Marketing Assignment 23 PDF

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Marketing Plan Students Cheng Ming Wei Seng Mei Yi Derrick Tan Leroy Lee Lee Wei Cheng Cheng Jia Jun Lecturer Mr Kee Lee Koh Table of Contents 1. Executive Summary…………………………………………………………….……………. 2. Introduction……………………………………………………………………………………. 2 Vitagen History……………………………………………………...……….…….... 4 3. O...

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Marketing Plan

Students Cheng Ming Wei Seng Mei Yi Derrick Tan Leroy Lee Lee Wei Cheng Cheng Jia Jun Lecturer Mr Kee Lee Koh

Table of Contents 1. Executive Summary…………………………………………………………….……………..3 2. Introduction……………………………………………………………………………………..4 2.1 Vitagen History……………………………………………………...……….…….... 4 3. Objectives …………………………………………………………………...........…………. 4 3.1 Vision…………………………………………………………………….………....... 4 3.2 Mission………………………………………………………………….....……...…. 4 3.3 Marketing Objectives…………………………………………………..…..……….. 5 4. Situational Analysis……………………………………………………..……...…..... 5 4.1 The Macroenvironment……………………………………………...……………... 5 4.1.1 Social-cultural Environment…………………………………..……………... 5 4.1.2 Economic Environment……………………………………..……………...... 5 4.1.3 Political/Legal Environment ……………………………………………….... 6 4.1.4 Changes in technology……………………………………………………......6 4.1.5 Competitors…………………………………………………………………....7-8 4.2 The Microenvironment……………………………………..…………………..…... 9 4.2.1 SWOT Analysis………………………………………...……………………... 9 5. Market Research……………………………………………………………………………….10 5.1 Market Size and Potential…………………………………………………………...10 5.2 Market Trend……………………………………………………………………….....11 5.3 Market Structure…………………………………………………………………..….11 6. Selection and Measuring of Target Markets………………………………………………....12 6.1 Market Segmentation………………………………………………………………...12 6.1.1 Age…………………………………………………………………………..13 6.2 Target Marketing……………………………………………………………………....13 6.3 Marketing Position…………………………………………………………………….14 7. Product Objectives………………………………………………………………………………15 9. Target Market…………………………………………………………………………………15-16 10. Desired Positioning…………………………………………………………………………….17 11. Budget Forecast………………………………………………………………………………...18 12. Marketing Mix (4PS)…………………………………………………………………………….19 12.1 Product………………………………………………………………………………….19 12.2 Place…………………………………………………………………………………….20

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12.2.1 Vending Machines………………………………………………………..20 12.2.2 Marathons………………………………………………………………….21 12.3 Promotion……………………………………………………………………………..21 12.4 Price……………………………………………………………………………………22 13. Conclusion……………………………………………………………………………………….22 14. References……………………………………………………………………………………23-24

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1. Executive Summary The marketing report analyses Vitagen in the cultured milk market and its influence with market share. It starts with a brief history of Vitagen, followed by the company’s objectives and mission statement. Research from collected secondary information on the macroenvironment in Singapore, as well as its trends, will be presented and discussed. A SWOT analysis will also be used to evaluate Vitagen in its current market. Vitagen products are targeted more towards children and the elderly, hence new marketing and pricing strategies will be implemented. In addition, increase in advertisements and promotions will attract the target market segment and improve the value delivery network chain. Budget forecast will be reflected in later part of the report to determine sales. A marketing plan will be devised for a new product “Vitagen Chia”, with objectives of gaining market leadership and brand expansion. Implementation of STP, Consumer Segmentation, Target Market, and Product Placement will be carried out. The product launch will be documented and evaluated with Marketing Mix strategies (4Ps).

2. Introduction

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2.1 Vitagen History Vitagen was launched in 1997 by the Malaysia Dairy Industries (MDI), with the understanding that healthy digestive system is the key to helping Singaporeans lead healthier lifestyles. Vitagen became the premier cultured milk brand in Singapore. In 2005 MDI relaunched Vitagen to Vitagen Less Sugar to meet the increasing demands of health-conscious consumers. (Vitagen 2012). Following that, Singapore bought over Australian Shares leading in Equity, taking over the production of MDI in singapore. Condensed milk was produced under MDI, the first company to ever produce this product, and it was one of their very first milk products. MDI started the manufacturing and production of evaporated milk in 1970. MDI has been successful through, generating an annual sales income of around SGD$250million + RM400 million, both in Singapore and Malaysia. (MDI, 2017) 3. Objectives 3.1 Vision At Vitagen, you can always count on us to provide you with the energy you need to get through your day with our healthy drinks as we focuses on quality and health. 3.2 Mission The company provides consumers with healthy products to enhance their quality of life. Vitagen ensures quality by achieving International Organisation for Standardisation (ISO 9001:2008) that is certified for quality management systems.

3.3 Marketing objectives

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The objective of the company is to construct productive client connections by improving its marketing leadership position. This can be done by venturing into new geographical markets and being more prominent in key export markets. Vitagen aims to increase its sales in Singapore by 10% in the current year.

Figure 1: Product/ Market Expansion Grid

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Situational Analysis

4.1 The Macroenvironment 4.1.1 Socio-cultural Environment In today’s society, Singaporeans are becoming more health-conscious as individuals who are looking for ways to lead a healthy lifestyle have tend to increase overtime. This is evident since looking great and feeling young has become a priority for the working population. “Consumers are expected to become increasingly health-conscious and more discerning in their choices of packaged foods and beverages.” (Euromonitor 2016)

4.1.2 Economic Situation The economy in Singapore "expanded at a faster-than-expected 1.8% on a year-on-year basis in the final three months of 2016” (Tang 2017), which implies that Singapore is experiencing economic growth, hence individuals have the ability to buy the tangible products that is needed. This could suggest that individuals with a healthy mindsets are able to purchase healthier products like Vitagen. While workers see an increase in their salary, their spending power and patterns could still be restricted by inflation as costs of the products and services rises. 4.1.3 Political/Legal Situation

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Health awareness campaigns such as National Healthy Lifestyle Campaign (NHLC), organised yearly by the Health Promotion Board (HPB), is aimed to raise awareness and encourage healthy living among Singaporeans (Health Promotion Board 2014). This has led to individuals opting to consume healthier drink options. This indirectly supports Vitagen as they become a choice for individuals who are searching for healthier drink alternatives. Also, Singapore has implemented increased legislation, such as demanding detailed nutritional labels. This is important as it results in consumers’ satisfaction. 4.1.4 Changes in Technology

In today’s world, other than being able to communicate globally, people also have the privilege to buy products online in which they do not need to physically purchase them from stores. As there is significant increase in shopping online in Singapore, by 2025 the e-commerce industry is expected to generate US$5.4 billion in revenue(Channel News Asia, 24 May 2016, viewed 30 September 2016, Factiva Database). Vitagen has utilised the online platform to delivers its products to homes and preschools, allowing consumers to have a subscription based delivery system. Payment is made in cash after collecting the goods and consumers will have a ease of mind when shopping online.

4.1.5 Competitors

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Direct Competitor 1 - Yakult

Direct Competitor 2 - Meiji

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CP-Meiji Co, Ltd is one of the leading manufacturers of dairy products in Thailand. Although it is available in Singapore, there is not much awareness and marketing about it since CP-Meiji just entered the market compared with those traditional local milk brand. As far as value worth, Meiji Paigen is not a practical choice as Vitagen offers more at a much lower cost. (Meiji, 2017)

Brand Size Packaging Cost

Vitagen 125ml Pack of 5 bottles $3.20

Meiji Paigen 160ml Single bottle $1.20

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4.2 The MicroEnvironment 4.2.1 SWOT Analysis SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. We use SWOT Analysis to review our overall business condition.

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5. Market Research 5.1 Market Size and Potential

(Passport 2016) The above graphs displays the volume and sales in drinking yoghurt recorded over the years from 2011 to 2016 in Singapore respectively. According to Passport (2016), the market is still a growing industry and the figures are expected to increase with a forecasted growth of reaching 17.31 thousand tonnes in volume and 117.94 million in sales by 2021. The local cultured milk market grows at a steady constant rate 5 - 10% per annum. Vitagen has since become a household brand for more than 30 years in the industry. It is currently holding over 60% share in the local cultured milk industry and is widely distributed in Malaysia and Singapore. Vitagen has the opportunity to capitalise on the prospect and grow their market share.

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5.2 Market Trend In Singapore’s society, there is a rising trend in health-conscious individuals who are seeking healthier way of lifestyle. Supermarkets are bringing in more organic and healthier food choices which shows an implication of healthy trends. More Singaporeans are becoming proactive in purchasing products that enable them to feel good and young. This is especially so for the working population as it is important to look at one’s best in order to feel confident at work. "Cosmeceuticals, foods that claim to keep you looking good, are the next big nutritional thing. The trend continues to grow and develop. In Asia, we are beginning to see more beauty beverages. It is the beginning of 'beauty-food revolution' in Singapore." (MDI) 5.3 Market Structure

The data from the pie chart above shows that the Singapore yoghurt market is mostly occupied by 3 major brands, Yakult at 51.6%, Vitagen at 17.9% and Marigold at 10%. All the brands are very competitive in marketing and advertising to its consumers in Singapore. Vitagen and Marigold advertisement can be mostly seen on televisions commercials, outdoor advertisements and point-of-sale advertisements (Euromonitor 2013).

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6. Selection And Measuring of Target Markets 6.1 Market Segmentation

In Singapore, the government has been aggressively campaigning about the importance of health and wellness. More people are being educated about the importance of certain nutrients and thus shifting towards a healthier lifestyle. According to Passport (2016), many areas in the healthy food and drinks market are encountering a growth in consumption. Specifically, the digestive health market experienced a 35.5% increase from 2010 to 2015 and is expected to continue.

6.1.1 Age:

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6.2. Target Marketing Vitagen’s market target is aimed more towards toddlers and those who want to lead a healthy lifestyle, also take into consideration the delivery methods. A newly developed product called the Vitagen Collagen Less Sugar is a modified version of previous Vitagen, by doing so Vitagen is also broadening their range of products to cater women in their mid 20’s above. 5.1. Who can drink Vitagen LESS SUGAR? Vitagen LESS SUGAR is suited for anyone who is healthy conscious, its main motive is to be the pioneer of all probiotics drink. It can boost individuals with weak immune system and counter indigestion issues.

5.2. The perks of drinking Vitagen Vitagen proclaims to contain billions of active good bacteria called Lactobacillus acidophilus and Lactobacillus casei from Chr,Hansen’s Laboratories in Denmark.On top of that, it is the only cultured milk drink that has the highest in prebiotic fibre.

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6.3 Marketing Position

From the diagram above, in terms of quality Yakult and Vitagen are on par. However in price wise, Yakult is more pricey as compared to Vitagen and other products. To be able to stand out in the marketplace with a large range of products, Market positioning is essential. The purpose of positioning is to come up with a product and its marketing plan to highlight the attributes and benefits to entice the customers to buy their products. To be differentiated from their competitors, Vitagen strives to offer customers a low sugar content cultured milk drink which is value for money. Positioning statement for Vitagen Less Sugar: For all those people are health conscious, it is a better choice for consumers who are cautious about their sugar intake and wants to lead a healthy lifestyle. Positioning statement for Vitagen Collagen Less Sugar: For women that pays a lot of attention to their appearance, Vitagen Collagen less sugar is made to suit consumers that cares about their aesthetics at a low cost.

7. Product Objectives 1. To improve Vitagen’s market share and overtaking Yakult, achieving overall market leadership. 2. Penetrate new market opportunities by creating value to a new target segment 3. Raise awareness of “Vitagen Chia” to target market

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4. Achieve an increase in sales 5. Improve brand loyalty by achieving an increase in customer satisfaction 8. Target Market “Vitagen Chia” aims to open new doors by entering into the teenagers and young adult market. By capitalizing on the growing health trends and employing a new product for this target segment.

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9. Desired Positioning Vitagen Chia would be considered a premium from the standard Vitagen Less Sugar version as it provides more benefits and contains chia seeds that are also costly to produce.

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High Value

High Cost

Low Cost

Low Value

10. Budget Forecast

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11. Marketing Mix (4Ps) 11. 1 Product

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A new product will be introduced to improve Vitagen’s position in the market. The product would be Vitagen added with chia seeds, called “Vitagen Chia”. Chia seeds are currently marketed as a superfood, with a tremendous amount of nutritional value in them, including high amounts of fibre, protein, antioxidants, calcium, phosphorus, manganese and omega-3 fatty acids (Soat 2015). Many singaporeans are health conscious. Singapore has been promoting a healthy lifestyle to her citizens. Such nutritional benefits will attract these people to be potential consumers. Moreover, chia seeds are relatively tasteless and versatile when it comes to mixing with other foods and beverages; adding chia seeds into Vitagen still maintains the original taste, just with added benefit (Weintraub 2016). Chia seeds are also in trend. Many teenagers are influenced by trends as they want to fit in with their peers, and this ultimately leads to them purchasing the product. “Vitagen Chia” will help push Vitagen above all its competitors by targeting trends for young adults and teenagers and using its health benefits for working adults. This widens our target market to trendy teenagers and young adults. In addition, we would also improve the packaging. The packaging would be transparent, with its original shape and logo still printed on the same way.

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(Source: Carousell. Image by Unknown) Customers can see the content before purchasing the product, which gives a sense of transparency between the company and consumers. If they can see the product, the consumer would trust it more (Connolly 2014). On the other hand, Vitagen would be able to feature the chia seeds (Heneghan 2016). 12. 2 Place 12.2.1 Vending machines Vending machines would be placed at parks (in bicycle rental shops and outside restrooms) and gyms. In most cases, such places do not provide a convenient source to purchase Vitagen’s products. For fast moving consumer goods like Vitagen, it is important for these goods to be readily available to customers. Agreeably, people who would be present at parks and gyms would exercise and most likely are health conscious. Placing Vitagen Chia in these areas would likely result in a high profit. Vending machines would also be placed in schools, hospitals and nursing homes. These places usually restrict their students/residents to leave the place for a period of time, restricting more opportunities for them to purchase the products. By placing vending machines at such places, more consumers would be able to enjoy Vitagen’s products. Therefore, having Vitagen to be at these places would be beneficial for the profit and growth of the company. 12.2.2 Marathons Booths would be placed around the start and finishing points of marathons. By being involved in marathons such as SAFRA Singapore Bay Run & Army Half Marathon, it heightens awareness and creates positive publicity for our product through sponsoring events that aligns with the

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value of our product. Improving credibility image and prestige by association with sponsee(Friedman 2016). At the same time, people who run marathons are usually health conscious. Therefore, it would be beneficial to have Vitagen Chia in such events. This will help bring publicity to the new product as there would be large crowds at these events. Vitagen Chia would be placed in all the same distributors as Vitagen Less Sugar as well. 12.3 Promotion We would sell on allowance and give a discount to retailers. This is for shelf space and to maintain the relationship with distributors. A new product might not appeal to retailers as they would be unsure of the sales. Therefore, such measures are needed to convince retailers to give up some shelf space for the new product. This would be the best way to get the most exposure for Vitagen Chia. There would also be a promotion period for new delivery subscriptions. We could package Vitagen Less Sugar with Vitagen Chia with a discounted price. By giving discounts, we would be able to lure customers to purchase the new product. We could also hire salespeople at supermarkets, letting consumers have samples before purchasing products. This way, there would be trust between consumers and the company as they would know exactly what they are consuming. 12.4 Price Vitagen Chia would be priced at S$4.00, the same price as Vitagen Collagen. This would allow customers to have a choice and not be influenced by price when they do not feel like purchasing the usual Vitagen Less Sugar. The packaged delivery system would include 2 packages for introducing Vitagen Chia into the market. We would use bundle pricing strategy to package Vitagen Less Sugar and Vitagen Chia at the price of S$6.50, and Vitagen Collagen and Vitagen Chia at S$7.00 (Miceri 2009). Vitagen Chia could also be delivered individually at S$4.00. With such discounted pricing, consumers

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would most likely be interested to purchase the new product, considering that Vitagen Less Sugar and Vitagen Collagen are sold at only their original price of S$3.20 and S$4.00 respectively.

12. Conclusion We believe that if this marketing plan is followed through, we will be able to achieve our goal of 10% growth in Singapore by the end of the fiscal year based on our analysis. Also, we also believe that Vitagen will be able to claim the title as a market leader in the food and beverages industry in Singapore.

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13. Reference List Connolly, KB 2014, Food and Beverage Packaging in the Clear, Food Processing, viewed 6 March 2017, . Euromonitor 2016, Health and Wellness in Singapore, Singapore, viewed 29 March 2017, . Friedman, W 2016, Sponsorship: a key to powerful marketing, The Balance, viewed 7 April 2017, . Health Promotion Board 2014, National Healthy Lifestyle Campaign 2014 celebrates Healthy Living Master Plan achievements, raises awareness of healthy living options, Health Promotion Board,...