Brief Content

I  Marketing Strategy Plan  1

1  Company and Product  1

1.1  Company overview  1

1.2  Mission Statement  1

1.3  Product and market  2

1.3  Corporate objectives  2

2  Executive Summary  2

3  External Business environment  4

3.1  Macro environment  4

3.2  Markets  5

3.3  Competition  5

4  SWOT Analysis  6

5  Marketing objectives  7

5.1  Strategic thrust  7

5.2  Strategic marketing objectives  8

6  Core strategy  10

6.1  Target Markets  10

6.2  Competitor advantages and objectives  11

6.3  Brand positioning  12

7  Marketing Mix Decision  13

7.1  Product Strategy  13

7.2  Promotion Strategy  14

7.3  Price Strategy  16

7.4  Distribution Strategy  16

8  Organisation and Implementation  16

9  Control  17

II  Appendix: Marketing Audit  18

1  Introduction  18

2  Market Audit  19

2.1  Marketing Environment Audit  19

2.2  Marketing Strategy Audit  34

2.3  Marketing Organisation Audit  36

2.4  Marketing Systems Audit  36

2.5  Marketing Productivity Audit  37

2.6  Marketing Function Audit  38

III  References  42

IV  References Internet  43

V  Bibliography  44

I Marketing Strategy Plan

1 Company and Product

1.1 Company overview

The “BIONADE GmbH” is a small German manufacturer and distributor of the organic lemonade brand “Bionade”. The family-owned-enterprise has 107 employees and is located in Ostheim, a small town in the northern Bavaria region of Germany. Sigrid Peter-Leipold is the industrial business manager, owner and executive manager of the “Privat Brauerei Peter KG

Associate Partner” and the “BIONADE GmbH” and “BIONADE International GmbH”. ¹ As an offshoot of the private beer brewery (Rhoehnpils), the “BIONADE GmbH” was incorporated in 1995. The brewery master in this time Dieter Leipold invented the beverage, especially the technical producing process. It is made by a complete organic process according to a century old brewing tradition. It is the first fermented non-alcoholic drink without any extras of sugar or antidegradantes. The company started in 1995 with around 100.000 bottles per year. In 2000 a big beverage distributor of the gastronomy sector in Hamburg discovered the product. Since then sales increased continuously up to 25 million bottles in 2005. 2006 it would be twice as much. Today the company is market leader of the German organic beverage market (Anon, 2006a; Lange & Lange, 2006; Bionade, 2006).

1.2 Mission Statement

The Mission of BIONADE GmbH is to offer a high quality product produced by a completely organic process according the old family brewing tradition. The identity and the origin of the product are guaranteed. Additional the company aims to provide a higher standard of living in

the area by support the local organic farming and give new job opportunities to the people. 2

¹ In the following report the company is named as Bionade. This includes the international and the national firm. The private beer brewery Peter KG will not be examined.

² The company do not present an official mission statement. The mission is formulated by the author, out of the given official information (Bionade, 2006).

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1.3 Product and market

The company sells only one product - Bionade. Bionade is convenience product, an organic refreshment drink. Because of the high level on minerals (calcium and magnesium) as well as the low calories (20 cal/ 100ml) it is additionally an adequate diet and sport drink. It is main sold as a non alcoholic alternative to beer in 0,33 litre glass bottles. Additionally it is available in 0,5 PET bottles. Among to the classical herb product, it is offered in four other tastes: Elderberry, Lyche, Lyche-Forte and Ginger-Orange.

Located in the market for soft drinks ¹ , it is a functional as well as a non coke carbonate beverage. Additionally it is part of the organic food market (Bionade, 2006).

The marketing strategy plan follows from the approach of Dibb et al. (1994) and Kotler & Keller (2006). It is based on the marketing audit, which is shown in the appendix.

1.3 Corporate objectives

The corporate objectives of the company are:

⇒ Increase sales up to 99 million litres in 2010 by an entrance in the international market over all distribution channels

⇒ Start running the new factory in the springtime of 2007 with a capacity of 120 million bottles per year

⇒ Further support of the local organic farming

2 Executive Summary

This report shows the marketing strategy plan for the next 5 years for the beverage company Bionade GmbH. It is based on an external and internal marketing audit of this organisation (appendix). The product performed well. Sales rates increased about 350% over the last years. They did not do any big marketing campaigns. To achieve the planned sales forecast over the

¹ The soft drink market is differentiated into carbonates (coke and non coke carbonates), fruit juice, bottled water, functional drinks, RTD tea, RTD coffee and Asian speciality drinks (Euromonitor International category

definition, 2005).

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next year and to protect the current market leader ship in the segment of healthy functional drinks, a marketing mix will be established. The following marketing strategy objectives are defined:

⇒ Keep hold of the marketing leader position in the organic beverage sector, by starting marketing campaigns in the middle of 2007.

⇒ Increase sales twice in the next year up to 33 million litres in 2007. ⇒ Increase market share of the domestic soft drink market up to 0.14% in 2007. ⇒ Increase marketing budget up to 8 % of turnover from 2007. ⇒ International market entrance start in 2007 ⇒ Further research on new products

The current external environmental forces are mainly support the organisation’s business. Changed consumer patterns regarding a higher consumption of healthy food, as well as the faster lifestyle and the bad image of global companies in the group of younger adults are the main reasons for the increased sales of Bionade. The brand is characterised as unique, innovative, healthy, value added, credible, social and “green”. The marketing strategy is based on a mass market penetration strategy in the domestic market and a new market entry strategy in the international markets. The main objective is to keep the current competitor advantages of the unique product in hole. Increase brand awareness and sales by the development of the product line. The product line will be extended by new package sizes and materials. A 0,33 l and a 0,5 l PET bottles are planned to make the product more practicable for sportive and “on the street” users.

To increase brand awareness classical advertising (print and radio), free sampling in universities, schools, company events, as well as sponsorship of local sport events will be used. A database will be established to increase customer relationship by direct mailing. In future the current distribution strategy in cooperation with the distribution company of Coca Cola Company will be used to get into all traditional retail channels in the domestic and the international markets. In a long time view own sales offices will be open in the main markets to organise distribution, marketing and communication in these countries.

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The price in the domestic market will increase up to a compared price level of classical soft drinks. Bioande has the chance to be a “mass” product by a high level of quality. But the differentiation is not done by the price. The transfer in the international markets will be follow a clear and credibility branding strategy.

3 External Business environment

In this part the situation regarding the macro environment, the market and the competition is presented (Dibb et all., 1994). It is based on the results of the marketing environment audit (appendix 3.1).

3.1 Macro environment

The political and legal situation (appendix, chapter 2.1.1.1) in the domestic market is determined by the new recycling regulations of the German government. Packaging gets an important role for this industry. The new regulations do not have such a big influence for Bionade, because the main sale is doing by glass bottles. They are reusable packaging since a long time. Manufacturers, Distributors and Customers are used to it. Additionally the “green” positioning and image of Bioande supports a system that protects the environment. The European Union agricultural department focus more and more on a further support of organic farming, which is positive for Bionade.

The international political and legal situation depends on the country. The patent on process, technology and brand is valid in all international markets except of the US and China. China has not such a law. Therefore a market entrance in this country would bring further more risks in kind of copying. The political uncertainty in the developing countries (eastern countries) has to keep in mind by an international expansion.

The current economic situation (appendix chapter 2.1.1.2) in the domestic market is characterised by a small growth and economic uncertainty, a high unemployment rate and regressive consumer spending. The developed countries are determined by saturation and maturity. Additionally declined birth rates and an aging population influence the target audiences of the companies. Consumer patterns are determined by a current “Fast-Paced-Lifestyle” by smaller households. The current health and wellness trend is a further positive

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opportunity for Bionade. People attach more importance on food and their ingredients (appendix, chapter 2.1.1.3).

The technological situation (appendix chapter 2.1.1.4) in the producing process is leaded by Bionade. Distribution channels are influenced by a higher using rate of the internet. Convenience products like Bionade are not the main E-commerce products, therefore ecommerce as a new retail channel is not focussed yet.

3.2 Markets

The soft drink market grows over the last years in all segments. The forecast for 2007 is a trade off volume of 79.339, 98 million litres in Western Europe. Germany is the main market for soft drinks in Western Europe. 22.61 % of soft drink volume is done in Germany in 2005. Out of a world wide view North America and Western Europe are the most important markets. The Asian regions are the future markets because of the high potential in economic developing. In the developed countries functional and wellness drinks are the growing products. The current wellness and health trend is supported by many food scandals over the last two years. Today not only traditional organic food customers choose a healthy drink. The market is changing. Younger people are paying more attention on organic food. Some of them are interested in the health aspect for others it is the value of money and time they associate with a drink like Bionade.

The main distribution channels in the soft drink market are supermarkets/ hypermarkets. The sales with organic food products in the German supermarkets increased 2005 up to 10%. There is a trend on concentration in the wholesale and retail level at time. Metro in Germany, Carrefour in France and Tesco in the UK are the main players on retail level. High listing prices as well as smaller portfolios make it difficult for organisations without big financial resources to be presented in their shops (appendix chapter 2.1.2.2). Bionade could get over these rules in Germany, because of the high demand of the product, but this must not apply accordingly for all countries.

3.3 Competition

In the special market of Bionade there are no direct competitors. The main indirect competitors are the big soft drink companies like Coca Cola Company, Pepsi, Nestle and Danone. They

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do not have a similar product. There power on the distribution level, their broad brand and product portfolio, their international presence and their financial resources are the main competitive advantages. But the last year Coca Cola Co. lost market share in Western Europe. More and more smaller brands enter in the market. Discounter brands are growing. Additionally there are three smaller brands: “Sinalco” a German traditional lemonade brand, “Almdudler”, an Austrian herb lemonade and “Carpe diem” a functional wellness drink distributed by Red Bull. “Almdudler” is a local Austrian brand. It is not used in Germany. Sinalco is no organic drink. Carpe diem is not well promoted in the German market. The turnover would be less than the Bionade ones ¹ . The positioning as a refreshment drink with value added healthy ingredients is similar to Bionade (Carpe diem, 2006). In the organic market segment in Germany the Voekle GmbH came out with “Voekles Bio lemonade”. It is also sold in a glass bottle, but by a higher price. The main risks for Bionade are new market entrees (appendix chapter 2.1.2.3).

4 SWOT Analysis

The following picture shows the main strengths, weaknesses, opportunities and threats in an overview as a result of the marketing audit (appendix, main chapters 2.1 and 2.2):

¹ There are no financial data of this company for the German market available. It is based on the experiences of the author.

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Figure 1: SWOT Analysis Bionade

Source: According to Kotler & Keller (2006), p. 55.

5 Marketing objectives

Out of the marketing audit and the SWOT analysis the following marketing objectives could be defined. This includes the strategic thrust and the strategic objectives (Dibb et al., 1994).

5.1 Strategic thrust

The “Ansoff´s Product-Market Expansion Grid” (1956) is used to underline the strategy thrust of the company.

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