Category: Beverage

Abstract

The American Beverage Association was established with the intention of protecting all players in the soft drink industry. This report will provide knowledge on the history of the association and its roles in the industry. It will also highlight factors that influence business and the financial outlay both in the present and in future. A market demographic trend and ethical issues in the industry are also explored. The purpose of this report is to equip the accounts department with necessary background knowledge on the industry.

Problem/Background

The American Beverage Association is currently seeking to enlist the services of a new advertisement agency in light of its dissatisfaction with its current agency. One Way Advertising Agency is looking towards applying for the bid and therefore gave its marketing department the mandate to research on the American soft drink industry and compile a report to be used in preparation for launching the bid.

The purpose of this report is to provide basic information to the accounts department on the soft drink industry to help it launch a successful bid that would eventually culminate in its winning of the advertising tender successfully.

The American Beverage Association

The American beverage Association was established in 1919 and over the years, the company has represented various stakeholders in the soft drink industry such as franchise owners, suppliers and industry support organizations. In 1966, The American beverage Association changed its name to National Soft Drink Association.

The American beverage Association is one of the greatest contributors to the American economy. The American Beverage Association acts as the representative of hundreds of distributors, franchise companies, producers, and support industries (ABA, 2011). The direct economic impact of the beverage industry is huge, and is estimated to be approximately $178.5 billion.

Moreover, member companies of the ABA are thought to employ over 208,000 employees. These member countries are actively involved in the marketing of various flavors, packages, and brands. These also include diet and regular soft drinks, water beverages, and bottled water. Other products marketed by ABA affiliate companies include energy drinks, juice drinks, sports drinks, as well as the ready-to-drinks teas.

The American Beverage Association helps its members market all categories of soft drinks including, fresh juice, carbonated drinks, bottled water, sport drinks, juice concentrated syrups, among others.

The American Beverage Association plays the role of a neutral forum whereby it allows the affiliate member companies to assemble and brainstorm on some of the common issues facing them, even as they endeavor to uphold their spirited competition tradition (ABA, 2011. In addition, the ABA also plays the role of liaising between the government, the beverage industry, as well as the public.

Moreover, the Association is also actively involved in the regulatory and legislative matter involving the beverage industry. To oversee its work effectively, its It has employed professionals in all fields ranging from legal, information technology, technical and scientific research (ABA, 2011; Source Watch, 2011).

Factors affecting American soft drink industry

Over the year’s trends in the American soft drink industry has been affected by several factors. There are several social indicators that drive the trends in this industry. The industry is conscious of people’s health needs, and thus is moving towards manufacturing drinks that contain low levels of calories age especially for its adult consumers.

Young adults are shoeing more preference to decaffeinated drinks and tea that is laced with healthy additives. A majority of consumers are also showing preference to products that have limited amount of both natural and artificial sugars for health reasons (Farlex, 2011).

The American working class is a unique social group that has unique needs. It wants soft drinks that do not betray their professional look. Thus canning of soft drinks is intended to appeal to this class of consumers. Economic indicators show that the American soft drink industry in one of the most solid in the economy. The industry commands a 46.77% share of the soft drink market, which is $407.2 billion in market value.

As a result of its impressive market capitalization the soft drink industry has experienced an influx in of soft drink brands in the last few years and the future outlook is solid. The leading player in the market have also registered commendable profits despite a stagnation due to an influx of other brands in the market (Deihert , Ellenbecker , Klehr, Leslie & Zilegeler , 2006 ).

Technological advances have also affected the industry positively. The innovation of vending machines has taken the product loser to the customers (Bellis 2011). Technological innovation in the manufacturing segments has also helped the growth of this industry. HighBeam Business, (2011) explains that automated production increases production efficiency and thus lowers the cost of production. The ability to produce carbonated drink extends the shelf life of soft drinks thus increasing marketability of these drinks.

Using technology, it is possible to monitor the process of production and ensure that the correct ingredients rations are observed. The same technology helps to extract unhealthy elements such as extra calories therefore making healthy drinks that appeal to the increasingly health conscious American population.

Major players in the American soft drink by market share are: Coca-Cola, Pepsi and Cadburys Schweppes. Coca-Cola is the leading position controlling more than half that market. Its profits in 2004 increased by 1.5% to 22.1% in 2004 as a result of increasing its soft drinks brands Pepsi cola comes second holding a solid third of the market. it has consistently registerd an increase in profits and volumes of its of drinks the for last few years.

Cadburys Schweppes is third averaging $12 billion of total sales. This three control about 91% of the market. There are more than 500 soft drinks company’s in America. The government has very stiff regulation that govern the production of soft drinks to ensure consumer safety is not threatened (Govt notice, 1985; Deihert et al, 2006)

Consumer psychographic and demographics

The largest consumers of American soft drinks are American males aged between 12 – 29 years with each estimated to consume 2 quarts per day. There is also a significant market for school going children in America with manufacturers packaging drinks to suit this category. The adult market is however considerably stable but stagnant.

Each American consumes at least 12 oz every year. Consumption of soft drinks has increased three times for boys and two times for girls in the last few years. Movie goers have are also another category consumers who partake a considerable amount of soft drinks. Some companies like Coca-Cola are targeting student in and have even managed to involve them in their marketing campaigns. This is a proof that American students offer a lucrative market for soft drinks (valentine, 2011).

History, American soft drink industry

The history of the American soft drink industry can be traced from earliest human activities before the advent of modern technology. People were fond of bathing in natural springs, which were believed to have curative powers. With time scientist discovered that a carbon based gas could be infused in water for drinking for healthy purposes. Carbonated bottled water was first manufactured in the 19^th century. Carn in soft drink may result in very high pressure and thus scientists invented the cork to tap bottles.

Earlier on in the in nineteenth century, lemon and honey were used to flavor drinking water. This is the earliest known form of soft drink. This followed the bottling of drinking water and later soda water in 1850s. Coca-Cola was the first patented soda invented in the late 19th century. Coca colas major competitor Pepsi was among the first soft drink companies to be established in America by a famous chemist, who saved it to the clients who visited chemist.

Pepsi Cola was initially made of soda water mixed with sugar and pepsin. In 1930s Pepsi went down as a result of the effect of the world war one on sugar prices. Pepsi even tried to sell itself to Coca-Cola who refused the offer. However, Pepsi was revived and has emerged as Coca Cola’s worthy competitor.

Tremendous growth continued to be experienced in this industry and such as dispensing machines and home packs were unveiled in the early 20^th century. In the early 1900s, vending machines were invented. These were robot like machines, which released a certain drink if prompted through a program. “HomPak”, the famous pack of six soft dinks packed into a carton were also invented to cater for families.

The number of manufacturer have grown tremendously that the American Beverage Company was formed in 1919 and still exists today. There are more than 7000 bottlers that exist in the US soft drink industry today (Riley, 1972). The industry is grossly dominated by the Coca-Cola Company, which controls about 50% of the market share and unveils product after product to counter its rival and competitors. (Pendergrast, 1994).

Financial outlook

The future of the soft drink industry is great because of the factors mentioned in this report. Currently the American soft drink industry has an annual turnover of $127965.4 billion (market publishers, 2010).

Ethical issues

There are several ethical considerations in the soft drink industry, which are related to manufacturers cooperate social responsibility and the aspect of soft drink makers marketing their products under fair trade policy to increase profits and improve corporate image. Some makers such as Coca-Cola have expanded their social responsibility activities to help fruit farmers in East Africa increase their productions.

All these efforts are geared towards improving companies image in the cooperate world (Farr, 2010). Coca-Cola has been known to use schoolchildren in its marketing campaigns. It has also paid colossal amounts of money to school going children who have helped market it to their friends (valentine, 2011). While this is creative marketing idea, it should be queried effectively as the company can be seen to prey on minors innocence for profits gain.

The size of the American soft drink industry is significant enough to encourage further business growth. The future outlook is bright and the ABA has made tremendous work in ensuring that the industry is one of the most vibrant in the American economy. Technological advancements have ensured that the industry registers efficiency and improved quality products.

Conclusion

This report therefore recommends to One Way Advertising agency to proceed with its planned bid to ABA. This is because of the nature of competition amongst players and thus it is a lucrative field. The outlook especially in the healthy soft drinks market looks bright.

American are increasingly becoming aware of their health requirements and the need to adapt health dietary habits. Any company that ventures into this market will definitely reap handsome rewards. Lastly, previous experience in advertising together knowledge provide in this report will be useful to the agency should it win the bid.

If you’re reading this as a soon-to-be or recent college graduate, you have probably already seriously considered starting a business rather than working for others. Do you have what it takes to make a go of it? Let’s examine some issues around this career option that, for many young people, seems increasingly appealing. Consider the following critical questions before taking this particularly exciting and risky plunge.

Do you have something to offer?

A new business must meet (or create) a consumer need. This seems self-evident, but is often blithely overlooked. Do you have a skill or expertise that is paid for by someone, somewhere, at some reasonable level of remuneration? An affirmative to this query suggests at least a baseline need.

How can you find out?

List everything you do well. Include even activities not normally considered skills. If, for example, you can kiss with swoon-inducing effect, this constitutes a skill that could, conceivable, be monetized somehow. More seriously, any competency that goes on this list – dishwashing, comforting babies, LEGO sculptures, sailing, tennis, scoring high on video games, writing funny emails or tweets, musical tarot readings – is a possible service for another person. All it takes are desire and discretionary funds on customers’ parts to generate a market for your item/service.

Sometimes, professional associations reveal hitherto unknown lines of work. A young graduate really wanted to work therapeutically with the elderly and handicapped, but also wanted to pursue the horticulture interests that were his passion. Imagine his surprise upon finding that there was a professional association for horticultural therapy professionals!

Consider this authentic pre-internet example: An Ivy League sophomore (and his friends) wanted cleaner dormitory rooms, but also wanted more time to maintain good grades. Unable to find maid service, he started one on campus. This netted him a tidy profit until the university’s legal eagles insisted that his student house-cleaners be bonded (check your local jurisdiction regarding this) for security purposes. The expense of blanket liability proved prohibitive. However, despite this setback, his initiative gave him on-campus prominence in a later student government campaign and a very legitimate entry in his resume.

List everything you make:

Think hard! You must make something – everyone does – even if it is just reservations for dinner. Photo-ready cakes, recycled content sweaters, thumb warmers, decorative headbands, photographs that compel attention, macro code for spreadsheets, custom-designed avatars for gaming, or whatever it may be, you probably create something in your life. Does anyone want such an item? Look in online sales sites such as EBay to find out if such products already are for sale, and their price ranges.

As a real example, a college football player sidelined by injury parlayed his flair for movie filming, as well as his knowledge/contacts in the sport, into a nice little business. He created professional quality films for pee-wee football teams. Sophisticated angles and effects, background music, voice-overs and high production values made this a substantial offset for his lost athletic scholarship.

Do you have access to your target consumers?

It is all well and good to know that something you can do, whether it is to hand-crochet I-pod warmers, write advertising jingles, create computer code, organize people’s CD collections, or exercise their bearded lizards, is needed by customers, but you need to be somehow close enough to them to sell it! With the internet, this is often irrelevant. However, for many of us, place – the element of location and geography – is crucial.

How can you determine access?

Market research locally is challenging. Start, however, in the shops of your own community. You can short-cut some of the foot work with online directories such as Yelp. They will at least provide phone numbers – call and make inquiries of the proprietor discreetly.

You need to find out whether there are potential customers for your service, who can access the outlets you will have the privilege of using. For example, luxurious custom evening handbags demand customers with the disposable funds to pay the price for your many hours of labor. However, if your only distribution channels are flea markets and street sales, you may be stuck unless you can assure yourself that the right sort of customer is routinely present. Find out by visiting before committing.

For services, especially intellectual services, the internet is irreplaceable. For example, writing is borderless and global! Personal services also are often advertised on the web, and if no one is listed in your region, doing what you propose to do, that is a potentially empty niche for you to fill!

Can you successfully work solo?

Only you can tell this, but you can certainly get some objective input by using such test instruments as Meyers-Briggs , or others, to tell whether your personality demands team effort and companionship. There is support out there, however.

Can you tolerate the intense effort and risk?

The uncertainty and workload of entrepreneurs should be well-known, but every year, most efforts fail, and some of these failures are due to the strain that starting a business places on the entrepreneur. For recent grads, the experience can be overwhelming.

Can you handle the paperwork?

Although all jurisdictions try to ease the process, being incorporated takes ongoing effort! Know what is needed, in your jurisdiction, before you leap.

Do you have a fallback position?

Having a “real” job – even briefly – can offer a launching pad (and financial security) as well as providing insights into management of businesses.

Consider carefully whether you should first learn what all employers have in common, and what characteristics all jobs share, before ruling out that work environment in favor of your own independent business venture. You may benefit from having done so.

But believe in yourself- wisely!

Introduction

In the world today, all businesses including hotels are faced with stiff market competition; this is because of new inventions and changes in technologies coming up, all with the aims of winning customers confidence in terms of quality products and services rendered by the hotel (Atkinson and Brander, 2001).

This will only be achieved if the owner of the hotel employs a qualified food and beverage manager to manage the hotel. For the manager to be competent in his duties, he must be a very hard working person who bears good transformational leadership qualities such as inspiring and being the role model to employees, demonstrating good leadership and how to become a model employee for the good of the hotel (Anoop and Lokman, 1985).

An F&B manager must be able to win trust of employees and have the ability to communicate with the employees in very simple way that they can understand. The F&B manager should also be able to be motivating and awarding employees who do satisfactory work. Whenever there is a problem or misunderstanding among the employees or with the customers, the F&B manager must be in the best position to solve such issues with intelligence to avoid problems.

Food and beverage operations

The major role of the food and beverage manager is to ensure that all methods and recipes followed in every food preparation are of accepted standard that are according to the cooking plan of each specific food. In rare cases where the cooks or chefs need some help or when the cook delays or fails to report to work on time, the manager has the responsibility of stepping in temporarily and work in the kitchen so as not to cause inconveniences to the customers.

In addition, menus play a key role when it comes to food and catering services (Atkinson and Brander, 2001); it’s again the role of the manager to come up with the hotels menu list and customize it by adding or removing items on the menu based on the demand and preferences of the customers. The F&B manager has the responsibility of changing the menu prices once the prices of the commodities fluctuate or when there is complains from the customers.

Additionally, the F&B manager has the mandate to consider and approve preparation of special meals for customers who are for instance vegetarians, elderly people, expectant mothers, diabetic people and little children’s (Atkinson and Brander, 2001). Thus, the F&B manager has to effectively manage the menu since the “effectiveness of the menu is based on the technique where the manager will have to check menu average versus the guest check average,” (Atkinson and Brander, 2001).

It is up to the F&B manager to ensure that there is minimal amount of food wastages (Wong and Pang, 2003); thus, a manager must be able to forecast the amount of food production required in the hotel per day to reduce wastage. This is because the manager is in the best position to forecast the required food amounts per day based on past consumption trends. This will also makes work easier and lighter for the cooks who will have enough time to prepare great meals because they will not have to over produce.

Recruitment and training of staff

The other major duty of an F&B manager is to hire new employees both permanent and daily casual workers whenever there is demand. The F&B manager is also supposed to carry out interviews to applicants for any catering post applied and carry out orientation of the new employees (Xenikou and Simosi, 2006).

Most importantly the F&B manager is also required to train staffs in catering skills including food preparation skills, food safety, kitchen cleanliness and proper sanitation when handling food (Xenikou and Simosi, 2006). Finally, the F&B manager must ensure that new staff follows the rules and that they abide to the hotels code of conduct when working.

Performance management

The food and beverage manager also has the duty of monitoring staff performance and recording any misconduct of the staff. When a customer complains of rude treatment from any staff for instance, it’s the responsibility of the manager to intervene and get to the root of the problem.

Disciplinary measures according to the codes of conduct must be taken against the staff after guiding them on how to improve on the mistake next time it happens. By doing so, the manager maintains is able to retain customers and train staffs on how to solve issues with customers in future.

High quality performance by employees in the hotel is achieved based on the behaviors and attitudes of the employees (Xenikou and Simosi, 2006). Well motivated employees are in the best position to provide high quality service and respond to customers’ needs fully; furthermore, it’s the work of the food and beverage manager to ensure that the staffs are motivated and appreciated to strengthen their performance (Xenikou and Simosi, 2006).

The F&B manager must enforce periodic patrol and assessment to ensure that the customers receive the best services in order to win customers confidence. The F&B manager has a major role of monitoring cleanliness all the time and ensuring constant cleaning of the hotel. The F&B manager does this by developing a daily cleaning schedule to assist the employees in cleaning every part of the hotel for example floor, tables, kitchen, utensils and making sure it is adhered to daily by all the employees (Xenikou and Simosi, 2006).

It is also up to the food and beverage manger to negotiate and arrange with the supplier of the food and beverage products who will without failing be supplying the product daily and on time to avoid delaying customers.

The vendor’s delivery products quality must always be monitored to ensure that products are delivered which are fresh and of accurate quantity (Xenikou and Simosi, 2006). The F&B manager has a duty of providing excellent and consistent products that will satisfy the customers who will then spread the fame of the hotel and maintain frequent visitation to the hotel.

The food and beverage manager also has the duty of keeping hotels records of the employees, hours of working and calculate them when preparing the paychecks (Xenikou and Simosi, 2006). If any employee complain of his pay not reflecting the number of hours he/she worked, it’s the manager’s duty to use the employees working records he must always keep to solve that problem (Xenikou and Simosi, 2006).

An important task that F&B manager must perform is to win customers trust and confidence always in order to make them come frequently and ensure that the business remains profitable because there is usually stiff competition from other international hotels (Xenikou and Simosi, 2006).

In such a competitive environment, the manager has the power to adjust rates based on the circumstances without comprising the standards of the hotel; the manager is sometimes for instance is required to reduce costs of the rooms thereby attracting customers or sometimes offering discounts to their customers.

This however is disadvantageous to the hotel since it might reduce perceived standard of the hotel if practiced for a long time and should be used only as a short term strategy to win few and especially new customers over other competitors (Baum, 1990).

Notable to mention is that its up to the food and beverage manager to ensure that the staffs are delivering quality and satisfactory services to the customers by employing the use of Servequal scale instrument which is currently used in many hotel around the world to check and investigate the quality of the services rendered by the hotels staff (Xenikou and Simosi, 2006).

This will help maintain the frequent customer visit by improving on the weaknesses mentioned by customers and upgrading services rendered thus contributing to the success of the business.

Health and safety regulations

The food and beverage manager has to ensure that all the employees are bound to and follow safety regulation to avoid accidents and mishandling of food which can cause health complication to the customers and other hazards. There are many international laws and regulation governing food and beverage services which the manager must be aware of and must ensure all the employees follow them.

For example, if alcoholic drinks or cocktail are served in the hotel not bar, then safety regulation must be followed to prevent chaos from drunkards who will interfere with other customers. It’s the role of the food and beverage manager to ensure that the employees abide to this and others international hotel regulations.

The manager must also be licensed by the food and beverage board of that country which must be renewed periodically (Xenikou and Simosi, 2006). The F&B manager must again be wiling to upgrade his knowledge and skills by continuing education and short training programme especially on food safety, food storage and health (Xenikou and Simosi, 2006). This is important so that he will be aware of new emerging techniques on handling of food and health matters.

Continuing education

The manager must be a well educated person and must have academic qualifications with at least a secondary education certificate with a diploma or degree in business management, tourism or any related field plus several years experience, but this varies with regions.

This knowledge and experience are necessary as it equips the manager with relevant management skills that promotes efficiency in the workplace (Wong and Pang, 1989). In addition, the food and beverage manager must have various skills and ability to perform all related tasks discussed above efficiently; for example the manager should have leadership skills which will enable him/her to solve conflicts arising in the hotel.

The F&B manager should be flexible and be able to multi-task effectively even when working under pressure because of newness of the course in many countries including Australia where few managers have advanced diploma education, degree up to post graduate (Wong and Pang, 1989). This is because highly qualified employees in terms of education are always considered for higher posts by the employer.

The most common type of vocational education among many managers in Australia and most parts of the world is at diploma level but this is expected to change with time since many young people are now joining the hotel industry (Wong and Pang, 1993). In addition, the food and beverage manager must have knowledge of foreign languages since most visitors lodging in the international hotel comes from other countries not Australia (Nikolich and Sparks, 1995).

This will solve the communication barrier which causes poor interaction between the hotels service providers and the guests. The hotels services must always satisfy the customers and that’s why it’s the duty of the F&B manager to hire competent and experienced staffs preferably those who have knowledge of foreign languages to act as interpreters.

Conclusion

As we have seen because of the essential duties that rest on F&B manager it is paramount that all hotels including five star, three star and local hotels must employ a food and beverage manager.

Indeed, the F&B manager has the overall duty to participate in ensuring success of the hotel in overall catering operations including; purchasing and receiving foodstuff and beverages, ensuring proper storage of foods and non foods items, issue out foodstuff and beverages, production of food and beverages menus lists and also takes part in supervision and monitoring of employees services at the hotel.

It’s the roles of the food and beverage manager to be able to multitask and aptly capable of being in charge of day to day operation of the restaurant. The F&B manager must be competent in country restaurant laws, health codes, and food safety; also attractiveness and beauty of the hotel must be overseen by the manager.

The F&B manager must undergo the international food and beverage management course which is meant to create international uniformity when managing food and beverages in an international hotel. The programme equips all managers with skills and knowledge required for successful management of food and beverage business in an international hotel in Australia and elsewhere.

References

Anoop, P. & Lokman, M. 2009. Transformational leadership style, market competition and departmental performance: Evidence from luxury hotels in Australia, 28(1): 254-262.

Atkinson, J. & Brander, B. 2001. Rethinking Performance Measures, Assessing Progress in International Hotels. International Journal of contemporary Hospitality Management, 12(4): 123-134.

Baum, T. 1990. Competence for Hotel Management, Industry Expectation of Education. International Journal of Hospitality and Management, 3(2): 31-39.

Nikolich, M. & Sparks. 1995. The Hospitality Services Encounter, the Roles of Communication. Hospitality Research Journal, 4 (3): 87-95.

Wong, S. & Pang, L. 2003. Motivators to creativity in the hotel industry—perspectives of managers and supervisors. Tourism Management, 24(2): 551-559.

Xenikou, G. & Simosi, A. 2006. Organizational Culture and Transformational Leadership as Predictors of Business Unit Performance. Journal of Managerial Psychology, 13(4): 156-162.

Introduction

The Eden Land Company has developed a new business idea. It plans to combine water with slices of fruits and serve them to customers. The water will be packed in uniquely designed and eco-friendly bottles. This paper provides a market research and feasibility study report for the Healthy Drink.

“SMART” objectives

Eden Land has set objectives and their feasibility tests. For instance, one of its objectives is to satisfy the needs of customers within the first week after the product is introduced into the market by meeting their needs. The Customers tastes differ in many ways, and the company understands that creativity is one of the ways it can use to influence the purchase of its products (Burns 111).

The company has noted that many young people suffer from blood pressure and water retention problems. It has developed a remedy to this problem by offering the Healthy Drink product. This objective will be measured by the outcomes, testimonies, and reactions of customers to the product (Burns 221).

Healthy Drink (Product)

The Eden Land Company will offer the Healthy Drink product to its customers. The Healthy Drink is a type of water with minimum quantities of sodium and is ideal for people suffering from high blood pressure. It is also ideal for people suffering from water retention.

The Healthy Drink product is packed in unique bottles different from those of their competitors in order for customers to easily recognize them in the market. The company will also ensure that the Healthy Drink stands out consistently by ensuring that it is treated in accordance with the required specifications. It will provide customers with a high quality Healthy Drink to influence post-purchase of the product, and hence maximize on sales, profits, and revenues.

Market Research

The market for the Healthy Drink product is readily available. Market research plays a significant role in successful business development (Carson 52). The product is targeted at the youths (generation Y) with water retention problems and high blood pressure.

To avoid these problems, they should take the Healthy Drink product, which is a type of water with minimum sodium quantities. The company will add slices of fruits to this water to make it appealing to the target audience. The demand for pure healthy water is on the increase. This is an added advantage for the Eden Land Company because it meets the customers’ specifications.

Pricing and Promotion

The Eden Land Company will set affordable prices for its Healthy Drink mineral water immediately after launching the product. There is stiff competition from other products such as Masafi, Panna, Aquafina and Pellegrik among others. The company will ensure that it employs the price leadership strategy to gain competitive advantage over its competitors (Marn, Eric & Craig 79).

The company also intends to integrate the most efficient promotional campaigns for its product before and after the launch of the new product. Considering that the target audience are echo boomers who spend most of their time in the browsing the internet, the company will employ social media marketing strategies (Strydom 140).

Operations Plan /Organization Chart

Eden Land will develop departments, which include research and development, marketing, customer service, sales and human resource department. Each of these departments will have 20 employees and will be headed by a manager. The manager will be responsible in staffing, planning and controlling operations in their respective departments.

The company will use raw materials such as disinfectants (chlorine and chloramine), organic polymers, acidity neutralizers (lime or caustic soda), and coagulants (sodium). The company will design a supply chain network to facilitate efficient supply of Healthy Drink mineral water to the target audience in Abu Dhiabi.

It will open stores near the customers’ reach and use mobile vehicles to supply the product. The company will need refrigerators in the stores and vehicles to store the product. The company also intends to employ the NICHE strategy of marketing since it is targeting the echo boomers who are active on social media. The company expects to break into the Middle East market within two years after launching the Healthy Drink product.

Eden Land Company Organization chart

Financial Projections/Income Statement

The company will pursue a loan of 500,000 Dirhams from a local lender. It will present a cash flow forecast, an opening Balance sheet for the first month, and, a closing Balance Sheet ending for first year to the bank. Eden Land will also present its income statement forecasting for the first year and owner equity, to the lender. This will help the bank to see how the company has planned its future cash requirements in avoiding the liquidity crisis.

Justification

The company chose this product because it is more profitable than the other products. Moreover, the demand for the Healthy Drink mineral water is high considering that the target audience wants healthy lives. The product will do well in the market place because it meets the needs of consumers.

The water business is profitable compared to other products in the market place (Drelich & Hwang 211). For instance, the costs incurred in the whole process before the product reaches the consumers are low. In addition, water is abundant and it costs less money to treat, and make it conducive for drinking.

Works Cited

Burns, Paul. Entrepreneurship and Small Business: Start-up, Growth and Maturity. Basingstoke: Palgrave Macmillan, 2011. Print.

Carson, David. Qualitative Marketing Research. London [u.a.: SAGE, 2001. Print.

Drelich, J, & Jiann-Yang Hwang. Water in Mineral Processing. Englewood, Colo: Society for Mining, Metallurgy, and Exploration, 2012. Print.

Marn, Michael V, Eric V. Roegner, & Craig C. Zawada. The Price Advantage. Hoboken, NJ: Wiley, 2004. Print.

Strydom, Johan. Introduction to Marketing. Cape Town, South Africa: Juta, 2004. Print.

Background

The beverage industry in the United Kingdom is well developed. There are firms that have been in this industry for several years. They have taken a large share of the market. Companies such as Natural Fruit and Beverage Company and Italian Beverage Company are well developed in this market.

They have a deeper understanding of the market and therefore can manipulate market conditions to favor them. This makes the market very competitive. However, apart from all these, a clear gap ought to be filled through creative business idea (Ghemawat 1991, p. 47).

The consumers of fruit juice are not fully satisfied in most markets in the United Kingdom. Bigger companies produce their products in mass. However, fruit juices may not take this long. For this reason, these kinds of products have remained popular in the UK market.

It is upon this realization that the researcher decided to draw a report that would lead to the establishment of the firm that would operate in this market.

The business opportunity

Fruit juice is a snack that is very popular among the people of UK. From those on trips or tours to those from or to work, as well as school-going children, fruit juice is a common product. It is popular because it is easy to consume and it is refreshing.

A product has a ready market. Competition in the market is not very stiff because major beverage firms have not considered this type of product. Once introduced in the market, sales of the product are assured (Ghemawat 1999, p. 89)

The product

Description

Fruit juice, just as the name suggests, is a juice made from fruits. It is very natural, with no additives. The juices are squeezed from their fruits to make the beverage using a special machine called the blender. The juice is then stored in a cool place but not necessarily under refrigeration.

Customers would be served the product in plastic cups with a straw. No such additives as food color or sugar would be added. The product would be free of any industrial product. It is simple and natural.

Novel features and benefits for users

This product is pure and natural. It is the best product for anyone who feels thirsty. It is even better than water because it is as natural as water but on top of having 75% water content, it is also rich in vitamins and other nutrients. It does not have chemicals found in cola products or such other related drinks (Oster 1994, p. 67). It is of benefit to one’s health. Medics from all over the world recommend it.

Achievement to date

The project is yet to be enrolled in the market. However, the team has successfully identified the location where the project would be launched. All members have made their contributions. The team has drawn a proposal that would be presented to donors.

Technology development milestones

This product does not require sophisticated technology to be successful. It requires simple tools in order to accomplish its production. Although there are new blenders, which are bigger and more efficient, this has not brought a big shift from what has been in use.

However, refrigeration advancements have had positive impacts on it. The product is highly perishable and having storage facilities that lower its temperatures not only make the product more durable but also more refreshing.

Intellectual property

Although this project may not have much in terms of intellectual property, measures have been put in place to impede anyone from implementing its blue print before it enters the market. The business plan would remain an intellectual property of the firm.

Opportunities for further development/expansion

This project has the capability of advancing to cover other cities not covered in its first phase. The project would start with the London market. Because of the projected sale, it is planned that after one year, it would be rolled out to the city of Manchester.

The market for this product is big and the requirements needed are simple and readily available within the immediate environment.

The raw materials used are inexpensive and can be obtained from within the locality (Besanko & Dranove 1996, p. 67). To expand production, it may not need much effort. With the market readily available, the project would easily take off in other markets outside the initial one.

The Market

Market structure

The UK market targeted by this project is varied in terms of age, gender, and level of income. The product targets both male and female customers. It also cuts across ages as young, middle aged and the old would find it refreshing.

Market trends and drivers

The market driver for this product is, among other factors, weather. This market is easily affected by weather (Porter & McGahan 2007, p. 41). During hot seasons, the market for this product becomes very large. Many people become attracted to the product because of its refreshing nature.

During cold season, sales may drop, as many would prefer other beverages such as tea and coffee. However, health sensitive customers would still come for the product even during this period. The market is learning more on healthy food, a fact that boosts the sales of this product.

Market segmentation

According to Kanniainen & Keuschnigg (2005, p. 74), the easiest way to navigate the market is to segment it according to its similarities and differences. When segmenting the market for this product, demographical characteristics of the targeted market would be given emphasis.

Although the product is popular across ages, the level of consumption varies according to age. Teenagers and young adults constitute the most attractive segment. In terms of income, middle-income earners constitute the most attractive market segment.

Target markets

Key characteristics

As stated above, teenagers and young adults constitute the most attractive market segment. Some of the characteristics make the market attractive. One of it is that individuals in this group are spendthrifts. They love leisure and would go for it at all costs within their means.

Fruit juice offers them a relaxed feeling when out on a tour or travel. They rarely bargain and most of their payments are always made in cash. These groups like partying. During such parties, it would be easy for the marketing team to secure an order from them to supply the product in such parties.

Size and future growth estimates

The size of the target market is huge. Within the city of London alone, the number of teenagers and young adults is great.

The competition

Key competitors

Several competitors for this product in London exist. There is a direct and an indirect competition in this market. The indirect competitors are very advanced in this market. The Coca Cola Company offers a wide range of products that come as direct substitutes for fruit juice (Amable 2003, p. 56).

With brands such as fanta, sprite and cold tea, the company creates a very strong competition in the market. To the health sensitive individuals who want to quench their thirst, this Company comes with its bottled water that is, Dasani. There is also a direct competition from smaller firms offering fruit juices in the same market.

Barriers to entry

This market operates like a perfect competition market. The government has been keen on encouraging entrepreneurship in the country. Any barrier to new firms wanting to join this industry is eliminated. The only barrier that remains therefore is the market knowledge.

There are investors who are keen on entering this market. However, because they lack appropriate knowledge about the market, they prefer to stay away. Though not meant to be a barrier, some investors consider the registration process and charges concerning the same as a barrier.

Our competitive advantage

Our firm has a competitive advantage in the market (Porter 1990, p. 66). The product has been proven free of any industrial product. Furthermore, various physicians have recommended due to its health sensitivity policy.

To those offering similar products, the product packaging and pricing would be the cutting edge for our product. The product would be sold at a slightly lower price. Our customer care service would be responsive to the needs of customer. Communication would also be enhance to increase this satisfaction.

Commercialization Plan

Business objectives

The project is guided by well-laid objectives. The main objective is to turn the project into a powerhouse in the beverage industry in the UK. In so doing, we hope to be one of the major employers in the kingdom.

Overall Business Strategy

The project plans to employ an outward in approach in conducting its activities once the project becomes operational. Strategic goals would be laid after taking into consideration what the market wants (Casper & Matraves 2003, p. 1871).

Key commercialization milestones

The planners of this project have conducted market analysis and have successfully understood market requirements. For the commercialization process, the team has identified a suitable location where it would take place. All relevant stakeholders have been informed.

Marketing strategy

When introducing the product in the market, the team has planned to offer the product to the market at break-even prices for the first one week. This low price is meant to draw customers to the firm and create a name. After the first week, normal pricing, which would be market friendly, would be adopted. The business would also employ other customer attraction strategies.

Production and operations

The members will carry out production and general operation. The members would run the project during the initial years. As the firm grows, it is planned that relevant skills would be employed to manage production and operations of the firm.

Risk analysis

In every business venture, there are always some risks that would be faced in the market. One such risk is customer indifference. Because it is a new business unit, some customers may fail to identify it. Market competition in itself is a risk.

Management

The current members and their roles

This project was started by a group of ten high school graduates from different schools within the city of London (Hollingsworth 2000, p. 597). They were motivated by the need to have an income-generating project that would help them be self-reliant.

They elected project coordinator, who also doubled as the chairperson of the entire team. He was the team’s representative to the outside world. To help him lead this team, a secretary and a treasurer were also elected.

All members have the duty to ensure that activities of the group are operational. All the activities of the firm were to be conducted by members without hiring any individual.

Future management needs

As the project grows, the current members would consider hiring some external skills, especially in the management. Because the current team has no technical expertise on issues of strategic management, it plans to hire a few graduates in the field of management as the business grows (Porter 1980, p. 56).

There would also be the need to hire a few college graduates in food and beverages. They would be bringing their knowledge into the firm so that the firm would be in a position to not only respond to the changing needs of the market but also meet the regulatory procedures put in place by the concerned bodies.

Financial projections

At the inception level, the major source of finance is expected to be the contributions from the members in form of subscription fees. However, the project is expected to be self-supportive within the fourth month of operation. Further details about the financial projection are given in the appendix below.

Key revenue assumptions

There are some revenue assumptions that have been made in coming up with the plan for this project. The first assumption that was made was that the project would be self-supporting within its first four months of operations.

It is assumed that within this period, the project shall have overcome the initial challenges and would be in a position to break-even within the period (Hall & Soskice 2001, p. 35). It is assumed that after the fifth month, the firm would start registering positive returns in its revenues. It was also assumed that the project proposal would be considered for initial funding by the concerned donors.

Key expenditure assumptions

The team assumed that the expenditure of the project would be within its budget constrain. It is believed that the initial purchase, which would involve purchase of the machines and other required tools, as well as the raw materials to start the project, would take up about forty percent of the total amount that would be available for the project.

The project would use the remaining percentage to ensure that daily production needs are catered for (Gompers & Lerner 2004, p. 57). The amount that would be obtained from the daily operations would be ploughed back to the project.

Sources of finance

The sources of finance for this project are divided into three categories. The first category would be funding from the members of the project. From the subscriptions and annual payments, the project would have some amount to further the project.

The project hopes to obtain further funding from donors who would consider the project viable and worth investing. Their funding may come in form of grants or loans that would be refunded later (Peteraf 1993, p. 182). The last source of funds would be the proceeds from the business. This is expected to be the main source of finance for the organization in the end.

Exit for investors

Investors in this project would exit at their own pleasures. However, here are well laid procedures for such members to leave, especially when they need a refund. All the members are assigned a value of shares according to their contributions. This value would increase or decrease, depending on the growth of the firm. When leaving, the member would sell his or her shares to other members. If no member would be willing to buy the value, then the business fraternity would buy it and appropriately refund the leaving partner.

Cash Flow Forecast

List of References

Amable, B 2003, The Diversity of Modern Capitalism, Oxford University Press, Oxford.

Besanko, D & Dranove, D 1996, Economics of Strategy, John Willey & Sons, Nueva York.

Casper, S & Matraves, C 2003, “Institutional Frameworks and Innovation in the German and UK Pharmaceutical Industry”, Research Policy, Vol. 32, no. 1, pp 1865–1879.

Ghemawat, P 1991, Commitment, The Dynamic of Strategy, Free Press, New York.

Ghemawat, P 1999, Games Businesses Play: Cases and Models, MIT Press, Cambridge.

Gompers, P & Lerner, J 2004, The Venture Capital Cycle, MIT Press, Cambridge.

Hall, PA & Soskice, W 2001, Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford University Press, Oxford.

Hollingsworth, RJ 2000, “Doing Institutional Analysis: Implications for the Study of Innovations”, Review of International Political Economy, Vol. 7, no. 1, pp 595–644.

Kanniainen, V & Keuschnigg, C 2005, Venture Capital, Entrepreneurship, and Public Policy, MIT Press, Cambridge.

Oster, SM 1994, Modern Competitive Analysis, Oxford University Press, Nueva

Peteraf, MA 1993, “The Cornerstone of Competitive Advantage: A Resource-Based View”, Strategic Management Journal, Issue.14, no.1, pp 179-191.

Porter, ME 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press, London.

Porter, ME 1990, The Competitive Advantage of Nations, London, MacMillan Press. Porter, ME & McGahan, MA 2007, “An Interview with Michael Porter”, The Academy of Management Executive, Issue 16, no. 1, pp 2-44.

Introduction

Competition in the market increases everyday and business enterprises that produce substitute products and services introduce them to the market all the time. This has increased the market competition as the enterprises try to outdo each other. To ensure they achieve the competitive advantage, every enterprise plans its strategy to use in order to gain the market (Aaker & McLaughlin 2010).

During the planning, the enterprises focus on consistent approaches that will offer their products or services competitive advantage in the market. They emphasize on issues that will help their products or services to outsell the competition. Similarly, the implementation of the market plan is as crucial as its planning (Aaker & McLaughlin 2010).

Many enterprises formulate their market plan in a very competitive manner but fail in the implementation. This makes them to have a good market plan but they do not penetrate to the market due to poor implementation methods (Aaker & McLaughlin 2010). This paper gives a report of all natural nutritional drink –green fit market plan.

The paper focuses on Australia as the target market and the generation born between 1965 and 1979 as the target customers. In addition, the paper addresses the current marketing situation in terms of market, product, competition, distribution and macro environment situation. Finally, the paper addresses the SWOT analysis of the company.

Current marketing situation

Market situation: Green Fit Nutritional Drink target for the year 2012 is the Australian market with the customer target being the people born between 1967 and 1979. In choosing the market, the company put various factors into consideration. The company did a market analysis that gave the overview of the market that guided the company in choosing the market and customer target (Klein 2007).

In the analysis, the company realized that competition of naturally healthy products in Australia was not stiff as in some countries. The company objective in this market is to establish itself and ensure it penetrates to all parts that require naturally healthy products. In the analysis, Green Fit managed to identify a competitor in the Australian market who is not well established.

The company has made the capture of the market their major concern before this competitor penetrates to the market. From the analysis, the company realized that majority of the people born between 1967 and 1979 need naturally healthy products that made the company to choose this people as the target customers. The company realized that Australian market did not have enough naturally healthy products and the demand for the products was increasing.

The company understood that the majority of the people who demanded the products were in this age bracket. The company on the other hand, has a passionate of serving people in this age bracket as they have experience in the other markets. Green Fit finds customers in this age bracket as reliable and easy to handle than any other age bracket. However, the company also considers other age brackets if they find them reliable and able to handle.

In addition, the company put into consideration the availability of the customers and the ease of reaching them (Mahoney 2005). The company realized that in the Australian market, majority of the people in this age bracket are employees who may not have enough time for their meals and they would therefore offer a good market for the company products.

Further, majority of these customers are literate and have exposure to various media sources that the company can use in promotion and advertisement of their products (Klein 2007). The company can also access these prospects through workshops and conferences as majority are used to these activities. The company can make use of these platforms to introduce and promote the products. The company further emphasize on other prospects once it succeeds in this market and customer target.

Product situation: The Australian market like other markets had exposure to naturally healthy products in the past years. However, the number of products that are in the market are few. The products in the market match our products in that they are supplement to meals. In terms of our products, we have only two products that are in the market.

This gives Green Fit a challenge, as they need more products with different tastes for the customers to have a wide variety to choose. Currently, the company only produces Green Fit Tropical Citrus that has a crisp, light and refreshing blend of exotic flavor and Green Fit pomegranate that has a perfect balance of sweet and tart flavor. The customers who do not have a passion for this taste will then shift to competitors products.

For a company to penetrate well in the market it needs to produce a wide variety of products so that the customers can have the choices depending on their taste, flavor, color and other characteristics (Westwood 2002). The company further has analyzed the competitors pricing of the products to have a clear understanding of the prices in the market. Green Fit products are normally customer friendly and reliable in all markets.

Competition situation: During the analysis, Green Fit Nutritional Drink Company realized there were few companies in the Australian market that were dealing with naturally healthy products. In the evaluation, Green Fit Company realized that these companies had the ability to produce a variety of naturally healthy products.

In addition, the company realized that the competitors’ prices were highly competitive as they were more customer friendly than their prices. They therefore came up with a plan to lower the prices, and increase the variety of their products in the market. On the other hand, the company agreed on having intensive promotion for their products. In addition, the company agreed to offer services such as after- sale service and free samples to their customers in order to attract more prospects.

Distribution situation: In the analysis, the company realized as in other countries that it has market, Australian market means of product distribution is through dealers. The company highlighted prominent dealers in the Australian market that can distribute their products. In their tendering, the Green Fit ensured that these dealers met the requirements and are able to distribute the products to the market.

Macro environment situation: The macro environment refers to those external factors that affect a business. They include political and legal factors, cultural and social factors, technological factors and economic factors (Westwood 2002). In the analysis, Green Fit realized that Australian economy has been stable for several years a factor that has influenced business growth in the market.

The legal and political factors have less influence and they emphasize on a political and legal environment that boosts business growth. In terms of technology, Australia is developed but the market does not like exposure to artificially healthy products. In social and cultural factors, the company realized that majority of the Australian market has an influence on naturally healthy products.

SWOT analysis

Opportunities and threats (external) analysis: The external factors refer to the issues that affect the business from the outside (Grant 2005). The opportunities refer to those ventures that a business can invest in or technology that it can utilize to have a competitive advantage (Grant 2005).

Green Fit has several opportunities to venture in to capture Australian market. They can improve their technology, increase the variety of products in the market, they can outsource labor from the Australian labor market in order to acquire highly skilled and competent labor force and production in bulk so that they enjoy advantage of economies of scale. On the threats, the Green Fit has exposure to competition, economic inflation, change in political atmosphere and business laws (Grant 2005).

Strengths and weaknesses (internal) analysis: This analysis involves evaluation of factors that affect a business from within (Mahoney 2005). In the strengths, the company evaluates what it has been able to achieve. Green Fit has managed to meet its mission statement through creation of healthiest healthy drinks that do not contain artificial preservatives.

The company has also managed to offer friendly prices to their customers as well as good penetration to the market. The company is also able to identify the target market that has enhanced its growth. In weaknesses, the Green Fit evaluated what it needs to improve (Mahoney 2005). The company realized it production was too thin and they need to introduce more products to the market.

Issues Analysis: Depending on the analysis done on the marketing situation and the SWOT analysis various things need the attention of the company. The company must work towards achieving its objectives in the market. To ensure this the company needs to have the ability to handle competition in the market, handle the threats, improve its weakness and maintain/improve its strengths.

The methodologies Green Fit will apply in meeting these issues will highly influence the outcomes (Klein 2007). A good methodology will yield good results while the converse is true. Therefore, Green Fit should choose a method that will ensure they attain their objectives in the Australian market.

References

Aaker, D & McLaughlin, D 2010, Strategic market management: Global perspectives, John Wiley & Sons, United Kingdom.

Grant, R 2005, Contemporary strategy analysis fifth eds, Blackwell Publishing, Malden.

Klein, G 2007, Strategic marketing, Grin Verlag, Nordetstedt.

Mahoney, J 2005, Economic foundations of strategy, Sage Publication, Inc, London.

Westwood, J 2002, The marketing plan: a step by step guide (third edition), Kogan Page Limited, London.

Strategic Problem and Issue Identification

Cadbury Beverages has been a successful marketer of different carbonated drinks. The company wanted to “re-launch its brands acquired from Procter & Gamble” (Kerin and Peterson 316). The Senior Marketing Executives (SMEs) focused on the Crush brand in order to emerge successful.

To begin with, it was mandatory to rejuvenate the brand’s bottling network. The company also analyzed the facts associated with its leading brands. It was also mandatory for the firm to establish a powerful advertising program for its Crush brand.

This advertising program “required the best strategies, objectives, and preliminary budgets” (Kerin and Peterson 316).

From 1985 to 1989, the Crush orange flavor had become less competitive. The company was using ineffective advertising strategies thus affecting its goals. In 1989, most of “the competitors were using a wider spectrum of avenues to advertise their superior brands” (Kerin and Peterson 324).

Many players in the industry were using similar promotional strategies for their products. It is agreeable that many consumers admired the Crush brand. However, new strategies were required in order to re-launch the product in the targeted markets. This approach would make it easier for Cadbury Beverages Incorporation to achieve its potentials.

Analysis and Evaluation

The problems affecting Cadbury Beverages forced the Marketing Executives (MEs) to make new changes in 1990. To begin with, the MEs decided to focus on the Crush brand. The marketers wanted to make the brand successful. This approach was critical because the flavor accounted for two-thirds of the total sales.

A new bottling network for the brand was also established (Kerin and Peterson 319). The positioning strategy only focused on the existing customer base. New bottling agreements “were created in order to make the orange flavor available to more consumers” (Kerin and Peterson 320).

The level of competition also affected the performance of the Crush brand.

However, the above positioning strategy presented numerous threats to the other brands such as Sunkist. The strategy was also ineffective because the company was making little profits. The “existing competitors were also attracting more customers using their diet segments” (Kerin and Peterson 324).

There was also the need to establish new positions in order to make the brand successful. That being the case, it was appropriate to have a powerful advertising program that could make the brand successful.

Recommendations

It is notable that “the Crush brand boasted of high-awareness in different regions such as Boston, Miami, Seattle, San Francisco, New York, and Miami” (Kerin and Peterson 329). However, it was appropriate to create a powerful promotion program for the brand. Cadbury Beverages Incorporation should therefore have a proper budget for every promotional strategy. That being the case, the firm should use its resources to support the Crush brand. The firm should use appropriate marketing strategies in order to emerge successful because more customers are aware of this brand. A proper knowledge of the existing market conditions will produce the best strategies.

The firm should also identify new distribution channels. It should also collaborate with different restaurants and Gas Stations (GSs) in order to increase its market share. The use of modern technologies such as social media networks will inform more people about the targeted brand.

The firm should also use a powerful marketing mix. This approach will “ensure the firm uses competitive prices, strategic positions, and effective promotional practices” (Kerin and Peterson 18). The strategy will ensure the firm achieves its marketing goals.

Works Cited

Kerin, Roger, and Robert Peterson. Strategic Marketing Problems: Cases and Comments. Upper-Saddle River, NJ: Prentice Hall, 2009. Print.

Introduction

In 2008, GlaxoSmithKline [GSK], which is a well-established global pharmaceutical company, was entangled in a major legal tussle that arose from the ineffective application of strategic management practices. The legal situation involved two 14-year old schoolchildren from New Zealand who challenged the organisation’s marketing campaign.

In its advertising, GSK claimed that Ribena Drink, which is one of its products, was enriched with vitamin C. In an effort to ascertain the truth of the firm’s claims, the two girls undertook extensive tests. The results showed that the organisation’s advert was a hoax that aimed at marketing the product to the target customers.

The girls raised the issue to GSK through writing, but the organisation did not respond. This aspect prompted the girls to raise their concerns via a local media house, which broadcasted the issue through a local television consumer affairs program. The broadcast house raised the issue to the New Zealand Government Commerce Commission, which took GSK to court.

Subsequently, the organisation was fined for misleading the public. In addition, the company was ordered to correct the misrepresentation by placing a new advert in major print media [newspaper] in New Zealand. Jaques (2008, p.394) affirms that the action by the two complainants ‘triggered a sequence of events, which led to prosecution, public opprobrium, and international damage to an iconic brand’.

This paper entails a case study on the Ribena issue at GSK. The case study evaluates the strategic issues that GSK’s management team should have considered in order to avoid the legal and reputational effect.

Secondly, the paper identifies and discusses the possible barriers that might be encountered in addressing the legal and reputational impacts. The final part involves an evaluation of the implications of the suggestions identified in organisational and management practices from the risk management perspective.

Analysis

The situation encountered at GSK was mainly due to poor management practices. Additionally, the management team did not appreciate the magnitude of the issue on the organisation’s corporate reputation. According to Page and Fearn (2005), corporate reputation is an indispensable element in organisations’ pursuit for excellence.

Page and Fearn (2005) further accentuate that the consumers’ perception influences an organisation’s performance. Consumers have noticeably become more concerned with organisation’s behaviour in making decisions on store and product loyalty. This aspect underscores the existence of a strong correlation between organisational behaviour and consumer behaviour.

Since its inception, GSK has managed to penetrate the global market largely due to the extensive investment in product diversification. Consequently, the firm has gained remarkable global reputation. Additionally, GSK global success has also been enhanced by investment in extensive marketing.

The firm did not recognise the effect of ignoring the customers’ complaints on brand preference. Hur, Kim, and Woo (2014, p.76) emphasise that achieving ‘brand preference and stimulating demand are particularly challenging for a company with no reputation in a given product category’.

Moreover, organisations that do not have sufficient reputation experience challenges in developing credibility for their products. Managing corporate reputation leads to the development of positive moral capital, which protects an organisation from negative encountering negative stakeholder evaluation.

GSK should have considered a number of issues in order to avoid the legal and reputational situation that occurred. Some of the issues that the firm should have considered are evaluated and discussed herein.

Ethical advertising

Despite the fact that GSK intended the marketing campaign to be persuasive, the firm failed to adopt effective practices that would have contributed to the attainment of the desired outcomes. Reast, Palihawadana, and Shabbir (2008) affirm that persuasive advertising is focused on establishing a strong bond, hence fostering long-term purchase intention.

The organisation’s marketing department should have ensured that it integrates ethical advertising practices (Biegler 2013). In a bid to achieve this goal, the organisation’s management team should have adhered to the stipulated legal and regulatory standards with reference to advertising.

Countries such as the US have established a Federal Trade Commission, which is charged with the responsibility of regulating advertising practices (Synder 2011).

In the event that there are no clear ethical standards for advertising, GSK should have advocated truthful advertising practices. On the contrary, the firm exaggerated the claim that one of the ingredients used in making Ribena included Vitamin C.

Thus, the advert was deceptive. Trehan and Trehan (2011) argue that a customer has the right to sue organisations based on deceptive advert.

Cramphorn (2014) is of the opinion that developing brand identity depends on the effectiveness with which an organisation nurtures a strong and positive emotional bond. However, ineffective advertising can hinder the development of such strong bond (Trehan & Trehan 2011).

In a bid to achieve this goal, the organisation should have avoided misrepresenting or omitting material facts on product characteristics in the marketing communication process. Product characteristic constitutes a critical element in the consumers’ decision-making process.

Perry, Cox, and Cox (2013) corroborate that consumers seek product information in order to make a purchase decision that is aligned with their product taste, preferences, and values.

By misleading customers to purchase the product through the advert, GSK influenced adversely the consumers’ right to purchase. Koslow (2000, p.248) supports the theory of consumer right by asserting that consumers ‘learn about who, what, where, when, and how to buy through advertising’.

This aspect underscores the fact that organisations should value advertising as a critical element in facilitating the consumers’ right to choose. GSK denied the target consumers the right to choose.

This move led to the development of a negative reaction amongst the consumers. The advertising process was based on different interests, which entailed influencing the consumers to make a purchase decision.

GSK should have avoided incorporating misleading facts in the advert. Conversely, the firm’s marketing manager should have ensured a high level of honesty in its full disclosure on product characteristics. This element would have improved the consumers’ ability to make a decision from an informed position.

Moreover, adopting this approach would have minimised the negative reaction significantly from consumers.

The capacity to influence the consumers positively would have originated from the development of positive perception on the organisation’s approach towards truthfulness in its marketing communication (Gurhan-Canli & Batra 2004). Thus, the firm would have succeeded in protecting its reputation.

Customer Relationship Management

Organisations should not be concerned with profit maximisation only. On the contrary, they should focus on fulfilling the customers’ needs (Bang, Sooyen & Lyndon 2014). This case shows that the advertising process was skewed towards generating sales revenue rather than educating customers on the products.

GSK should have appreciated the importance of integrating the concept of customer relationship management [CRM]. The firm’s management team should have perceived customers as an essential asset in maximising sales revenue. Leticia, Rodolfo, and Ana (2011) cite customers as a fundamental element in achieving corporate success.

The concept of CRM would have enabled the firm to establish a cohesive relationship with its customers (Senn, Thoma & Yip 2013). One of the issues that the organisation should have taken into account in its pursuit for CRM entails complaint management.

Despite the fact that organisations are concerned with delivering value to customers, the probability of errors occurring, hence hindering the delivery of the intended value cannot be ruled out. Customers may raise product complaints, which the firm must address adequately. Ang and Buttle (2012, p.1021) accentuate that customer ‘complaints are a fact of organisational life’.

Past studies show that customers switch service providers due to diverse reasons. Some of the major reasons include the products’ failure to deliver the desired value and unfavourable service encounters from core organisational personnel.

In the event that customers do not receive adequate treatment from key organisational personnel such as the top management, they react by voicing their concerns to third parties (Malhotra, Agarwal & Ndubisi 2010).

This aspect mirrors the situation encountered at GSK. Integrating optimal complaint management minimises the likelihood of customers terminating their relationship with other organisations.

Knox and Oest (2014, p.42) affirm that customer complaints ‘are important non-transactional events because they represent a critical turning point in the company’s relationship with its customers’. Organisations can entrench a high level of customer loyalty through effective complaints handling.

Ang and Buttle (2012) support this argument by affirming that excellent handling of complaints is critical to pre-empting the occurrence of an undesirable outcome. In order to manage customer complaints successfully, GSK should have integrated the concept of data warehousing using the effective customer relationship-management software.

The software would have played a fundamental role in collecting and storing diverse customer complaints and complements. This move would have ensured that that the complaints raised by customers are understood and managed easily.

In its quest to develop a better understanding of the customers’ complaints, it is imperative for the organisation to appreciate the contribution of social media in developing a strong customer relationship. The emergence of social media has provided customers with an opportunity to share their consumption experiences.

Harrigan and Miles (2014) cite Facebook, YouTube, Twitter, Google Plus, and LinkedIn as some of the common social mediums used by organisations in their CRM practices. Consequently, social media has become a critical source of product information that consumers are using.

Raj et al. (2012) opine that negative product experiences shared on social media platforms might have a multiplier effect, hence affecting the organisation’s reputation adversely. This aspect might affect the organisation’s ability to generate sales revenue. GSK should have used its CRM practices in apologising to clients.

In order to undertake CRM successfully, GSK should have integrated the International Organisation for Standardisation [ISO]. Some of the ISO standards that the organisation should have considered entail ISO 10002 and ISO 9001. Adopting ISO 9001 would have provided GSK with an effective framework for integration in managing diverse organisational processes.

Thus, the firm would have ensured that its products meet the customers’ expectations, hence culminating in a high level of satisfaction (Nicklas, Schluter & Winzer 2013).

Conversely, ISO 10002 provides organisational managers with guidance on how to deal with customer complaints related to products. This goal is achieved through optimal product planning, designing, product improvement, and operation.

Potential problems that might arise

The above analysis illustrates the magnitude of the issue faced by GSK as substantially high. This assertion arises from the view that the reaction by the two 14-year old girls received global awareness, which affected GSK’s global reputation adversely.

However, implementing the above issues may improve the GSK’s capacity to prevent the occurrence of such incidences in the future. Some of the major problems that the firm might encounter in implementing the proposed issues are evaluated herein.

Resistance

Implementing the above issues means that the organisation will be required to undertake remarkable strategic changes. Thus, the firm’s management team should not rule out the possibility of resistance to change. Wittig (2012, p.23) accentuates that employees ‘resist change because it involves moving from the known to the unknown’.

In this situation, GSK employees might resist the proposed strategic changes. For example, the process of implementing ISO standards might require the organisation to change the norm with reference to how its personnel handles and interacts with customers.

Some employees might develop the perception that implementing the proposed changes will lead to a significant change in job characteristics.

One of the perceptions that the employees might develop relates to an increase in the degree of job strain due to additional job demands (Choi 2011). Job strain increases the level of work-related stress. Such occurrences might stimulate employees not to support the strategic changes.

Resistance to the proposed change might not only be limited to the lower levels of management, but also amongst the middle and top levels of management. This assertion arises from the fact that the middle and top levels of management would be required to oversee the implementation of the required changes (Shin, Taylor & Seo 2012).

Lack of teamwork

The process of implementing the above strategic issues will depend on the contribution of all the internal stakeholders. Thus, successful change implementation will be influenced by the extent of organisational learning. Perez and Gutierrez (2013, p.245) define organisation learning as ‘a process of knowledge acquisition, assimilation, and exploitation’.

Therefore, it is imperative for the GSK’s management team to consider the concept of employee collaboration in order to derive the required synergy.

One of the strategies that the organisation’s management team should consider entails teamwork. Lack of effective networking amongst the organisation’s employees will affect GSK employees’ ability to share ideas and information (Ulrich et al. 2013).

Thus, its application to the organisation’s needs, which entail the application of ethical advertising and the adoption of a customer-focused approach in the organisation’s operation in order to minimise occurrence of complaints, will be affected adversely.

The capacity to improve an organisation’s competitive advantage entails the understanding that is effectively applied to the already existing knowledge.

Lack of vision and ineffective planning

The effectiveness with which GSK implements the proposed issues will greatly depend on the extent to which the employees have developed a clear vision. Palmer (2015) asserts that successful implementation of change is determined by the degree to which all the directly affected stakeholders by the change have developed a ‘shared-need-for-change’.

The majority of the organisational employees might not appreciate the significance of the proposed approaches in restoring the organisation’s global reputation. Such aspects highlight the existence of lack of clear vision. Moreover, the implementation of the issues identified will depend on the efficacy of the organisation in planning the implementation process.

The organisation’s management team has an obligation to ensure that the vision is well articulated by all the internal stakeholders. Huyer (2014, p.19) asserts that a ‘well-articulated vision paints a visual picture of what it looks like when complete and it has a clearly set direction and purpose’.

Implication of the suggestions

From the above analysis, it is evident that GSK could have avoided the occurrence of the negative publicity by implementing the proposed suggestions. However, the organisation’s management team can derive a number of lessons.

First, by integrating ethical organisational practices, the organisation’s management team would have protected the firm’s corporate reputation. This assertion means that the firm would have improved its effectiveness in managing crises that arise from the external environment.

Hearit (2008) cites reputation as a fundamental strategic resource in an organisation’s operation. Moreover, Hearit (2008, p.319) affirms that reputation ‘is valuable because it informs us about what products to purchase, what companies to work for, or what stocks to invest in’.

This aspect means that investing in ethical practices will play a fundamental role in improving the GSK’s market position. Consequently, the organisation will evade the occurrence of human capital crisis.

For example, the firm will be in a position to attract valuable job candidates from the global labour market because of the positive reputation. Additionally, the likelihood of the organisation optimising its performance, hence its competitive advantage will be improved substantially.

Sohn and Lariscy (2012) accentuate that reputation is a rare resource that most organisations experience in their quest to develop a strong organisational culture. Providing truthful and material facts in the marketing communication process would have promoted the organisation’s ability to develop a strong customer base.

This assertion arises from the view that customers would have been in a position to make optimal purchase decision. Consequently, the likelihood of the firm maximising its sales revenue will be improved considerably.

Furthermore, integrating the concept of customer relationship management [CRM] will play a considerable role in improving its crisis communication. Through effective crisis communication, GSK will be in a position to gain insight on how to manage crisis due to the integration of collaborative communication between the organisation and its customers.

Furthermore, CRM will enable the organisation to be proactive in identifying issues that might affect the organisation’s corporate reputation adversely.

In addition to the above aspect, investing in CRM will improve the organisation’s capacity to undertake crisis management. For example, the firm will entrench different communication approaches such as impression management, image restoration, and apologia (Kim 2014).

According to Riddell (2013), apologia entails a compelling and vigorous defence mechanism used in organisational management in order to restore corporate reputation.

One of the elements in entrenching the concept of apologia includes admission of guilt. In this case study, GSK did not admit guilt for the inclusion of false information in its advert. Consequently, the complainants were forced to take extreme measures by raising the issue to third parties.

Conclusion

Marketing communication constitutes one of the essential elements in organisations’ quest to optimise their performance. However, in their marketing communication process, it is imperative for organisations’ management teams to recognise their capability of influencing the consumers’ purchase decisions.

Thus, organisations have an obligation to give truthful and material facts of their products. This approach improves the consumers’ ability to make effective purchase decisions, hence attaining a high level of satisfaction. For example, customers base their product preference on product information offered through the marketing communication process.

In this case, GSK erred in its market communication through the falsification of the product characteristics. Consequently, the firm’s global reputation was affected adversely. Apart from the reputation impact, the organisation suffered remarkable legal implications.

However, the organisation would have been in a position to avoid such situations by implementing effective strategic management practices. Amongst the issues that the organisation’s management team should consider include ethical practices and customer relationship management.

The firm should ensure that all its operations adhere to ethical practices. Currently, consumers are increasingly becoming concerned with how ethical an organisation is in its operations. This trend is influencing the consumers’ product choice and preference. Therefore, it is imperative for organisations to ensure that they give truthful information.

The adoption of ethical practices will culminate in the development of a strong level of customer loyalty. Moreover, the case study indicates the importance of integrating effective customer relationship management in order to gain insight on diverse customer concerns.

Thus, the organisation will be proactive in dealing with emergent issues. The case study further underscores the likelihood of challenges occurring in implementing the proposed suggestions. However, the firm should consider integrating effective leaders, planning, internal communication, and teamwork.

These elements will improve the likelihood of the organisation transforming its global reputation successfully. Moreover, the organisation’s effectiveness in crisis management will improve considerably.

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TCH realises the importance of having a built-in exit strategy for the company’s Tropical Health Drink. This is because of the fact that uncertain business environments may either hinder future commercialisation of the product or make it gain immense market share to a point of wanting to sell the product line to more established businesses (Clarke n.d.).

An explicit exit strategy is also important not only to plan for the future but also to enhance the confidence of potential funders. TCH adopts two exit strategies to cater for the two probable eventualities described above. If the Tropical Health product line starts to make losses due to prevailing market conditions, TCH will consider a friendly buy-out with the view to transferring more ownership to shareholders and employees to keep the product afloat during the turbulent times (Clarke n.d.).

This is a viable exit strategy as TCH will cease substantial ownership of Tropical Health while pumping in more resources from shareholders to maintain the product in the market. TCH will consider selling the product to an established health drinks manufacturer for a fortune if it continues being competitive in the market for a period of 20 years (Yeanoplos 2001).

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Introduction

It is necessary to mention that the role of the Internet and social media in marketing has been increasing over the last few years. Many professionals in the area have focused on the development of approaches that would help to maximize the profits. Worldwide Beverage Innovations is a company that was selected in this case. The company is specialized in the development and promotion of unique drinks, and it is quite profitable at the moment. However, its strategy has several weaknesses that must be addressed. The development of a promotional campaign that would utilize a social media platform would be highly beneficial. Peer-reviewed journals and the literature on this subject matter will be examined to ensure that proposed solutions are justified and are based on evidence.

Selection

It would be appropriate to develop a new flavor of the beverage, and focus on the product during all stages of the campaign. One of the primary reasons this selection is reasonable is that it would help to attract current and past customers at the same time.

The individuals that have tried the drink in the past may be interested in what the firm has to offer. It is hard to argue with the fact that new products make clients excited, and it is reasonable to focus on the design of the bottle and overall presentation. Also, it will be rather colorful to ensure that it captures the attention of users that see the posts via Instagram. Another reason that needs to be mentioned is that the standard flavors are already well-known and liked by customers, and it is an outstanding opportunity to establish the reputation of a new drink.

Purpose

The primary goal of the campaign is to increase the level of interest in a particular product, and the company overall. The products have gained enormous popularity. However, the problem is that the client base is rather stable, and opportunities for expansion are not explored. The firm is trying to expand in other regions, and this marketing strategy should help to facilitate the development. The primary target market is young people in the age group from 21 to 30.

The product is aimed at individuals that like to engage in a variety of activities and value their leisure time. Their attitude towards this type of drinks is mostly positive, and they prefer such aspects as quality and taste the most.

Customers demonstrate various kinds of behavior, but a significant percentage is loyal to the brand and makes purchases quite often. One of the needs that the Instagram will help to address is that many clients would like to influence the opinions of their friends regarding this product. Furthermore, they will have an opportunity to share the photos and show that the beverage is popular among many consumers. The approach is reasonable because one of the studies has shown that social factors play a critical role when it comes to buying intentions (Gunawan & Huarng, 2015).

Contest

The competition will focus on original and unique pictures that would include a new product. Only one entry from an account will be accepted each week to ensure that the contest is fair. A particular hashtag will be required to participate and receive awards. Captions that describe the benefits and qualities of the beverage will also be appreciated. The central purpose of the contest is to make clients engaged in the development of the content related to the brand and to increase the rating of the firm’s Instagram account. The photographs made by winners will be printed on billboards with all the hashtags and usernames also available.

Therefore, the contest seems like an outstanding opportunity to gain the popularity and significant numbers of followers on the social media. Moreover, it would be appropriate to introduce a website that would have polls to engage the customers, and the most attention should be devoted to fairness. Preventive measures should be taken to avoid any complications related to questionable results. The creativity of the photographs is the most valuable aspect in such contests. For instance, an individual may take a selfie with a product while he or she is skating or yachting. An appropriate caption would also help to grab the attention of the company and users that rate the pictures.

Metrics

It would be reasonable to keep track of overall sales to determine the impact that the campaign has on the behavior and decision-making of customers. Many companies offer well-developed Instagram analytics instruments, and the expenses used on the purchase are justified because the information that can be collected and analyzed is critical. The most attention should be devoted to trends and hashtags. Moreover, specific techniques such as coding should be utilized to look for the information on the Internet and determine if the campaign has managed to draw the attention of media (Dhaoui, 2014).

Engagement levels will be measured in this case. Therefore, such indicators as likes, shares, and traffic should be examined and evaluated, and it will be possible to determine correlations and relationships between particular factors. It is imperative to develop an assessment schedule to ensure that reports can be provided promptly and other issues related to time constraints are avoided.

Benefits

One of the core benefits of the campaign is that it that the range of products is aimed primarily at the same demographic that uses Instagram, and it is a critical factor. One of the unique aspects of this platform is that users share the necessary data themselves, and the company does not have to utilize enormous resources to attract the attention of consumers. One of the recent studies has shown that the experience related to food is enhanced if a person takes a picture beforehand.

Therefore, it is reasonable to focus on the incentives that would promote consumer-generated images (Coary & Poor, 2016). Such findings are rather intriguing, and more research on this subject matter would be beneficial, but it is hard to argue with the fact that this approach is beneficial to the company in the long-term. It is suggested that social media campaigns help to develop trust in the brand, and it is vital to the company at the moment (M. Barker, D. Barker, Bormann, & Neher, 2012).

Conclusion

In summary, it is possible to state that the campaign that has been developed is quite efficient, and should be considered by the enterprise. One of its primary weaknesses is that it is not original, and other enterprises in this sector have utilized similar techniques, but the fact that unique prizes are offered is critical. Overall, the development of the campaign should not take too much time or resources, and profits are expected to be significant.

References

Barker, M., Barker, D. I., Bormann, N. F., & Neher, K. E. (2012). Social media marketing: A strategic approach. Boston, MA: Cengage Learning.

Coary, S., & Poor, M. (2016). How consumer-generated images shape important consumption outcomes in the food domain. Journal of Consumer Marketing, 33(1), 1-8.

Dhaoui, C. (2014). What social media content is best to engage consumers? A content analysis of Facebook brand pages. In F. Bowen (Ed.), Computer-mediated marketing strategies: Social media and online brand communities (pp. 134-156). Hershey, PA: IGI Global.

Gunawan, D., & Huarng, K. (2015). Viral effects of social network and media on consumers’ purchase intention. Journal of Business Research, 68(11), 2237-2241.