Free Essay About Marketing Plan For The Chocoholic
The Chocoholic Company is located in Central Colorado City and works in the food industry, specializing in manufacturing various kinds of candy, sweets, chocolates, cakes and other confectionery. Market segment, at which the object aims, is retail confectionery, chocolate products wholesale, production of cocoa, chocolate. This market is designed to provide natural (physiological) needs of people with food. According to Maslow pyramid, they relate to the primary needs.
The company has chosen a strategy of growth, particularly focused on deepening into the market and developing a new product. The strategy of movement in the market is consumer-oriented and is based on the principles of everything for the customer and customer is always right. Overall, the company’s planned level of sales of confectionery in 2015 is 6610.58 tons in physical terms and $63352.51 thousand - in terms of value. By segment sales is:
Segment 1 (population under 25 years of middle and lower income) - $12181.83 thousand;
Segment 2 (population aged 25-50 years with high, middle income) - $40378.66 thousand;
Segment 3 (population aged 50 years and above with low income) - $10792.02 thousand.
The total budget marketing plan for 2015 Colorado confectionery factory is $21000. As for the main financial and economic indicators of economic activity, the cost of production of confectionery is equal to $49,548.51. Profitability and sales amount to 0.08% and return on equity - 0.9%, although these figures may vary.
The main factors of success of a marketing plan, based on market opportunities and strengths of the factory are:
loyal contacts with customers, business partners;
enterprise working to expand production of confectionery products, which are made using natural materials;
competitiveness not only in the domestic market, but also abroad;
reliable suppliers of raw materials, energy components;
replacement of old equipment with new.
Research of the Current Market Situation
Brief Description of the Market
The Chocoholic Company is located in Central Colorado City, 412 S 8th St. The Company is a legal entity from the date of its registration, operates in accordance with the current legislation of USA, charter and memorandum of association. The company operates in the food industry and specializes in manufacturing various kinds of candy, sweets, chocolates, cakes and other sweets. The purpose of operation is uniting the material, financial and other resources of founders for economic activity and getting profit from providing natural and legal persons manufacturing and supply of all kinds of confectionery products, retail and wholesale trade of this type of product.
The Chocoholic Company uses a mixed method of marketing, as part of products the company sells through its own distribution network, and the other part through intermediaries. It should also be noted that the company has its own brand store "Chocoholic" located in Central Colorado City, where mainly sells its products and some other products of confectionery companies.
Demographic Characteristics of the Market
Factory sells its products to retail chains in Colorado, other regions of the country. Consumers of confectionery products are people of different ages, regardless of nationality, education, but they are in the greatest demand among young people, which helps accelerate sales, since young people are more active and adaptable to changes in the environment and does not control the spending of money. Products are frequently used and refer to a group of consumer goods. Days before Christmas - a particularly "hot" time when demand for confectionery factories increases considerably.
In the company, there are made more than 250 items of confectionery products. The enterprise is working on expanding the production of wafers with fruit fillings, chocolates on the waffle basis, soft toffee, retail sorts of chocolates, thereby output increased by 250 tons per year. Confectionary products are made using natural materials and the emphasis is primarily on the quality and variety of products. To improve the external design, there are constantly introduced new types of wrappers and artful boxes, which significantly increases the degree of interest in the product. The factory has a department that controls the output.
Segment, at which aims object is retail confectionery, chocolate products wholesale, production of cocoa, chocolate. This market is designed to provide natural (physiological) needs - human food. According to Maslow pyramid, they relate to the primary needs. For example, candy "Cherry Chocolate" by the Chocoholic is food and can satisfy the need for food. A box of chocolates "Cherry Chocolate" offered as a gift makes it possible to express feelings of gratitude, love, which is a manifestation of social needs.
Domestic confectionery are better than imported and are in great demand among consumers. They are made only from natural products, and therefore different from other designs that are on the market. Caramel and waffle shops are now working in three shifts; sweets - in 2, producing more than 200 products, 25 of which - the new candy.
The food industry has one of the leading places in the economy of Ukraine and reaches approximately 18%. In 2004-2006 there was an unstable trend of the confectionery industry. In the Chocoholic, there was a decrease in sales of products in the market, such as in 2005 over the previous year sales fell by 5645 tons; in 2006 compared to 2005 - by 1924.4 tons. Although market share reduced, but there were plans to increase sales of confectionery.
The main components of the increase in competition and expansion in the external and internal markets are factory: development of new technologies, the development of new varieties of caramel and sweets, reconstruction of fixed assets, plans to reduce the cost of production of confectionery, study the market. The above plans are being implemented - recently Colorado confectionery factory put into operation a new line that produces candy made by modern technology. The new line is capable of producing soft candy, brought from Italy and installed in place of the old line, which made toffee. A new type of product, hopefully at the factory, will find the consumer, because it is made by European technology and meets all requirements.
Marketing Strategy and Program
Mission of the Colorado confectionery is the union of all the founders’ resources for economic activity and getting profit from providing individuals, legal persons with manufacturing and supply of all kinds of confectionery products, retail and wholesale trade of this type of product. Based on the company's mission, there were developed the following short-term marketing goals: to attract new employees; to start work in three shifts; to develop and begin to release new confectionery products made by the European model; to increase interest of mediators in the sale of goods; to increase market share by 1.0%.
Trading Policy. The special features of confectionery factory include compatibility of goods; simplicity; comparative advantage; testability of goods. The assortment includes about 250 of various items. In 2006, the company started operations on developing documentation for certification in accordance with international quality standard ISO 9001: 2001. To improve the external design, there were introduced new types of wrappers. Confectionery products are at the fourth stage of maturity goods and market saturation. At this stage, the product is known and attracts new groups of customers. Although sales volume increases, there is felt the influence of competitors.
Pricing policy. Confectionery production cost is increasing every year, thus increasing the price of the goods. To reduce the cost of production, funds should be used for the production of goods; qualified employees should be hired; workers should carefully treat the equipment at the factory. The factory has a direct marketing policy. Based on this strategy, the company’s aim is to obtain pricing factory now stable income and preserve the volume of turnover.
The marketing policy. It is painful issue – the low sales promotion. The main market is the domestic market. Analyzing the level of distribution channels, the company uses zero, single-level and two-level distribution channels. Therefore, Colorado Confectionery Factory uses a mixed method of marketing.
Communications policy. The main objectives are the promotion of confectionery products, stimulating demand; occupying more market share; increasing sales. The Colorado confectionery has chosen the following methods of products promotion: sales promotion and personal selling.
Strategic Direction of the Company
Based on the defined mission, Colorado confectionery can define strategic directions of its development to achieve promising future activities. Factory has chosen a strategy of growth, particularly focused on deepening in the market and in development of a new product. The strategy aims at consumers and is based on the principles of everything for the customer and customer is always right. This strategy is embodied in life by:
ensuring the highest level of quality of confectionery products, which are made using natural ingredients, resulting factory has regular customers and attracts new ones;
minimizing costs and eliminating unjustified expenses, through the procurement of new technologies (especially commissioned new European line for manufacturing caramels) and the involvement of highly skilled workers;
development and sale of new goods (caramels), which will expand the range of consumers and get more profit;
ensuring stable prices in the near future;
control the activities of intermediaries with the definition of their sales of confectionery products and their storage conditions.
In short, growth strategy of the Colorado confectionery involves new product development, focus, and emphasis on deepening the existing market. However, the factory is inclined to support the existing level of strategy, as it plans to increase the profitability of production, due to a slight decrease in production and lowering the cost of production of confectionery, by introducing new technologies that will increase profits.
Short-Term Marketing Goals
Based on the mission of the company and its resource support, there can be developed the following short-term marketing objectives:
1. During the first six months to attract new employees (millers, turners, welders) to improve the human resource capacity of the factory.
2. Get started in three shifts from September this year (2015), because of technical and technological conditions.
3. By February 10, 2016, to develop and begin to release new confectionery products made by the European model.
4. Increase interest in active agent selling goods at the expense allowances.
5. Expand sales, signing contracts next year with three supermarket chains.
6. By 20 March 2016 to increase market share by 1.0%.
7. Sales of confectionery in physical terms in 2015 will be approximately 6610.58 t., according to calculations forecast for next year.
Thus, these short-term goals are out of the mission of the enterprise, i.e. combining material, financial and other resources of founders for economic activity and profit, and maintain it.
Short-Term Financial Goals
Short-term goals come out of the short-term marketing goals. This can cause such short-term goals:
1. By December 31, 2015 to reach annual production to $65852.73 thousand.
2. During 2015, annual sales should reach $63352.51 thousand, which is reduced compared to 2006 by $1965.99 thousand.
3. Profitability of production by analyzing three years in 2015 should be at least 0.008.
4. Return on sales in 2015 should not be less than 0.008.
The above short-term financial goals were made by using calculations and analysis of financial performance during 2012-2014, on which the forecast was made. It is an estimate and may vary.
Marketing trading policy is a set of measures to create effective range to meet consumer needs and achieve their goals now. Analyzing the relationship in "buyer - goods" system, you should pay attention to the characteristics of the goods. Typical features of Colorado confectionery include:
product compatibility in line with confectionery tastes of consumers in the city, the region;
simplicity - easy understanding of the possibilities of using the product for customers;
comparative advantage - this product is different from other products in this class that pastry is made using natural ingredients unlike competitors that produce goods using various additives;
testability of the product - confectionery enjoys great confidence of consumers in the market.
As for the quality of confectionery, it is high, because made using natural ingredients. In the company, there is a department that controls production. In 2006, the company started operations on developing documentation for certification in accordance with international quality standard ISO 9001: 2001. To improve the external design, there are constantly introduced new types of wrappers and boxes. Products are realized in retail chains of town, region and other regions of the country.
As for the product life cycle, we can say that this concept comes from the fact that any product will eventually be forced out of the other, more perfect. The company has five stages and pastries confectionery located on the fourth stage of "maturity of the product and market saturation." At this stage the product is known and attracting new groups of consumers. Although sales volume increases the influence of competitors is observed. They are beginning to produce goods analogues. Costs begin to grow due to the need to modify the product, promote, change price policy. But at the factory, there is introduced a new production line that produces candy by the European model, which indicates that candy are in the first stage and the company is investing in product development, hoping in the future to cover their income from the sale.
Sales policy – activity of an enterprise in planning, implementing and monitoring the movement of goods from producer to final consumer to meet the needs of consumers and get corporate profits. Regarding the Colorado confectionery, even given high praise of marketing services painful question is a low level of sales promotion, i.e. activities that contribute to the expansion of sales of goods and allocated to buyers, brokers and sellers.
This essentially stems from the limited financial resources of the enterprise as providing different kinds of discount, as the large enterprises, the confectionary has no possibility. And not to get into some kind of an awkward situation, any actions of the company must be considered and specifically justified.
The factory’s main market is the domestic market, particularly firms, shops, children's cafe in Colorado and the neighboring areas that implement pastries in the proposed range of their own services. It should also be noted that the company has its own brand store "Chocoholic", which mainly sells its products and some other products of confectionery companies.
Analyzing the level of distribution channels, i.e. routes by which goods are moved from the place of production to another with the transfer of ownership, it should be noted that Colorado Confectionery Factory uses zero, single-level and two-level distribution channels. In particular, channel zero is represented by its own company store "Chocoholic", i.e. pastries are sold directly from the factory. Single-level channel is represented by a chain "manufacturer - retailer - consumer" and a two-level channel - "producer - wholesaler - retailer - consumer." So we can say that Colorado Confectionery Factory uses a mixed method of marketing, as part of products the company sells through its own distribution network, and the other part through intermediaries.
The advantage of the method chosen is that the company can at least for some products get the highest possible market price, but the downside is the fact that the vast majority of the produced products are sold through intermediaries who are establishing their market prices get maximum profit from the sale of confectionery. But the presence of flaws in this method is excluded because the company still uses channels as "1" and "2" level, which, in turn, reduce the cost of creating and keeping its own distribution network.
Marketing communication policy – activity of an enterprise on informing, persuading, reminding consumers of their products and creating a positive company image in the public eye. Under the short-term marketing goals and target market, we can say that Colorado confectionary chosen target audience is a complete family with children under 18 years.
The main objectives of promoting confectionery are:
further stimulate demand;
occupy more market share;
increase in sales.
Colorado confectionery has chosen the following methods of product promotion: sales promotion and personal selling. As for the sales promotion, we can say that the main means of stimulating consumer are discounts when purchasing large batch of enterprise, bonuses as a present for a single product purchase another, demonstrations (placing special expertise on product quality, to familiarize consumers with this type of product). The main means of stimulation of trade factory is the conference for the purpose of certification programs for training their employees and contests to compare results reseller for material incentives winners.
Colorado confectionary apply in their work a method of moving goods as personal selling, i.e. individual oral presentation of the goods during a conversation with a specific buyer to carry out the purchase of this product. In the practice factory uses three types of personal selling confectionery: taking orders, receiving orders and provide sales. Unfortunately, the company does not use in their work product promotion techniques such as advertising, promotion, direct marketing, due to lack of financial resources.
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