Parts 4 To 7

Parts 4 to 7 THE BRAND PLAN (Deadline Sept 10) Parts 8 onwards (Deadline Sept 22)

Part 4 Identified Market Opportunity

Product Definition • Product – Features – Advantages – Benefits

• Needs and Wants being addressed

Findings from Industry Experts • Findings, insights and input from credible industry experts to lend credibility to the chosen product concept

Findings from Consumer Reserach • Findings, insights from consumer research about the product – Acceptance – Purchase Frequency – Usage

Estimate of Existing Market Size and/or Potential of Product

• Based from existing data • Based from computations / estimates coming from data and information from Consumer Research findings • Based from product concept testing among consumers

Part 5 General Marketing Strategy & Objectives

Right to Left Planning • Always begin with the end in mind • The “end” should be the goal / vision • These should be SPECIFIC & QUANTIFIED • The more exact the measures, the more you can manage your resources & concentration of time, effort, & money • “If you cannot measure it, you cannot really manage it” Brand Plan

MARKETING DEPARTMENT

VMOKRAPISPATRES

Brand Plan

MARKETING DEPARTMENT

Brand Vision • A futuristic picture of the brand, described in words or a vision statement • It should be time bound (3 to 5 years) • Ambitious BUT realistic • May have a geographical and target market focus that would help you plan strategically • The vision can also be in relation to the company • It is something to pursue Brand Plan

MARKETING DEPARTMENT

ADPIC Wine Department • VISION – ADPIC will become the market leader in the Philippine wine industry in 5 years. In pursuit of this, ADPIC’s wine division will have the highest contribution-tosales percentage among all the product lines in the company

Brand Plan

MARKETING DEPARTMENT

Brand Mission Statement • The basic “purpose of being” for the brand • Basic purpose includes earning a decent return and getting a share of the market • Mission statements specify the product or service to be rendered and the market. • Mission Statement = Something to achieve • Relate to mother company’s vision

Brand Plan

MARKETING DEPARTMENT

ADPIC Wine Department • MISSION STATEMENTS – To market and distribute high quality wines at reasonable prices for the typical Filipino Consumer – To generate sufficient profits for the company

Brand Plan

MARKETING DEPARTMENT

Brand Objectives • •

Measurable END results that translate the vision and mission Objectives usually center around 4 major ends: 1. Sales & Profits 2. Expanding markets 3. Satisfying customers with quality products 4. Providing reasonable compensation / benefits to employees

Brand Plan

MARKETING DEPARTMENT

ADPIC Wine Department • OBJECTIVES: – To establish a dominant market presence in the country – To satisfy the customers with quality wines at reasonable prices – To earn good financial returns for the company

Brand Plan

MARKETING DEPARTMENT

BRAND KRAs • The attainment of the objectives or measurable end results could be described by Key Result Areas (KRA) • KRAs are proofs that the objectives are being achieved! • Qualitative measures that the objectives are being achieved • Discuss each KRA, explain why it is a KRA in relation to insights from EA and/or IA Brand Plan

MARKETING DEPARTMENT

ADP Wine Department Objective 1: To establish a dominant market presence in the country KRAs: 1a) Distribution in major off-premise outlets in all key cities 1b) Distribution in major on-premise outlets in all key cities Objective 2: To satisfy the customers with quality wines at reasonable prices KRAs: 2a) Growth in sales per outlet (off-premise) 2b) Growth in sales per outlet (on-premise) 2c) Market share Objectives

Key Result Areas 1a. Distribution in major off-premise outlets in all key cities in the country 1b. Distribution in major on-premise outlets in all key cities in the country 1c. Presence in the direct selling segment 1) To establish a dominant market presence in the country 1d. Market share in the country 2a1. Growth in sales per outlet (off-premise) 2a2. Growth in sales per outlet (on-premise) Brand Plan MARKETING DEPARTMENT 2) To satisfy the customers with quality wines at reasonable prices 2b. Market share

ADP Wine Department Objective 3: To earn good financial returns for the company KRAs: 3a) Gross Margin 3b) Return on Sales 3) To earn good financial returns for the company

Brand Plan

MARKETING DEPARTMENT

3a. Gross margin 3b. Return on Sales

ADPIC Wine Department IV. KEY RESULT AREAS Objective 1: To establish a dominant market presence in the country KRAs: 1a. The distribution in major off-premise outlets (i.e. supermarkets, hyper marts, and warehouse clubs) is necessary since these outlets contribute to 36% of the total volume sales of wines in the country. In addition, although Metro Manila accounts for 80% of this volume, there are key cities throughout the rest of the country that account for the remaining twenty. 1b. A strong presence in major HORECA outlets across the country is likewise important. The company should make its wines available in on-premise outlets for sales and marketing purposes. These outlets include five star hotels, restaurants, and bars located in cosmopolitan cities. Brand Plan

MARKETING DEPARTMENT

BRAND PERFROMANCE INDICATORS (PIs) • PIs are the KRAs quantified! • Discuss each PI (at least for the first year PIs). • Example: OBJ 1) To establish strong market presence in Luzon 2) To earn good financial returns

Brand Plan

KRA Number of food outlets in Luzon Sales volume Market share ROE ROI ROS

MARKETING DEPARTMENT

1999 (now) 3 7M 2% 30% 14% 14%

PI 2000 2001 5 20 13M 60M 3% 12% 40% 60% 20% 30% 15% 16%

ADPIC Wine Department

Key Result Areas 1a. Distribution in major off-premise outlets in all key cities in the country 1b. Distribution in major on-premise outlets in all key cities in the country 1c. Presence in the direct selling segment 1d. Market share in the country 2a1. Growth in sales per outlet (off-premise) 2a2. Growth in sales per outlet (on-premise) 2b. Market share 3a. Gross margin 3b. Return on Sales

Brand Plan

MARKETING DEPARTMENT

Performance Indicators 2004 2006 2008 100 121 146 75 147 288 45 227 446 1% 8% 15% 53 449 885 42 216 262 1% 8% 15% 40% 40% 40% 8% 8% 8%

ADPIC Wine Department 1)Presence in 100 off-premise outlets in 2004 and 146 in 2008 • Off-premise channel = 69% of the total volume sales • Dominated by the supermarkets at 52%. • Supermarkets account for 36% of the total wine • Euromonitor identifies seven major accounts controlling 70-80% of the total supermarket sub-segment • It is vital to cover these major supermarkets. As mentioned in the industry analysis, these channels are fewer in number, but account for bulk of the sales. Brand Plan MARKETING DEPARTMENT

ADPIC Wine Department 1)Presence in 100 off-premise outlets in 2004 and 146 in 2008 • The 100 outlets being targeted will comprise of the aforementioned accounts that have 35 branches already. • The remaining 65 will be comprised of other key accounts/outlets already being serviced by ADPIC (i.e. Landmark, Unimart, South (Makati) Supermarket, etc). According to the same Euromonitor study, the size of these major supermarkets range from 2,000 to 75,000 square meters. This will be used as criteria for choosing which off-premise outlets to target. Brand Plan

MARKETING DEPARTMENT

ADPIC Wine Department Rene Barbier Five Year Plan

BUILD THE BRAND

BUILD PORTFOLIO

2004 2005 2006 2007 (in cases) Total Market* 890,928 1,022,007 1,132,841 1,251,553 Projected sales 8,909 51,100 90,627 125,155 Projected share** 1% 5% 8% 10% Total off-premise sales*** 5,346 30,660 54,376 75,093 Projected off premise outlets 100 110 121 133 Sales per outlet 53 279 449 564 Total on-premise sales 3,118 17,885 31,720 43,804 Projected on premise outlets*** 75 105 147 206 Number of direct sellers**** 15 21 29 41 Sales per outlet 42 170 216 213 Total direct sales*** 445 2,555 4,531 6,258 Projected direct accounts 45 213 227 284 Number of direct sellers**** 9 43 45 57 Sales per account***** 10 12 20 22 *According to Euromonitor **By 2008, Rene Barbier will overtake Gato in market shares ***Off-premise 60% of sales, on-premise is 35%, and direct selling 5%. ****Assumption = each direct seller will open at least 5 accounts. Currently, each seller opens an average of 2 within 3 months.This time, they will be selling throughout the year. *****Current red wine sales is 10 per account. Some of the sales is going to the cavas. After two years, cavas will be phased out and the red wines will take all of the sales. Brandthe Plan MARKETING DEPARTMENT

2008 1,439,286 215,893 15% 129,536 146 885 75,563 288 58 262 10,795 446 89 24

Part 6 OVERALL MARKETING STRATEGY

VMOKRAPISPATRES

Brand Plan

MARKETING DEPARTMENT

BRAND STRATEGY • The second half of the process starts after the PIs • Generate major alternatives/strategic options for attaining each and all the PIs • The Strengths, Weaknesses of the Brand & the opportunities and threats in the industry should be addressed. • Using the modified SWOT Matrix, which includes the PIs, generate strategic options • You may also use other strategyformulation matrices if you wish! Brand Plan MARKETING DEPARTMENT

Example: A Multi-Purpose Coop STRATEGIC OPTIONS: 1.

Helping members set up & operate own enterprises. For members with existing enterprises, make them grow bigger. 2. Train members of the family in technical skills that would make them gainfully employed. 3. The coop should establish business ventures that yield substantial profits and dividends for its Brand Plan MARKETING DEPARTMENT members & provide

Performance Indicator: P13,000 Monthly Income

ADP WINE DEPARTMENT

STRENGTHS (S) Corporate Strengths 1) Extensive off-premise distribution set-up (breadth and depth) 2) Existing relationships with major off-trade accounts 3) Integrated marketing set-up 4) Competent sales representatives 5) Increase presence in direct selling to corporate accounts due to the strong direct selling team of freelance sales people Wine Department / Brand Strengths 6) The still wines of Freixenet fit the consumer’s taste 7) Competitive costs of still wines 8) The quality of Freixenet Cava Carta Nevada and Spumante have a fit with the largest consumer group’s taste WEAKNESSES (W) Corporate Weaknesses 1) Weak HORECA (On-premise) presence Wine Department / Brand Weaknesses 2) Weak presence in key accounts 3) Unprofitable price structure for Freixenet Cavas 4) Absence of marketing budget support necessary to develop brand equity of all Freixenet Wines 5) Freixenet S.A. wines have no properly guided positioning strategy 6) “Freixenet” and “Mederano” brand names ring the consumer’s ears 7) Mederano’s Worcestershire packaging 9) Freixenet Cordon Negro does not fit the consumers’ taste 10) Low brand equity for all Freixenet S.A. wines

Brand Plan

OPPORTUNITIES (O) 1) While the industry is projected to grow, there is still a large untapped market. 2) Although there are four brand leaders, majority of the market has no brand loyalty, let alone high brand awareness. 3) The major players in the industry have yet to launch any major brand-building advertising and promotions like full-scale tri-media campaigns. 4) Direct selling to end consumers or corporate buyers is an overlooked distribution channel. Strategic options: Market and distribute a brand of wine rather than distribute wine as a generic product (S3,S8,O1,O2,O3,P5,P6,P7,P8,P10) Penetrate off-premise outlets (S1,S2,O1,P1,P3,P5,P6) Sell to corporate accounts (S5, S3, O4,P5,P8,P10) Concentrate on still wines, rather than sparklings (S6,S7,O1,O2,P1,P2,P3,P4, P4,P5,P6,P7,P8,P9,P10) Build the Carta and Spumante Variants and drop Cordon Negro (W8)

Strategic options: Use the Y2K Direct Selling Group to penetrate HORECA (S5,W1,O1,P2,P5,P7,P8) Support branded wine with marketing program (S1,W1,P1,P2,P5,P6,P7,P8,P10) Discontinue Freixenet Cavas in on and off premise outlets (W3,W9,P3,P4,P5,P9,P10) Use ADPIC funds to develop brand of wine (W4,O1,O2,O3,P5,P8,P10) Develop proper positioning strategies for wines (W5,O2,O3,P5,P6,P7,P8) Drop Mederano and Frexienet Wines (W6,P5,P6,P7,P10) Change Mederano packaging (W7) Drop Freixenet Cordon Negro (O9,P3,P4,P5,P6,P7,P8,P10) Launch brand building program for wines (W10, O1,O2,O3,P1,P2,P5,P6,P7,P8,P10) Concentrate on developing Rene Barbier Brand of wines (S6,O1,O2,O3,W3,W6,W7, W8,P3,P4,P5,P9,P10)

Performance Indicators (P) 1) Presence in 200 off-premise outlets in 2004 2) Presence in 50 on-premise outlets in 2004 3) Provide off-premise outlets at least 20% mark-up over list price 4) Provide on-premise outlets at least 200% mark-up over list price 5) Attain 1% Market Share by 2004 ( 9,000 Cases) 6) Achieve an average annual turnover of 50 cases per year per off-premise outlet 7) Achieve an average annual turnover of 25 cases per year per on-premise outlet 8) Achieve at least 40% brand awareness in 2004 MARKETING DEPARTMENT 9) Ensure a 40% gross margin from the wines 10)Achieve a 10% minimum return on sales

ADP WINE DEPARTMENT STRENGTHS (S) Corporate Strengths 1) Extensive off-premise distribution set-up (breadth and depth) 2) Existing relationships with major off-trade accounts 3) Integrated marketing set-up 4) Competent sales representatives 5) Increase presence in direct selling to corporate accounts due to the strong direct selling team of freelance sales people Wine Department / Brand Strengths 6) The still wines of Freixenet fit the consumer’s taste 7) Competitive costs of still wines 8) The quality of Freixenet Cava Carta Nevada and Spumante have a fit with the largest consumer group’s taste WEAKNESSES (W) Corporate Weaknesses 1) Weak HORECA (On-premise) presence Wine Department / Brand Weaknesses 2) Weak presence in key accounts 3) Unprofitable price structure for Freixenet Cavas 4) Absence of marketing budget support necessary to develop brand equity of all Freixenet Wines 5) Freixenet S.A. wines have no properly guided positioning strategy 6) “Freixenet” and “Mederano” brand names ring the consumer’s ears 7) Mederano’s Worcestershire packaging 9) Freixenet Cordon Negro does not fit the consumers’ taste 10) Low brand equity for all Freixenet S.A. wines

Brand Plan

THREATS 1) The brand leaders all have low landed costs and high margins. 2) The “piggy back” wine importers might start focusing more time and financial resources on the wines. Strategic options: Concentrate on still wines (S7,T1,P3,P4,P5,P6,P7,P9,P10) Become a first mover in aggressive intergrated marketing strategy (S1,S2,S3,S4,S5,S6,S7,S8,T2,P1,P2,P5,P6,P7,P8,P10)

Strategic options: Drop Freixenet Cavas (W3,T1,P3,P4,P9,P10)

Performance Indicators (P) 1) Presence in 200 off-premise outlets in 2004 2) Presence in 50 on-premise outlets in 2004 3) Provide off-premise outlets at least 20% mark-up over list price 4) Provide on-premise outlets at least 200% mark-up over list price 5) Attain 1% Market Share by 2004 ( 9,000 Cases) 6) Achieve an average annual turnover of 50 cases per year per off-premise outlet 7) Achieve an average annual turnover of 25 cases per year per on-premise outlet 8) Achieve at least 40% brand awareness in 2004 MARKETING 9)DEPARTMENT Ensure a 40% gross margin from the wines 10)Achieve a 10% minimum return on sales

Brand Plan

MARKETING DEPARTMENT

Summary of Strategic Options

General Strategic Options: • Market and distribute a brand of wine rather than distribute wine as a generic product • Concentrate on still wines, rather than sparklings • Support branded wine with marketing program • Use ADPIC funds to develop brand of wine • Concentrate on developing Rene Barbier Brand of wines • Use the Y2K Direct Selling Group to penetrate HORECA • Penetrate off-premise outlets • Sell to corporate accounts • Drop Freixenet Cordon Negro Brand Plan MARKETING DEPARTMENT • Launch brand building program for wines

Summary of Strategic Options

• Brand-specific Options: • Discontinue Freixenet Cavas in on and off premise outlets • Develop proper positioning strategies for wines • Change Mederano packaging • Build the Carta and Spumante Variants and drop Cordon Negro • Discontinue Freixenet Cavas in on and off premise outlets and concentrate it in corporate accounts

Brand Plan

MARKETING DEPARTMENT

STRATEGY FORMULATION AFTER LISTING DOWN THE STRATEGIC OPTIONS, IDENTIFY WHAT MAJOR ALTERNATIVES CAN BE DEVELOPED FROM THE OPTIONS!!! Discuss each alternative thoroughly. Explain the positive and negative points of each alternative. Relate to Industry KSFs, Industry Logic, Industry Opportunities & Threats, and Brand Strengths and Weaknesses. Choose the best alternative! (duh) If possible, develop a matrix that would help you determine which alternative is the best. Brand Plan

MARKETING DEPARTMENT

ADPIC Wine: Major Strategic Alternatives • Rene Barbier Option – – – –

Concentrate on Rene Barbier Still Wines Drop Freixenet Cavas Advantages: taste, price, and heritage Disadvantages: Freixenet’s neglect, no budget

• New Brand Option – Look for a new wine supplier – Advantages: corporate fit, marketing budget – Disadvantages: taste of wine not sure

• Own Brand Option – Develop own brand and look for supplier that will produce own ADPIC brand – Advantages: own brand, CONTROL – Disadvantages: time, credible supplier Brand Plan

MARKETING DEPARTMENT

Product / Industry Life Cycle • Introduction – Product launch – Monopoly

• Growth – Rapid climb in sales – Increase in competition

• Maturity – Sales growth rate decline, plateau, absolute sales declines – Fierce competition

• Decline – Complete decline of sales and profits Marketing Department

Marketing & Brand Equity Management

Product / Industry Life Cycle Characteristics, Objectives, & Strategies STAGE CHARACTERISTICS SALES COSTS PROFITS CUSTOMERS COMPETITORS

INTRODUCTION

GROWTH

MATURITY

DECLINE

Low Sales High cost per customer Negative Innovators Few

Rapidly rising sales Average cost per customer Rising profits Early adopters Growing number

Peak sales Low cost per customer High profits Middle majority Stable number beginning to decline

Declining Low cost per customer Declining profits Laggards Declining number

Maximize profit & defend market share

Reduce expenses & milk the brand

Diversify brands & models

Phase out weak items

Competitive pricing More intensive Stress brand differences and benefits Increase to encourage brand switching

Cut price Selective Reduce to level needed to retain loyalists Reduce to minimal level

MARKETING OBJECTIVES Create product awareness STRATEGIES PRODUCT PRICE DISTRIBUTION ADVERTISING SALES PROMOTION

Offer basic product Charge cost-plus Selective Awareness among early adopters & dealers Use heavily to generate trial (PUSH)

Marketing & Brand Equity Management

Maximize market share

Product extensions, service, and warranty Price to penetrate market Intensive Awareness and interest in the mass market Reduce to take advantage of increasing demand

Marketing Department

Portfolio Analysis & Strategic Market Plans

Marketing & Brand Equity Management

Marketing Department

Offensive Strategies: Penetrate Markets • Grow Market Share – New users (i.e. Red Bull)

• Grow Customer Purchase – New uses (i.e. Vaseline Petroleum Jelly) – More usage (i.e. Ph Care) – Line extensions • Nike Shoes = Basketball, running, tennis, etc.

• Enter New Customer Segments – New demographics (i.e. Nike Woman)

• Grow Market Demand

Marketing & Brand Equity Management

Marketing Department

Offensive Strategies: Enter New Markets • Enter related market – Brand extensions • Kodak = films, cameras • Sony = TV, radios, DVD Players

• Enter diversified market – Brand extensions • Bic Lighters, Shavers, Pen

• Enter emerging market – i.e. Smart & Globe (piso loads)

• Develop untapped market – i.e. Apple (consumer computers) Marketing & Brand Equity Management

Marketing Department

Defensive Strategies: Protect Market Position • Protect Market Share – In High-Growth Industries • Introduce new products • More investment needed • In the FMCG industry, the rate of share change is -0.5% per 1% market growth if there is no investment to protect share.

– Protecting a high-share position • Continuous improvement of competitive advantage * mktg effort • New products, improve products and services, marketing support

Marketing & Brand Equity Management

Marketing Department

Defensive Strategies: Protect Market Position • Protect Market Share – Protecting a follower position • Decide = fight leader or stay as a follower

– Protecting a niche share position • Build loyalty among consumers, “CULT” • Decide = fight leader or stay in the niche

Marketing & Brand Equity Management

Marketing Department

Defensive Strategies: Protect Market Position • Build Customer Retention – Improve After-service – Reaffirm that your brand is the best choice (i.e. endorsers) • Example: Green Cross and Zesto “historical” / “nostalgic” ads – Loyalty programs (i.e. frequent flyers program) – Make it hard for consumer to switch to a different product

• Reduced Focus – Isuzu abandoned passenger car market in favor of trucks to focus on their Marketing & Brand Marketing Department Equity Management strength

Defensive Strategies: Exit Market Position • Harvest Price Strategy – Reduce and increase price and cost to achieve the optimal price-cost structure to achieve profits

• Harvest Resource Strategy • Divest Market Position

Marketing & Brand Equity Management

Marketing Department

Part 7 Segmentation – Targeting Positioning

STP • Develop the appropriate Segmentation – Targeting – Positioning strategy • Use different matrices (i.e. consumer perception mapping) to develop positioning!

Brand Plan

MARKETING DEPARTMENT

Segmentation & Profiling of Target Market • Proposed Target Market Analysis – – – – – – – – –

Demographics Psychographics Behavioral Geographic Lifestyle Behavior Motivation Attitude Attitude & Motivation toward the product

• Total Population • Breakdown: Primary Target Market, Secondary Target Market and if necessary, Tertiary and Emerging Markets

Positioning Strategy • Proposed Target Market Analysis – – – – – – – – –

Demographics Psychographics Behavioral Geographic Lifestyle Behavior Motivation Attitude Attitude & Motivation toward the product

• Total Population • Breakdown: Primary Target Market, Secondary Target Market and if necessary, Tertiary and Emerging Markets