New Zealand Institute of Education (NZIE) Diploma in Applied Business Business Research Methods

ASSESSMENT 2 MARKETING STRATEGY REPORT

L&P Soft Drink of Coca Cola Amatil (NZ) Ltd.

Prepared for: Dr. Robert Davis Prepared by: Team ZHAR (Zharina, Has And Rikin)

Zharina Pelea (ID# 27763)

Hasarath Bulumulla (ID# 27646) Rikin Shah (ID# 27440)

Due Date: 03 October 2014

Table of Contents

I. Project Plan

3

II. Executive Summary

4

III. SWOT Analysis

5

IV. Objectives

7

V. Strategic Formulation

8

VI. Tools

12

VII. Target Customer Segment Analysis

15

VIII. Strategies, Objectives and Marketing Mix

16

IX. Conclusions and

Recommendations

26

X. References 27

!

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References

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Assessment62:6Marketing6Strategy66(DUE6on6OCTOBER63)

EXECUTIVE SUMMARY This marketing strategy report aims to examine the market and competitive situation in the New Zealand context for the soft drink industry particularly the iconic Kiwi soft drink brand L&P and recommend strategies to reinforce brand awareness and perceived product value that will increase volume sales and contribute to top-line revenue growth. The report provides the basis of objective setting through summarizing the situational analysis and highlighting the strength, weaknesses, threats and opportunities related to the CCA Company and the L&P product. The SMART method was then used to formulate the objectives indicated in the succeeding sections of the report that will serve as the direction for L&P in formulating strategies. In the strategic formulation, the report draws attention to the attractiveness of the market and the brand’s strength to assess L&P’s strategic position. Based on evaluation of key factors – market, competition, financial and economic, technological and socio-political, L&P has the potential to obtain market share leadership by leveraging on CCA’s market leadership in the bottling industry, investments made in advertising and marketing activities, innovative technological advances gaining operational, efficiency extensive distribution channels consistent with consumers’ purchasing patterns and preferences. Factors related to current trends in social values and political agendas can be easily addressed by L&P through its existing product variants. Additionally, the L&P brand is a strong brand in itself as it offers a brand promise consistent with its brand identity that is beyond functional benefits (taste, quality and packaging) and goes further to create a perceived product value through its symbolic benefits (authenticity, identity, heritage and social benefits). Tools for strategic decision-making were used to further understand where L&P competes and how it competes in it. The target customer segmentation is based on demographics (age) and psychographics (values and lifestyle). The report concludes that L&P should leverage on its strong Kiwi cultural heritage and strive to differentiate itself in the market. It is recommended that L&P brand:

• Establish L&P as a trusted and authentic NZ brand through: o strategic brand alliances with respected and trusted brands o non-industry related organization (brand charity partnerships/ support

for social causes) o involving the community as co-creators of the brand

• Increase brand awareness and perceived value through:

o end-user sales promotions and consumer education materials o publicity efforts and events and provision of rewards o marketing campaigns and activities that leverages existing customer

reviews and encourages them to conduct word of mouth with their peers in online and real world settings

• Optimize distribution channels through improvements in existing distribution networks and expansion of channels which are in line with the brand’s value proposition

• Ensure affordability of L&P through effective and timely pricing mechanisms

• Establish and develop good and productive working relationships with intermediaries through trade promotions and technology advances to streamline systems and processes

INTRODUCTION To provide the context for setting the objectives and formulating the marketing strategies, below is an overview of CCA’s situational analysis highlighting its strengths, weakness, opportunities, and threats (SWOT analysis).

STRENGTHS WEAKNESS CCA’s extensive experience in leadership and management Strong financial performance and wide array of global markets CCA’s strong brand recognition and market leadership in the soft drinks industry through successful marketing strategies. Similarly, L&P has worked with advertising agency, Saatchi & Saatchi NZ for its promotional campaigns. It also collaborated with branding specialist, Dow Designs to revitalize its bottle design. CCA’s expertise in product innovation by growing the business organically and by acquiring other brands to build product portfolio—eg. Acquisition of L&P brand and introduction of L&P Sugar Free and L&P Sour Lemon CCA’s tested manufacturing and distribution systems and good supply chain management L&P’s strong Kiwi cultural heritage L&P soft drink’s availability and affordability L&P’s unique taste and experience brought about by its brand history L&P Sugar Free availability to cater to health conscious consumers

Despite having local Kiwi historical and cultural elements and a unique brand story, the L&P brand doesn’t have the same value and recognition in the minds of its consumers. In the Reader’s Digest Most Trusted Brands in New Zealand results, L&P held the 10th place in 2011 and climbed up to the 7th place in 2012. However, it has lost its place in the said list in 2013. Commercially produced and mass-marketed by CCA contributed to the decline in the brand’s image of being authentic (from the small town of Paeroa) Some health conscious people feel strongly against the harmful side effects of using sugar substitutes (aspartame) in sugar-free or diet soft drinks (L&P Sugar Free). Researchers have shown that consuming diet soda flavored with artificial sweeteners increases cravings for sugar-flavored sweets (“Exploring a surprising link between obesity and diet soda”, 2007).

OPPORTUNITES THREATS Most L&P consumers’ consumption is driven by the local Kiwi heritage linked to the brand. Marketing strategies can be developed to capitalize on this brand attribute for improved brand awareness and recall. With an increasing health concern among consumers and despite existence of critics of artificial sweeteners found in diet sodas, L&P Sugar Free is still a preferred option among health conscious consumers. Improving economic conditions in New Zealand will increase consumer spending and allow more people of different economic statuses to buy soft drinks. L&P can continue to form brand alliances with trusted and recognized Kiwi brand names to boost positive attributes shared by both brands.

Dynamically changing consumer market and preference for healthier beverages to limit consumption of harmful chemicals. Constantly evolving conditions of the market include product lines of energy drinks and bottled water becoming increasingly popular (“Firms fuelling the thirst for energy drinks”, 2011). Entry of new competitors such as Frucor and ‘V’ energy drinks can impact CCA and L&P sales. New Zealand’s population is ageing, according to the Ministry of Social Development in New Zealand. This threat leaves L&P with fewer younger segments to market to.

OBJECTIVES

Setting clear and defined objectives are important for any brand to provide direction and a way to effectively measure performance and progress. Below are the objectives for the L&P brand. The objectives will follow the SMART method: Specific, Measurable, Achievable, Realistic and Timed-based • Specific – Must be well-defined and focused

• Measurable – Numbers are important to know what you’re on track with

your goals

• Achievable – Must ensure that you have the resources and capacity to attain the objectives

• Realistic – Objectives are based on existing market and business conditions and realities. Must ensure that they are possible to attain.

• Time-based – Time frame must be included in objective setting. 1. To reinforce L&P as a trusted and authentic NZ brand - be recognized as

one of the trusted brands in New Zealand every year starting 2015.

2. To increase brand awareness and perceived value - promote the brand to both the online and offline communities on a periodical basis

3. To consistently make L&P brand easily accessible and available -

expanding outlets that are in line with the brand’s concept in the next 5 years.

4. To make L&P always affordable – competitive pricing mechanisms for

consumers to prefer the brand over competitors on a regular basis

5. To establish and develop productive working relationships with intermediaries in the next 3 years

STRATEGIC FORMULATION Framework for Marketing Objectives There are three (3) considerations in developing marketing objectives and formulating marketing strategies (Reed, 2010).

A. Corporate Objective Objectives in the corporate level focus on satisfying the organization’s shareholders through financial performance. The corporate objectives are:

• For CCA, to ensure top-line revenue growth every fiscal year

• For L&P, to be the market share leader in the local NZ market in the industry every year

In the New Zealand and Fiji segment of CCA’s geographical market segmentation, revenue has increased from $412 million to $460.6 million, which is the highest recorded from 2011 – 2013 (CCA Annual Report, 2013). Since L&P is manufactured and distributed to mainly the New Zealand consumer market, the improving economic conditions in the country can benefit the sales and revenue of CCA’s L&P. According to the 2013 Annual Report, there was a “strong return to growth in New Zealand with over 10% local currency EBIT growth” (CCA Annual Report, 2013). Additionally, there was an appreciation of the New Zealand dollar and a robust summer trading season (CCA Annual Report, 2013).

!!!!!

Corporate objectives: financial imperatives

Strategic position: business’ competitive situation

Marketing strategies: potential product-market strategies and competitive marketing strategy options

B. Strategic Position This is an analysis of the market situation of L&P. It is important to consider current and future market attractiveness and the brand strength of L&P in that market (Reed, 2010). A better understanding of the L&P brand’s growth potential can be used to develop effective competitive and marketing strategies.

I. Product Analysis

L&P is soft drink brand that was acquired by Coca-Cola Amatil (CCA) as part of its product portfolio expansion and diversification. The L&P brand has a distinct lemon taste and comes in three variants – L&P Regular, L&P Sugar Free and L&P Sour Lemon. As with most soft drinks, L&P caters to the younger segments but also to the older segments looking for healthier alternatives (L&P Sugar Free). Due to CCA’s investments and expertise in distribution and marketing products, L&P is easily available and recognizable to its consumers.

In itself, the L&P brand has strong Kiwi cultural elements that contribute to its brand value. Consumers still see L&P as an iconic local soft drink in New Zealand that offers a unique brand identity and experience.

II. Product Life Cycle

Given the dynamic and competitive market of the soft drinks industry, extending the product’s life and avoiding the decline stage becomes a paramount concern in formulating product and marketing strategies.

The L&P brand finds itself in the maturity stage and a revitalizing brand strategy must be put in place to extend its product life. It must ensure that it doesn’t lose its market share and keep loyal consumers. It must remain competitively priced and readily available. In its promotions, it must highlight brand differences and benefits. III. Market Attractiveness and Brand Strength

The factors that determine the degree of market attractiveness and business strength are drawn from the situational analysis.

a. Market factors • In the carbonated beverage industry, CCA holds 70% of the

market share in New Zealand. L&P can capitalize on the captured market share of CCA and increase it through marketing strategies and efforts.

• In the New Zealand and Fiji market segment, revenue has increased from $412 million to $460.6 million, which is the highest recorded from 2011 – 2013 (CCA Annual Report, 2013). There is an opportunity to ride on this upward growth rate trend for the L&P soft drink brand.

• Low bargaining power of suppliers due to: undifferentiated ingredients and packaging, numerous suppliers of ingredients and equipment and ease in switching suppliers.

• High bargaining power of buyers due to: large number of consumers, many retail outlets and price sensitivity of consumers.

b. Competition

• Presence of widely recognized and strong brand – Pepsi

(Frucor)

• Rise of smaller soft drink brands and companies – V and The Better Drinks Co.

• Despite the large industry size, CCA and L&P have higher brand

loyalty compared to its competitors from heavy and expensive marketing and advertising.

c. Financial and economic factors

• Given that CCA is an industry leader, there is a low threat of new

entrants due to: capital intensive and high fixed costs, large economies of scale and need for direct supply and strong distribution networks

• Improved economic conditions in New Zealand can increase consumer spending for soft drinks and contribute to revenue generation of CCA.

d. Technological factors

• Interactive marketing communications through digital or online

platforms with the consumers to get their views and feedback

• “myCCA” website is CCA’s online customer portal for its business consumers apart from its presence in the social media community. Product offerings, tips and insights on business profitability as well as customer care are available in the website.

• CCA self-manufactures its own PET plastic (Polyethylene

terephthalate) bottles using lighter and fewer raw materials

• CCA’s further investments in the upgrade of its Auckland and Christchurch facilities to blow-fill technology will bring an approximate 20% decrease in the carbon footprint of every bottle (Coca-Cola Amatil, n.d.).

• CCA’s additional investments of NZ$80 million in 2008 were

made to produce an advanced and improved distribution center in Auckland to simplify warehousing and distribution processes.

e. Sociopolitical factors • Ageing population of New Zealand

• Increased influx of immigrants to New Zealand coming mostly

from Australia, United Kingdom, China and India and other countries. Thus, making the consumer market in NZ more diverse.

• Growing awareness of negative health impacts of soft drinks

• Proposals from various groups (eg. New Zealand Beverage

Guidance Panel) to impose 20% tax on soft drinks, regulate sales within schools and hospitals and educate families and communities about problems associated with high sugar intake (Anderson, 2014).

IV. Brand Strength

Functional benefits - L&P brand provides a refreshing and tasty drink that is always affordable and accessible

Symbolic benefits - L&P offers a unique and authentic customer experience built on its strong Kiwi cultural heritage. This authentic experience is one of the ways consumers give value and make choices. It strengthens emotional bonds with the brands, appreciation of them and the extent to which consumers become brand loyalists. The relationships formed not only influences the consumers to drink L&P but also spread the word about L&P because they get to share the experience with others (social aspect of the brand).

Hence, L&P’s brand promise (position) is to provide a refreshing and tasty drink that gives the consumers the unique identity of New Zealand. The L&P flavor IS the New Zealand flavor.

TOOLS The review above will help L&P determine its strategic position in terms of market attractiveness and its strengths. Marketing objectives and strategies can then be developed in line with L&P’s strategic direction of where and how it competes. Other tools are also available to provide guidance and direction in formulating appropriate objectives and strategies (Reed, 2010). Below is a discussion of those tools that can aid the L&P brand in its strategic decision making process. General Electric/ McKinsey model (Reed, 2010)

This model is used to find out the best way to allocate and prioritize resources given existing market conditions. The L&P brand will be able to better decide on which product variants and market segments to focus on. The model provides a summary approach particularly effective in formulating, implementing and evaluating strategies.

High Medium Low

MARKET ATTRACTIVENESS

Protect Position

Invest to build

Build selectively High

Build selectively

Selectivity/ Manage

for earnings

Limited expansion or harvest

Medium

Protect and

refocus

Manage for

earnings Divest Low

BUSINESS (BRAND) POSITION

Based on the assessment of the market attractiveness and brand position, L&P finds itself in the Invest to build section of the GE/McKinsey matrix. The task of L&P is to obtain leadership in the soft drink category particularly in the New Zealand consumer market. It must build on its unique brand story as a way to communicate its authenticity and nostalgic appeal and differentiate it from other soft drink brands. It must reinforce emotional branding strategies by creating brand meanings through ongoing communications and interactions with its consumers.

Ansoff Matrix Considering L&P’s strategy with reference to Ansoff’s Matrix, it points out a clear strategic evolution in the case of the L&P brand.

Market Penetration Strategy - In the beginning, there was only L&P Regular, one core product, geographically located in New Zealand. Across time, L&P had become recognized in its local market by increasing market share and product consumption Market Development Strategy – When L&P was commercially produced by CCA, it was launched alongside the other brands of CCA and into other existing market segments of CCA brands - local and international consumers. Product Development Strategy – As other markets were served and developed, L&P needed to think of ways to further penetrate them. L&P Sugar Free and L&P Sour Lemon were developed and have become core products over time. Diversification Strategy – Originally L&P’s business was defined as one operating in the carbonated beverage market. In order to develop new markets, it co-branded with Whittaker’s (chocolate) and Holy Moly Ice Cream to further differentiate the L&P brand from its competitors.

Sustainable Competitive Advantage

Porter’s generic ‘competitive strategies model’ enables the organization to “evaluate its competitive position and develop strategies to improve its current position” (Reed, 2010, page 114). The L&P brand finds itself in the Differentiation Focus quadrant. It attempts to be diverse from other competitors by adding something extra to its product that will give a unique value to its consumers. This can be obtained through well formulated and managed marketing strategies that will result to perceived superior product quality and high brand image and recognition. L&P will concentrate on particular niche markets to better understand the dynamics of those markets and the unique needs of consumers that belong to them. By understanding and serving the customers in those markets uniquely well L&P can build a strong brand loyalty among them and make them less attractive to competitors.

TARGET CUSTOMER SEGMENT ANALYSIS Market segmentation and focusing on target end consumers who have similar consumption behavior and brand perceptions will allow L&P to tailor fit its strategies and communicate its brand value. L&P’s end consumer markets will be segmented based on demographics (age) and psychographic (values and lifestyle). Demographic – Age According to the survey findings conducted on the consumption behavior of L&P consumers, majority of the end consumers of L&P are found in the age groups of 15-25 and 56-65 years. Studies show that the younger generation (teenagers to young adults) have a relatively higher need for belongingness, independence and approval. More importantly, the need to feel accepted, particularly by their peers (Solomon et al., 2001). As a result, they are easy targets for promotional strategies as they frequently and easily switch brands. They are more exposed to consumerism and media than other age groups and are more influenced by it in their choice of soft drink brand. The older segment of 56-65 years is characterized as being more brand loyal and support brands that offer them more than the refreshment purpose of soft drinks. This segment is also more aware of the historical elements linked to the L&P brand. Promotional strategies that build on brand authenticity and emotional branding can be used to strengthen the bond of this segment to the L&P brand. Though these two age groups are already captured markets, it is important to reinforce L&P’s brand image so as not to lose them to competitors. Psychographic (values and lifestyle) To cater to the other age groups and truly make the L&P soft drink brand one of the top most trusted brands in New Zealand, end consumer markets are segmented based on their values and lifestyle. According to the interview findings in the qualitative research, consumers valued the unique experience brought about by the tangible (unique taste and packaging) and intangible (brand history and Kiwi cultural heritage, affordability and availability) attributes. Accordingly, the two (2) defined psychographic segments are:

Unique tangible seekers Brand intangible lovers They value unique quality drinks in terms of taste and attractive packaging. They want the drink to serve its purpose of making them feel refreshed plus something extra to set it apart from the rest.

They value the story and creative process behind the brand. They don’t just want to feel refreshed but want to have a deeper connection and relationship with the brand that goes beyond the physical drink.

MARKETING OBJECTIVES, STRATEGIES AND MARKETING MIX Through the qualitative and quantitative research findings, factors that influence L&P consumption behavior were identified. A good understanding of the needs and wants of the consumer will aid in the successful formulation of marketing strategies and objectives. Leveraging on the strong Kiwi cultural heritage of the brand to promote perceived brand authenticity is the main priority of L&P in making itself relevant to the target consumers. It is important for L&P to reinforce its brand image in the minds of its consumers through positive experiences, good reputation and unique brand attributes. The focus of these marketing activities are to build brand communities who socially and personally benefit from the L&P brand by forming social networks, sharing information and expressing themselves. After careful consideration of the situational environment, below are L&P’s marketing strategies and objectives incorporating the marketing mix for the 1st, 3rd and 5th years. The objectives listed under each year will be the focus of the marketing efforts and activities but other objectives such as financial performance will always be part of the strategic objectives every fiscal year although not indicated below.

1st Year Objectives Strategies and Tactics

To reinforce L&P as a trusted and authentic NZ brand

Strategy: Establish support and reinforce efforts to work together with local communities’ health concerns and issues with soft drinks Tactic: • Offer smaller portion or controlled

sizes across all distribution channels • Sponsor clubs, activities and

programs that encourage people to have active and healthy lifestyles

To make L&P always affordable to consumers

Strategy: Establish competitive and low prices to increase market share in terms of volume sales and repeat purchases Tactics: • Offer loyalty cards or trading stamps

for bulk purchases (at least 6 cans/bottles); once loyalty cards or stamp forms are complete, customers get a dozen pack of L&P soft drink (cans/bottles) for free

• Offer price-offs during off-peak seasons (winter and autumn)

• Reduced prices for multiple packs (at least 2 cans/ bottles) of L&P drinks

when purchased in the L&P Café in Paeroa and other local historical or cultural establishment (eg. museums, local theaters for cultural shows, etc.)

• Bonus packs (additional 3 cans/ bottles) for the price of one pack for purchases made for social events (parties, indoor and outdoor recreational activities)

• Product bundling – bundle L&P with junk foods (eg. chips, popcorn) and sell the bundled product lower with a 10% discount

To increase brand awareness and perceived value among existing consumers

Strategy: Establish brand loyalty and increase product usage among existing end-consumers Tactics: End-user Sales Promotion • With-pack premium offers – drinks to

come with free L&P designed coasters/ shot glasses 1/ refrigerator magnets, etc.

• L&P to be bundled with frozen fish and frozen chips (fries) and be sold with 20% discount 2

Point of Purchase Communication • Provide in-store displays, video units

displaying history of L&P and aisle sign indicators

• Consumer education materials printed on a canvas with a map of Paeroa town (as the background). Details and historical facts will be presented in trivia form. Free for customers who purchase L&P drinks.

Strategy: Deploy marketing campaigns and activities that leverages existing customer reviews and encourages them to conduct word of mouth with their peers in online and real world settings

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1!Will be only used in beverage stores that sell liquor or alcoholic drinks; Interview respondents said that L&P is a good alcohol drink mixer 2!Combination with fish and chips (fries) adds to the uniqueness and local cultural association of L&P since the former is one of the staple and known foods in the local NZ market

Tactics: • Create L&P website that features its

history, product variants, lists of retailers selling L&P, contact us page, updates on events and activities of the L&P and links to other social media platforms

• Create L&P Google+ account and make use of its features to promote L&P brand in social circles and community members in Google

• Real-time dialogue through Google+, Facebook and Twitter accounts - consumers to voice out their good and bad experiences with the brand; L&P to closely monitor and provide feedback in a timely manner.

• “My L&P Story” campaign -

consumers to share their L&P experiences and stories in video or article form and upload them in their personal sites tagging the official L&P social media links (YouTube, Twitter & Facebook)

• L&P sponsoring local community events such as food fairs, cook offs, etc. to increase visibility among offline communities

To consistently make L&P brand easily accessible and available

Strategy: Expanding distribution channels at low cost and in line with the brand’s concept Tactic: Partnering with one chain of souvenir shops to sell L&P drinks (chain of souvenir shops that has the most number of branches in New Zealand)

To establish and develop productive working relationships with intermediaries

Strategy: Encourage intermediaries to increase inventory/ stock and to increase shelf space Tactics: • Offer buy-back allowance to retailers;

5-10% discount for new orders based on the quantity of orders made on the first trade deal

• Provide detached shelves that are part of the in-store display with orders from retailers

• Retailer store coupons (to give liberty to retailers on how to boost sales and design promotional activities for their own stores)

Strategy: Motivate sales force in retail outlets to sell more L&P through incentives Tactic:

• Hold quarterly contests that reward sellers who have reached sales goals with incentives (eg. meal coupons at L&P Café in Paeroa)

3rd Year Objectives Strategies and Tactics

To reinforce L&P as a trusted and authentic NZ brand - be recognized as one of the trusted brands in New Zealand

Strategy: Involvement of the community as brand co-creators Tactic: Provide an online contest where consumers submit bottle/can designs they have made; other consumers vote for the design they like the most; At the end of the contest, the most voted design will be used as a limited edition bottle design of L&P soft drink to be sold to the public Strategy: Use co-branding to evoke positive associations Tactic: • Form alliance with NZ locally owned

food places (eg. Burger Fuel) to sell L&P drinks with their food listings in packaged / combo meals

To increase brand awareness and perceived value to competitors’ consumers

Strategy: Encourage brand switch and frequency of product usage among competitors’ consumers Tactics: Point of Purchase Communication • Consumers to get coupons from

discount sites to purchase bulk orders

of L&P (eg. Groupon, GrabOne) • Recipes where L&P was used as and

ingredient in food items (eg. cupcakes, gelatin, pudding, etc.) will be attached to the the packaging

Publicity • Employ product placements in music

videos of local NZ artists and local NZ films

• Sponsor local social events (eg. company events, parties) and local sports events (eg. rugby, cricket)

End-user Sales Promotion • L&P to release limited edition L&P

bottles with iconic local figures/ individuals (eg. national heroes) embedded on the other side of the bottle (opposite of the L&P logo)

Strategy: Deploy marketing campaigns and activities that leverage existing customer reviews and encourages them to conduct word of mouth with their peers in online and real world settings Tactics: • Photo contest (Instagram) –

consumers to send pictures of themselves: a) enjoying L&P at historical and cultural places, b) creative ways they use the L&P bottles/ cans, c) unique ways of drinking L&P (eg. sitting on top of a tree branch enjoying the sun and nature). Pictures will be accompanied with a creative title/tagline/short statement that best describes what L&P is to them. L&P brand managers will choose top 5 photo entries in each category and give cash or product rewards. These pictures will be featured in the L&P website 3.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3!Instead of computer generated graphics on the website, actual pictures taken by actual L&P consumers will be used.!

• “Me!” campaign – consumers to share their thoughts on what makes them unique as individuals; content to be uploaded in social media platforms of L&P; can be in video or article form

To consistently make L&P brand easily accessible and available

Strategy: Expanding distribution channels at low cost and in line with the brand’s concept Tactic: Partnership with local tourist attractions/ destinations (eg. museum) to hold separate in-house display (L&P customized stand and shelves, video unit looping history of L&P, freebies) of L&P drinks together with their own sale items

To develop productive working relationships with intermediaries

Strategy: Develop trade promotions that boost sales of poorly performing products by tying them to good selling products Tactic: Include 1 free bottle/cans of L&P Sour Lemon 4 for every purchase of 2 bottles/cans of L&P Regular or L&P Sugar Free Strategy: Develop trade promotions that increase sales volumes Tactic: Offer incentives to retailers or their sales force to push L&P drinks rather than its competitors. A minimum sale quota is set by L&P for this activity based on previous sales performance of the retailers.

5th Year Objectives Strategies and Tactics

To reinforce L&P as a trusted and authentic NZ brand

Strategy: Involvement of the community as brand co-creators Tactics: • Do qualitative research (interviews or

FGDs) with actual L&P consumers to gain insights and preferences for a new L&P product variant

• Do quantitative research (surveys) on !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!4!Based on survey findings, L&P Sour Lemon has the lowest number of consumers among the three L&P variants.!

consumers to explore changing consumer behavior trends

• Conduct ongoing studies on the effectiveness and appropriateness of existing and potential new L&P product variants

Strategy: Establish brand charity partnerships and support for social causes (locally) Tactics: • Donate or assist in the Christchurch

rebuild (cash or provision of free refreshments for the manual laborers there)

• Sponsor environment protection activities or charity events by local communities

• Coordinate with local boards or city councils for community based projects or programs

To increase brand awareness and perceived product value to new consumer markets

Strategy: Encourage new consumers to try the L&P product Tactic: • Offer in store free samples • Limited edition L&P drinks in reusable

containers to entice non-users • Offer freebies with L&P purchases • Use games to entice new consumers

– for every L&P drink purchase (individual or in packs), the consumer gets a piece of a puzzle that may or may not help him/ her win the game. The puzzle is an L&P bottle. The more purchases, the more pieces of the puzzle, the better the chances of completing the L&P bottle puzzle. The first to complete gets a reward from L&P (cash or gift item).

• Offer education materials (creative forms) such as list of top New Zealand tourist destinations, list of common NZ slangs, etc. together with L&P purchases

Strategy: Use social media platforms to research on changes in consumer

preferences and explore market opportunities through real time dialogues online Tactics: • Track use generated content in social

media sites • Engage in interactive communication

by providing timely responses to consumer feedback

• Develop studies on insights drawn from social media content analysis and findings

To consistently make L&P brand easily accessible and available at low cost

Strategy: Optimizing existing distribution channels – retailers, on-site consumption in restaurants and bars, supermarkets and third party distributors Tactics: • Formulate analysis of the purchasing

patterns and preferences of different types of consumers in each of the distribution channels

• Tailor fit product, price and packaging to the specific needs of each distribution channel

• Continue to seek improvements in the distribution network

Strategy: Expanding distribution channels in line with the brand’s concept Tactic: • Offering L&P in airport shops (in the

souvenir or gift items section) complete with own L&P customized stand and shelves, video unit looping L&P history and other L&P merchandise

Strategy: Employ multi-segmentation strategy in consumer markets Tactic: • Evaluate and implement market based

prices/product and packaging based on consumption behavior, competitive and socio-economic levels

To develop productive working relationships with intermediaries

Strategy: Develop new technologies and trade promotions that would enhance systems for L&P manufacturer and intermediaries Tactics: • Employ advances in technology that

would streamline order to delivery process

• L&P to provide advertising allowance to retailers for advertisement exposure – retailer ads featuring L&P’s product variants

• Use dealer-listed promotions where there is an advertising material attached to the L&P products that also contains the list of retailers who stock the L&P products

CONCLUSIONS AND RECOMMENDATIONS

L&P as a soft drink brand had differentiated itself from other brands in the industry through the local historical and cultural elements that add to its brand value. In terms of consumer experience, it has extended beyond its tangible attributes such as taste, quality and packaging to further create an intangible attribute that enhances the perceived product value in the minds of its consumers. It is recommended that L&P advocate a proactive approach in brand management and strategic marketing decisions. Continuous consumer and market research must be in place. Moreover, strategies and tactics have to work in tandem to make necessary timely adaptions to trends and market changes. Consequently, objectives and strategies will change depending on consumer demand and behavior. Based on the points and issues discussed in the earlier sections of this report, the following recommendations are:

• Establish on-going evaluation of the consumer markets through qualitative and quantitative researches to set effective and appropriate objectives and strategies

• Establish L&P as a trusted and authentic NZ brand through: o strategic brand alliances with respected and trusted brands o non-industry related organization (brand charity partnerships/ support

for social causes) o involving the community as co-creators of the brand

• Increase brand awareness and perceived value through: o end-user sales promotions o consumer education materials o publicity efforts and events o provision of rewards and marketing campaigns and activities that

leverages existing customer reviews and encourages them to conduct word of mouth with their peers in online and real world settings

• Optimize distribution channels through improvements in existing distribution networks and expansion of channels which are in line with the brand’s value proposition

• Ensure affordability of L&P through effective and timely pricing mechanisms • Establish and develop good and productive working relationships with

intermediaries through trade promotions and technology advances to streamline systems and processes

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