Marketing Strategy for Gluten Free Cookies
The paper will present a marketing plan for the Gluten free Cookies franchise. The plan will include an assessment of the market attractiveness and competitive position for the product as well as creating an exit strategy for the product once it reaches the decline stage. The following section will present a detailed tactical marketing mix strategy for the same product. The mix strategy will include an in-depth look at the product, price, promotion, place, and service.
This section will expound on three essential components of a marketing strategy. These components include the market attractiveness of the product, its competitive position, and an exit strategy once the product has reached its decline stage.
a). Assessing the Market Attractiveness/ Competitive Position
In today’s competitive world, companies no longer develop a single product and marketing strategy for the entire market. Nowadays, companies break the market into homogenous segments that allow the company to develop products and marketing strategies that are tailor-made for each segment. It should be noted that not all of the segments are equally attractive to the company. For this reason, the company needs to prioritize the target segments using their potential levels or attractiveness as the measuring criteria. The company uses the market-attractiveness/competitive position matrix to determine the potential for each segment.
Assessing the market attractiveness involves determining the size of the market, market’s growth rate, and assessing different trends such as demographic, technological, and economic trends that may influence the demand of the product in the market. Most importantly, when determining the market attractiveness of the market, the company has to determine the degree to which the unmet customer needs or under-served customer needs can be identified. The unmet or underserved needs make it easier for the company to gain customer loyalty and a sizeable market share upon entry into the market.
One need that the company has identified in the market is the lack of healthy and good-tasting cookies. More customers are turning to a healthier lifestyle and gluten-free food has become a dietary fad in many metropolitan areas. There are also individuals who are allergic to gluten who are constantly searching for gluten-free products such as gluten-free cookies. The company has observed that there are very few gluten-free cookies’ products in the market and the gluten-free cookie market has a lot of potential. We shall give the unmet customer needs a rating of 8 out of 10 because there are some gluten-free cookies in the market.
In terms of market size and growth rate, the gluten-free cookie market is relatively small but has a huge potential to grow. The gluten-free cookie segment is small but it has the potential to lead to other unidentified segments in the future. Many celebrities have shone a light as to the benefits of a gluten-free diet, which is fueling the number of consumers who are switching to a gluten-free diet. Our gluten-free cookies will benefit greatly from this endorsement from influential people in the society. The endorsement is sure to open other segments that we are yet to identify. We shall give this factor a rating of 6 out 10.
The macro trends for this market segment are largely favorable. The gluten-free dietary fad is catching up with the demographic groups. These individuals believe that engaging in a gluten-free diet will help them lose weight, is more nutritious, improves their moods, and clears their systems of toxins. It also helps that many famous celebrities have endorsed the gluten-free diet that includes gluten-free cookies as a way of keeping fit and staying healthy. The rating of this factor will be 9 out of 10 as more and more people are leaning towards healthier diets including the gluten-free fad.
The company has to be sure that the industry in which it is entering is attractive. The industry is very attractive to consumers who are looking to change their diets into a gluten-free diet. The barriers to entry are low and there is a significant decline in the threat of substitutes. Buyers’ and suppliers’ bargaining power is average while competitive rivalry is moderate. The rating for industry attractiveness is 6 out of 10.
When looking at the competitive position of our proposed product, we need to look at how our product will be sufficiently differentiated from the competitors’ products. This is because the company needs a competitive advantage once it enters the gluten-free market. This differentiation will ensure that the customers will perceive our product to be slightly better than the competitors’ products. In light of this concern, we have differentiated our product based on taste. We are confident that customers will prefer our product because of its enhanced taste, which many gluten-free cookies in the market lack. The rating for the opportunity for competitive advantage is 8 out 10.
When assessing the competitive position of the company in the new market, we also have to focus on the resources needed to produce the gluten-free cookies. This involves identifying how easy or difficult it is to acquire resources for production including labor and finances. Resources for production are not as abundant as the company would like meaning that it will have to expend more financial resources on the acquisition of these resources. For instance, the company needs highly skilled labor, which is limited at this juncture. This factor will receive a rating of 5 out.
b). Developing an Exit Strategy
An exit strategy can be helpful in improving the chances for the success of a company. The company’s is leaning towards acquisition as an exit strategy. The company believes in its inherent strategic value in the gluten-free cookie market and this will give it leverage when negotiating an acquisition. A major benefit of acquisition is that we will only sell the company to one that has the same value, standards, and business ethics. Another advantage is that there is no limit to how much we can sell the company for to the potential acquirer.
Guidelines for Implementation:
1. Setting benchmarks- the benchmarks will assist in determining when there is no more money to continue running the company. The benchmarks will act as indicators of the company’s worsening financial health, which will help us, determine how to start the exit strategy. In addition, these indicators will alert us when personal liabilities are at risk.
2. Carrying costs- the carrying costs will help the company managers determine whether it is financially viable to keep the doors to the business or stop operations completely. Sometimes the cost of shutting down the business is greater than keeping it open for a while longer.
3. Asset Distribution- The company will develop a list of all of its assets, both tangible and intangible, and then find the right buyers to dispose these assets to. There is also the possibility that the acquiring company would want to purchase some of the assets.
4. Paperwork- paperwork will help reduce the number of legal liabilities.
5. Public Relations- inform all the relevant stakeholders of the closure of the company or its sale to another company. This will help prepare everyone for the imminent closure of the company. In addition, the company might strike a deal with the acquirer to have the current employees work for the new company.
Tactical Marketing Mix Strategy
The marketing mix can be defined as the set of tactical marketing tools that the company can control in its attempt to derive the desired response from the target market. The marketing mix will include product, price, place, promotion, and service (Goi, 2009; Borden, 1984).
Product- our company is offering delicious gluten-free cookies to the target market. Many customers who have switched to the gluten-free diet are looking for a variety of products that fit their diets. This variety will include cookies. Most of the gluten-free cookies in the market currently are not savory making many people shy away from purchasing the gluten-free cookies. This is especially the case for customers who have turned to a gluten-free diet fad because they want to lose weight. Even the customers who are on a gluten-free diet because they are allergic to gluten are looking for cookies that are savory. Our company will meet this need by introducing gluten-free cookies that have a savory, enhanced taste.
There is a lack of variety among similar products that are already in the market. Customers are bored of the current choice of gluten-free cookies in the market. Our company will offer different types of gluten-free cookies to the market in order to serve all the different types of customers looking for gluten-free cookies. Our products will feature gluten free chocolate chip cookies, gluten free sugar cookies, gluten free oatmeal cookies, shortbread gluten free cookies, low sodium gluten free cookies, cookies with indigenous flavors, and gluten free peanut butter cookies. In addition, our product line will also feature gluten free vegan cookies for the vegan customers who are also into a gluten-free diet.
Our packaging is also designed to be attractive to people of all ages. With our packaging, we are aiming to attract children with health-conscious parents who are constantly worrying about what type of healthy snacks to give to their kids. Once the children see the colorful packaging on the display section, they will alert their parents who will be pleased to find a wholesome snack for their young ones.
Price- the customers that the company is eyeing are those who are willing to spend extra on luxury products. Gluten-free cookies are classified as luxury goods as the demand will increase more than proportionally as an individual’s income increases. In other words, products such as the gluten-free cookies are not necessary but they make the lives of the consumers more pleasant (Case, 2011). Our gluten-free cookies are competitively priced to attract all the customers who are on a gluten-free diet. Our prices are specifically aimed to target those individuals who are on a gluten free diet because of a health issue. They have been forced by their bodies to be on this diet due to a number of diseases and disorders including an allergy to gluten meaning that gluten-free products are a necessity and not just a luxury product.
Place- Based on our research, customers looking for gluten free products usually visit three or more stores looking for the gluten-free products. This is time-consuming for the customer and creates a lot of inconvenience for the individual. In light of this information, we have endeavored to ensure that our gluten-free products will be made available at convenient shopping centers across the country. Our gluten-free cookies will be found in every grocery store and healthy foods store in the country.
The company has a website that provides a list of all of the locations in which our products are stored. In addition, we have developed an app that informs the client in which shopping malls to find our gluten-free products. The app alerts the user when he is near a store that has our products in display shelves. The company decided to develop an app because nearly all of our customers have smart phones that they rely heavily on for all their daily shopping tasks. Apps have revolutionized how individuals shop and look for stores that have what they are looking for.
We also sell our products to wholesalers, local cafes, and duty free shops. Individuals can also order for a batch of cookies at the company’s website, have the products made within two working days and delivered to the customer’s doorstep. Payment is made on delivery and the customer may opt to decline an order if he is willing to make another order. The premise of diversifying our locations is to ensure that the customers can access our products wherever they are.
Promotion- The company promotes its gluten-free products in various ways. The company has several intriguing advertisements in print and visual media. The company also promotes its products through its official website that is user-friendly and easy to navigate. The company also uses its brand-specific smartphone app as a way of advertising its products to the customers. There also advertisements that the company has placed in the cafes that carry its products. In addition, the company sponsors many events to increase its exposure to the market. The company sponsors a gluten-free cook-off every month as well a You-tube channel that teaches people how to prepare gluten-free meals including a variation of our gluten-free cookies.
The paper has looked at the market attractiveness of the market as well as its competition position. We have also looked at the exit strategy that will be utilized once the product or the company has reached its decline stage. The company’s preferred exit strategy is acquisition whereby an acquirer buys the company at a negotiated price. We have also looked at the marketing mix strategy the company has utilized in trying to attract as many customers as possible to the gluten-free savory cookies.
Borden, N. (1984). The concept of the marketing mix. Retrieved on 4/12/2015 from http://www.guillaumenicaise.com/wp-content/uploads/2013/10/Borden-1984_The-concept-of-marketing-mix.pdf
Case, S. (2011). The gluten-free boom: understanding and marketing to this growing consumer group is key to building the gluten-free category. Retrieved on 4/12/2015 from https://www.glutenfreediet.ca/img/GHQ-SWgluten094.pdf
Goi, C.L. (2009). A review of marketing mix: 4Ps or more? International Journal of Marketing Studies, 1 (1): 2-15.