The product lines that the business deals with are fruit and fruit products. The fruits include mangoes, pineapples, papayas, bananas, oranges, water melons and passion fruits. The fruit products include fruit juices of the different fruit flavors and desiccated dried fruits.
Product Description
The quality of the products is the one that creates its uniqueness in the eyes of those buying it.
Some of the characteristics of the products that contribute to the product uniqueness are to maintain its natural taste and freshness, and the use of extremely attractive packaging to attract the customers thus, by just looking at the outward appearance, the product is likely to motivate and convince customers to buy them without any hesitations.
The products are also environmental friendly due to use of recyclable packs for packing them. Lastly, the products are clinically and nutritionally fit for human consumption.
Product Life Cycle
The product life cycle of a product describes the product’s stages of life. The initial stage is the introduction stage. The characteristics of this stage are few competitors, lack of product diversity, low volumes of sales leading to low profit margins. At this stage, the business has no competitors at all because it is the only business of this kind at the premises.
At the initial stage, the business concentrates on selling only the fruits in season which are a maximum of three fruits per season. Many customers are unaware of the business existence and thus the low volumes of sales at this stage. The second stage is the growth stage of a product. At this stage, the business faces a few competitors and increased product diversification.
The business does not only rely only on the products in the season, but also imports fruits from the rest of East African region. At this stage also, the sales increases rapidly due to customer awareness. This improves the profit margins. The third stage of product life cycle is the maturity stage. At this stage, the number of competitors increases and this leads to a drop in the profit margin.
The sales level stagnates. The final stage is the decline stage. At this stage, the business owner concentrates on improving the features of the products. For example, the business can introduce another line of products like concentrated fruit powder.
Brand
The brand of the business is its name, CK fruit digest. The brand name does not exist in the business name registry. This is because the name was in my mind. CK are the initials of the owner’s name, and fruit digest is the main activity of the business. The name is unique, easy to read, and pronounce. The name is easy to remember because it describes the nature of the business; therefore it is descriptive.
Packaging and labelling
The packaging for Fresh Juice is in branded plastic cups. The cups are easy to carry. The cups are of two different sizes; 250ml capacity and 500ml capacity. The packaging for desiccated fruits is in colorful labelled paper packs, which are easy to carry and store.
Marketing Mix – Price
Price Strategy
The pricing strategy that the business owner uses to get the price of the product is the cost plus pricing method. This is the simplest pricing method. In this method, the organization adds up all the costs it incurs in producing the product. This occurs when one considers both the variable and fixed costs and then adds up a percentage profit margin to determine the cost.
The other is the direct cost pricing which takes into consideration all the direct costs and profit margin. An inflation margin of 4% and an additional of 30% mark – up adds to the indirect cost to get the ultimate price of the product.
Price
Cost of the product = indirect cost X 30% mark-up X 4% inflation margin.
Price = 52.95 Kenya shillings
The wholesalers buy the products at ksh.60 per liter, and the retail price is 80 Kenya shillings per liter. The selling price is variable because it changes with the changes in the economy. This happens because of the inflation index which might be high or low. Only regular customers and those who buy the products in bulk enjoy a 15 days credit terms. The credit terms accrues an interest income of 10% per month upon expiry.
Marketing Mix – Place
Location
The location of the business premises is within the busy city center of Nairobi, Kenya’s capital city. The strategic location is within Uchumi supermarket, along Aga Khan Walk, plot number 5002/056. The choice of location is convenient because it is frequent by many people who visit the supermarket for shopping.
Within the location there exists a number of companies and institutions among which include; Kenya Power Company, Uchumi house, Kenya cinema, and Reinsurance plaza. The institutions around the place are; Institute of Human Resources Management, Vision Institute of Professional studies.
The location is advantageous due to the ample supply of clean water supplied by the city council of Nairobi, and there is also reliable supply of electricity. There is tight security around the area. The location is also near many open air markets such as Gikomba, Muthurwa and wakullima Markets from which the business gets its raw materials. The location has good reads for vehicles and well maintained and clean foot path for pedestrians.
Distribution
The product reaches the customers through road especially to customers who cannot get the product from the business due to the distance. The quantity that a customer purchases are under consideration because if the customer stays out of Nairobi city center, and he or she has an order of less than 20 liters then we advise the customer to include transportation charges.
For customers who purchase in bulk, transportation is an after sales service and not an added cost. The approximate cost of transport is 5,000 Kenya shillings per month, which translates to 60,000 Kenya shillings per year.
The transportation problems include poor handling of products thus leading to wastage. The other problem is a traffic jam that can lead to late deliveries. To mitigate the problems, the business ensures that there is safe handling of the products and that there are alternative transport modes of transport such as motor cycles and bicycles.
Sales Promotion
Publicity
The business could participate in the annual beverage testing event at KICC. The charges of the whole event are 50,000 Kenya shillings. The business offers free samples to create awareness to those customers who are not familiar with the products in terms of its taste
Specialty
The business uses specialty form of sales promotion at the beginning of each. The business achieves this by giving out calendars which have the business brand name on them. This increases the level of sales because to get a free calendar one has to purchase more than one liter of the products.
Personal Selling
This is the most efficient method of promoting a product. This is because in personal selling, the customer and the sales person maintain a direct contact. The benefit of this method is the direct communication between the two and hence the promotion of a personal contact.
Another advantage of this method is that the levels of sales are likely to shoot because a sales person can easily convince the customer to buy the product. Personal selling can take the form of a telephone conversation or face to face meeting of the seller and the buyer.
Advertising
The business could use different advertising Medias to create awareness of products to the customers. The business uses advertisements to increase the sales levels of the products and strengthen the business’s brand name. Different advertising Medias will help the organization achieve its goal. They include; advertising through social network media like Facebook and twitter.
The business can create a page to communicate to the customers the products it has. Photos of the products could also be put on the Facebook wall for customers to view and like or comment on the page. The social networks also enable the business to get feedback from its customers regarding the products.
Internet advertising could also create awareness of the products. The business could also use website to advertise both the products and the business. The use of a domain name similar to the one of the business name could create an easy access for customers. The domain name that the business intends to use is www.ckfruitdigest.com Does not exist.
Advertising through the daily newspaper especially towards the last week of month end can boost the level of sales. Advertising through the radio can also boost the levels of sales and create awareness to a vast population. The advert can be aired during the weekdays any time between 6am in the morning and 8.30am. The traffic jam towards Nairobi city catches up with many people who on their way to the city center for work.
Television is also another mode of advertisement that offers both the audio and visual advantages. The customers can hear and see the products as advertised in the television stations. Digital bill boards create vast awareness of products to different groups of customers.
They also have the advantage of displaying pictures and messages in motion. The business can edit the information in the digital bill board often for the benefit of the customers. Posters could enhance the creation of awareness of products especially during the product initial stages in the market.
There are different factors affect the sales promotion techniques thus affecting the objectives for promoting the products. For example if the advertisement is not timely then, it may not achieve its purpose. The target group can easily miss an advertisement if it is not timely. Another factor to consider is the target population.
The advertisement that an organization uses for children is highly different from the one that targets the working population. For example, if my target population is school going children then I would use the television with children enjoying the products after playing football in school. The advertisement will have the theme of a school set up. Another factor to consider is the cost effectiveness of the promotion media.
A business should select a method that it can afford without straining the operations of the business. Media that are too expensive for an organization may not survive in the long run thus hinders the achievement of the intended objectives. A factor to consider is the size of the advertisement. The bigger the advertisement in terms of space and time, expensive it becomes to the organization.