Essay: Marketing Mix and Strategy

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Marketing Strategies - breakfast cereal Australia

Marketing Mix And Strategy

Healthy Co. Pty Ltd. is a food processing organisation located in Queensland, Australia. 'Nutri Mix' breakfast cereal is the product developed by the company for this market and it's focused on nutrition and healthy life choices. The initial research was focused on six local macro-environment factors that could potentially impact the product. The factors in favour of marketing such a product on the Australian market reside in an aging population as proportion of total population, forcing the government to focus on nutrition as a means to slow down health care expenses (IGR, 2004); the local market being a stable and developed one; the country's technological development enabling advanced marketing and logistics techniques; and an increased concern for 21st century nutrition trends, pointing to an alarming growth rate of child obesity. Between 1985 and 1995 the child obesity grey almost 50% in both genders (Parliament of Australia, 2006)

Target market

Demographic segmentation refers to the process of dividing the market into groups based on variables such as age, gender, income, occupation, education, religion, race, nationality, family size, etc.

Age is an important demographic variable for 'Nutri Mix' as the product will target certain segments that are more likely to consume healthy food products. The logic behind using age as a segmentation variable is the fact the consumer needs and wants change as they grow older and marketers need to design products, packages and promotions to meet these needs and wants. The healthy breakfast cereal product will focus more on children -- 3 to 12 years old and senior adults -- above 65 years old. The children segment is chosen due to the parents' increased concern regarding child obesity in Australia, whereas the senior segment is chosen due the government's increased concern for growing health care expenses generated by an aging population and a shrinking taxation base generated by a slow down in natality rates.

Gender is another relevant variable for 'Nutri Mix' market segmentation. This variable is widely used in consumer marketing, mostly in clothing, cosmetics or toiletries. However, given that one of the main age segments targeted by the breakfast cereal refers to children, the product's specifications, package and promotional activity should focus on the female segment as they hold the buying decision.

Behavioural segmentation consists of dividing customers into groups based on the way they respond to, use or posses knowledge regarding a product.

Occasions can be used to group consumers into different segments. For instance, Kelloggs, one of the largest breakfast cereal producer worldwide, encouraged its consumers to eat its products on the occasion of getting up. One other behavioural variable refers to the product's benefits. In this case, the benefits are related to the health and well being of the consumer. 'Nutri Mix' is recommended for people with weight problems, as well as people with healthy eating habits.

Psychographic segmentation refers to the process of dividing the market into groups based on variables such as social class, lifestyle or personality type. 'Nutri Mix' is a product designed for the middle class in Australia and with a healthy life style (individuals that practice outdoor activities, individuals that spend a lot of energy and individuals looking to improve the state of their health). Personality type segmentation can be useful at a later point in time for designing targeted promotional activities. However, in the beginning this variable will not be considered relevant for the market segmentation.

Geographic segmentation consists of dividing customers into groups based on variables such as region of the country to or rural/urban area in which they are located. The breakfast cereal product will be launched in Western Australia, more specifically Queensland, third state in the country as size of the population with 4,35 million inhabitants (Queensland Government, 2009).

Marketing objectives

The marketing objectives for 'Nutri Mix' refer to product awareness, target market and market share. The company is aiming to increase product awareness through intensive targeted promotional campaigns over a period of 6 months. The Target market refers to the senior consumers and children. Thus, the promotional campaigns will target female adults fitting the mother profile, seniors and nutrition consultants. The product awareness will be increased via multiple channels, both with above the line and below the line sales promotions.

The company also wishes to reach a market share of 5% from the breakfast cereal segment within the first 6 months of launching the product on the Australian market. This segment is dominated by Kellogg's, which is also one of the largest breakfast cereal marketers worldwide. However, most of the products in this category are not very healthy. A study made by CHOICE on 152 breakfast cereals suggested that "Most breakfast cereals contain far too much sugar, salt or both to be healthy choices for everyday eating, while cereals aimed at kids can be among the worst for nutrition" (CHOICE, 2009).

The marketing mix

Product

This strategy pays respect to the characteristics of the final product, namely the extent to which it matches the customer requirements, the quality, the brand name, functionality, styling, safety, packaging, warranty, reparations & support and accessories & services (NetMba.com (a)).

The same CHOICE study mentioned previously identified 4 dimensions that Healthy Co. Pty Ltd. should consider for 'Nutri Mix': dietary fibre, saturated fat, sugars and salt. 'Nutri Mix' will have a high content of fibre, low saturated fat content even when the recipe contains nuts, relatively low sugar and low salt. The content of sugars and salt will be carefully control, as these represent the main concern in children nutrition. Thus, sugar can contribute to tooth decay and has a major contribution in gaining weight. Salt has been linked to high blood pressure, which can lead to heart diseases and stroke.

'Nutri Mix' will be developed as a range of healthy products, including: (a) simple muesli cereals, dried fruit muesli cereals, nuts muesli cereals (such as Brookfarm Natural Macadamia Muesli -- nuts content); (b) simple muesli bars, dried fruit muesli bars, nuts muesli bars (such as the Carman's range of breakfast cereal bars range); (c) wheat biscuits (such as Weet-Bix and Weet-Bix for kids); (d) puffed rice cereals (such as Abundant Earth Organic Puffed Rice); (e) puffed corn cereals (such as Abundant Earth Organic Puffed Corn); and (f) instant oat meals with various flavours.

The package will be designed to look appealing on one hand to children and mothers and on the other side to senior consumers. Also, the company will consider the environmental implications and design a package that is easily recyclable, but in the same time it properly preserves the content, the feature of environmentally-friendly being almost a mandatory requisite in a country in which 62% of adults (8.9 million people) stating to be concerned about environmental problems (Australian Bureau of Statistics, 2004). Thus, the puffed rice and corn cereals, which are mostly for children will have a package displaying a licensed character or a movie theme and containing either a cartoon drawing (e.g. Tony the tiger) and/or an activity or promotion directed to children (e.g. collect stickers). All the bars will have the packaging in lively colours as they stand for energy, which is associated with these colours. However, the designing will consider matching these lively colours with the usual colour set displayed on the rest of the products. The rest of the products will adopt packages matching with the children and cereal bar styles, but in weaker shades. The material used for packaging will be mostly paper as it might be an optimal solution from the environment point-of-view for both the package per se and information about nutritional content.

The package for all consumers will display the nutritional content according to the latest food regulations. Packages will be coded for food-related claims, including here the food authorities and other contributors, such as the national heart associations.

Product differentiation will be considered a strategic competitive advantage for Healthy Co. Pty Ltd. As the Australian market if a mature one in terms of general breakfast cereals, but not on the healthy products niche.

Price

This strategy refers to the approach that the management will have vis-a-vis prices, discounts or financing. The pricing strategy has to be planned carefully because it is the one that supports the cost structure. Example of pricing decisions include: pricing strategy (e.g. skimming), bundling, price discrimination, price flexibility, cash discounts, early payment discounts, suggested retail price, seasonal pricing, volume discounts and wholesales pricing (NetMba.com (a)).

According to NetMba.com (b), pricing objectives can be categorized as:

Current profit maximization. This objective seeks to maximize current profit taking into account revenues and costs. However, this objective might not be ideal if it results in lower long-term profits.

Current revenue maximization. This objective seeks to maximize current revenues, regardless of the profit margins. In the long-term this objective aims to maximize profits by reducing costs and increasing market share.

Maximize profit margin. The objective seeks to maximize the unit profit margin at the expense of quantity, which is… [END OF PREVIEW]

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