The company that I have chosen is Orange Crush. Orange Crush was introduced in 1916 by an inventor called Clayton J. Howell who was the founder and the president of Orange Crush Company, who lived in Los Angeles, California. The Orange Crush Company was partnered Neil C. Wardwith, who a chemist. When soft drinks were introduced in that time they used to carry the name of the inventor on its bottle along with the name of the product as well. Howell had sold his rights so that he could use his name along with his first brand and his partner had been given the honor too. Therefore when Orange Crush was first introduced to the country, it was introduced under the name ‘Ward’s Orange Crush’.
There was a time when Orange crush was owned by Procter and Gamble and in 1989 Cadbury Beverages bought Orange Crush from P&G. The company changed the outlook of the product by giving it new colorful packaging graphics and introduced peach and tropical punch crush in 1992, when the company extended the line of the crushes. Now presently the brand and the trademark of Orange Crush are owned by Dr Pepper Snapple. Orange crush is presently been distributed by the Plano, Cadbury Schweppes Americas Beverages, which is a Texas based company. This company is the largest North American non- cola drink enterprises. (Crush, 2008)
Just after eight years of success, Crush had somewhere around 1200 bottlers and the company were on its way to international expansion. From 1920 to 1950 the company had expanded from North America to South America, Europe, New Zealand and Africa. This drink was a success from the very beginning and by 1918 is was available in Canada.
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Orange crush was the first flavor that was produced by the company and then other flavors followed with time. Lime and lemon Crush was introduced after a few years of the Orange crush and then Grape Crush was introduced 1960’s, Cherry Crush in 1962 and Pineapple Crush in 1966. As time went on the company kept on introducing new flavors to the country. And now Orange Crush has somewhere around 24 different flavors which also includes some diet flavors too. These flavors include grape crush, strawberry crush, cherry crush, pineapple crush, peach crush, apple crush, pear crush, blue raspberry crush, chocolate crush, crush grapefruit, lemon-lime crush, lime crush, crush tropical punch, berry blast crush, crush nectar, crush frozen orange dream, diet orange crush, diet cream soda crush, diet grape crush, crush birch beer, crush ginger beer, red cream crush and wild cherry crush etc.
Orange Crush is an orange soft drink, are sometimes also called orange pop or orange soda, which are carbonated orange drinks that is they become type fizzy drinks. It so happens that sometimes orange drinks are confused with orange juice, therefore the US mostly requires that the beverages whose names include any fruit should show the percentage of juice contained in the product and it should come under the nutrients label so that the consumers would not be mislead by the company. There are some orange drinks which do not contain orange juice but do contain sodium benzoate and rosin and sodium hexameta phosphate. But the thing about Orange Crush which makes it different from the other orange drinks is that it contains the extract oils from an orange. (Brand, 2007)
PESTLE analysis is an abbreviation for Political, Economical, Social, Technological, Legal and Environmental analysis. This analysis is a marketing tool that helps the company in making strategies. It helps the company to know its environmental challenges and it also helps the company to in how to operate their company in the present and it helps the company to prep itself for the future as well. This analysis also helps the company to match its resources with its activities and helps the company to move along in the right direction. (PESTLE Analysis, 2007)
Here the political term refers to the global, national, regional and local trends, changes or events. When we talk about the political analysis for orange crush we would see the government plays an important role in the manufacturing of non- alcoholic beverages that is only in the terms of rules and regulations. As we know that the US government requires that the beverages whose names include any fruit should show the percentage of juice contained in the product and it should come under the nutrients label so that the consumers would not be mislead by the company therefore Orange Crush makes sure that there is the percentages of orange content written on the bottle or can under the nutrients label.
The economical term in the PESTLE analysis refers to the local, national and global changes in the events or trends. As we know that non –alcoholic beverages are very popular outside the US borders. There have been major improvements and a continual growth for the non-alcoholic drinks. Therefore since the Orange crush has been introduced to countries other than US, it company has been growing and generating a great deal of revenue and profit.
The social term in the analysis refers to the developments within the society that is means culture, behavior, the expectations of the customer, the attitude of the company towards the society etc. Orange Crush strongly believes in social corporate responsibility. To the company the well being and health of their customers comes first. They are very much committed towards providing their customers the best quality and great tasting products like orange, grape, pineapple flavored drinks whose flavors are made from the extract oils of the fruits. And they also believe in investing in the community as well.
The technological term over here refers to the development, such as, the processing of the products, how the machines are operated. All the machines that help to manufacture the products are automated and the company’s production line is also automated. Technology also here would include the company’s use of plastic bottles and tin cans. And the company has very effective advertising and promotional programs as well.
The legal term over here refers to the rules and regulations of the government and the local community’s rules and regulations where the company operates or manufactures its products. The company follows all the rules and regulations regarding their employees’ safety and security. The company is also an equal opportunity employer.
The environmental term over here refers to the local or national issues of the company. The company believes in keeping the environment keep clean. They try their level best to save energy and water. The company has been working with its suppliers to reduce the use of polypropylene and polyethylene from their bottle caps.
When we talk about market analysis, the company needs to have thorough knowledge of their market and need to decide upon their market’s size, growth rate, profitability, trends, the success factors and distribution channels etc.
The rapid technological change, global competition and the diversity of the buyers preferences in many markets require the constant attention of market watchers to identify promising business opportunities, see the shifting requirements of buyers, evaluate changes in competitive positioning and guide the choice of which buyers to target and how to position a product or service. Mapping the entire market is considered very important for the company to understand and anticipate market changes and competitive threats. Understanding the markets and how they are going to change in the future indefinitely, are considered very important elements to market driven strategies of the company like Orange Crush.
The importance of forming a vision about the future is highlighted by the changes occurring in the beverage market. The key strategic issue for Orange Crush and other beverage companies competing in this market is anticipating the nature and the scope of the impact of the introduction of new and different flavors on the beverage market. The Orange Crush management must compete aggressively in the beverage market while recognizing the importance of developing capabilities.
If Orange Crush wants to gain an in-depth understanding of the market it has to define its boundaries and describes its structure. As it is shown in the following figure:
- The Process of Gaining an Understanding of Markets
- Mapping the Product Market
- Market Structure Analysis
- Market Forecasts
- Future Vision about the Market (Cravens, 2000)
These activities help create a map for Orange Crush’s products market. The markets can be defined in many different ways and they are constantly changing. Marketing analysis provides extremely important information for developing business and marketing strategies and it alerts the management of the Orange Crush to new competition. When considering the company’s only brands and its direct competitors it may mask the potential competitive threats or opportunities of the company. It is also very important for the company to develop profiles for its end users for generic, product type and product variant levels of product market. Buyers are identified and described, purchase choice criteria are indicated and environmental influences like interest rate trends on buyers are even evaluated. An important part of market analysis is estimating potential and forecasting sales. The forecasts often used in market analysis include estimates of market potential, forecasts of total sales by firms competing in the market and sales forecasts of the company’s interest.
When we talk about industry analysis the information that would be required for such an analysis would include characteristics of the industry where it operates, the trends of the beverage market, overall sales in the market, number of companies that operate in that particular market and growth rates of companies and different operating practices of the companies beverage within the industry. Industry analysis will also include the product mix; service provided by the company, barriers to entry, and geographical scope i.e. the location. The company needs to identify the companies that comprise the industry and develop descriptive information on the industry and its members. It may be useful to examine the industry structure beyond the domestic market boundaries because of the international industry developments may affect regional, national and international markets. As you know the industry that Orange Crush operates in is the soft drink industry. The soft drink is a beverage which does not include alcohol. These are just carbonated drinks which are also known as sodas, fizzy drinks or soda pop. The carbonated drink bottlers are under a great deal of pressure from the gas companies. The soft drink market is the largest market in the world and it has the highest per capita. The highest consumption level of drinking soft drinks is in US. Coca-cola is the leading company in the carbonated soft drink market it has a 60% market share, where as PepsiCo subsidiary Tropicana is the leader in the fruit juice and drinks market. (The Soft drinks Market- Global Trends and Developments)
It is bottler network which makes the drink a success or a failure. And it is the bottler network which has made the soft drink industry a success. The soft drink industry actually uses a great deal of multiple outlets, which helps to make a difference between different types of retailers and it also helps with saturating the market the product. With the intensive distribution channel the soft drink manufacturer gets a lot of coverage, customer recognition and a high turnover. But it must be remembered that if a company applies intensive distribution it would have to face a great deal of competition.
In the competitor analysis the company first has to know who its competition is and identifying the competitor is considered to be a simple task. The competitor of orange crush would be Fanta, which has somewhere around 70 fruit flavor drinks. It must be remembered that the range of company’s actual and potential competitors is very broad. A company is more likely to be out done by new competitors or even new technologies than by the current competitors. A company can distinguish between 4 levels of completion, which is based upon the degree of the product’s substitutability. They are as follows:-
- Brand competition: brand competition occurs when the company who has the same products sees its competitors providing a similar product, here the case would be Fanta selling an orange flavor drink, to the same customers at similar or exactly the same price.
- Industry competition: industry competition occurs when a company sees its competitors as all companies within the same industry making the same kind of product or providing the same collection of products to the same customers. Here Orange Crush would see itself competing against all other soft drink manufacturers.
- Form Competition: form competition occurs when a company sees its competitors as the entire set of companies within the same industry manufacturing the products that supply the same service to the customers. Here Orange Crush would see itself in competition with not only with other soft drink manufacturers but with the entire beverage industry.
- Generic competition: generic competition occurs when a company sees its competitors as the entire set of companies within the same industry competing for the same consumer dollars for their products. Here Orange Crush would see itself competing with companies that sell major consumer products like eatables.
More specifically a company would be able to identify its competitors from such an industrial point of view and a market point of view as well. As we know that the company’s closest competitors are those which are pursuing the same target markets with the same strategy. A group of companies that follow the same target markets are known as a strategic group. Orange crush would need to indentify the strategic group in which it competes. Once Orange Crush has identified Fanta’s strategies it must then ask itself that what the competitor is from the marketplace? Or what drives the competitor’s behavior?
The initial assumption is that Fanta strives to maximize its profits. However the company differs in the weights that it puts on short term versus long term profits. Furthermore Fanta orient its thinking towards satisfying rather than maximizing, the company sets a target profit goals and is satisfied when it achieves it set goals and objectives, even if the company produced more profits with other strategies or with more effort. Another assumption would be that Fanta can pursue a mix of objectives, which is based on current profit, the market share and the market growth for its products, the cash flow of the company, the usage f technology within its manufacturing process, service leadership and so on and so forth. If Orange Crush knows that how Fanta weighs each objective then it would help the company to figure out whether Fanta is satisfied with its current financial outcomes or not. And Orange Crush will also be able to figure out that how Fanta reacts to different types of competitive attacks and so on. The competitor’s objectives are mostly shaped by many things such as size, history, current management, financial situation and place in the larger organization. If the competitor is part of a larger company which it is, Fanta is a part of The Coca-Cola Company, it is important for Orange Crush to know whether the parent company is running for growth or just milking it. Finally Orange crush must monitor Fanta’s expansion plans. (Competitor Analysis, 2007)
In general every company should monitor 3 variables when analyzing its competitors. They are as follows:
- Share of market; is defined as the market share a competitor has.
- Share of mind; provides a percentage of customers who named the competitor when they were asked to respond to a statement that‘ what is the first name of the company that comes in your mind in this particular industry’
- Share of heart; provides a percentage of customers who have actually named the competitor when responding to the statement that ‘what name the company pops in your head from whom you would like to buy the product’
There is a relationship between these three measures, for example, if Fanta enjoys the highest market share let’s say 50% it might fall in the next year or so. And it has to kept in mind if the company is losing its market share then it is also losing the share of mind and share of heart as well. In an attempt to improve its market share a company needs to conduct benchmarking against their most successful competitors.
When a company analysis is being conducted, the company needs to know its demand. Company demand can be defined as the share of the market demand the company has at different levels of the marketing efforts. The company’s share markets mostly depends on the products that how they are perceived by their customers in terms of services, prices, communication and so on and so forth against their competitors product. If other things are kept equal Orange Crush’s market share is mostly dependable on the size of the beverage market and effectiveness of the market expenditures, which is relative to its competitor Fanta. Marketing model builders have developed a function that relates to sales, this function helps to measure the sales of the company these sales are affected by the level of marketing expenditure, marketing mix that is provided by the company and effectiveness of marketing of Orange Crush.
Once the marketers of the company have estimated the demand of Orange Crush’s, their next task is to choose a level of marketing effort for the company. The level which has been chosen by the marketers would help to produce an expected level of the company’s sales. Sometimes it so happens that the sequential relationship between the company forecast and its marketing plan is often mixed up. It is mostly heard that the companies should always develop a marketing plan on the basis of their sales forecasts. The company sales forecast are not always establish on the basis of deciding that what to spend on marketing efforts of the company. The sales forecast happens due to the result of an assumed marketing expenditure plan. The company also needs to find about its total market potential. A common way to estimate total market potential is as follows:-
Companies are generally faced with the problem of selecting the best territories in the market and allocating their marketing budget in an effective manner among the territories within the industry. Therefore the company needs to estimate their market potential in different cities, states and nations. Two methods that help with assessing the area of market potential are 1) the market build-up method; this method is mostly used by the business marketers. This method helps with identifying all potential buyers in each market of the industry and it also helps with assessing and estimating the company’s potential buyers and customers and as well as helps with providing a good estimate of what each customer will buy and how many he or she will purchase. 2) And the multiple factor indexes, is used mostly by the consumer marketers. The consumer companies need to estimate area market potential as well. But the customers of consumer companies like Orange Crush, are too numerous even for listing. Therefore the method that is mostly used in a consumer market is straight forward index method.
A company needs to estimate it future demands as well, so that it can remain on the top of the game. There are extremely few products that can be easily forecasted. In most markets the total demand of the product and company’s demand for its product are usually not stable and forecasting becomes a major element in the company’s success. If the demand of the product is unstable, forecast is done more accurately and the forecasting is a more elaborate procedure of the company.
Companies like Orange crush usually use a 3 stage procedure to prepare a sales forecast, the company prepares a macroeconomic forecast first then it is followed by an industry forecast and finally it is followed by a company’s forecast for its sales. All the forecast of a company are mostly built on the basis of information bases and that is what the customers say, what the customers do and what the customers have done.
Implications of Situation Analysis
Situational analysis is the first step, when company has to make a marketing plan. With the help of situational analysis the company can find out that where it is standing, what is it position in the market and is its future status in the market as well. As we know that the situational analysis is based on 5C’s of marketing. They are 1) competitors; which includes the product, position of the product, market shares and strengths of the company 2) climate; which includes the social environment of the company, economic environment and political environment, 3) company; it includes the product line of the company, like the different flavors, image of the company in the beverage industry, technology and culture, 4) collaborator; it includes the distributors and the suppliers of the company and 5) customers; it includes the market size and the growth, different segment of the market where the company wants to penetrate, the retail channel of the business, buying behaviors of the people, the quality of the product purchased by the customer at one time, the trends and the needs and the changing tastes and preferences of the people, seasonal factors and the decision maker in the customer for purchasing the product.
Situational analysis is also considered the first step in different problem solving situations. When the company is solving its problems it needs to follow the following steps they are:
- Identify the need i.e. find that what is required by the company or what is the problem that is being faced by the company
- Create ideas which will help solve the problem
- Create and develop concepts for the ideas
- Choose the best idea
- Implement the idea for problem solving
SWOT analysis is the evaluation of the of a company’s strengths, weaknesses, opportunities and threats. Once the company has performed it SWOT analysis, it can then proceed to develop specific goals for planning period. The SWOT analysis is used by the company so that the management of the company can see the impact it has on each possible strategic opportunity. This analysis is used in the decision making process of the company when the company’s desired object or goal is targeted and defined by the management of the company. SWOT analysis is also used in pre-crisis planning of the company and preventive crisis management of the company as well. With the help of information which is extracted from the SWOT analysis the company, it helps the company to match its sources, resources and capabilities with its work activities and the competitive environment. SWOT analysis is an important marketing tool in the strategy formulation of the company and selection of the market’s segments in which the company wants to penetrate and sell its products. When SWOT analysis is applied, it helps the company with quantitative and qualitative marker research, it also helps with experimental tests of the company’s product, it helps the management to see the environmental challenges and it gives it time so that the company can overcome the challenges and it also helps with observational techniques as well.
SWOT Analysis Framework
- Environmental Scan
- Internal Analysis
- External Analysis
A company’s strengths are its core competencies and resources in which it is one of the market or industry leaders. Orange Crush’s strengths are that the company is extremely competitive, another strength of Orange Crush is that the excellent brand awareness of the product and a high quality image of Orange Crush’s drinks. The Orange crush has brand recognition within the country. The buyers of the Orange Crush have a know- how of the company. the products of the company are reliable and another strength of Orange Crush is that the products are healthy and they have nutrition in them not like other brands that just has flavorings and additives in them.
Weaknesses of the company are considered those areas, when the business of the company is compared to others in their own industry or market segments. Weaknesses of the company can also be defined as elements of the organization that considered very harmful in achieving the set target and objective. The first weakness of Orange Crush is the low market share of the company, and then the company has also low market coverage as well. The second weakness of the company is that there are limited bottlers of the company, who bottle the soft drinks. The third weakness of the company is that there is relatively limited low advertising of the product along with low promotion expenditure of the product. The last weakness is the risky positioning of Orange Crush due to Fanta.
Opportunities are can be classified according to the company’s attractiveness and the success and profitability. Orange Crush’s opportunities are that the company’s product development provides tons of opportunities for Orange Crush. And the brand of Orange Crush itself creates a great deal of opportunities for the company like more sales of the company’s products since people consider it as a fashion brand as well. Another opportunity for Orange Crush is the large market for diet soft drinks and there is an increase in the consumption of soft drinks all over the world. And lastly there is a large variety of media which can help the company to promote their products.
Threats can be described as the seriousness and profitability occurrence of the company. To deal with threats the company needs to prepare plans that show the changes the company can make before or during the occurrence of the threat. A threat that is faced by Orange Crush is the environmental damage that is done to the society by air and water pollution, noises and change in the climate due to the pollution etc. Another threat to Orange Crush is the issue of child labor and the low wages of the workers who work in the company’s factories. Another threat of Orange Crush is the huge completion from Fanta and Miranda. The competitors have the budgets to do huge promotions and advertising programs whereas Orange Crush has a limited budget for such marketing. And lastly the company is faced by unplanned purchase of a soft drink by their competitors.
Implications of the SWOT Analysis
The implications of the SWOT analysis can be positive as well as negative. The positive implication of the analysis would be that how can a company like Orange Crush can use the internal strengths to meet up with different kinds of opportunities for the company in the marketplace. And the negative implication of the SWOT analysis would be for a company like Orange Crush would be how the company can reduce its internal weaknesses especially when those weaknesses are created due to the external threats from the company’s competitors like Fanta and Miranda. When the company is applying SWOT analysis it needs to avoid and reduce its threats and weaknesses completely so that it can also become a success. SWOT analysis is extremely beneficial for a company if the management of the company analyzes itself thoroughly and honestly without any kinds of frauds. Due to the limited resources of the company has, it is very difficult to accomplish everything at once for the management. The managers and the management of Orange Crush must put all marketing activities into consideration and develop specific goals and objectives for the marketing plan of the company. (Danca, 1999)
Mission Statement and Corporate Objectives
The mission statement can be defined as a broadly stated definition of the company’s basic business scope and operations, which distinguishes it from similar types of companies within the industry. The content of the mission statement mostly directed at the market of the company and its customers, it also identifies the desired goals and objectives of the company. There are some statements which describe the company’s characteristics such as the corporate value of the company, the quality of the product, location of the company’s outlets and facilities and sometimes the statement also identifies the company’s attitude towards its employees and workers. And the mission statement also shows the company’s philosophy along with the company’s goals and objectives. It is due to the mission statement that the employees, customers, suppliers and stockholders known about the stated goals and objectives and the aim of the company. (Cravens, 2000)
The mission statement of the company remains essentially the same over the long-term it basically emphasizes the fact that to become the dominant market leader in the donuts and beverages retailing business one has to intercept the customer’s needs and preferences and to change with time. The mission statement of all companies and Orange Crush is based on 5 elements are as follows:
- History; every company has a history of aims, policies ad achievements. The organization must not depart too radically from its past history.
- Current preference of the owners and management; if Orange Crush’s current management wants to get out of the beverage industry, Orange Crush’s mission statement is very likely to be affected.
- The market environment; the company needs to thoroughly view their environment; the company would not become a success if the company doesn’t change with time and the different preferences of the people.
- Resources; the organization’s resources actually determine, that which missions are possible for the company. Orange Crush would be deluding itself if it adopted the mission of becoming the world’s largest beverage company.
- Distinctive competences; the organization should base its mission on what is does and what does it do best. Orange Crush could probably enter the solar energy business, but doing it so the company would not use its core competence that is providing drinks at affordable prices to their customers.
The mission statement of Orange Crush is to provide its customers with quality. The reputation of the company is based upon its quality of their product. They believe in continuous improvement of their products. And they deliver what they promise.
Objectives need to be set so that the performance of Orange Crush can be gauged. Corporate objectives are established in the following areas; marketing of the company, innovation in the company’s product, resources of the company, productivity of the company’s employees, social responsibility of the company, and finances of the company. Examples would include growth and market share expectation, improving product quality, employee training program and development program, new product targets, return on investment and energy reduction plans etc.
The corporate objective of the company is to build and enhance their brands that are the company keeps an ongoing evaluation of the market and keeps a look out for the changing preferences of their company. Another objective of the company they keep their employees motivated and happy so that they do not leave the company or do not do their work activities properly. Corporate objective of Orange Crush is that they believe in improving the efficiency of their operation, so that the company can keep its high standard quality of their products. And lastly the company believes on focusing of their opportunities and changing with time and according to their tastes and preferences.
Marketing objectives are also known as the marketing plan of the company. Market plans are developed, implemented, evaluated and adjusted to keep the strategy on target. Since the marketing strategy normally extend beyond a year it is considered useful to develop an annual to manage marketing activities for that year. Budgets for marketing activities for example, advertising, are set annually by Orange Crush.
Preparing the Marketing Plan
The marketing plan’s format and content actually depends on the size of Orange Crush, managerial responsibility of the company relating to planning, product, market scope and other situational factors that would affect Orange Crush. The marketing planning is based on the following elements:-
The situation summary; this part of the plan describes the market of Orange Crush that is the people who drink soft drinks in their daily routine. Market segmentation analysis indicates the segments to be targeted and their relative importance. The competitor analysis show that who are Orange Crush’s competitors. In this case would be Fanta. The situational analysis also indicates the company’s internal and external challenges. The summary should be very precise and the information should support the summary.
Describing the market target; the management of Orange Crush should be able to describe each and every target market that is the people who drink soft drinks, the size if that market, the growth rate of the market, in this the growth rate of people who intake soft drinks is growing this market is one of the largest markets in food and beverage industry. The management should be able to define their end users and their tastes and buying patterns. When 2 or more targets are involved it is helpful for the company to show the priorities for guiding resource allocation.
Objectives for the market target; here the company needs to spell out what the marketing strategy of Orange Crush is expected to accomplish. Here the case would be that with the help of the marketing strategy the company wants their customers to remember their products when they go to purchase a soft drink. The management needs objectives for each of their target markets, need to show the financial positioning on their product in that market, and needs to see that the customer is satisfied with the product. The management also needs to look over their other desired objectives and their outcomes. And it must be remembered that objectives are usually included for each marketing program component of the company.
Marketing program positioning strategy; the positioning statement indicates how the management of Orange Crush wants the targeted customers and prospects to perceive the brand. When the company is making the positioning strategy for their product it needs to look over the distribution channel, the product’s qualities, and price of the product and the promotion of the Orange Crush’s products like grape crush, orange crush or pineapple crush. Actions that are taken by, responsibilities of, time schedules given by and other information implications that are given by the management of Orange Crush needs to be included in the plan as well. But most importantly the planning process should encourage participation from all the areas responsible for implementing the plan. Contingency plans which consider possible actions if the anticipated planning environment is different from what actually occurs may be included in the marketing plan as well.
Forecasting and budgeting; financial planning indicates forecasting revenues and profits ad estimating the costs necessary to carry out the marketing plan of Orange Crush. The people who are responsible for market target, product, geographical area or other units should prepare the forecasts ad budgets for the Orange Crush products. Comparative data on sales, profits and expenses for prior years are considered very useful to link the current plan of the company with the previous results, so that the plan can become a success and if there are any changes to make can be made in time. (Cravens, 2000)
International planning process; there are 4 major phases of planning for multinational companies like Orange Crush who are operating in several countries. The first step in the planning process is the market opportunity analysis for the company. For Orange Crush to introduce more flavors in their diet drinks line would be considered as an opportunity in their market. The second step is the positioning strategy of the company. Orange Crush should have a positioning strategy for each of their product, so that their product will be easily remembered by their customers, the third step in the planning process is the preparation of the marketing efforts which will include the situation assessment, objectives, strategy and tactics, budgets and forecasts, and action programs of the company and lastly the fourth step in planning process is the implementation and the managing and controlling of the marketing plan. Although the management of the Orange Crush should remember that the international market planning process is similar to planning domestic market strategies, the environment is far more complex and uncertain in international markets.
Country Market Selection
The country that I have selected to enter is India. India is a huge market therefore it will be the best opportunity for Orange Crush to enter this market. The population of India is somewhere around 1,147,995,904. For example if an Orange Crush bottle let’s say cost somewhere around 50 cents per bottle and if all the people in India by a bottle daily, Orange Crush would be able to generate a revenue of somewhere around $2,095,092,525 billion a year. Another reason why I have selected India is that the population is mostly of 14-63 years which is 63.3%, these people will be willing to buy the product more. And another reason would be that the population growth of India is increasing by 1.578%, which means that the beverage industry would also grow and the demand for the company’s product will increase and the company would be able to achieve their set targets and goals and will be able to generate more revenue than it is doing presently. In India the demand for soft and fizzy drinks are increasing, and people are decreasing their intake of cola drinks or soda drinks or carbonated drinks and are now moving towards healthy and fruity drinks, so it would be an excellent opportunity now to introduce their fruit based drinks. (The World Fact book-India)
Fruit or vegetable juices are a growing industry due to the result of increased consumer expenditure on naturally healthy (NH) beverages. And if Orange Crush introduces their current flavors and products along with new flavors in India then the company will be able to gain a lot of market share and can become a leader in that market. And if Orange Crush raises health consciousness of the people it would help the company to increase their sales of naturally healthy (NH) soft drinks such as the grape crush or pineapple crush, crush grapefruit, lemon-lime crush, lime crush, crush tropical punch, berry blast crush, crush nectar, crush frozen orange dream, diet orange crush, diet cream soda crush or diet grape crush etc.
Another thing if Orange Crush set’s up its manufacturing industries in India, it will be like outsourcing for the company because the labor would be cheap and the materials that are required by the company for the production of their product would be less expensive and the company will be able to save money. The company in outsourcing usually takes away the contract from a domestic supplier and the company can place it with a company in the South East Asia like India for cheapest labor and supplies. (Soft Drink in India)
Market Entry Mode
Industries differ greatly in their ease of entry into a new market, that is how it is easy for a new company to enter a market, which is showing great profits, over here would be the Indian market which is showing great prospective for Orange Crush. It is easier to open a new restaurant in the market but it would be considered difficult to enter the beverage industry which is being ruled by the Coca-Cola Company and PepsiCo and their products. Orange Crush when entering the market will be faced by barriers like high capital requirements for the company, economies of scale, patents and licensing requirements for the company, scarce locations of their industries, raw materials availability, or distributors and suppliers, and reputational requirements of the company regarding its product.
The best way for Orange Crush to enter into the market would be through its selection of healthy and fruity drinks because at the moment people are more inclined towards healthy drinks because they have become very health conscious. Therefore the company can play the healthy card for entering into the market. And it can also introduce its line of diet fruit drinks for people who are diabetic, this will also go in the favor of Orange Crush and it will give the company an open gateway to the Indian beverage industry.
Target Market Selection
Target market is a process where the company evaluates all the market segments and then chooses one or more segments which the company thinks is profitable, and then it enters that market segment. A company like Orange Crush target segments like children, teenagers, adults and old age people that is mostly people around 14-63 years of age, so that they can create the greatest customer value for its customers and also create profit and sustain the value and profit for a long period of time. And in the end large companies like Orange Crush eventually seek full market coverage, they want to be the Coca Cola of their perspective industry.
It is important for companies like Orange Crush to segment their markets. Market segmentation means dividing the market into distinctive groups of customers and buyers. These buyers have distinctive requirements such as different needs, characteristics or even have different buying behaviors and they might or might-not need require different kinds of products or marketing strategies. Companies like Orange Crush are much focused on their efforts to meet the distinct needs of individual market segments.
The marketing plan of the company is that it is making sure that the consumers and the beverage market are aware of the existence of Orange Crush and to do that Orange Crush has adopted marketing mix. Marketing mix can be defined as a set of tools for marketing purpose that the company uses, so that it can achieve its marketing goals and objectives in their targeted market. The marketing mix is also known as the 4P’s. The 4Ps include the following:
- Product: product includes product variety, quality, design, features, brand name, packaging, sizes, services, warranties and return. Orange Crush provides flavors in its drink products like grape crush, strawberry crush, cherry crush, pineapple crush, peach crush, apple crush, pear crush, blue raspberry crush, chocolate crush, crush grapefruit, lemon-lime crush, lime crush, crush tropical punch, berry blast crush, crush nectar, crush frozen orange dream, diet orange crush, diet cream soda crush, diet grape crush, crush birch beer, crush ginger beer, red cream crush and wild cherry crush etc. So many kinds of flavors can provide a competitive advantage in the globally competitive marketplace of beverages.
- Price: price includes list price, discounts, allowances, payment period and as well as credit terms for its customers. Orange Crush has decided upon retail prices in routine days and discount prices on special events. The price of the Orange Crush product should match with the offer’s perceived value, if it does not the buyers will turn to competitors products like Fanta or Miranda.
- Promotion: promotion includes sales promotion, advertising, sales force, public relations, direct marketing and the company also uses its catalog for promoting of their products worldwide. Orange Crush has to hire, train and motivate salespeople; it has to set up communication and a promotion program, which includes advertising, sales promotion, public relations, direct marketing, institutional selling and online marketing.
- Place: place would include channels, coverage, assortments, locations, inventory and transport. Orange Crush must identify, recruit and link various marketing distributors who would supply Orange Crush’s products efficiently to their target market. It must understand the various types of retailers, wholesalers and physical distribution companies and how they make their decisions.
We have know that how companies, brand and products are differentiated. Even in the case of a commodity product like the Orange Crush, the company must see its task as that of converting an undifferentiated product into a differentiated offering in the Indian beverage industry or market. It must be remembered that not all brand differences of the company are meaningful or even important. Each difference in the product has the potential to create expenses for the company as well as customer benefits. Therefore Orange Crush must carefully select ways in which it will be able to differentiate itself from its competitors like Fanta. A difference is worth establishing to the extent that it satisfies the following criteria.
- Important; the difference actually delivers a highly valued benefits to Orange Crush’s customers
- Distinctive; the difference is either offered or not offered at all by other companies
- Superior; the difference is that some products are superior to other in ways of getting the same benefit
- Communicable; the difference can be communicate with the customer and is visible to the buyers of Orange Crush
- Preemptive; the difference of the product that a competitor cannot copy easily
- Affordable; the customer is able to pay the difference in the product
- Profitable; the company can find the difference in the product profitable therefore it can introduce a different flavor beverage in the market.
- All the companies in the beverage industry want to promote differences that will appeal most strongly to the targeted market. For example, Orange Crush chooses to differentiate it flavors on taste preferences of the customer and it can emphasize on that fact that it has 24 different flavors for its customers. The end result of positioning of the product would be the successful creation of a market which is mostly focused on value proposition, a simple clear statement of why the target market should by the product from Orange Crush. As a company increases the number of claims for its product or brand, the company can be at risk and a loss of clear positioning as well; in general Orange Crush should avoid four major positioning errors.
- Under- positioning; the company can discover that the customers have only a hazy idea of the company’s product. The customers do not feel anything special towards that product, the product will only be seen as another product which has entered into an over crowed marketplace. Let’s take the example of PepsiCo when it introduced clear Crystal Pepsi in 1993, the customers were not impressed by the product; they were not able to see the ‘clarity’ as an important benefit in a carbonated drink.
- Over- positioning; the customers have too narrow image about a company’s product or brand. For example, a customer mostly thinks that a diamond ring at Tiffany’s starts from somewhere around $5000, but in actual Tiffany’s now offer affordable diamond rings starting from $900.
- Confused positioning; the customers has a confused image of the company’s product due to many claims made by the company or it keeps on changing the products positioning within the industry or marketplace.
- Doubtful positioning; the customers find it very hard to believe that what the brand claims in view of the product’s features, price or even manufacturer.
Market share is defined as the company sales that are divided by the total sales of all the companies for specified product market. The market share can be calculated on the company’s actual sales or even the sales that have been forecasted by the management of the company. The market share is mostly used by the company’s management to foretell about the future sales and it also compares the company’s product with other same competing products, in other words it tells about the market position of the product. It also may vary depending on the unit sales to price differences across competitors. (Kotler, 1997)
As we know that companies do not reveal how that company is doing regarding its major competitors. Therefore the management of the company needs to track down its market share within the industry. The market share of any company is based on four measures, they are as follows:
- Overall market share: the company’s overall market share is actually the sales that are expresses as a percentage of the whole market sales. There are two decisions that are considered important in this measure. The first one is based on the use of unit sales that help to express the market share of the company. The second one basically helps to define the total market of that product in our case would be the total market of furniture. As we know that Orange Crush’s share depends on different kinds of flavors that are included in the beverage market definition and if they are included in the market then Orange Crush’s market position would be a medium one.
- Served market share: served market share of a company can be defined as the sales of the company’s product, which is expressed in terms of percentage of the total sales. The served market shows all the buyers who are able and willing to buy the company’s product. As we know that Orange Crush’ produces its products at a reasonable and affordable price so that many people around the world can buy its beverages. A company should try to capture 100% of its served market but it should have a small share of the total food and beverage industry. The company’s first task is to own a largest share of the market in which they serve. As the company approaches this objective they should increase and add new served markets as well.
- Relative market share: the company’s relative market share to its top competitor expresses the sales as a percentage of the three largest competitor sales combined. In our case the major competitors of Orange Crush are Fanta and Miranda. If for example, the relative market share which is above 33% therefore it is considered to be strong.
- Relative market share (to leading competitor): there are some companies that track their shares as a percentage of their leading competitor’s sales. If the relative market share is greater than 100% it indicates that the company as the leader in the market. And if the relative market share of a company is exactly 100% then the company is tied for the lead. If there is an increase in the company’s relative market share it means that the company is moving ahead from its competitor and in our case, it would be Fanta.
Brand Strategy Decision
A company has a lot of choices when it comes to brand strategy. But we are only going to discuss one of them line extension and brand extension. The company can introduce line extensions i.e. existing brand name which is extended to new sizes, designs and so on in the existing product category. Therefore the line extension in Orange Crush would be the flavors of the drink such as grape crush, strawberry crush, cherry crush, pineapple crush, peach crush, apple crush, pear crush, blue raspberry crush, chocolate crush, crush grapefruit, lemon-lime crush, lime crush, crush tropical punch, berry blast crush, crush nectar, crush frozen orange dream, crush birch beer, crush ginger beer, red cream crush and wild cherry crush etc.
The company can introduce brand extensions i.e. brand names that extend to new product categories. Therefore the brand extension in Orange Crush would be its introduction of diet drinks line. The diet drink flavors would include diet orange crush, diet cream soda crush, diet grape crush.
Economic (Financial) Evaluation
Financial analysis analyzes the overall financial framework of the company and it shows that how the company is making its revenue and profit. The management of Orange Crush uses financial analysis to find profitable strategies that go beyond the sales. The management of the company uses financial analysis to see that what factors that affects the company’s profit. The financial analysis and projection analyzes the position of the company assets and see if it can improve the assets management.
Since Orange Crush has the shifted from Procter and Gamble to Dr Pepper Snapple, it has bought in new clientele for the company and which has help the company to increase its sales and make profits. The company also keeps in mind that the customers are always changing their tastes and preferences and the company anticipates these changing tastes and preferences of their customers and provides them with new flavors fruity drinks. With the help of innovation the company to gets new clients and the sales also increase which in return increases the profit.
Implementation and Control
Implementation is a stage which involves the use of managerial, administrative and persuasive abilities to make sure that the company’s chosen alternative is carried out correctly. Orange Crush is one of those companies that meet their customer’s needs conveniently and with clear and effective communication. When the company is applying implementing plans there are some surprises and disappointments that the company would have to face. (Kotler, 1997)
Control can be defined as the management function of the company which is concerned with monitoring the employee’s activities, keeping the organization on track towards its goals and making correction where ever needed. Therefore Orange Crush would need feedbacks and control. There are three kinds of control. And they are as follows:
- Annual plan control: annual plan control makes sure that the company is achieving its targeted goals. The management of the company must state well define goals each month or quarter. The management should measure the ongoing performance of their employees, and lastly the management of the company must determine the causes of any serious performance gaps and should choose the correct actions to bridge those gaps.
- Profitability control: profitability control measures the actual profit of the products, customer groups and order sizes of the company’s product. This is not a very easy task for the management of the company. The company’s account is seldom designed in such a way that it would be able to report the profitability of the company and different market entities and activities.
- Strategic Control: strategic control basically evaluates the company marketing strategy and makes sure that it is appropriate. Due to rapid changes in the consumer’s tastes and environment the company needs to reassess its effectiveness
Evaluation can be defined as merit or a measure against which the performance of the company is measured. Evaluation of the company also includes continuous improvement which can be defined as the implementation of a large number of small but incremental improvements in all the areas of Orange Crush as an ongoing process. In a successful total quality improvement program all the employees of Orange Crush learn what they are expected to contribute by initiating changes in their own work activities. The basic thing in this process is that to improve things little by little at a time but all the time. This process has the highest probability of success in quality improvement of the company. There is no improvement that is considered small to implement the activities are fine tuned all the time and if the organization starts with little improvements it would lead them to big improvements in time.
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