Temple Foods Marketing Plan: Specialization in Healthy Foods Essay (Article)

SWOT Analysis

Strengths

• Temple is a foods company that has been in the market since 1970.The reputation is a plus to the company, as individuals will associate with the good report of the company. Its specialization in healthy foods for two decades will make the firm to penetrate the market easily.
• The ready-to-drink beverage has nutritional values in it. This acts as a real meal. This therefore implies that the drink will be suitable to most people at different times. The beverage will solve the ardent problem of avoiding breakfast while adding nutritional benefit to the customers.
• The location of the company is unique to the venture. West of Australia is inhabited by a large population, most of whom are working and others are school going children. This will provide a ready market for the product as school children and working individuals will easily access the food store.
• Temple Company has interacted and satisfied its customers for several years. Their experience in handling clients will positively influence their daily transactions. The three representatives who streamline the company operations have a wide knowledge of customer needs (Hough, 2006). This experience will enable the representatives to address any queries from customers in relation to the new product.
• The company enjoys an already established network chain of retailers. The over a thousand outlets offer customer services and operate for long hours. With their long hour operations, the product will attract much attention from traditional customers. This will ease exposure of the product to the market. Together with the help of its initial market niche in health foods, customers will accept the product with ease.

Weaknesses

• The number of sales representatives poses a challenge to the firm considering its intention is to increase its market niche. They might have the experience but to capture a wide area, the firms need to have additional representatives in the market to help address the client queries.

• The initial strategy by the firm of not advertising might be a great undoing. This is because the existence of the firm and its intentions might be questioned by the market. Competitors might assert that the product is not up to standard

Opportunities

• There is a large population that is ripe for a beverage to substitute their breakfast. This population is increasing rapidly. The product therefore has a ready market for the products. The increase in demand of breakfast drinks i.e. in the USA is a clear indication that the market is in dire need of a unique product that fully meets their requirements.

• Temple has been making a fortune even without necessarily advertising their products. The strategy to adopt advertisement as part of the firm’s initiative to market the new beverage will create major attraction and curiosity among the customers who will be eager to test the product (Hough, 2006). This will largely attract quite a number of new customers, disadvantaging the traditional players.
• As the product is new in the market, its price will be competitive. This will be determined by the level of demand. The higher demand of the beverage will attract a higher price. This is because of the controlled production of the drink and before the duplication of the product by other competitors.
• The increasing number of employed people in the region will provide a ready market for the commodity. Moreover, with its unique features, some will opt to substitute it with meals. This will improve the firm’s portfolio.
• With the fall in the traditional consumption of traditional breakfast, there is a large market ready to be satisfied. These individuals are looking for an alternative and the new product will ultimately satisfy this group.

Threats

• Competition with food companies is high. This is because of the increasing market of breakfast foods. The close relationship of the product with the McDonalds cereal will provide a cutthroat competition.
• The increase in the market competitors will relatively lower the beverage price. This will affect the firm’s revenues negatively. In addition, it will discourage the penetration of the product to the market, as the prices will be biased.
• The unspecified consumption time of the new product might decrease consumption and ultimately profits. The beverage consumption period is not unique to breakfast alone. This might fail to interest the breakfast defaulters. The taking of the beverage might relatively vary over different times and seasons.

Objectives and strategy

Marketing and Financial Objectives

Sales

The main objective of Temple Company is to make a profit; the possibility of achieving this aim is the amount of sales the product fetches. Moreover, the firm intends to design a product that will address the breakfast issue while keeping customer’s health in a good condition.

• The new product is expected to be attractive to retail joints as its costs are much below the market figures. Apparently, the supermarkets operate with a 20 – 30 percent cost. With the initial production capacity, the Temple Company is able to produce up to 200,000 liters of the new beverage. This has a low unit cost of $0.8. The units are delivered to stores at half a liter containers.
• The market retail rates range from $2 to $6.The beverage will fetch a profit of up to 600% given the demand for the product is high.

Value of sales

Temple Company has a capacity of producing 200,000 liters a day with a unit cost of 0.8 dollars. The total cost is equal to,

(200,000 * 0.8) = $160,000 per day

Given minimum market price of 2 dollars, the sales value will be (200,000 * 2) = $ 400,000 per day.

From the above, daily sales value stands at $400,000. Monthly value of sales is 12 million dollars. The year value of sales will be 144 million dollars.

Firm’s profit

The value of sales and costs incurred are vital in calculating a firm’s profit. The main aim of the firm in the establishment of the new product is profit making. However, for profit to be maximized the firm’s cost should be minimized. Costs of the firm include both operation and manufacturing costs. A firm is said to have made a profit when its revenue is more than the costs incurred. The Temple Company costs include the payment of staff costs and those amounts used in advertisement.

The total costs of the firm are: (20,000 + 30,000 + 120,000 + 10,000) = $180,000.

Net profit = ($144,000,000 – $180,000) = $139,820,000 per annum.

The firm’s revenue postulates that the investment is worth because the costs are much below the revenue realized by the firm.

Strategy statement

Target Market

The target markets of Temple Company in relation to the beverage are both young and the working class individuals. In addition, the market extends to those individuals who have stopped the consumption of traditional breakfast. These individuals are either students or other firm employees. Due to the nature of the target market, Temple company strategy is based on how to bring the products close to these individuals.

Additional food stores close to the learning institution is pertinent to address the needs of the student population. The establishment of additional food joints near residential homes is good for quick access of the beverage to those who are employed and see taking breakfast as time wastage. The creation of awareness is paramount in marketing the product to the identified market; this therefore necessitates the usage of media to do advertisements.

Product uniqueness

The new product is differentiated from other competitors’ beverages. The beverage has nutritional value, which can substitute meals if taken three times a day. The packaging also uses the modern technology and can be stored for a while before it expires. The beverage purchase and usage time is at the convenience of the consumer. This uniqueness together with pocket friendly prices will make the product attractive to the customers who already subscribe to other competitors.

Marketing Mix

Product design and development

Product

The new product is designed to address the plight of individuals who have avoided breakfast. The beverage has also factored in the importance of nutrition in the product. The product is well packaged and it is comfortable to consume even while on transit.

• The retail prices are customer friendly; they range from two to six dollars. This is an affordable price as it is in a range of a day’s meal whose full nutrients are contained in the beverage.
• The packaging is done in 500 ml containers. This eases portability and enhances convenience, as the customers are able to enjoy their usage at their comfort.

Product classification

The new product is a breakfast unique brand in the breakfast food market. This is because of its distinct nutritional value. The necessity to satisfy the food market and provide an unrivaled service in the market is a plus to the product. The product is a ready-to-drink beverage; this does not require any additional improvement before consumption.

Students and employees have a product that satisfy their needs and therefore have no reason to stay hungry and be unproductive in their daily assignments. The nutritional value of the new drink will also promote their alertness on duty.

Sales

Due to insufficient market information about the introduction of new products into the market, turnover will be low at the initial stages of trading. Before the company breaks-even; it is unlikely that profits will be generated within the first year of establishment. This will however change after the creation of awareness through advertisements and use of sales representatives.

Advertisement creates awareness and builds interest on the product. Customers will seek association with this product given the sales representatives address their queries accordingly. Sales increase relatively when the customer base increases.

Profits

Breakfast market is an area that has not yet been fully exploited. Temple Company is also new in the market in relation to a unique product. With this mild experience about the market, it will take a while before the firm enjoys increased revenue. Most of the firm’s revenue in the initial stages will be used in the creation of awareness and other strategies to foster future growth and consequently increase revenue.

Apart from advertisement, the firm will relatively increase its funding on market research to establish the reactions of customers to their products and to advance other market requirements. Considering the high level of competition and the new state of Temple foods in the market, it is unlikely that the firm will make immediate profit. However, with the popularity of breakfast drink, Temple positioning in the market will earn her a fortune.

Beverage demand increases given the customers are curious and feel their needs are taken care of. This will increase the turnover and revenue in the long run. However, initial operations cost may outweigh the revenue realized, this reduces the profitability of the firm for a given duration before the operations are harmonized in accordance with the market demand.

Customers

Temple foods target customers are those individuals who do not take breakfast. The firm has already packed product to address the situation. The firm has a bright future in relation to customer base. This is because of the nature, specification and packaging of its products.

Given the firm’s adopted marketing strategy of advertisement, a lot of awareness of its products will be realized. This will generate massive interest and thereby increase the customer base. In addition, the customers attracted will be new customers outside the market and those already in the market. That is those who are already clients of competing firms like Kelloggs.

Competition

With the product being new in the foods market, competitors will initially be few. However, with the fierce competition in the foods industry, many companies will duplicate the product in the long run with the aim of matching the competition and retaining customers.

Product presentation

Temple Foods is aware that to market a new product, a strong choice of name is important to attract and create curiosity to customers. With the ingredients of the new product, temple is looking to devise a brand name that will increase customer impression in terms of the meal quality, convenience and portability of the beverage. Considering this is a unique product in the market, it is prudent for Temple to register and own the patent of the product. This will discourage duplication and foster revenue generation by the firm.

Place

The food company is located in Western Australia. The firm has been in existence since 1970; this has enabled it spread its branches to several regions. It has over a thousand outlets of its healthy foods. The establishment of outlets is done in places with dense population i.e. commercial centers. This has helped it stay in the market for over 4 decades without majoring on advertisement to increase its revenues.

Promotion plan

Objectives

• Creating Awareness

The proposed beverage is new in the market. The objective is to inform the breakfast defaulters about the existence of a new product with nutritional value in the market. Considering the price of the product might be high, advertisement in the media, i.e. TV is paramount. The advertisement will cover a wide area within a short period hence creation of a huge impact.

• Persuasion

The beverage has unique characteristics and the customers have to be persuaded to try the new product and experience its satisfaction quality. For a large group to be persuaded, the campaign should be high to reach a good number of people.

• Reminder

With the massive amount of products in the market, conduction of advertisements more often is paramount to remind existing and new customers of the new product in the market.

Strategies

Temple company promotional plan ensures that sales of the new product are not affected. Several factors are employed to address this; first, the use of advertisement is paramount. In addition, sales promotion will help act as a reminder. This is an initiative that will be fostered by the presence of traditional sales representatives of the company.

Pricing

This is a vital component which affects demand of a new product. Temple Company seeks to adopt a price flexible to the industry players and consumers. The cost of production per unit is 0.8 dollars. The market retail price ranges from 2 – 6 dollars. The highest price that a consumer is willing and able to pay is 6 dollars. This will lead to a maximum income by the firm after factoring in the unit production cost.

The lowest price that will be at the advantage of the consumer is 2 dollars. Temple Company will still make profit, although not maximum. The retail price that will satisfy the industry players, as it will help maximize revenue largely, is 4 dollars. The pricing of the product is in accordance to standards of customers. Lower income customers i.e. students will pay less while the employed will pay more because of market differentiation.

References

Hough, J.R. (2006). Business segment performance redux: a multilevel approach. Strategic Management Journal, 27(1), 45-61.