Name: Gabreilla Mcsweeneystudent Number: N9422765

BSB 126 MARKETING PLAN

NAME: GABREILLA MCSWEENEYSTUDENT NUMBER: N9422765

TOTAL WORD COUNT 1,649

I.Situation Analysis

Lewis Roads Chocolate Milk has taken the New Zealand market by storm by launching a quality natural milk product by forming the “perfect marriage” between Lewis Roads full cream milk and Whittaker’s 5 Roll Refined Milk Chocolate to enhance the flavour and taste beyond anything else in today’s market (Astley, 2014).

Lewis Road intention is to launch and establish their Fresh Chocolate Milk product in Australia.

The Key Macro Environment factors for this product aredemographics and social trends with competitors being the most influential macro – environment forces to be considered.

Demographics allow comparison between generational cohorts, gender and income allowing Lewis Road to easily identify and target their specific audience. Social trends shape consumer values and influence the purchasing decisions of the individual. By understanding their customers’ social trends, Lewis Road is provided further insight into their customer base and future product consumption and development. Appendix 1shows milk sales by type (million litres) over a number of years. The trends for flavoured milk have been upwards with fresh flavoured milk increasing from 7% to 10%. (Dairy Australia , 2014)

The Flavoured Milk Industry in Australia consists of many brands of flavoured milk. Lewis Roadwill need to consider this extensive competition when entering into the milk industry in Australia.When reviewing competitors, Lewis Road must considerprice, packaging, flavours, size and varieties. Appendix 2 highlights the Flavoured Milk Industry competitors currently in Australia.

Appendix 3 is the SWOT analysis that was conducted and revealed a variety of strengths, weaknesses, opportunities and threats for the introduction of Lewis Road Creamery’s Fresh Chocolate Milk to the Australian market. One of the major strengths is that Lewis Road has combined with Whittaker’s Chocolate. Both companies are well known and provide quality premium products. A major weakness is that Lewis Road onlyhasone flavoured milk available at present. However, this presents an opportunity for further development of milk flavours. Another weakness is that Lewis Road has previously struggled to keep up with the customer demands for their chocolate flavoured milk.

II.Marketing Goal

To attain 15% market shares of Lewis Road’s CreameryChocolate Milkthe Flavoured Milk Market, in Australia within two (2) years of launching the product.

III.Marketing Strategy

Target Customers

The Flavoured Milk Industry target market has historically been males aged 18 to 24 years (WordPress, 2012). Lewis Road produces premium products aimed at a niche group of sophisticated and older people in New Zealand (Freya, 2014). By considering quality over quantity, Lewis Road Creamery is confident the drink will appeal to people who do not consider themselves drinkers of flavoured milk and will offer a more sophisticated and natural range of flavoured milk (FMCG, 2014). This drink will appeal to people who do not consider themselves drinkers of flavoured milk because it is made from New Zealand’s organic milk. The milk is permeant free, Palm kennel expeller (PKE) Free and then combined with real and rich chocolate unlike most flavoured milks. A lot of milk companies add permeant free back into their milk which essentially waters it down, customers want their milk to be as close to the product which comes out of the cow as it can be, and that is what Lewis Roads fresh chocolate milk achieves(Wendyl, 2014).

For Lewis Road Creamery’s Chocolate Milk to be a success and for them to meet their goal, the target market for Lewis Roads Fresh Chocolate Milk has to be segmented to focus on a particular market. Table 2 below displays the target customer profile for Lewis Road Creamery’s Chocolate Milk.

Table 1: Target Customer profile for Lewis Road Creamery’s Chocolate milk

Gender / Female
Age/Demographic / 27-35 years
Geographic / Brisbane, Australia
Occupation / Mother- working professional
Hobbies / Enjoys cooking, lifestyle shows and social media
Marital & Family Status / Married with Children
Status / Middle class
Income / Higher income

The segmented market for Lewis RoadsChocolate Milk is primarily white collared professional females aged 27-35 years earning a higher income with their children being the secondary market.Since the chocolate milk is sold at a premium price, children and teenagers may not be able to afford the milk themselves but by targeting mothers they provide a spin off to the other products as well as increasing the volume of sales. Many females in average households are keen to purchase a Dairy product they think is a superior quality. It can be seen as a family treat or be given to guests or used for cooking.

Value Proposition

Lewis Roads Chocolate Milk is the best product for mothers searching for a quality product for their family as it offers a superior flavour without the additives and excessive processing found in Moove flavoured milk. Moove consists of added sugars and cocoa powder instead of chocolate.

Positioning statement = Combined with Whittaker’s’ 5 Roll refined creamy milk chocolate, Lewis Road Creamery delivers a delicious velvety chocolate milk like no other available within the Australian market.

Lewis will be the first in the market with these benefits and therefore gain an advantage (Grewel, 2015, p. 276).

Despite the fact Lewis Roads Chocolate milk will be more expensive than Moove flavoured milk, customers will be willing to pay more because they recognise the product consist of real chocolate and premium milk.

Lewis Roads Organic Jersey Milk is the first 100 percent Jersey milk to be available. Jersey milk is renowned for being richer and creamier in taste and texture as well as an organic whole milk that is free from permeate and palm kernel expeller. It delivers a top quality product that surpasses standard milk with the benefit of being a healthier choice(Scoop Media , 2013).Both the primary and secondary target markets would benefit from this as females are often health conscious andin searchof an alternative for their children from the unhealthy processed milks currently on the market. The target customer perception of Lewis RoadsChocolate Milk and Moove’s Chocolate Milk is represented in figure 1.

Figure 1 Perceptual Map of Lewis Road Creamery’s Chocolate Milk and Moove Chocolate Milk

IV.Marketing Tactics

Product

Lewis Road will launch with a 300ml and 750ml bottle in fresh Chocolate Milkflavour (Astley, 2014).

In order for customers to have variety, new flavours will need to be established. By producing and introducing more flavours Lewis Roads customerswill have a wider range of choice and future sales will increase. To develop their flavoured milk range they will need to consider current competitors range and expand their premier quality range. Further flavour development would enable Lewis Road to explore compatible companies with natural flavours as undertaken with Whitakers. Co-branding could be explored withCapilanoto combine Australia’s favourite honey to create a naturalquality flavour like their chocolate flavour(Grewal, 2015, p. 253).

Price

The pricing strategy for Lewis Roads Chocolate Milk is crucial. It is built around the 5 critical components of pricing including competition, costs, company objectives, customers and channel members.

The current cost price will need to be monitored to ensure that profits are retained whilst maintaining a quality premium price point. Enhanced by quality flavours the product will remain in the niche high end market. This pricing structure is essential for further development of high end flavours sourced throughout Australia. Current pricing also aligns with the company objectives of maintaining their products as “tastes like nothing else on the market”. This would be impossible if they resorted to cheaper additives and flavours. Though there are brands like Norco and Maleny Dairy that offer quality milk at higher prices, Lewis Road offers a superior product with a more sophisticated look. Accordingly it will be sold in 300ml for bottles for $3.69 and a 750ml bottles for $6.49(Astley, 2014).

Distribution

In New Zealand Lewis Roads currently distributestheir fresh chocolate milk through the major supermarket chains and speciality grocery outlets.in New Zealand. They also supply the product through a national fuel station company.

In Australia, Lewis Road will intended to follow the similar distribution system that it has in New Zealand and will look to distributed their chocolate milk via the major supermarket chains in Australia being Coles and Woolworths. It will also to distribute the product at higher end groceries such as the Standard Food Market Company that supplies high end top quality produce (Must do Brisbane , 2014).

In the initial stages, the product will be shipped in bulk from New Zealand and packaged in Australia. Once sales of the product reaches a target level, Lewis Road will then look to engage an Australian processer to make the product or will look to establish their own processing facilities in Australia.

Promotion

The promotion objectives for Lewis Roads Chocolate Milk are to be able to sell the chocolate milk in Australia and gain a greater customer base whilst keeping up with customer demand. Lewis Road has AUD$ 50,000 to spend on an integrated marketing communications (IMC) plan in order to achieve the promotional objective (Grewal, 2015, p. 424). Lewis Road must employ a variety of marketing techniques to ensure the right message is communicated through the right medium and to the right audience(Olenski, 2014). Table 2 provides an example of the objective and task method that Lewis Road will use for their Chocolate milk.

Table 2: Objective and Task Method for Lewis Road Creamery’s Chocolate Milk

Objective / Task / Media Cost
For Lewis Roads to be able to sell their Chocolate Milk in Australia and gain a greater customer base whilst keeping up with customer demand / Negotiate with Woolworths to advertise a point of sale display in 25 stores to have free taste testers for customers to taste and also have bottles for purchase available to customers. / Cost per store - $2,000

The advertising method is both a pull and push strategy. By using this form of advertising it will be informative advertising for Lewis Road Creamery and customers. It will help create a level of brand awareness whilst moving the consumer through the buying cycle to make a purchase (Grewal, 2015, p. 435). By having free sample taste testers it uses persuasive advertising to motivate consumers to try the product before they purchase and therefore help influence their purchasing decisions. It will also allow Lewis Road to judge how consumers in Australia respond to their chocolate milk compared to consumers in New Zealand. The above task will be complimented with a national media commercial that will reach a wider customer base.

V. References

Bibliography

Astley, M. (2014, October 30). Lewis Road Creamery ups choclate milk production 4000% after 'unprecedented demand'. Retrieved April 27, 2015, from DairyReport.com:

Australian Bureau of Statistics. (2011). Family Composition by income comparison for parents/partners. Retrieved May 2, 2015, from Australian Bureau of Statistics:

Capilano, Australians Favourite Honey. (n.d.). Australians Favourite Honey. Retrieved May 2, 2015, from Australians Favourite Honey:

Dairy Australia . (2014). Drinking milk sales. Retrieved May 2, 2015, from Dairy Australa :

FMCG. (2014, September 29). A match made in heaven. Retrieved April 27, 2015, from FMCG Business:

Freya. (2014, October 19). Liquid Gold: Lewis Road Creamery and Whittakers Chocolate's Co-branding success . Retrieved April 27, 2015, from Freya Hill Eassays about now:

Grewal, D. (2015). Queensland University of Technology Marketing . North Ryde NSW: McGraw-Hill.

le, J. (2014, October 17). Chocolate Milk craze hits Kiwi Shoppers . Retrieved April 27, 2015, from The Australian:

Lewis Road Creamery New Zealand. (n.d.). Chocolate Milk. Retrieved from Lewis Road Creamery New Zealand:

Matters, J. (2014, November 23). Sunday insight: We've all gone chocolate milk mad. Retrieved from The New Zealand Herald:

Must do Brisbane . (2014). The Standard Market Company Newstead . Retrieved from Must do Brisbane.com:

New milk provides closer to farm gate taste experience . (2013, October 21). Retrieved May 2, 2015, from Scoop Brisbane Independent news:

Olenski, S. (2014, October 14). 5 Inexpensive Ways to Promote A Product Launch . Retrieved from Forbes:

Scoop Media . (2013, October 21). New milk provides closer to farm gate taste experience. Retrieved May 2, 2015, from Scoop Business Indepent news:

Wendyl. (2014, November 23). Wendyl wants to know: Lewis Road Creamery Fresh Chocolate Milk $3.69 per 300ml . Retrieved from The New Zealand Herald:

WordPress. (2012, April). Pepsico . Retrieved from Product Launch :

VI. Appendices

Appendix 1

Appendix 2 Competitor Analysis

Products / Varieties of milk type (E.g. Skim, Full cream etc.) / Company that makes the product / Packaging / Size / Pricing / Flavours
Shake n shake / Full cream, HI-LO and Skim
Only full cream for flavoured milks / Shake n Shake / Milk cartons for flavoured milk / 600ml / $2.89 / -Vanilla
-Chocolate – some vanilla added
-Choc -honeycomb
-Rocky road
Breaka / Full Cream Milk / Breaka / Milk cartons / 300ml
500ml
600ml
750ml
1L
2L
3L
Sizes varies depending on the flavour / 600ml = $2.80 / -Chocolate
-Iced coffee
-Strawberry
-Banana
-Lime
-Caramel latter (limited edition)
Moove / Reduced fat milk / Moove / Milk bottle and Cartons / 600ml
1L
6 pack 1.2L / $3.20 600ml
$2.55 per L
$3.78 per L / -chocolate
-strawberry
Oak / Full Cream Milk
Some light milk options and no sugar options / Oak / Milk bottles and Cartons / 300ml
600ml
750ml
2l
500ml
Sizes varies depend on the flavours / 300ml = $1.80
600ml = $2.79 / -Chocolate
-Chocolate light
-Iced coffee
-Iced coffee no sugar
-Strawberry
-Vanilla malt
-Banana
-Egg nog
-The max choc mint
-The max Molten Caramel
-light chocolate
- light strawberry
-light banana
Dare / All full cream
Except raw with no added sugar, 1% fat / Dare Arabica and Robusta coffee / Milk Bottles / 500ml / 500ml =$2.70 / -Double expresso
-mocha
-expresso
-dare raw
Iced Coffee / Reduced Fat / Farmers Union / Milk Cartons / 600ml / $3.30 / -coffee
Ice Break / Full cream
No added sugar milk / Ice Break / Bottles / 500ml
750ml
1.25L
2L / 500ml= $3.00
750ml = $3.80 / -ice break
-ice break no added sugar
- ice break loaded
-ice break extra shot
Rush / Low fat milk - 99% fat free and 30% less sugar / Rush / Bottles / 500ml / 500ml = $3.09 / -iced latte
-iced chocolate
-iced vanilla malt
-strong iced coffee
Just Natural / 98% fat free / Pauls / Bottles / 500ml / 500ml = $2.95 / -malt, honey and chocolate
-iced coffee
-banana and honey
Mighty Cool / Low in fat
(easy for children over 3 years) / Norco / Pop top plastic bottles / 250ml / 250ml= $1.78 / -strawberry
-chocolate
Classic / Full cream milk / Dairy Farmers / Bottle / 300ml
500ml
2L / 500ml = $2.20 / -chocolate
-strawberry
-Iced coffee

Appendix 3 SWOT Analysis

Strengths / Weaknesses

• Lewis Road Creamery flavoured milk is more expensive per unit therefore creating a niche market
• Lewis Road Creamery and Whittaker’s chocolate are both well-known and respected companies
• Launch of the Chocolate milk product follows the successful introduction of the brand’s award winning premium butters in 2012 as well as artisan butter and organic milks and creams in 2013
• Fresh Chocolate Milk comes in 2 recyclable sizes 750 ml at $6.29 and 300 ml at $3.59
• Due to the fact Lewis Road Creamery has combined with Whittaker’s Chocolate, both companies will be able to advertise the product which will enhance advertising and distribute costs

/

• Stock shortages have already been experienced in NZ
• Consumers in Australia may prefer to support local dairy industries and may not wish to buy this product
• Lewis Road Creamery may need to consider changing their price structure for Australian consumers who may be unwilling to pay premium prices for flavoured milk
• Potential increased costs and overheads of shipping the product and packaging in Australia may not be worth the added costs and eventual profits
• Health conscious people may be less inclined to purchase the product due to the full fat content of the product
• The product is only available in 1 flavour at present
• This product is more expensive than the flavoured milks already being sold in Australia

Opportunities / Threats

• Investigate future possibilities of on-line bulk selling for the product

• Opportunities for first mover advantage in the flavoured milk industry as a more prestige quality product
• Establishment of the product in an overseas market may increase the likelihood of sales for the company’s existing and future products e.g. butter, ice-cream
• Consider making the Fresh Chocolate milk in different flavours and also in a low fat milk form
• Customers who develop loyalty towards the new Fresh Chocolate Milk will be excited about the prospects of new ice-cream products that are to be developed
• As Lewis Road Creamery would be targeting the Australian market there will be a larger consumer base

/

• Cost competitiveness could be problematic as the majority of brands within the Australian flavoured milk industry are based on commodity pricing.
• Brand loyalty already exists to a number of brands in the flavoured milk portfolio.