Executive Summary
The report at hand is aimed at providing an explicit analysis of Blackmores’ marketing situation and formulating a guideline for the company’s operation for the next twelve months. The introductory part provides some background information and the analysis of the current situation with the help of SWOT so that the readers might get acquainted with the main aspects of the company’s performance.
The next part of the report is devoted to the marketing objectives – the plan offers four key objectives in various market dimensions. The report also provides a detailed examination of the target market and product positioning. This part does not only review the current trends but also suggests the relevant recommendations for potential improvements. The final part of the report is devoted to the marketing mix review; it sets a rough framework for the company’s activity within the following segments: product and price, place and promotion. The conclusion passage includes a summary of the key data, and the recommendations elucidated throughout the report.
Introduction: SWOT Analysis
Blackmores is one of the leading Australian companies in the natural health market. The company casts itself as “the most trusted name in natural health” (About Blackmores, 2014). This statement is substantiated as Blackmores offers the widest range of high-quality health products and performs significant contribution to the support of the local community and environment. In the meantime, a varied product line and a well-established brand are not the only strengths of Blackmores. Experts also point out that the company has strong positions both in the domestic and Asian markets. Thus, with the launch of new products, Blackmores constantly strengthens its presence in such countries as China, Thailand, and Malaysia (CFA Institute, 2012).
Few aspects might be pointed out in terms of weaknesses. In the meantime, one of the main benefits of Blackmore – the multi-faceted character of its activity – can be treated as a disadvantage from the standpoint of competitiveness. Thus, the company has to compete not only with similar suppliers but with all the players related to complementary medicine.
The key opportunities are associated with the company’s activity in the Asian market. Blackmores has recently reported on the beginning of the collaboration with Bega Cheese Ltd, one of the leading vitamin distributors in China. The cooperation opens up new opportunities in terms of extending the product line. Moreover, Blackmores has signed a profitable free-trade agreement that is likely to facilitate its operations in this country (Mackinnon, 2016)
The principle threat for the company is connected with the usage of exclusively natural ingredients in its production. Thus, one product might comprise up to 20 different ingredients (Evans, 2016). As long as the cost of raw materials is constantly increasing, the company will have to search for alternative solutions to sustain the prices. This threat is rather critical taking into account the fact that the competitive environment is already intense due to the activity of the low-cost players.
Marketing Objectives
The key step in working out a consistent marketing plan is setting the right objectives. First and foremost, they will provide a precise framework for further operating. They will also point out the criteria for assessing the plan’s implementation (McDonald, 2007). While setting the objectives, the following aspects were taken into account: the targeted period and the measurability of the targeted aims. For each of the critical segments – market penetration, market extension, product development and diversification – there is an objective set.
Thus, in the framework of market penetration, it is suggested that Blackmores strengthens its positions in Korea. According to the company’s report, its presence in some of the countries in the Asian market is already well established. For example, the average sales growth in Thailand and Malaysia composes 17-27% (Blackmores Limited Presentation to Goldman Sachs Emerging Companies Conference, 2013). Therefore, it is suggested that the sales growth in Korea in the next 12 months should also make a minimum of 17%.
In terms of the market extension, it is proposed that the company extends its operation to the Turkish market. Three years ago, the company announced its intention to strengthen its presence in three countries – Turkey, Korea, and Kazakhstan – as long as its presence is strong enough in the existing markets (Blackmores Limited Presentation to Goldman Sachs Emerging Companies Conference, 2013). Whereas the latter two countries already cooperate with the company, the Turkish market needs to be penetrated.
From the standpoint of the product development, it is suggested that the company promotes its innovative formula, UltraClean 85 and searches for the new ways of its implementation. A year ago, this concentrated fish oil was admitted for utilization by the world health community. Therefore, it is assumed reasonably that Blackmores creates a couple of products based on this formula. An alternative solution resides in finding new parties that would be interested in purchasing this formula for their production (Annual Report, 2015).
Lastly, the company must manage to maintain the current market share within the next 12 months. This objective is particularly important as long as the competitive environment gets more and more severe.
Thus, there are four principal objectives set for the next 12 months.
Target Markets and Positioning
Target Markets
Defining a target market is critical for the creation of an effective marketing plan. It is essential to note that due to the wide range of products that Blackmores offers, the potential market is rather wide. Thus, it is essential to examine the company’s offers to identify potential customers. From this perspective, the offered Blackmores’ products might be roughly divided into five groups: products for children, products for women, products for men, specific health products (eye health, brain health, etc.) and non-specific health products (vitamins, energy, everyday health, etc.).
Moreover, it is essential to note that the cost of Blackmores’ goods is relatively high due to the high quality of the ingredients and multicomponent formula of the products. Hence, the average price for a company’s product composes around 20 dollars, with a minimum price of 6.29 dollars and the maximum price of 57.39 dollars (Products, 2016).
Taking into account all the conditions described above, it is possible to draw a framework for the target market. Thus, Blackmores’ clientele might comprise both men and women, irrespective of their family status as the company offers products for both single people who want to improve their health and married couples who care about the health of their children. Moreover, the potential client is supposed to have sufficient income – as long as the company’s goods do not refer to those of primary necessity, a person should have enough money to afford to buy them. Lastly, it is the lifestyle vision that determines the targeted market largely. Thus, potential clients necessarily keep a healthy lifestyle and are interested in maintaining good physical and mental condition.
It is essential to note that current statistic shows that the interest in healthy products is increasing rapidly in Australia – people are willing to compensate for the shortage of essential vitamins in foods with the help of various health medicaments (Vitamins and Dietary Supplements in Australia, 2016). From this perspective, Blackmores’ prospects are rather promising.
Positioning
While working out an effective marketing plan, it is equally important to perform a consistent positioning that will let the company manage priorities in the right manner. Therefore, it is critical to indicate the factors that comprise Blackmores’ competitive capacity.
As it has been already mentioned above, the company does not pursue a low-cost policy so that the price factor cannot be treated as an advantage. In the meantime, the high products’ cost can be turned into a benefit on the condition that the company presents it as a sign of quality. High-quality is the main factor that allows Blackmores to preserve the customer’s loyalty. It is due to the quality that the company has won “Australia’s Most Trusted Vitamin & Supplement Brand” award for the seven years running; thus, the key focus should be put on this aspect of the offered goods (Blackmores wins Australia’s Most Trusted Vitamin & Supplement Brand 7 years running, 2015).
Another factor that helps Blackmores maintain its competitive advantage is its advisory activity. Thus, the customers are enabled to receive qualified online and phone consultation from the corporate specialists regarding the relevant products (Research and innovation, 2016). The individual approach assists in creating the impression of “specialty” in clients and preserving their loyalty. Moreover, it helps to promote the company’s production as customers are more likely to trust the experts’ opinion rather than advertising appeals.
As a result, the key aspects, that the company should focus on, in its promoting strategy is the high quality of the offered products and the availability of the professional consultation.
Marketing Mix Strategy
Product and Price
The company offers a wide range of products that can meet the varied demands of its clientele. Hence, a potential customer, concerned about keeping a healthy lifestyle, can find a lot of vitamins, medicaments, and foods in Blackmores’ product line. Also, the company launches some innovative products regularly. From this perspective, Blackmores needs to keep advancing their principle strategy encouraging their clients to consume healthy and natural products. Moreover, Blackmores must assure the high-quality of its goods: firstly because it is their key competitive benefit; secondly, because they operate in the field within which the quality of a product is crucial as it has a direct impact on a customer’s health.
In terms of pricing, the situation is more complicated. The average price of any product depends on the current cost of the raw materials that are used in its production. The main difficulty resides in the fact that some of Blackmores’ products have a multi-component formula. Hence, for instance, one product might comprise up to 20 ingredients. Nevertheless, the company’s CEO assures that the company holds the prices stable despite the leaps in the raw materials’ costs (Velissaris, 2015). Therefore, Blackmores must continue keeping the prices at the same level. Otherwise, the competitive advantage will be won by low-cost companies.
Place
The company has a large number of sites where customers can buy their products in Australia. Thus, the main distributing centres are located in Queensland, Victoria, Western Australia, etc. Also, the company has opened a series of its outlets in such countries as Kazakhstan, Thailand, Taiwan, Singapore, New Zealand, Malaysia, Korea, Hong Kong and China (Annual Report, 2015).
Meanwhile, to improve its distribution activity, Blackmores will necessarily have to emphasize the development of e-commerce. The option of online purchasing will allow advancing its production in those cities where there is no distribution site. It is expected that this measure will help to draw new customers, particularly young people that prefer doing shopping via the Internet.
Promotion
The promotion strategy is one of the most critical aspects of the marketing plan as it has a direct impact on the company’s sales. It is essential to note that Blackmores’ promotion policy is not stable; thus, the company tries different approaches, the outcomes of which are not always desirable. In 2011, for instance, its promotion campaign failed dramatically due to the companies over the pressing manner in trying to make an advertising agreement with the Australian pharmaceutical guild (Pharmacy guild pulls out of promotion deal with vitamin supplements giant Blackmores, 2011). This incident showed that Blackmores should pursue an independent promotion campaign relying on its resources.
According to experts’ opinion, the most efficient approach in the relevant framework resides in employing the so-called “promotional mix” (Kaser, 2012). In other words, different segments of the target market should be impacted in different ways: young customers can receive advertisements via social networks; elderly people can be contacted by phone and welcomed to receive a professional consultation, etc. Also, it is expected that all types of clients should be necessarily attracted by season discounts and special offers.
Conclusion
The report at hand provides a complex analysis of the current marketing situation in Blackmores and points out a framework for further development. Thus, the examination of the corporate data and the official company’s report has shown that Blackmores has a series of competitive advantages over its rivals in the relevant market.
The key benefits of the company are its high-quality goods and the wide range of items in the product line. As a result, it is suggested that Blackmores puts a particular emphasis on thee aspects while carrying out its positioning and promotion strategies. In the meantime, the multi-component formula of Blackmores’ products makes the company dependent on the prices in various markets. As a consequence, the company’s prices are relatively high that gives a certain advantage to its low-cost competitors. From this perspective, it is proposed that Blackmores manages to keep their prices stable regardless of the costs’ leaps in the raw material market.
It is also critical to note that the target market is highly varied; thus, the company should try to find a relevant approach to addressing different types of clients. The objectives set in the framework of the presented marketing plan are cons ice and measurable; the results of their accomplishment are expected to be viewed in twelve months.
Reference List
About Blackmores. (2014). Web.
Annual Report. (2015). Web.
Blackmores Limited Presentation to Goldman Sachs Emerging Companies Conference. (2013). Web.
Blackmores wins Australia’s Most Trusted Vitamin & Supplement Brand 7 years running. (2015). Web.
CFA Institute. (2012). Blackmores Limited. Web.
Evans, S. (2016). China Boom Helps Blackmores More Than Double its Interim Profit. The Sydney Morning Herald. Web.
Kaser, K. (2012). Advertising and Sales Promotion. Mason, Ohio: Cengage Learning. Web.
Mackinnon, M. (2016). Australia’s Blackmores enters China’s burgeoning baby formula market. Reuters. Web.
McDonald, M. (2007). Malcolm McDonald on Marketing Planning: Understanding Marketing Plans and Strategy. Philadelphia, Pennsylvania: Kogan Page Publishers. Web.
Pharmacy guild pulls out of promotion deal with vitamin supplements giant Blackmores. (2011). The Australian. Web.
Products. (2016). Web.
Research and innovation. (2016). Web.
Velissaris, H. (2015). Blackmores Expands Into Infant Formula. The Australian. Web.
Vitamins and Dietary Supplements in Australia. (2016). Web.