and free
sample distributions. A big UK celebrity like an English footballer or movie star
would be convinced for advertising the product.

Place: This Organic Valley coffee would be sold mainly in retail Costa outlets
and through vending machines at supermarkets etc. The crushed coffee
beans will however be sold at all major supermarkets in the UK. One can also
buy Organic valley products online at their official UK and US website.

People: The people mainly involved would be our farmers producing organic
supplies for us workers in the factory making processing the coffee beans and
milk and the staff at Costa outlets selling the product. We shall try to provide
them best treatment, which will eventually increase the efficiency of the
business. In India they say the customer is your god. Customers are of course
also a major focus where people are concerned.

Physical evidence: Packaging will be in sync with costa only difference
would be a logo of organic valley will also be present on the cup. Organic
rushed coffee beans sold in the will also have the organic valley logo which
automatically gives the idea of an eco friendliness.

Process: The production process would strictly be ethical. There will not be
use of artificial hormones or other antibiotics to increase milk production. We
will offer only Pasteurized, Non-homogenized products.