RAHMY MIP Assignment

8/3/2019 RAHMY MIP Assignment

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Author: M. Rahmy. H

1 Marketing In Practice

February 16, 2010

ACKNOWLEDGMENT

Author would like to thank Miss Nilusha Gallage for her

continuous support and guidance in the preparation of this study. Without her valuable

supervision, all my efforts would have been short-sighted.

Author would also like to thank a few of my fellow batch mates

who were always around to support me morally.

Author owes quite a lot to my parents who provided me the chance

to fulfill my career objectives and for the support throughout my studies. Author would like to

dedicate this study to them as an indication of their significance in this study as well as in my

life.

Author would also like to thank APIIT Lanka (PVT) Ltd for

providing me with the necessary facilities such as the library for all our references and also the

computer lab which helped me to find information on different topics by the use of the internet.


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TABLE OF CONTENT

ACKNOWLEDGMENT ...................................................................................................................1

TABLE OF CONTENT ....................................................................................................................2

Table of Figures ........................................................................................................................................ 5

List of Table .............................................................................................................................................. 8

ABBREVIATIONS ......................................................................................................................... 11

PROPOSAL.................................................................................................................................... 12

CONTENTS ................................................................................................................................... 13

COMPANY BACKGROUNG ........................................................................................................ 14

Formation................................................................................................................................................ 14

Progression.............................................................................................................................................. 15

Future ...................................................................................................................................................... 15

Mission & Vision .................................................................................................................................... 16

Product Range......................................................................................................................................... 16

Marketing Philosophy............................................................................................................................. 17

MARKET SUMMARY................................................................................................................... 18

Industry Structure.................................................................................................................................... 18

Industry Participants ............................................................................................................................... 19

Target Market.......................................................................................................................................... 20

Trend, Growth & Opportunity ................................................................................................................ 21

Gaps & Problems .................................................................................................................................... 21

SWOT ANALYSIS ......................................................................................................................... 22

Strengths ................................................................................................................................................. 22

Weakness ................................................................................................................................................ 23

Opportunities........................................................................................................................................... 23Threats .................................................................................................................................................... 23

Analysis & Wrap up................................................................................................................................ 24

MARKETING OBJECTIVES ........................................................................................................ 25

Functional Objectives ............................................................................................................................. 25


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Quantitative Objectives........................................................................................................................... 27

Qualitative Objectives............................................................................................................................. 28

MARKETING STRATEGY .................................................................................................................... 29

SEGMENTATION ................................................................................................................................. 30

Consumer Segmentation Bases ........................................................................................................... 30

Characteristics of Profile..................................................................................................................... 31

TARGETING.......................................................................................................................................... 32

Evaluation & Effectiveness of Segments............................................................................................ 32

Other Segment(s) evaluating criteria .................................................................................................. 33

Final Target Market & Location ......................................................................................................... 33

POSITIONING ....................................................................................................................................... 35

Differentiation Strategies and Description. ........................................................................................ 36

POSITIONING PROCESS .................................................................................................................. 38

Positioning Map .................................................................................................................................. 38

MARKETING MIX........................................................................................................................ 39

PRODUCT.............................................................................................................................................. 39

Product ................................................................................................................................................ 39

Product Concept.................................................................................................................................. 39

Product Classification ......................................................................................................................... 40

Brand Name ........................................................................................................................................ 40

Packaging & Labeling......................................................................................................................... 40

Product Levels .................................................................................................................................... 41

Product Type ....................................................................................................................................... 42

Product Life Cycle (PLC) ................................................................................................................... 43

Consumer benefits .............................................................................................................................. 44

Total Product Concept ........................................................................................................................ 45

PRICE ..................................................................................................................................................... 46

Factors Affecting Price ....................................................................................................................... 46

PRICING PROCESS ........................................................................................................................... 47

Price according to PLC ....................................................................................................................... 50

PLACE.................................................................................................................................................... 51


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CHANNEL DESIGN DECISION........................................................................................................ 51

Marketing Channel Flow .................................................................................................................... 55

Placed Retail Outlets ........................................................................................................................... 56

Delivery Road Map............................................................................................................................. 57

Proposed Channel Alternatives ........................................................................................................... 58

Place according to PLC....................................................................................................................... 58

PROMOTION......................................................................................................................................... 59

MARKETING COMMUNICATION PROCESS .................................................................................. 59

MARKETING MATERIALS ................................................................................................................ 71

Promotional activities according to PLC ............................................................................................ 82

IMPLEMENTATION & CONTROL ............................................................................................. 83

STEPS FOR SUCCESSFUL PLAN EXECUTION.................................................................................. 83

APPENDIX................................................................................................................................................ 91

REFERENCE LIST...................................................................................................................... 118


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Table of Figures

Figure 1 Then & Now ................................................................................................................... 15

Figure 2 Future Expansion ............................................................................................................ 15

Figure 3 Mission & Vision ........................................................................................................... 16

Figure 4 Product Range ................................................................................................................ 16

Figure 5 Product Needs ................................................................................................................. 17

Figure 6 Marketing Concept ......................................................................................................... 17

Figure 7 Monopolistic Competition .............................................................................................. 18

Figure 8 Competitors .................................................................................................................... 19

Figure 9 Indirect Competition ....................................................................................................... 19

Figure 10 Business to Customers .................................................................................................. 20

Figure 11 Business to Business..................................................................................................... 20

Figure 12 Trend, Growth and Opportunity ................................................................................... 21

Figure 13 Gaps and Problem......................................................................................................... 21

Figure 14 SWOT Analysis ............................................................................................................ 22

Figure 15 Corporate Objectives .................................................................................................... 25

Figure 16 ANSOFF Matrix ........................................................................................................... 26

Figure 17 AIDA Model ................................................................................................................. 26

Figure 18 Quantitative Objectives ................................................................................................ 27

Figure 19 Qualitative Objectives .................................................................................................. 28

Figure 20 STP Process .................................................................................................................. 29

Figure 21 Value Proposition ......................................................................................................... 35

Figure 22 Positioning Map............................................................................................................ 38

Figure 23 Brand Logo 2 ................................................................................................................ 40

Figure 24 Brand Logo ................................................................................................................... 40

Figure 25 6 & 9 Pack .................................................................................................................... 40

Figure 26 Single Pack ................................................................................................................... 40

Figure 27 Product Levels .............................................................................................................. 41

Figure 28 Potential Product .......................................................................................................... 41

Figure 29 Boston Consulting Group Matrix ................................................................................. 42

Figure 30 Consumer Benefits ....................................................................................................... 44
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Figure 31 Tangible Benefits.......................................................................................................... 44

Figure 32 In-Tangible Benefits ..................................................................................................... 44

Figure 33 Total Product Concept .................................................................................................. 45

Figure 34 Pricing Process ............................................................................................................. 47

Figure 35 Elastic Demand Curve .................................................................................................. 48

Figure 36 Channel Design Decision ............................................................................................. 51

Figure 37 Buying Requirements ................................................................................................... 52

Figure 38 Selected Distribution Channel ...................................................................................... 54

Figure 39 Physical Flow ............................................................................................................... 55

Figure 40 Payment Flow ............................................................................................................... 55

Figure 41 Information Flow .......................................................................................................... 55

Figure 42 Promotion Flow ............................................................................................................ 56

Figure 43 Road Map 2 .................................................................................................................. 57

Figure 44 Road Map ..................................................................................................................... 57

Figure 45 Marketing Communication Process ............................................................................. 59

Figure 46 Favorability & Familiarity Matrix ................................................................................ 61

Figure 47 Communication Message ............................................................................................. 62

Figure 48 Communication Platform ............................................................................................. 65

Figure 49 Billboards targeting Workers .................................................................................... 71

Figure 50 Billboards targeting Parents & Shoppers 2 ............................................................... 72

Figure 51 Billboards targeting Parents & Shoppers .................................................................. 72

Figure 52 Billboards targeting Children .................................................................................... 73

Figure 53 Posters for all target groups ...................................................................................... 73

Figure 54 Magazines & News Papers targeting Workers, Parents & Shoppers........................ 74

Figure 55 Magazines & News Papers targeting Children & Parents ........................................ 75

Figure 56 Flyers targeting all target audience 2 ........................................................................ 76

Figure 57 Flyers targeting all target audience ........................................................................... 76

Figure 58 Corporate Webpage for all target audiences ............................................................. 77

Figure 59 Advertising Pillar 3....................................................................................................... 78


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Figure 62 Functional Pillar ........................................................................................................... 79

Figure 63 Bus Stop Shelter 1 ........................................................................................................ 80

Figure 64 Bus Stop Shelter 2 ........................................................................................................ 80

Figure 65 Complements 2 ............................................................................................................. 81

Figure 66 Complements ................................................................................................................ 81

Figure 67 Toy gifts targeting Children...................................................................................... 81

Figure 68 Successful Marketing Plan ........................................................................................... 83

Figure 69 Functional Structure ..................................................................................................... 84

Figure 70 L-M-J Group of Companies ......................................................................................... 91

Figure 71 Formation Process ........................................................................................................ 92

Figure 72 Go Nuts Donuts Product Range ................................................................................... 93

Figure 73 Branch Network............................................................................................................ 94

Figure 74 Newly Introduced Donuts............................................................................................. 94

Figure 75 Donuts........................................................................................................................... 95

Figure 76 Beverages ..................................................................................................................... 96

Figure 77 Internal Factors affecting Marketing Objectives .......................................................... 99

Figure 78 External Factors affecting Marketing Objectives ......................................................... 99

Figure 79 Process of Positioning ................................................................................................ 107

Figure 80 Competitive Advantage .............................................................................................. 107

Figure 81 Value Proposition ....................................................................................................... 110

Figure 82 Corporate Website Design .......................................................................................... 117
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List of Table

Table 1 Selected Consumer Segment Bases ................................................................................. 30

Table 2 Characteristics of Profile ................................................................................................. 31

Table 3 Target Segment/Audience................................................................................................ 33

Table 4 Target Location ................................................................................................................ 33

Table 5 MIS .................................................................................................................................. 34

Table 6 Differentiation Strategies ................................................................................................. 35

Table 7 Differentiation Strategies & Description ......................................................................... 36

Table 8 Positioning Strategies ...................................................................................................... 37

Table 9 Positioning Strategies & Description ............................................................................... 37

Table 10 Go nuts Cup Cake .......................................................................................................... 39

Table 11 Point of Differences (POD's) ......................................................................................... 42

Table 12 Product Life Cycle ......................................................................................................... 43

Table 13 Total Product Concept & Description ........................................................................... 45

Table 14 Internal Factors Affecting Price ..................................................................................... 46

Table 15 External Factors Affecting Price.................................................................................... 47

Table 16 Fixed & Variable Cost ................................................................................................... 48

Table 17 GNWD Cost Estimation ................................................................................................ 49

Table 18 Competitors Price .......................................................................................................... 49

Table 19 Final Cupcake Price ....................................................................................................... 50

Table 20 Price according to PLC .................................................................................................. 50

Table 21 Desired Service Output Level ........................................................................................ 52

Table 22 Factors affecting Channel Objectives ............................................................................ 53

Table 23 Identifying Channel Alternatives ................................................................................... 53

Table 24 Placed Retail Outlets ...................................................................................................... 56

Table 25 Proposed Channel Alternatives ...................................................................................... 58

Table 26 Place according to PLC.................................................................................................. 58

Table 27 Target Audience ............................................................................................................. 60

Table 28 Familiarity Scale ............................................................................................................ 60

Table 29 Favorability Scale .......................................................................................................... 61

Table 30 Communication Objectives............................................................................................ 62


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Table 31 Communication Channels .............................................................................................. 64

Table 32 Promotion Budget .......................................................................................................... 64

Table 33 Factors affecting Marketing Mix ................................................................................... 65

Table 34 The Best Selected Promotional Mix .............................................................................. 66

Table 35 Media type and their respective descriptions on which to promote .............................. 67

Table 36 How to, what time and the frequency to promote .......................................................... 69

Table 37 Related Time according to Target Market ..................................................................... 70

Table 38 Indicators ....................................................................................................................... 70

Table 39 Promotional Activities according to PLC ...................................................................... 82

Table 40 Resources ....................................................................................................................... 84

Table 41 Departments Workload................................................................................................. 85

Table 42 Target People ................................................................................................................. 87

Table 43 Controls .......................................................................................................................... 88

Table 44 Controls & their Methods .............................................................................................. 89

Table 45 District Population ......................................................................................................... 97

Table 46 City Population .............................................................................................................. 97

Table 47 Internal Factors & Description ...................................................................................... 99

Table 48 Population of Targeted Cities according to Age wise ................................................. 101

Table 49 Population of Targeted District according to Age wise ............................................... 102

Table 50 Population of Targeted District according to Gender wise .......................................... 102

Table 51 Population of married couple, which could be equal to parents in Targeted District .. 103

Table 52 Number of people employed in Sri Lanka ................................................................... 103

Table 53 Expenditure of Sri Lankan Households ....................................................................... 104

Table 54 Income Level of Sri Lanka .......................................................................................... 105

Table 55 Other Segment(s) evaluating criteria ........................................................................... 106

Table 56 Competitive Advantages & Criteria ............................................................................ 108

Table 57 Criteria for Differences ................................................................................................ 109

Table 58 Winning Value Proposition Strategy ........................................................................... 110

Table 59 Marketing Objectives ................................................................................................... 113

Table 60 85% of the target market to reach ................................................................................ 113

Table 61 85% of Target Market to reach .................................................................................... 114


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Table 62 Respective Costs .......................................................................................................... 116


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ABBREVIATIONS

GNWD - Go Nuts with Donuts

CSR - Corporate Social Responsibility

PLC - Product Life Cycle

LMJ - Lalin Michael Jinasena

MIS - Marketing Information System


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PROPOSAL

To : Gonuts with Donuts

From : Mohammed Rahmy Haniffa

Date : 16FEBRUARY2010

Subject: Marketing Plan for Cup Cakes to deliver customer value amongst the

snack cake segment, keeping in line with strategic aspiration of Gonuts

with Donuts.


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CONTENTS

MAIN HEADINGS

ACKNOWLEDGMENT............................................................................................................................... 1

TABLE OF CONTENT ................................................................................................................................ 2

ABBREVIATIONS .................................................................................................................................... 11

PROPOSAL ................................................................................................................................................ 12

CONTENTS................................................................................................................................................ 13

COMPANY BACKGROUNG ................................................................................................................... 14

MARKET SUMMARY .............................................................................................................................. 18

SWOT ANALYSIS .................................................................................................................................... 22

MARKETING OBJECTIVES .................................................................................................................... 25

MARKETING STRATEGY....................................................................................................................... 29

MARKETING MIX.................................................................................................................................... 39

IMPLEMENTATION & CONTROL......................................................................................................... 83

APPENDIX................................................................................................................................................. 91

REFERENCE LIST .................................................................................................................................. 118


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COMPANY BACKGROUNG

Formation

Go Nuts with Donuts is a business, which was the first to open a

donut caf, to provide a variety of delicious donuts to customers of Sri Lanka. This is a part of

Lalin Michael Jinasena & Co, (LMJ). They first launched their outlet at the ODEL Department

stores boulevard food court on the 2nd of March 2009. (Gonuts with Donuts corporate website,

2009)

There is also a similar business operating in Philippines, called

Go nuts Donuts, where they too offer a wide range of donuts and other snacks to their

customers. But GNWD is not a franchise of it. (Go Nuts Donuts corporate website, 2009)

REFER APPENDIX 01& 02

REFER APPENDIX 03


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Started With 1 Store

3 Delivery Bikes

6 Flavours

1160 Donuts per day Production

36,000 Donuts per month

Crew of 15

THEN

March 2009

8 stores in Colombo

6 Delivery bikes

16 Flavours + Specials

2600 Donuts per day Productiion

80,000 Donuts per month

Crew of 62

NOW

November 2009

LOCALLY

TO INTRODUCE A NEWRANGE OF PRODUCTS ANDINCREASE MARKET SHARE.

Introduce to Outstationcities.

To give permission onOperating Franchise.

GLOBALLY

To open a Donut Cafe inMaldives.

Expand to established

Regional Markets.

Progression

Lalin, CEO of GNWD (2009) stated in his corporate speech, from

the day of launch, there have being a high demand for their products, which lead to expand their

outlets to various places in Colombo and increase the variety of offerings.

Future

Is what GNWD wants to achieve in future according to their

prediction and business strategy.

Source: CEO GNWD Companys Internal Briefing (2009)


Figure 1 Then & Now

Figure 2 Future Expansion

REFER APPENDIX 04


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To Create "Gonuts with Donuts"as a household brand name forhigh quality, value for money

bakery products. To beome a "must have" for all ourTarget Market.

DONUTS

SWEET

DONUTS

SAVORY

DONUTS

SEASONAL

SPECIALS

BEVERAGES

DRINKS &

COFFEES

Mission & Vision

Product Range

These are the products which GNWD offers to their customers in

order to capture value in return.

Source: Gonuts with Donuts corporate website (2009)


Figure 3 Mission & Vision

Figure 4 Product Range

REFER APPENDIX 05 & 06


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PRODUCT NEEDS

HUNGER

Dessert

REFRESHMIND

SWEETTOOTH

GIFT

SNACK

PARTIES /FUNCTION

CustomersNeeds &Wants

IntegratedMarketing

ProfitsThrough

Satisfaction

The product needs explains the reasons or motive customer are

purchasing donuts:

Marketing Philosophy

Used by the company is Marketing Concept, where donuts are

produced according to customers needs and wants, these information regarding customers

needs are gathered using FACEBOOK, a group with 10,000 members and other sources. Also

referAPPENDIX 02 - FORMATION.

Source: Kotler & Keller (2006:16)

Source: Compiled by Author (2010)

Figure 5 Product Needs

Figure 6 Marketing Concept

REFER APPENDIX 07


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MONOPOLISTIC COMPETITION

Numerous & Largeproducers such asFab, Perera & Sonsand Barista. Alsolarge number of

consumers

DifferentiatedProducts according

to Savory, Taste,Branding &Advertising.

Low entry barriersand to exit to

industry. Hit andRun policy.

GNWD have somecontrol over theprice charged.

MARKET SUMMARY

Industry Structure

Theindustry in which GNWD operates is Confectionary

Industry. Industry Structure in which GNWD operates is Monopolistic Competition.

However in terms of product specialization, GNWD is the only

donut caf in Sri Lanka, which also could be a Monopoly. (Gonuts with Donuts corporate

website, 2009)


Figure 7 Monopolistic Competition


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Competitors

Fab PastryShop

Perera &Sons

Caravan

PastryShop

BaristaCinnamon

Grand -Coffee Stop

Sponge

PastryShop

ChariotPastryShop

Is a limted factor, customers can be spend on Donutsor other products such as Pizza, Burgers, other snacks.

MONEY

Customers could purchase Cakes, Ice cream,Choclates and other sweets.

OTHER SUPPLIES OF SWEETS

Customers could visit Pizza, Mc Donalds etc... on

behalf of GNWDFOOD RETAIL OUTLETS

Other outlets proviing this services such as Dinemore, Pizza Hut, Queens Cafe and etc...

DELIVERY SERVICES

Industry Participants

The below participants are the DIRECT competitors of GNWD,

where they have a direct impact on activities of the firm.

Indirect Competitors of GNWD, who competes with these

participants in terms of other factors as mentioned below.



Figure 8 Competitors

Figure 9 Indirect Competition


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Children

5 - 14years

ParentsAdults /Office

WorkersShoppers

TargetMarket

CAFE'sSCHOOL /

OFFICECANTEENS

TargetMarket

Target Market1

Business to Customers (B2C)

Business to Business (B2B)

1 Are the potential customers of GNWD, where they will mainly focus on them and prepare the marketing plan according to their

needs to capture value in return.



Figure 10 Business to Customers

Figure 11 Business to Business


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TREND

Increasing in Fast Foodsconsumption.

Increasing Demand forProduct Variety.

Increasing in sweetsconsumpition.

Building up Cafe trend

Snack trend

GROWTH

High Demand for Donuts

Loyal customers for GNWD

Strong Brand Image

GROWTH THROUGH OTHERPRODUCTS.

OPPORTUNITY

Increase Product Range /offerings.

Online Purchasing /Ordering.

Cater to Outstation Market.

Find another Target market /customers.(Sugar free donuts)

GAPS

Limited Product Range / Type(only donuts).

Delivery only to a limited area.

Offering are available only inColombo.

Inadequate marketingmaterials.

PROBLEM

Health Care Problem

Causes obesity

Limited Product Life cycle,Short for Donuts.

limited to one product type.

Customers are price Sensitive.

Cost Fluctuation

Trend, Growth & Opportunity

Gaps & Problems



Figure 12 Trend, Growth and Opportunity

Figure 13 Gaps and Problem


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STRENGTHS

+ First & Only donut cafe in Sri Lanka to establish.

+ Strong and Establish brand name.

+ Managed by Multinational team of industrySpecialist.

+ Consumer Focused.

+ Outstanding marketing & production technology.

+ Facebook group with 10,000 members.

+ Specialized Donuts manufacturer.

WEAKNESSES

- Unsuccessful cafe trend.

- Short product life cycle or life span.

- Uncreative Marketing Materials.

- Limited Price structure.

- Limited Product range.

- Low product available.

OPPORTUNITIES

* Locally untapped market.

* International markets.

* Business Franchise operations.

* Unlimted confectionary needs.

* Online purchasing.

* Vertical Integration.

* Healthy confectionary.

THREATS

! Increasing health concernd.

! Price Sensitive customers.

! Cost Fluctuation.

! Low industry entry barriers

! Local Competition

SWOT

SWOT ANALYSIS

Strengths

First and only caf to specialize and produce donuts to customers of Sri Lanka.

Very popular, strong and quickly (9 months) established brand.

Managed by well trained and multi skilled set of employees, who work in different trade.

Focused on customer needs, which makes it successful and minimize risk of failure.

Source: CEO GNWD Companys Internal Briefing (2009); Compiled by Author (2010)

Figure 14 SWOT Analysis


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Weakness

The trend of customers visiting and consuming habitually in cafes is unsuccessful.

The sweet products have a short life cycle, mature quickly. Marketing Techniques used is similar and common, so could lead to boredom to see.

The products have a limited price range which GNWD has to attach to.

There is no variety in product range unless in donuts.

Limited availability, only in Colombo.

Opportunities

Could focus on countryside cities, where there are potential cities.

Could focus on other countries such as Maldives and others.

Could give permission for franchise operation, easy way to expand and popularize.

Confectionary needs of people are always unlimited, always want sweets.

Make possible to make orders online and deliver home, reduces cost.

Vertical integration with suppliers could reduce cost of production and cost fluctuations.

Threats

People are more concerned about health which reduces consumption of sweet products.

Consumers are price sensitive cannot increase price, could decrease demand.

Cost fluctuates as import tariffs, seasons, economy changes.

Possible threats from new participant as low barriers to enter.

Local competition from already well established bakers.


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Analysis & Wrap up

GNWD has quickly & well established in the market with high

technology. They also have a good loyal customer base.

However they offer a limited product range of to customers, which

is also in maturity stage.

Since there is an endless confectionary needs and GNWD have a

good knowledge about the market they could introduce a new product line to their target

audience and achieve their objectives.


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CORPORATE OBJECTIVES

Company Growth

Move to Growth stage in their PLC fromthe Introduction stage in the life cycle of

GNWD.

Increase Revenue

+ Maintain daily sales and sales volumeaccording to their budgets.

+ Improve Brand Awareness and earn goodword of mouth

+ Quality and Fresh donuts to be offerd tocustomers.

+ Increase Availability of donuts tocustomers

MARKETING OBJECTIVES2

These are essential factor for the success since it gives a direction.

These are set for Operational level in the organization.

Functional Objectives

GNWD could grow in two methods according to ANSOFF Matrix,

Market Development by catering to other cities of Sri Lanka and Product Developmentthats

by introducing Cup Cakes to the existing market. (In Authors view point)

2 Is what GNWD wants to achieve in its life span. These objectives provide a direction for GNWD to move forwards and these

should be measured to check whether GNWD is in the right track by using mile stones. All objectives should be defined properly,

time bound and achievable (Kotler & Keller, 2006:37)


Figure 15 Corporate Objectives


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Awareness Interest Desire Action

GNWD should use these methods.

Also use AIDA3 model to increase sales, revenue, profits and

market share.

3 Create Awareness to customer about product, formulate Interest to purchase, create Desire and make Action among consumers

to consume the product and achieve the marketing objectives. (Kotler, 2002:637)

Source: Kotler (2002:637)


Figure 16 ANSOFF Matrix

Figure 17 AIDA Model


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QUANTITATIVE OBJECTIVES

STRECTH OR FILL THEPRODUCT PORTFOLIO

* Successfully stretchthe portfolio byintroducing Cup Cakes

by early 2010.

MARKET SHARE

* To increase by 20% inthe end of 2011 for

GNWD by focusing onother markets.

* Increase customerbase by 10% by

introducing Cup Cakesby 2011.

BRANDING

* To increase Brand

Awareness by 10% by2011.

* To Increase MarketingMaterials by 5% in

2010.

SALES / REVENUE

* Increase by 05% fordonuts by end of 2011.

* To Sell 1.5 Mil CupCakes by 2011.

* To maintain 20%Profit Margin.

Quantitative Objectives


Figure 18 Quantitative Objectives


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QUALITATIVE OBJECTIVES

BRANDING

* To increase Brand Image inthe Target Market by 2012.

* To increase brand recalling byinnovative Marketing

Materials.

* Increase Brand Loyaltyamoung customers.

CUSTOMER AWARENESS /SATISFACTION / RETENSION

* Increase retension byintroducing Cup Cakes by 2010

(Product Development).

* Increase Awareness byexpanding to Outstation by2011 (Market Deelopment).

* Increase Satisfaction byimproving quality & availability.

TREND SET

Successfully introduce a cafetrend to Sri Lanka and a "Donut

with Coffee" trend.

Qualitative Objectives

There are several internal factors4 and external factors5 which

affects GNWD while setting and achieving these objectives.

4Internal Factors could be the Resources of GNWD, Corporate culture and Staff Aspiration.

5External Factors could be Customers, Economy, Competitors and Technology.

REFER APPENDIX 08


Figure 19 Qualitative Objectives

REFER APPENDIX 09


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Group customers into segment based onsimilar charactoristics.

NEED BASEDSEGMENTATION

Determind segmentation variables forneed based group.

SEGMENTIDENTIFICATION

Determind segment attractiveness basedon criteria.

SEGMENTATTRACTIVENESS

Determind segment profitability.SEGMENTPROFITABILITY

Create value proposition & positioningstrategy.

SEGMENTPOSITIONING

Test segment attractivenessACID TEST

Plan all aspects of marketing mix.MARKETING MIX

MARKETING STRATEGY

For GNWD could be done in a process called STP (Segmentation

Targeting and Positioning).

SEGMENTATION

TARGETING

POSITIONING


Figure 20 STP Process


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SEGMENTATION6

According to levels of segmentation, the strategy used by GNWD

is Target Marketing, where different products (doughnuts, coffees & cupcakes) are offered to

few market segments. (Kotler & Keller 2006 p224)

Consumer Segmentation Bases

There are two main variables which GNWD has to considers,

which are as follows:

I. Needs7

II. Profilers8

Selected Consumer Segment Bases

GNWD could use the above bases do identify its target market or

the segment since these are bases which describes their customers in a well manner and they

are the probable and potential customers

6Is where GNWD will identify the overall market and separate them into different group of buyers with similar

consumer profiles. (Kotler, 2002:256)7A fundamental criterion is according to customers needs.

8Are the descriptive and measurable characteristics that can be used to differentiate customers.

DESCRIPTORS CHARACTERISTICS

Geographic Regions & Cities

Demographic Age, Gender, Income and Occupation.

Psychographics Life style

Behavioral Occasion & Benefits

Table 1 Selected Consumer Segment Bases



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Characteristics of Profile

BASESSUB

BASESCHILDREN PARENTS WORKERS SHOPPERS

GEOGRAPHAIC City &

Town

All children from

selected Cities &

Town.

All parents from

selected Cities &

Town.

All workers from

selected Cities &

Town.

All shoppers

fromselected

Cities & Town.

Regions &

District

Of all4 Districts Of all4 Districts Of all4 Districts Of all4 Districts

DEMOGRAPHIC Age 514years 2260 years 2050 years 560 years

Gender Male & Female Mothers Male & Female Male & Female

Family Size 210 2 - 2 - 10

Income - Above

Rs 20,000/=

Above

Rs 20,000/=

Above

Rs 20,000/=

Occupation Student Parents Any job Any job

PSYCHOGRAPHIC Life Style Dependent

BEHAVIORAL Occasions Evening Tea,

Snacks & Parties.

Snacks, Evening

Tea, Parties &

functions.

Snack and

Evening Tea.

Snacks, Evening

Tea, Parties &

functions.

Benefit

Sought

Sweet Tooth,Snack &Hunger.

Sweet Tooth,

Gift, Snack& Hunger.

Sweet Tooth,

Snack, Refresh

mind &

Hunger.

Sweet Tooth,

Gift, Snack,

Refresh mind &

Hunger.

Table 2 Characteristics of Profile

Selected Cities & Town:Colombo, Kandy, Kurunegala, Dehiwala MtLavania and Moratuwa,

4 Districts: Colombo, Kandy, Kurunegala & Gampaha.



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TARGETING9

For evaluating the effectiveness of the segments there are certain

factors it should comply with, they are Measurable, Accessible, Substantial, Differential and

Actionable. (Kotler & Keller 2006 p246)

Evaluation & Effectiveness of Segments

The selected segments are clearly measurable & substantial for

GNWD to cater successfully and earn an excellent profit, this could be proved by census and

statistics with the evidence as referring to appendix 10. (In Authors view point)

The preferred segments are accessible since in which Colombo

segment GNWD already successfully caters with donuts, so there will not be any further

quandary. As well as in other segments also there will not be any setbacks, because GNWD

operate in a monopolistic competition industry. (In Authors view point)

As the target market are Children, Parents, Workers & Shoppers,

are completely different in their characteristic, they prefer and respond to different marketing

mix, This proves they are differential. (In Authors view point)

According to the facts and figures referred in appendix 10 of Sri-

Lanka and the selected segments it endows us with a favorable upshot, which proves us that we

could cater to the selected market successfully. This is actionable. (In Authors view point)

9In this stage GNWD will evaluate the segments attractiveness and select the segments to penetrate.

REFER APPENDIX 10


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Other Segment(s) evaluating criteria

After considering and evaluating other segment(s) evaluating

criteria information, GNWD can target to serve the most appropriate segment(s), as they cannot

server all preferred since limited resources and not feasible at the present situation. (In Authors

view point, 2010).

Final Target Market & Location

Table 3 Target Segment/Audience

Table 4 Target Location

After GNWD evaluating the segments and selecting the target

market, the company has to decide how to serve, the Targeting Strategy. For GNWD the

appropriate strategy would be Differentiated Marketing10

, and use Product Specialization11

.

(In Authors view point, 2010)

10Is a Targeting Strategy in which it will serve several market segments and deign separate marketing mix or offers

for each segment.

11Is where they cater a specific range of products to all market segments.

TARGET SEGMENT / AUDIENCE

Children

Parents

Workers

Shoppers

TARGET LOCATION

Colombo

Kandy

Kurunegala

Dehiwala MtLavania

Moratuwa



REFER APPENDIX 11


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A fine developed MIS12 will provide GNWD with rich details to

make effective decision and seek opportunities.

12An integrated system consisting of people, equipment and procedures to gather, sort, analyze, evaluate and

distribute accurate & timely information to make effective decision. (Kotler,& Armstrong, 2006:102)

COMPONENTS OF MIS GNWDs DESCRIPTION

Internal Company Records Information gathered from source within the

organization.

Operation Latest technology and Moderate capacity

Finance Moderate financial positionManpower High competent team of management

Sales & Marketing High demand & High sales

Marketing Intelligence Identify & analyzing information regarding competitors

and development in market place.

Competitors Direct Competitors : Low

Indirect Competitors : High

Market Developments Moderate

Marketing Research Is a systematic design, collection and analysis of data

relevant to a specific situation faced by company.

Marketing Models Includes mathematical and statistical or such models

used for analyze information.

E.g.: Time Series, Elasticity Model etc

Table 5 MIS

Source: Kotler & Armstrong (2006:102)


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ValuePropositio

n

To establish our position as

pioneers and leaders in the

market by:

Creating brand loyalty Making our products omnipresent

readily available

Constantly improving with newproducts and promotions

ValuePropositio

n To become a

must have for

all our target

markets.

POSITIONING13

Value Proposition14 For GNWD is as follows:

GNWD can use different Differentiation Strategies15. They

could use the below strategy to execute.

13Is a process where GNWD creates a perception of the offerings in customers mind relative to competitors of

GNWD.14 Refers to the key set of benefits offered relative to competing brand upon which the brand is positioned.15

Is used to position its brand & identity and differentiate its offerings with its competitors. This is one of the most

imperative and critical factor to execute.

DIFFERENTIATION STRATEGIES SUB VARIABLES

Product Quality, Delivery, Benefits & Characteristics

Personnel Employee competency, Courtesy, Credibility,

Reliability, Responsiveness & Communication.

Channel Distribution ChannelCoverage, Expertise.

Image Identity

Table 6 Differentiation Strategies


Source: Kotler & Keller 2006:296

Figure 21 Value Proposition


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Differentiation Strategies and Description.

DIFFERENTIATION

STRATEGIES

SUB VARIABLES DESCRIPTION

Product Quality High since tasty, hygienic, worth for price,

manufacture reputation.

Delivery Free home delivery given to their customers.

Benefits Sweet Tooth, Gift, Snack, Refresh mind,

Hunger & Dessert.

Characteristics Variety of products (Sweet, Seasonal &Savory)

Personnel Competency Highly trained and multi skilled employees.

Courtesy Friendly employees in GNWD cafes

Reliability Provide accurate delivery.

Responsiveness Respond quickly when customers order, within

2 minutes.

Communication They provide information about product,

promotional offers & special events.

Channel Coverage Have their cafs in major cities of Colombo

and deliver in to where ever wanted with in

Colombo.

Image Identity To establish our position as pioneers and

leaders in the market & make the household

brand.

To become a must have for all our target

market

Table 7 Differentiation Strategies & Description



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GNWD Marketers can follow a several Positioning Strategies,

which can be from the following strategies,

Table 8 Positioning Strategies

The ideal way of positioning for the GNWD is using a combination of

these strategies, so that greater consumers could be captured.

POSITIONING STRATEGIES

o Product *

o Product Benefits *

o Usage Occasion

o Against Competitors *

o Price & Quality *

o Unique Selling Proposition (USP) *

o Product Class

o User Class

POSITIONING STRATERGIES DESCRIPTION

o Product Variety, Taste, Quality, Availability.

o Product Benefits Sweet Tooth, Gift, Snack, Refresh mind, Hunger &

Dessert.

o Against Competitors Product specialization, Variety (savory donuts),

Availability.

o

Price & Quality Affordable and Best

o Unique Selling Proposition (USP) Go Nuts With Donuts.

Table 9 Positioning Strategies & Description

Source: Kotler & Armstrong (2006:221)

* - USE THESE

STRATEGIES



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POSITIONING PROCESS according to appendix 12 would

clearly illustrate how to place their brand and product in the minds of customers as this is a major

factor to create loyal customers.

Positioning Map16

16 This also refers to Perceptual Positioning Map, which shows consumers perception of their brands versus competing products

on important buying dimensions.


Figure 22 Positioning Map

REFER APPENDIX 12


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MARKETING MIX17

PRODUCT18

Product: -Go nuts Cup Cake

Product Concept

To offer an unlike cupcake to target market in Sri Lanka, which

they havent tried out and take cupcake to a different stage. (In Authors view point, 2010)

17Is the set of controllable tactical marketing tool (Product, Price, Place and Promotion) that the firm blends to

produce the response it wants in the target market. (Kotler & Armstrong, 2006:50).18 Is what GNWD offers to the selected target market for attention, acquisition & consumption that might satisfy their needs and

wants

Hazelnut Crunch

Walnuts and crunch swimming in smokychoco-hazel frost over chocolate cake.

Double Choco

Star sprinkled chocolate ganache overchocolate cake.

Mexican Mocha

Crazily delicious whipped Mocha buttercream on top of chocolate cake.

Butter crunch Toffee

Almonds and toffee crunch covering moistchocolate cake.

Cookies N Cream

White chocolate cake with cookie bits overchocolate cake.

Chocolate Peanut Butter

Creamy peanut butter Fudge spread overchocolate cake.

Table 10 Go nuts Cup Cake

Source: Go Nuts Donuts corporate website, (2009)


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Product Classification

Consumer Product Convenience Product, are low cost product

thats immediately and frequently purchased, with little planning and bought on impulse.

Brand Name

Packaging & Labeling

The cup cakes will come in Single, 6 packs and 9 packs.

Brand Logo

Brand Logo

Source: Gonuts with Donuts corporate website (2009)

Source: Compiled by Author (2010)Source: Compiled by Author (2010)

Figure 24 Brand Logo

Figure 23 Brand Logo 2

Figure 25 6 & 9 PackFigure 26 Single Pack


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Product Levels

Figure 27 Product Levels

POTENTIAL PRODUCT **

POTENTIAL PRODUCT **

Sugar free cup cakes, Stuffed cup cake, Slider cupcake, Flower

cupcake, Mini cupcake & Rose cupcake.

AUGMENTED PRODUCT

Quality, Delivery, Appearence & variety of recipes

EXPECTED PRODUCT

Economic, Tasty, Hygenic, Affordable & Variety.

BASIC PRODUCT

Go nuts Cup cake.

CORE PRODUCTHunger, Refresh mind, Sweet tooth & Dessert.


Figure 28 Potential Product

Source: Google Images, (2010); Compiled by Author (2010)


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Table 11 Point of Differences (POD's)

Product Type

Imitative Products. This product is new to the GNWD, not to

the market. These are also called Me Too products. (In Authors view point)

GNWD compnay and their product donuts could be catogorised asa Question Mark with holding low market share in a high growing market, according to

Boston Consulting Group Matrix, as referd in the below figure.

POINT OF DIFFERENCES (PODs)

Product Variety

Tasty

Hygienic

Availability & Affordable

Product Specialized


Source: Kotler & Keller 2006:40 Figure 29 Boston Consulting Group Matrix


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At this stage there is high demand for GNWD but low return due

to low market share, GNWD has to quickly increase marketshare or it will become a dogand

go out of market. A strategy to increase market share will be to introduce GONUTS

CUPCAKES.

Product Life Cycle (PLC)

GNWD is in its introduction stage, as it launched its business 9

months ago.

INTRODUCTION GROWTH MATURITY DECLINE

THEORY ACTUAL FORECAST FORECAST FORECAST

THEORY THEORY THEORY

SALES Low High Raising Peak sales Falling

COSTS High Average Average Cost percustomer.

Low Cost Low Cost

PROFITS Low High Raising High Falling

CUSTOMERS Innovators Early Adaptors Middle Majority Laggards

Low High

COMPETITORS High Moderate Growing Number Stable & begin todecline.

Declining Number

Table 12 Product Life Cycle



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TANGIBLE BENEFITS

Less Costly

Different pack size.

Gift

Food - Dessert & Snack

IN-TANGIBLE BENEFITS

Sweet Tooth

Mind Refresh

Hunger

TANGIBLE INTANGIBLE CONSUMERBENEFITS

Consumer benefits19

There are two kinds of benefits:

Tangible Benefits20

In-Tangible Benefits21

19Refer to those positive factors that the consumers acquire when they purchase and / or consume the product or

service. Consumers or people buy the benefits not the products. (Lascu, Lindquist & Sirgy 2003: 04)20

Are those that are in some sense measurable.(Lascu, Lindquist & Sirgy 2003:04)21

Are more associated with the feeling that you experience when owning and/or using a product or service.

Source: Lascu, Lindquist & Sirgy (2003:03)



Figure 30 Consumer Benefits

Figure 31 Tangible Benefits

Figure 32 In-Tangible Benefits


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Time

PsychologicalRing

AccessoryRing

Basic Core

Total Product Concept22

22Refers to the broader view of the goods and service as a sum of their benefits, or its the sum of benefits offered

by products or service. (Lascu, Lindquist & Sirgy 2003: 04)

TYPE OF BENEFITS DESCRIPTION

Basic Core Tasty, Snack & Hunger.

Accessory Ring Online Product Menu, Within hours delivery& regular Facebook updates.

Psychological Ring Hunger & Sweet tooth.

Time Saves time, reduces hunger,

Table 13 Total Product Concept & Description


Source: Lascu, Lindquist & Sirgy (2003:04)

Figure 33 Total Product Concept


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PRICE23

Factors Affecting Price

Internal

FACTORS DESCRIPTION

Company & Marketing Objective To establish our position as pioneers and leaders in

the market & make the household brand.

To become a must have for all our target market.

Marketing Mix Strategy Product

Place

Promotion

Costs Food cost should not exceed 30% of retail price.

Overall rent should be 10% of total revenue.

Wastage must be controlled.

Advertising budget should be 2% - 5% of revenue.

Find out the tax implications when pricing.

Must monitor production costs, wastage daily.

Organizational Consideration CEO and Managements Accountants.

Table 14 Internal Factors Affecting Price

23Pricing is the amount money charged for GNWDs product, or the sum of the values that customers exchange for

the benefits of having/using the product.



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Selecting the Pricing Objective

Determing demand

Estimating costs

Analyzing competitors costs, price, & offers

Selecting the pricing strategy

Setting the Final Price

External

FACTORS DESCRIPTION

The Nature of the Market Monopolistic Competition

The Nature of the Demand Elastic Demand since not an essential product.

Competitors Cost, Unknown, as its confidential information

Customer expectation Moderate

Other External factors

Economy

GovernmentInflation

Favorable

StableMild Inflation (CCPI December 20094.8%)

Table 15 External Factors Affecting Price

PRICING PROCESS


Figure 34 Pricing Process



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In Step 1, GNWD has to select the pricing objective. Thats To

establish our position as pioneers and leaders in the market & make the household brand

(Maximum Market Share). (Kotler, Keller 2006 p224)

In Step 2, GNWD has to determine the demand. The product is

moderately price sensitive, so an increase in price could lead to a decrease in demand. The

Elasticity of Demand for the product in elastic.

In Step 3, GNWD has to estimate cost. They have to consider both

the Fixed and Variable cost.

FIXED COSTS VARIABLE COSTS

Caf rents Production Cost of Cup cakes

Salary of Employees Delivery Cost

Administration Advertising

Other promotional Campaigns

Table 16 Fixed & Variable Cost



Figure 35 Elastic Demand Curve


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Table 17 GNWD Cost Estimation

In Step 4, GNWD will analyze Competitors Cost, Prices &

Offers. The costs are unknown as they are confidential information. Prices of cupcakes of

competitors are as follows:

OVERALL COST ESTIMATION

Food cost should not exceed 30% of retail price.

Overall rent should be 10% of total revenue.

Wastage must be controlled.

Advertising budget should be 2% - 5% of revenue.

Find out the tax implications when pricing.

Must monitor production costs, wastage daily.

COMPETITORS PRICES

Fab Pastry Shop 60

Perera & Sons 55

Caravan Pastry Shop 60

Barista 80

Sponge Pastry Shop 50

Table 18 Competitors Price




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In step 5, GNWD will select a pricing strategy. Since its launching

a product GNWD has to use new product pricing strategy, in which use Market Penetration

Pricing24.

Lastly GNWD will set the Final Price for GONUTS CUPCAKE.

This is as follows.

Price according to PLC

24Setting a low price for cupcakes in order to attract new customers, increase market share and achieve its

objectives.

SIZE PRICE

Individual Rs 55 (Inclusive of VAT 17.5%)

6 Pack Rs 315 (Inclusive of VAT 17.5%)

9 Pack Rs 475 (Inclusive of VAT 17.5%)

Table 19 Final Cupcake Price

INTRODUCTION GROWTH MATURITY DECLINE

Pricing

Strategy

Penetration Pricing Increase Price Keep price

constant level

Reduce Price

Purpose /

Motive

To increase sales

and make

customers try the

product.

To increase

profit and

revenue as

increasing

demand

Constant

demand, so keep

price also

constant.

As demand

decreases,

reduce price and

make customer

buy.

Table 20 Price according to PLC




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Analysing Customers desired service output level,needs of place & determine buying requirements.

Establish channel objectivess & strategy.

Identify marketing channel alternatives.

Evaluate & Contract Intermediaries.

PLACE25

CHANNEL DESIGN DECISION

25This refers to the physical space where GNWDs products will be made available for sale for the target market, it

depends on where our target customers are.


Figure 36 Channel Design Decision


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Product variety, Taste, Quality, Hygenic & PriceINFORMATION

Available in major cities and shopping malls forcustomers.

CONVENIENCE

Donuts (Sweet, Savory & Seasonal), Cupcakes &Beverages.VARIETY

Home Delivery, Online product Menu,Discussion Forum (facebook)

ATTENDANT SERVICES

Step 01

In designing the marketing channel, the marketers must understand

the service output level desired by the target market of GNWD. There are 5 factors to consider

and the buying requirements to satisfy them.

Buying Requirements

FACTORS DESCRIPTION

Lot Size Can purchase any number preferred by customer. In

individual, 6 & 9 Pack size.

Waiting and Delivery Time Delivered with 23 minutes take away.

Home delivery done with-in 30 minutes.

Spatial Convenience Made available in 7 cafs in Colombo and future

expansion in other cities.

Product Variety Donuts (Sweet, Savory & Seasonal), Cupcakes &

Beverages.

Service Backup Home Delivery, Online product Menu, Discussion

Forum (facebook)

Table 21 Desired Service Output Level


Source: Kotler (2002:494)Figure 37 Buying Requirements


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Step 02

While setting the channel objective the following factors have to

be considered.

FACTORS DESCRIPTIONS

Product Characteristics Consumer goodsConvenience good & Perishable product.

Company Characteristics Dynamic, Multi Skilled, Innovative.

Characteristics of

Intermediaries

None since the product is Food & its perishable.

Competitors Chann

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