Marketing in Digital Era (MKT2002S)

Marketing Plan - Task B

1. Introduction

1.1 Aim of the Report

This marketing report seeks to provide a comprehensive analysis of the market by identifying potential opportunities and challenges for EcoSip. It aims to develop an effective marketing strategy that will successfully introduce the new product to the market while defining the target audience.

The report will cover a situational analysis that includes both macro and microenvironment analysis, an evaluation of new products in the market, a marketing strategy that covers the 4Ps (product,  price,  place,  promotion),  a target market  analysis and  concludes  with  a brand positioning strategy. Ultimately, this report should provide a roadmap for successful product launch and market penetration.

1.2 Product Introduction (refer to Figure 6 in Appendix C)

The EcoSip sachet is an instant beverage made of biodegradable material that can double as a straw or stirrer. This product is $9 per box and makes coffee and tea lovers who are always on the go have a convenient and sustainable solution. Through innovative products, EcoSip promotes the adoption of eco-friendly practices and creates a sustainable future.

1.3Ansoff Matrix Strategy

In view of the  Ansoff Matrix , our group  has chosen New Product , New Market for this assignment  .

EcoSip is an innovative and sustainable product that offers a novel way to consume coffee and tea. The product combines infusion, stirring, and drinking into a single stick (refer to Figure 6 in Appendix C), and is set to debut in December 2023. To ensure a successful launch, a well-planned strategy is imperative.

The first step in the strategy is to conduct market research to identify potential target audiences and analyse the competition, tailoring EcoSip to meet the needs and preferences of the target audience. A comprehensive marketing plan should be developed, focusing on brand awareness, generating interest, and highlighting EcoSip's unique features. Distribution strategies should also be carefully considered to make sure every customer can get the product from local retailers or e- commerce platforms readily.

In order to remain competitive in the market, EcoSip plans to continue innovating and expanding its product offerings. This includes introducing more localised flavours and drinks with additional health benefits, such as Kopi O, Bandung, and herbal health tea. These new products will help EcoSip compete with established instant beverage brands like Lipton, Nescafe, Golden Roast and Twinings.

3 Marketing Strategy

3.1. Marketing Objectives

The marketing objectives for EcoSip is to ensure that each of the four elements work together to create a cohesive and effective marketing strategy which ultimately leads to a successful promotion and sale of the product.

4.0 Target Market

4.1 Target Segmentation

4.2 Target Market

After conducting market research and segment analysis, the target market for EcoSip consists of environmentally conscious consumers who prioritise innovation and convenience. EcoSip’s packaging is made of biodegradable materials, which is in line with its sustainability mission to reduce environmental pollution. The unique design of biodegradable straws doubling as stirring sticks  caters  to  the  needs  of busy  individuals such  as  students,  office  workers,  and  urban commuters. Target consumers are willing to pay a premium for products that provide them with more convenience, innovation, and ethics.

On the other hand, EcoSip’s marketing positioning focuses on offering high quality at a lower price point (refers to 6. Brand Positioning), making it attractive to consumers of middle-class income levels and above who are seeking a quality beverage experience at an affordable price. This can help it to gain a competitive advantage and attract a wider range of customers, including non-users, first-time users and potential customers. By offering lower prices or comparable prices to similar products, EcoSip can increase its competitiveness and convert consumers of other brands into loyal customers of EcoSip.

The aim is to appeal to environmentally conscious consumers who seek convenience, innovation, and value in their products. Understanding the target consumer groups can help EcoSip allocate marketing resources more effectively while achieving greater product loyalty to the targeted market.

5.0 Brand Positioning

EcoSip’s brand positioning is  focused on providing  sustainable,  convenient  and high-quality beverages that fits the needs of individuals who lead busy lifestyles. EcoSip’s unique product design sets it apart from competitors in Singapore, and showcases the brand’s innovative spirit. As a beverage brand that caters to the public consumption level, EcoSip is committed to promoting eco-friendliness and creating value for the customers. In other words, what EcoSip is selling is not just beverages, but also promoting a healthy lifestyle.

As seen from the brand positioning map, EcoSip offers a cost-effective option despite its use of biodegradable packaging and premium raw material, which contribute to higher production costs. It is ofEcoSip interest to set its product pricing strategically to ensure affordability for customers, making it a product with exceptional value for money. Therefore, the cost performance of the product is particularly high, resulting in the company having a high bargaining power.

6.0 Products Mix

EcoSip falls under the consumer convenience product category. Some key characteristics of such products are usually affordable for the average consumer, widely available in most retail stores and online shopping platforms, encourage frequent purchases and require minimal effort on the part of the consumer.

4.2.1 Product Life Cycle

EcoSip is presently in the development stage where the ultimate goal at the present stage is to create products that are unique and different from competitors, and that appeal to the target market’s desire for sustainable and eco-friendly beverage options. On the other hand, marketing research is especially important at this stage to help understand how best to position the products in the market among the competitors. In the current stage, marketing efforts are primarily focused on creating a unique brand identity, creating a practical packaging design, and establishing a clear value proposition.

At the introduction stage, the goal is to increase awareness of the product and create demand, so the marketing effort should be focused on building brand awareness, generating excitement, and setting up distribution channels for the product to reach the target market.

Moving on to the growth stage, EcoSip’s goal is to expand the product’s market share and increase profitability. The focus of marketing efforts during this stage is to establish the brand, expand distribution, and increase sales revenue by maintaining customer loyalty and introducing new product variations or flavours.

Finally on the  decline  stage,  the  goal  is  to  extend  the product’s  life  cycle  through product improvements, cost-cutting measures and diversifying the product line to sustain growth and profitability, or phase out the product if necessary.

6.1 Five Product Levels

6.1.1 Core Benefits

Apart from just being convenient, EcoSip is environmentally friendly. The product is an eco- friendly way of enjoying a beverage. The multi-purpose sachet eliminates the need for additional tools, to make it easier for consumption on the go.

6.1.2 Basic Product

EcoSip offers a range of coffee and tea flavours that are packaged in biodegradable sachets. The sachets are multi-purpose which doubles as a straw and stirrer, providing an added level of convenience and functionality. This basic product level provides a quick and easy beverage solution that is also environmentally friendly. Customers can enjoy their favourite coffee or tea flavours without causing harm to the environment.

6.1.3 Expected Product

EcoSip offers a variety of flavours and beverage types to meet different preferences. Using only hot water, consumers can prepare the product easily and conveniently. Additionally, the product provides excellent quality and value for money, offering an affordable yet delicious choice for those who prefer an eco-friendly and convenient beverage solution. Customers can choose from a wide variety of flavours and beverage types, while also contributing towards a sustainable and environmentally friendly lifestyle.

6.1.4 Augmented Product

Free mascot toys and recycled bags with the brand’s logo printed on top will be given to encourage environmentally conscious customers to purchase the product, while enhancing their customer experience and adding value to EcoSip. Additionally, EcoSip offers free cookies that are specially designed to complement the taste of its coffee or tea. This unique offering provides customers with a delightful experience to enjoy the complementary item with their drink or take it to go as a snack.

6.1.5 Potential Product

EcoSip  offers  opportunities  for  growth  and  innovation,  including  the  ability  to customise corporate events or gifts to satisfy specific customer requirements. In addition, a new product line with new packaging that comes in cups can be added to the product range to increase its convenience and eco-friendliness. As a result of these potential product level features, the product can differentiate itself from competitors and grow its market share.

6.2 Place (Refer to Figure 7 in Appendix C)

EcoSip uses both multichannel and intensive distribution strategy to reach a wider audience and cater to different customer buying behaviours. Multiple channels include neighbourhood supermarkets such as U stars Supermarket and convenience stores, e-commerce platforms such as Lazada and Shopee, and its own company website and social media platforms.

By diversifying the marketing channels, EcoSip can reach a broader audience, improve brand visibility,  and increase   sales  revenue.  According  to   Shopify's  research,  businesses  using multichannel distribution methods tend to outperform their online-only counterparts, with an average sales growth of 57% compared to just 9.1% for ecommerce brands (2021).

Moreover, multichannel distribution can foster customer loyalty.  In a study published by IDC Retail  Insights,  customers  are  more  likely  to  spend  more  money  when  products  are  easily accessible, resulting in  15% to 35% higher average transaction values and 5% to  10% higher profitability for loyal customers (2015).

Intensive distribution through vending machines can also be a cost-effective way to improve brand awareness, expand into new markets and acquire new customers. Vending machines can be strategically  placed  in  high-traffic  areas  like  offices,  schools,  and  public  places,  enabling customers to make on-the-spot purchases while increasing brand exposure.

EcoSip collaborates with Unilever, a distributor, to effectively distribute its products and bridge the gap between production and consumption. Unilever offers EcoSip an opportunity to leverage their extensive distribution network and established connections with various retailers in Singapore such as supermarkets, convenience stores, and other distribution channels. As outlined in Appendix B, Section 2.3.3, the distributor acts as an intermediary to distribute the products effectively. Through this collaboration, EcoSip can reach a broader customer base, thereby enhancing its market share and customer reach.

6.3 Price

Penetration pricing strategy will be adopted at the initial stage of launching EcoSip. This involves selling a large volume of products at a low price to increase profitability by accumulating a small contribution  from  each  unit.  This  allows  for  fast  diffusion  of the  new  product,  capturing  a significant market share and reducing the likelihood ofcompetitors entering the market. As a result, EcoSip can increase its promotion and marketing budget for the product.

On top of that, EcoSip can adopt a going-rate pricing strategy by pricing new products lower than competitor's prices to increase sales. By pricing a product lower than the competitor, EcoSip can attract price-sensitive consumers and acquire customers quickly. For example, EcoSip may price at $0.45 per stick as compared to competitors which price their product at $0.48 per sachet. To apply going-rate pricing effectively, EcoSip should conduct market research to understand the competition's pricing and product features. This research can help EcoSip identify a competitive price point that is also profitable.

More importantly, EcoSip should differentiate its position from that of its competitors (Huong, 2020). For instance, one of the competitors, Lipton, is considered to be a product of lower quality. EcoSip can set a price higher than Lipton but still at a low-price range for EcoSip is more eco- friendly  and  convenient  compared  to  other  brands.   Since  EcoSip   is  marketed  towards environmentally conscious consumers who are willing to pay a premium for sustainable products, then a higher price point may be justified.

6.4 Promotion

According  to  Philip  Kotler  and  Gray  Armstrong,  the  promotion  mix  refers  to  the  unique combination of promotional techniques, including advertising, public relations, personal selling, and direct marketing, employed by a company to effectively communicate the value of their products or services to customers and cultivate enduring customer relationships (Kotler et al., 2022).

EcoSip recognizes the importance of establishing a strong brand and maintaining a positive image upon entering the Singaporean market. While the product offers added value through eco- friendly and versatile packaging, it is critical to avoid being perceived as insincere or misleading, given the rising trend of greenwashing. EcoSip can prioritise transparency throughout the entire process, from advertising to product sales and customer appreciation. This can be achieved by showcasing the eco-friendly manufacturing process in traditional and social media platforms, as well as printing eco-labels on products to inform customers of their biodegradability and toxin- free properties. Studies indicate that 57% of customers are more likely to choose eco-friendly products to reduce their carbon footprint (Troncoso, 2023).

Additionally, a campaign can be proposed to thank customers for their support of the environment by donating 5% of EcoSip's profits from each product purchased to organisations dedicated to environmental protection. This approach has proven to be an effective way to demonstrate the company's commitment to environmentalism and encourage customer loyalty (Turea, 2022).

6.4.2 Advertising - Social Media

Social media plays a significant role in green marketing. EcoSip can take advantage of this new market by setting up social media accounts on platforms like Instagram, Facebook, and others to promote its products. The brand can share information and media showcasing its environmental initiatives, such as donating profits to environmental organisations. Collaborating with social media  influencers would  allow  EcoSip  to  lead  the  environmental  trend  and  increase  brand awareness. This would help build trust with customers and increase loyalty. According to Schneider Electric’s survey, 90% of Singaporeans consider themselves environmentally conscious,  with a majority being young people who are more likely to follow trends and use social media (2021). For example, Patagonia's success in gaining 5.2M Instagram followers demonstrates the potential for EcoSip to achieve similar success (Troncoso, 2023). It is important to establish a strong presence on social media to reach potential customers and communicate the company's values and efforts to protect the environment.

6.4.3 Public Relations & Sponsorship

Singapore has a strong focus on environmental protection and sustainability. EcoSip can leverage public relations by partnering with hotels to use EcoSip in their guest rooms. This partnership will not only help to promote the brand but help to reach the target market who are environmentally conscious, on a larger scale. Apart from this, it is also possible to sponsor eco-friendly themed events by providing EcoSip products in the event’s goodie bags. An example of such events includes the annual Earth Hour campaign where WWF Singapore sets up roadshows at several locations in  Singapore. This can be effective to create brand awareness and showcase the products  to  potential  customers who  share  the  same  values  of  sustainability.  EcoSip  can associate the brand with the event’s environmental message and create a positive image in the minds of consumers.

7.0 Conclusion

In conclusion, this report has done a thorough analysis on the macro and micro environment that can impact EcoSip’s launch in Singapore. Through the evaluations of the competition, target market, and marketing mix, we have identified several key opportunities for the product. Taken together, this report strengthens the idea for EcoSip to emphasise on sustainability features of the product while keeping the sustainable effort transparent to better resonate with the target audience and leveraging on different pricing strategies for different stages to capture a considerable market share in the crowded market.

By  implementing  these  recommendations,  EcoSip  can  achieve  better  results  and  reach  the marketing goals. Despite the detailed analysis and strategy planning, it is useful to note that these analysis and strategies developed were based on the current market trend, so it is important that EcoSip continues to monitor and adjust the marketing strategy as necessary to ensure continued success in this ever-evolving landscape.