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Marketing In Practice

ACKNOWLEDGMENT

Author would like to thank Miss Nilusha Gallage for her continuous support and guidance in the preparation of this study. supervision, all my efforts would have been short-sighted. Author would also like to thank a few of my fellow batch mates who were always around to support me morally. Author owes quite a lot to my parents who provided me the chance to fulfill my career objectives and for the support throughout my studies. Author would like to dedicate this study to them as an indication of their significance in this study as well as in my life. Author would also like to thank APIIT Lanka (PVT) Ltd for providing me with the necessary facilities such as the library for all our references and also the computer lab which helped me to find information on different topics by the use of the internet. Without her valuable

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Author: M. Rahmy. H

Marketing In Practice

TABLE OF CONTENT
ACKNOWLEDGMENT ...................................................................................................................1 TABLE OF CONTENT ....................................................................................................................2 Table of Figures ........................................................................................................................................ 5 List of Table .............................................................................................................................................. 8 ABBREVIATIONS ......................................................................................................................... 11 PROPOSAL.................................................................................................................................... 12 CONTENTS ................................................................................................................................... 13 COMPANY BACKGROUNG ........................................................................................................ 14 Formation ................................................................................................................................................ 14 Progression.............................................................................................................................................. 15 Future ...................................................................................................................................................... 15 Mission & Vision .................................................................................................................................... 16 Product Range ......................................................................................................................................... 16 Marketing Philosophy ............................................................................................................................. 17 MARKET SUMMARY................................................................................................................... 18 Industry Structure.................................................................................................................................... 18 Industry Participants ............................................................................................................................... 19 Target Market.......................................................................................................................................... 20 Trend, Growth & Opportunity ................................................................................................................ 21 Gaps & Problems .................................................................................................................................... 21 SWOT ANALYSIS ......................................................................................................................... 22 Strengths ................................................................................................................................................. 22 Weakness ................................................................................................................................................ 23 Opportunities........................................................................................................................................... 23 Threats .................................................................................................................................................... 23 Analysis & Wrap up................................................................................................................................ 24 MARKETING OBJECTIVES ........................................................................................................ 25 Functional Objectives ............................................................................................................................. 25

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Marketing In Practice

Quantitative Objectives ........................................................................................................................... 27 Qualitative Objectives ............................................................................................................................. 28 MARKETING STRATEGY .................................................................................................................... 29 SEGMENTATION ................................................................................................................................. 30 Consumer Segmentation Bases ........................................................................................................... 30 Characteristics of Profile ..................................................................................................................... 31 TARGETING .......................................................................................................................................... 32 Evaluation & Effectiveness of Segments ............................................................................................ 32 Other Segment(s) evaluating criteria .................................................................................................. 33 Final Target Market & Location ......................................................................................................... 33 POSITIONING ....................................................................................................................................... 35 Differentiation Strategies and Description. ........................................................................................ 36 POSITIONING PROCESS .................................................................................................................. 38 Positioning Map .................................................................................................................................. 38 MARKETING MIX........................................................................................................................ 39 PRODUCT .............................................................................................................................................. 39 Product ................................................................................................................................................ 39 Product Concept .................................................................................................................................. 39 Product Classification ......................................................................................................................... 40 Brand Name ........................................................................................................................................ 40 Packaging & Labeling......................................................................................................................... 40 Product Levels .................................................................................................................................... 41 Product Type ....................................................................................................................................... 42 Product Life Cycle (PLC) ................................................................................................................... 43 Consumer benefits .............................................................................................................................. 44 Total Product Concept ........................................................................................................................ 45 PRICE ..................................................................................................................................................... 46 Factors Affecting Price ....................................................................................................................... 46 PRICING PROCESS ........................................................................................................................... 47 Price according to PLC ....................................................................................................................... 50 PLACE .................................................................................................................................................... 51

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Marketing In Practice

CHANNEL DESIGN DECISION ........................................................................................................ 51 Marketing Channel Flow .................................................................................................................... 55 Placed Retail Outlets ........................................................................................................................... 56 Delivery Road Map ............................................................................................................................. 57 Proposed Channel Alternatives ........................................................................................................... 58 Place according to PLC ....................................................................................................................... 58 PROMOTION ......................................................................................................................................... 59 MARKETING COMMUNICATION PROCESS .................................................................................. 59 MARKETING MATERIALS ................................................................................................................ 71 Promotional activities according to PLC ............................................................................................ 82 IMPLEMENTATION & CONTROL ............................................................................................. 83 STEPS FOR SUCCESSFUL PLAN EXECUTION .................................................................................. 83 APPENDIX ................................................................................................................................................ 91 REFERENCE LIST ...................................................................................................................... 118

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Table of Figures Figure 1 Then & Now ................................................................................................................... 15 Figure 2 Future Expansion ............................................................................................................ 15 Figure 3 Mission & Vision ........................................................................................................... 16 Figure 4 Product Range ................................................................................................................ 16 Figure 5 Product Needs ................................................................................................................. 17 Figure 6 Marketing Concept ......................................................................................................... 17 Figure 7 Monopolistic Competition .............................................................................................. 18 Figure 8 Competitors .................................................................................................................... 19 Figure 9 Indirect Competition ....................................................................................................... 19 Figure 10 Business to Customers .................................................................................................. 20 Figure 11 Business to Business..................................................................................................... 20 Figure 12 Trend, Growth and Opportunity ................................................................................... 21 Figure 13 Gaps and Problem......................................................................................................... 21 Figure 14 SWOT Analysis ............................................................................................................ 22 Figure 15 Corporate Objectives .................................................................................................... 25 Figure 16 ANSOFF Matrix ........................................................................................................... 26 Figure 17 AIDA Model ................................................................................................................. 26 Figure 18 Quantitative Objectives ................................................................................................ 27 Figure 19 Qualitative Objectives .................................................................................................. 28 Figure 20 STP Process .................................................................................................................. 29 Figure 21 Value Proposition ......................................................................................................... 35 Figure 22 Positioning Map............................................................................................................ 38 Figure 23 Brand Logo 2 ................................................................................................................ 40 Figure 24 Brand Logo ................................................................................................................... 40 Figure 25 6 & 9 Pack .................................................................................................................... 40 Figure 26 Single Pack ................................................................................................................... 40 Figure 27 Product Levels .............................................................................................................. 41 Figure 28 Potential Product .......................................................................................................... 41 Figure 29 Boston Consulting Group Matrix ................................................................................. 42 Figure 30 Consumer Benefits ....................................................................................................... 44
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Figure 31 Tangible Benefits.......................................................................................................... 44 Figure 32 In-Tangible Benefits ..................................................................................................... 44 Figure 33 Total Product Concept .................................................................................................. 45 Figure 34 Pricing Process ............................................................................................................. 47 Figure 35 Elastic Demand Curve .................................................................................................. 48 Figure 36 Channel Design Decision ............................................................................................. 51 Figure 37 Buying Requirements ................................................................................................... 52 Figure 38 Selected Distribution Channel ...................................................................................... 54 Figure 39 Physical Flow ............................................................................................................... 55 Figure 40 Payment Flow ............................................................................................................... 55 Figure 41 Information Flow .......................................................................................................... 55 Figure 42 Promotion Flow ............................................................................................................ 56 Figure 43 Road Map 2 .................................................................................................................. 57 Figure 44 Road Map ..................................................................................................................... 57 Figure 45 Marketing Communication Process ............................................................................. 59 Figure 46 Favorability & Familiarity Matrix ................................................................................ 61 Figure 47 Communication Message ............................................................................................. 62 Figure 48 Communication Platform ............................................................................................. 65 Figure 49 Billboards targeting Workers .................................................................................... 71 Figure 50 Billboards targeting Parents & Shoppers 2 ............................................................... 72 Figure 51 Billboards targeting Parents & Shoppers .................................................................. 72 Figure 52 Billboards targeting Children .................................................................................... 73 Figure 53 Posters for all target groups ...................................................................................... 73 Figure 54 Magazines & News Papers targeting Workers, Parents & Shoppers........................ 74 Figure 55 Magazines & News Papers targeting Children & Parents ........................................ 75 Figure 56 Flyers targeting all target audience 2 ........................................................................ 76 Figure 57 Flyers targeting all target audience ........................................................................... 76 Figure 58 Corporate Webpage for all target audiences ............................................................. 77 Figure 59 Advertising Pillar 3....................................................................................................... 78 Figure 60 Advertising Pillar 2....................................................................................................... 78 Figure 61 Advertising Pillar 1....................................................................................................... 78
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Figure 62 Functional Pillar ........................................................................................................... 79 Figure 63 Bus Stop Shelter 1 ........................................................................................................ 80 Figure 64 Bus Stop Shelter 2 ........................................................................................................ 80 Figure 65 Complements 2 ............................................................................................................. 81 Figure 66 Complements ................................................................................................................ 81 Figure 67 Toy gifts targeting Children ...................................................................................... 81 Figure 68 Successful Marketing Plan ........................................................................................... 83 Figure 69 Functional Structure ..................................................................................................... 84 Figure 70 L-M-J Group of Companies ......................................................................................... 91 Figure 71 Formation Process ........................................................................................................ 92 Figure 72 Go Nuts Donuts Product Range ................................................................................... 93 Figure 73 Branch Network............................................................................................................ 94 Figure 74 Newly Introduced Donuts............................................................................................. 94 Figure 75 Donuts........................................................................................................................... 95 Figure 76 Beverages ..................................................................................................................... 96 Figure 77 Internal Factors affecting Marketing Objectives .......................................................... 99 Figure 78 External Factors affecting Marketing Objectives ......................................................... 99 Figure 79 Process of Positioning ................................................................................................ 107 Figure 80 Competitive Advantage .............................................................................................. 107 Figure 81 Value Proposition ....................................................................................................... 110 Figure 82 Corporate Website Design .......................................................................................... 117

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List of Table Table 1 Selected Consumer Segment Bases ................................................................................. 30 Table 2 Characteristics of Profile ................................................................................................. 31 Table 3 Target Segment/Audience................................................................................................ 33 Table 4 Target Location ................................................................................................................ 33 Table 5 MIS .................................................................................................................................. 34 Table 6 Differentiation Strategies ................................................................................................. 35 Table 7 Differentiation Strategies & Description ......................................................................... 36 Table 8 Positioning Strategies ...................................................................................................... 37 Table 9 Positioning Strategies & Description ............................................................................... 37 Table 10 Go nuts Cup Cake .......................................................................................................... 39 Table 11 Point of Differences (POD's) ......................................................................................... 42 Table 12 Product Life Cycle ......................................................................................................... 43 Table 13 Total Product Concept & Description ........................................................................... 45 Table 14 Internal Factors Affecting Price ..................................................................................... 46 Table 15 External Factors Affecting Price.................................................................................... 47 Table 16 Fixed & Variable Cost ................................................................................................... 48 Table 17 GNWD Cost Estimation ................................................................................................ 49 Table 18 Competitors Price .......................................................................................................... 49 Table 19 Final Cupcake Price ....................................................................................................... 50 Table 20 Price according to PLC .................................................................................................. 50 Table 21 Desired Service Output Level ........................................................................................ 52 Table 22 Factors affecting Channel Objectives ............................................................................ 53 Table 23 Identifying Channel Alternatives ................................................................................... 53 Table 24 Placed Retail Outlets ...................................................................................................... 56 Table 25 Proposed Channel Alternatives ...................................................................................... 58 Table 26 Place according to PLC.................................................................................................. 58 Table 27 Target Audience ............................................................................................................. 60 Table 28 Familiarity Scale ............................................................................................................ 60 Table 29 Favorability Scale .......................................................................................................... 61 Table 30 Communication Objectives............................................................................................ 62
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Table 31 Communication Channels .............................................................................................. 64 Table 32 Promotion Budget .......................................................................................................... 64 Table 33 Factors affecting Marketing Mix ................................................................................... 65 Table 34 The Best Selected Promotional Mix .............................................................................. 66 Table 35 Media type and their respective descriptions on which to promote .............................. 67 Table 36 How to, what time and the frequency to promote.......................................................... 69 Table 37 Related Time according to Target Market ..................................................................... 70 Table 38 Indicators ....................................................................................................................... 70 Table 39 Promotional Activities according to PLC ...................................................................... 82 Table 40 Resources ....................................................................................................................... 84 Table 41 Departments Workload ................................................................................................. 85 Table 42 Target People ................................................................................................................. 87 Table 43 Controls .......................................................................................................................... 88 Table 44 Controls & their Methods .............................................................................................. 89 Table 45 District Population ......................................................................................................... 97 Table 46 City Population .............................................................................................................. 97 Table 47 Internal Factors & Description ...................................................................................... 99 Table 48 Population of Targeted Cities according to Age wise ................................................. 101 Table 49 Population of Targeted District according to Age wise ............................................... 102 Table 50 Population of Targeted District according to Gender wise .......................................... 102 Table 51 Population of married couple, which could be equal to parents in Targeted District .. 103 Table 52 Number of people employed in Sri Lanka ................................................................... 103 Table 53 Expenditure of Sri Lankan Households ....................................................................... 104 Table 54 Income Level of Sri Lanka .......................................................................................... 105 Table 55 Other Segment(s) evaluating criteria ........................................................................... 106 Table 56 Competitive Advantages & Criteria ............................................................................ 108 Table 57 Criteria for Differences ................................................................................................ 109 Table 58 Winning Value Proposition Strategy ........................................................................... 110 Table 59 Marketing Objectives ................................................................................................... 113 Table 60 85% of the target market to reach ................................................................................ 113 Table 61 85% of Target Market to reach .................................................................................... 114
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Marketing In Practice

Table 62 Respective Costs .......................................................................................................... 116

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Marketing In Practice

ABBREVIATIONS

GNWD CSR PLC LMJ MIS

Go Nuts with Donuts Corporate Social Responsibility Product Life Cycle Lalin Michael Jinasena Marketing Information System

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PROPOSAL

To

Gonuts with Donuts

From : Date :

Mohammed Rahmy Haniffa 16 FEBRUARY 2010 Marketing Plan for Cup Cakes to deliver customer value amongst the snack cake segment, keeping in line with strategic aspiration of Gonuts with Donuts.

Subject:

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CONTENTS
MAIN HEADINGS ACKNOWLEDGMENT............................................................................................................................... 1 TABLE OF CONTENT ................................................................................................................................ 2 ABBREVIATIONS .................................................................................................................................... 11 PROPOSAL ................................................................................................................................................ 12 CONTENTS................................................................................................................................................ 13 COMPANY BACKGROUNG ................................................................................................................... 14 MARKET SUMMARY .............................................................................................................................. 18 SWOT ANALYSIS .................................................................................................................................... 22 MARKETING OBJECTIVES .................................................................................................................... 25 MARKETING STRATEGY ....................................................................................................................... 29 MARKETING MIX .................................................................................................................................... 39 IMPLEMENTATION & CONTROL ......................................................................................................... 83 APPENDIX ................................................................................................................................................. 91 REFERENCE LIST .................................................................................................................................. 118

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COMPANY BACKGROUNG

Formation Go Nuts with Donuts is a business, which was the first to open a donut caf, to provide a variety of delicious donuts to customers of Sri Lanka. This is a part of Lalin Michael Jinasena & Co, (LMJ). They first launched their outlet at the ODEL Department stores boulevard food court on the 2nd of March 2009. (Gonuts with Donuts corporate website, 2009) REFER APPENDIX 01& 02 There is also a similar business operating in Philippines, called Go nuts Donuts, where they too offer a wide range of donuts and other snacks to their customers. But GNWD is not a franchise of it. (Go Nuts Donuts corporate website, 2009) REFER APPENDIX 03

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Progression Lalin, CEO of GNWD (2009) stated in his corporate speech, from the day of launch, there have being a high demand for their products, which lead to expand their outlets to various places in Colombo and increase the variety of offerings. REFER APPENDIX 04
NOW Started With 1 Store 3 Delivery Bikes 6 Flavours 1160 Donuts per day Production 36,000 Donuts per month Crew of 15 THEN March 2009 November 2009 8 stores in Colombo 6 Delivery bikes 16 Flavours + Specials 2600 Donuts per day Productiion 80,000 Donuts per month Crew of 62

Figure 1 Then & Now

Source: CEO GNWD Companys Internal Briefing (2009)

Future Is what GNWD wants to achieve in future according to their prediction and business strategy.

LOCALLY TO INTRODUCE A NEW RANGE OF PRODUCTS AND INCREASE MARKET SHARE. Introduce to Outstation cities. To give permission on Operating Franchise.

GLOBALLY To open a Donut Cafe in Maldives. Expand to established Regional Markets.

Figure 2 Future Expansion

Source: CEO GNWD Companys Internal Briefing (2009)

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Mission & Vision

To Create "Gonuts with Donuts" as a household brand name for high quality, value for money bakery products.

To beome a "must have" for all our Target Market.

Figure 3 Mission & Vision

Source: CEO GNWD Companys Internal Briefing (2009)

Product Range These are the products which GNWD offers to their customers in order to capture value in return.

DONUTS

BEVERAGES

SWEET DONUTS
Figure 4 Product Range

SAVORY DONUTS

SEASONAL SPECIALS

DRINKS & COFFEES

Source: Gonuts with Donuts corporate website (2009)

REFER APPENDIX 05 & 06

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The product needs explains the reasons or motive customer are purchasing donuts:

HUNGER
PARTIES / FUNCTION

Dessert

PRODUCT NEEDS SNACK REFRESH MIND

GIFT
Figure 5 Product Needs

SWEET TOOTH

Source: Compiled by Author (2010)

Marketing Philosophy Used by the company is Marketing Concept, where donuts are produced according to customers needs and wants, these information regarding customers needs are gathered using FACEBOOK, a group with 10,000 members and other sources. Also refer APPENDIX 02 - FORMATION.

Customers
Figure 6 Marketing Concept

Needs & Wants

Integrated Marketing

Profits Through Satisfaction

REFER APPENDIX 07
Source: Kotler & Keller (2006:16)

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MARKET SUMMARY

Industry Structure The industry in which GNWD operates is Confectionary Industry. Industry Structure in which GNWD operates is Monopolistic Competition.

MONOPOLISTIC COMPETITION

Numerous & Large producers such as Fab, Perera & Sons and Barista. Also large number of consumers

Differentiated Products according to Savory, Taste, Branding & Advertising.

Low entry barriers and to exit to industry. Hit and Run policy.

GNWD have some control over the price charged.

Figure 7 Monopolistic Competition

Source: Compiled by Author (2010)

However in terms of product specialization, GNWD is the only donut caf in Sri Lanka, which also could be a Monopoly. (Gonuts with Donuts corporate website, 2009)

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Industry Participants The below participants are the DIRECT competitors of GNWD, where they have a direct impact on activities of the firm.

Fab Pastry Shop Chariot Pastry Shop Perera & Sons

Competitors

Sponge Pastry Shop

Caravan Pastry Shop

Cinnamon Grand Coffee Stop


Figure 8 Competitors

Barista

Source: Compiled by Author (2010)

Indirect Competitors of GNWD, who competes with these participants in terms of other factors as mentioned below.
MONEY
Is a limted factor, customers can be spend on Donuts or other products such as Pizza, Burgers, other snacks. Customers could purchase Cakes, Ice cream, Choclates and other sweets. Customers could visit Pizza, Mc Donalds etc... on behalf of GNWD Other outlets proviing this services such as Dine more, Pizza Hut, Queens Cafe and etc...

OTHER SUPPLIES OF SWEETS

FOOD RETAIL OUTLETS

DELIVERY SERVICES
Figure 9 Indirect Competition

Source: Compiled by Author (2010)

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Target Market1

Business to Customers (B2C)

Children 5 - 14 years Parents

Adults / Office Workers

Shoppers

Target Market

Figure 10 Business to Customers

Source: Compiled by Author (2010)

Business to Business (B2B)

CAFE's

SCHOOL / OFFICE CANTEENS

Target Market

Figure 11 Business to Business

Source: Compiled by Author (2010)

Are the potential customers of GNWD, where they will mainly focus on them and prepare the marketing plan according to their

needs to capture value in return.

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Trend, Growth & Opportunity

TREND Increasing in Fast Foods consumption. Increasing Demand for Product Variety. Increasing in sweets consumpition. Building up Cafe trend Snack trend

GROWTH High Demand for Donuts Loyal customers for GNWD Strong Brand Image GROWTH THROUGH OTHER PRODUCTS.

OPPORTUNITY Increase Product Range / offerings. Online Purchasing / Ordering. Cater to Outstation Market. Find another Target market / customers. (Sugar free donuts)

Figure 12 Trend, Growth and Opportunity

Source: Compiled by Author (2010)

Gaps & Problems

GAPS Limited Product Range / Type (only donuts). Delivery only to a limited area.

PROBLEM Health Care Problem Causes obesity Limited Product Life cycle, Short for Donuts.

Offering are available only in Colombo. Inadequate marketing materials.

limited to one product type. Customers are price Sensitive. Cost Fluctuation

Figure 13 Gaps and Problem

Source: Compiled by Author (2010)

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SWOT ANALYSIS
STRENGTHS + First & Only donut cafe in Sri Lanka to establish. + Strong and Establish brand name. + Managed by Multinational team of industry Specialist. + Consumer Focused. + Outstanding marketing & production technology. + Facebook group with 10,000 members. + Specialized Donuts manufacturer. WEAKNESSES - Unsuccessful cafe trend. - Short product life cycle or life span. - Uncreative Marketing Materials. - Limited Price structure. - Limited Product range. - Low product available.

OPPORTUNITIES * Locally untapped market. * International markets. * Business Franchise operations. * Unlimted confectionary needs. * Online purchasing. * Vertical Integration. * Healthy confectionary.

SWOT
! Cost Fluctuation.

THREATS

! Increasing health concernd. ! Price Sensitive customers. ! Low industry entry barriers ! Local Competition

Figure 14 SWOT Analysis

Source: CEO GNWD Companys Internal Briefing (2009); Compiled by Author (2010)

Strengths First and only caf to specialize and produce donuts to customers of Sri Lanka. Very popular, strong and quickly (9 months) established brand. Managed by well trained and multi skilled set of employees, who work in different trade. Focused on customer needs, which makes it successful and minimize risk of failure.

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Weakness The trend of customers visiting and consuming habitually in cafes is unsuccessful. The sweet products have a short life cycle, mature quickly. Marketing Techniques used is similar and common, so could lead to boredom to see. The products have a limited price range which GNWD has to attach to. There is no variety in product range unless in donuts. Limited availability, only in Colombo.

Opportunities Could focus on countryside cities, where there are potential cities. Could focus on other countries such as Maldives and others. Could give permission for franchise operation, easy way to expand and popularize. Confectionary needs of people are always unlimited, always want sweets. Make possible to make orders online and deliver home, reduces cost. Vertical integration with suppliers could reduce cost of production and cost fluctuations.

Threats People are more concerned about health which reduces consumption of sweet products. Consumers are price sensitive cannot increase price, could decrease demand. Cost fluctuates as import tariffs, seasons, economy changes. Possible threats from new participant as low barriers to enter. Local competition from already well established bakers.

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Analysis & Wrap up

GNWD has quickly & well established in the market with high technology. They also have a good loyal customer base.

However they offer a limited product range of to customers, which is also in maturity stage.

Since there is an endless confectionary needs and GNWD have a good knowledge about the market they could introduce a new product line to their target audience and achieve their objectives.

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MARKETING OBJECTIVES2

These are essential factor for the success since it gives a direction. These are set for Operational level in the organization.

CORPORATE OBJECTIVES

Company Growth

Increase Revenue

+ Maintain daily sales and sales volume according to their budgets. Move to Growth stage in their PLC from the Introduction stage in the life cycle of GNWD. + Improve Brand Awareness and earn good word of mouth

+ Quality and Fresh donuts to be offerd to customers.


+ Increase Availability of donuts to customers

Figure 15 Corporate Objectives

Source: CEO GNWD Companys Internal Briefing (2009)

Functional Objectives GNWD could grow in two methods according to ANSOFF Matrix, Market Development by catering to other cities of Sri Lanka and Product Development thats by introducing Cup Cakes to the existing market. (In Authors view point)

Is what GNWD wants to achieve in its life span. These objectives provide a direction for GNWD to move forwards and these

should be measured to check whether GNWD is in the right track by using mile stones. All objectives should be defined properly, time bound and achievable (Kotler & Keller, 2006:37)

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Figure 16 ANSOFF Matrix

Source: Kotler & Keller (2006:41)

GNWD should use these methods.

Also use AIDA3 model to increase sales, revenue, profits and market share.

Awareness

Interest

Desire

Action

Figure 17 AIDA Model

Source: Kotler (2002:637)

Create Awareness to customer about product, formulate Interest to purchase, create Desire and make Action among consumers to consume the product and achieve the marketing objectives. (Kotler, 2002:637)

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Quantitative Objectives

QUANTITATIVE OBJECTIVES

MARKET SHARE STRECTH OR FILL THE PRODUCT PORTFOLIO * Successfully stretch the portfolio by introducing Cup Cakes by early 2010. BRANDING * To increase by 20% in the end of 2011 for GNWD by focusing on other markets. * Increase customer base by 10% by introducing Cup Cakes by 2011. * To increase Brand Awareness by 10% by 2011. * To Increase Marketing Materials by 5% in 2010.

SALES / REVENUE * Increase by 05% for donuts by end of 2011. * To Sell 1.5 Mil Cup Cakes by 2011. * To maintain 20% Profit Margin.

Figure 18 Quantitative Objectives

Source: CEO GNWD Companys Internal Briefing (2009); Compiled by Author (2010)

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Qualitative Objectives

QUALITATIVE OBJECTIVES

BRANDING
* To increase Brand Image in the Target Market by 2012. * To increase brand recalling by innovative Marketing Materials. * Increase Brand Loyalty amoung customers.

CUSTOMER AWARENESS / SATISFACTION / RETENSION * Increase retension by introducing Cup Cakes by 2010 (Product Development). * Increase Awareness by expanding to Outstation by 2011 (Market Deelopment). * Increase Satisfaction by improving quality & availability. TREND SET

Successfully introduce a cafe trend to Sri Lanka and a "Donut with Coffee" trend.

Figure 19 Qualitative Objectives

Source: CEO GNWD Companys Internal Briefing (2009); Compiled by Author (2010)

REFER APPENDIX 08 There are several internal factors4 and external factors5 which affects GNWD while setting and achieving these objectives. REFER APPENDIX 09

4 5

Internal Factors could be the Resources of GNWD, Corporate culture and Staff Aspiration. External Factors could be Customers, Economy, Competitors and Technology.

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MARKETING STRATEGY

For GNWD could be done in a process called STP (Segmentation Targeting and Positioning).

SEGMENTATION

NEED BASED SEGMENTATION SEGMENT IDENTIFICATION

Group customers into segment based on similar charactoristics. Determind segmentation variables for need based group. Determind segment attractiveness based on criteria. Determind segment profitability.

TARGETING

SEGMENT ATTRACTIVENESS SEGMENT PROFITABILITY

POSITIONING

SEGMENT POSITIONING ACID TEST

Create value proposition & positioning strategy. Test segment attractiveness

MARKETING MIX
Figure 20 STP Process

Plan all aspects of marketing mix.

Source: Kotler & Keller (2006:224)

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SEGMENTATION6 According to levels of segmentation, the strategy used by GNWD is Target Marketing, where different products (doughnuts, coffees & cupcakes) are offered to few market segments. (Kotler & Keller 2006 p224)

Consumer Segmentation Bases There are two main variables which GNWD has to considers, which are as follows: I. II. Needs7 Profilers8

Selected Consumer Segment Bases

DESCRIPTORS Geographic Demographic Psychographics Behavioral


Table 1 Selected Consumer Segment Bases

CHARACTERISTICS Regions & Cities Age, Gender, Income and Occupation. Life style Occasion & Benefits

Source: Kotler & Keller (2006:231)

GNWD could use the above bases do identify its target market or the segment since these are bases which describes their customers in a well manner and they are the probable and potential customers

Is where GNWD will identify the overall market and separate them into different group of buyers with similar consumer profiles. (Kotler, 2002:256) 7 A fundamental criterion is according to customers needs. 8 Are the descriptive and measurable characteristics that can be used to differentiate customers.

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Characteristics of Profile BASES


GEOGRAPHAIC

SUB BASES
City & Town Regions & District

CHILDREN
All children from selected Cities & Town. Of all 4 Districts

PARENTS
All parents from selected Cities & Town. Of all 4 Districts

WORKERS
All workers from selected Cities & Town. Of all 4 Districts

SHOPPERS
All shoppers from selected Cities & Town. Of all 4 Districts

DEMOGRAPHIC

Age Gender Family Size

5 14years Male & Female 2 10

22 60 years Mothers 2

20 50 years Male & Female -

5 60 years Male & Female 2 - 10

Income Occupation PSYCHOGRAPHIC Life Style

Above Rs 20,000/=

Above Rs 20,000/= Any job

Above Rs 20,000/= Any job

Student Dependent

Parents

BEHAVIORAL

Occasions

Evening Tea, Snacks & Parties.

Snacks, Evening Tea, Parties & functions.

Snack and Evening Tea.

Snacks, Evening Tea, Parties & functions.

Benefit Sought

Sweet Tooth, Snack & Hunger.

Sweet Tooth, Gift, Snack & Hunger.

Sweet Tooth, Snack, Refresh mind & Hunger.

Sweet Tooth, Gift, Snack, Refresh mind & Hunger.

Table 2 Characteristics of Profile

Source: Compiled by Author (2010)

Selected Cities & Town: Colombo, Kandy, Kurunegala, Dehiwala Mt Lavania and Moratuwa, 4 Districts: Colombo, Kandy, Kurunegala & Gampaha.

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TARGETING9

For evaluating the effectiveness of the segments there are certain factors it should comply with, they are Measurable, Accessible, Substantial, Differential and Actionable. (Kotler & Keller 2006 p246)

Evaluation & Effectiveness of Segments The selected segments are clearly measurable & substantial for GNWD to cater successfully and earn an excellent profit, this could be proved by census and statistics with the evidence as referring to appendix 10. (In Authors view point) REFER APPENDIX 10 The preferred segments are accessible since in which Colombo segment GNWD already successfully caters with donuts, so there will not be any further quandary. As well as in other segments also there will not be any setbacks, because GNWD operate in a monopolistic competition industry. (In Authors view point)

As the target market are Children, Parents, Workers & Shoppers, are completely different in their characteristic, they prefer and respond to different marketing mix, This proves they are differential. (In Authors view point)

According to the facts and figures referred in appendix 10 of SriLanka and the selected segments it endows us with a favorable upshot, which proves us that we could cater to the selected market successfully. This is actionable. (In Authors view point)

In this stage GNWD will evaluate the segments attractiveness and select the segments to penetrate.

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Other Segment(s) evaluating criteria REFER APPENDIX 11 After considering and evaluating other segment(s) evaluating criteria information, GNWD can target to serve the most appropriate segment(s), as they cannot server all preferred since limited resources and not feasible at the present situation. (In Authors view point, 2010). Final Target Market & Location TARGET SEGMENT / AUDIENCE Children Parents Workers Shoppers Moratuwa
Table 3 Target Segment/Audience

TARGET LOCATION Colombo Kandy Kurunegala Dehiwala Mt Lavania

Source: Compiled by Author (2010)

Table 4 Target Location

Source: Compiled by Author (2010)

After GNWD evaluating the segments and selecting the target market, the company has to decide how to serve, the Targeting Strategy. For GNWD the appropriate strategy would be Differentiated Marketing10, and use Product Specialization11. (In Authors view point, 2010)

10

Is a Targeting Strategy in which it will serve several market segments and deign separate marketing mix or offers

for each segment.


11

Is where they cater a specific range of products to all market segments.

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A fine developed MIS12 will provide GNWD with rich details to make effective decision and seek opportunities.

COMPONENTS OF MIS

GNWDs DESCRIPTION

Internal Company Records Operation Finance Manpower Sales & Marketing Marketing Intelligence Competitors

Information gathered from source within the organization. Latest technology and Moderate capacity Moderate financial position High competent team of management High demand & High sales Identify & analyzing information regarding competitors and development in market place. Direct Competitors : Low Indirect Competitors : High

Market Developments Marketing Research

Moderate Is a systematic design, collection and analysis of data relevant to a specific situation faced by company.

Marketing Models

Includes mathematical and statistical or such models used for analyze information. E.g.: Time Series, Elasticity Model etc

Table 5 MIS

Source: Kotler & Armstrong (2006:102)

12

An integrated system consisting of people, equipment and procedures to gather, sort, analyze, evaluate and

distribute accurate & timely information to make effective decision. (Kotler,& Armstrong, 2006:102)

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POSITIONING13 Value Proposition14 For GNWD is as follows:

Value Proposition

Value Proposition

To establish our position as pioneers and leaders in the market by: Creating brand loyalty Making our products omnipresent readily available Constantly improving with new products and promotions

To become a must have for all our target markets.

Figure 21 Value Proposition

Source: CEO GNWD Companys Internal Briefing (2009)

GNWD can use different Differentiation Strategies15. They could use the below strategy to execute.

DIFFERENTIATION STRATEGIES Product

SUB VARIABLES Quality, Delivery, Benefits & Characteristics

Personnel

Employee competency, Courtesy, Credibility, Reliability, Responsiveness & Communication. Distribution Channel Coverage, Expertise.

Channel

Image
Table 6 Differentiation Strategies
13

Identity
Source: Kotler & Keller (2006:296)

Is a process where GNWD creates a perception of the offerings in customers mind relative to competitors of GNWD. 14 Refers to the key set of benefits offered relative to competing brand upon which the brand is positioned. 15 Is used to position its brand & identity and differentiate its offerings with its competitors. This is one of the most imperative and critical factor to execute.

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Differentiation Strategies and Description. DIFFERENTIATION STRATEGIES Product Quality High since tasty, hygienic, worth for price, manufacture reputation. Delivery Benefits Free home delivery given to their customers. Sweet Tooth, Gift, Snack, Refresh mind, Hunger & Dessert. Characteristics Variety of products (Sweet, Seasonal & Savory) Personnel Competency Courtesy Reliability Responsiveness Highly trained and multi skilled employees. Friendly employees in GNWD cafes Provide accurate delivery. Respond quickly when customers order, within 2 minutes. Communication They provide information about product, promotional offers & special events. Channel Coverage Have their cafs in major cities of Colombo and deliver in to where ever wanted with in Colombo. Image Identity To establish our position as pioneers and leaders in the market & make the household brand. To become a must have for all our target market
Table 7 Differentiation Strategies & Description

SUB VARIABLES

DESCRIPTION

Source: Kotler & Keller (2006:296)

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GNWD Marketers can follow a several Positioning Strategies, which can be from the following strategies, POSITIONING STRATEGIES o Product * o Product Benefits * o Usage Occasion o Against Competitors * o Price & Quality * o Unique Selling Proposition (USP) * o Product Class o User Class
Table 8 Positioning Strategies

* - USE THESE STRATEGIES

Source: Kotler & Armstrong (2006:221)

The ideal way of positioning for the GNWD is using a combination of these strategies, so that greater consumers could be captured. POSITIONING STRATERGIES o Product o Product Benefits o Against Competitors o Price & Quality o Unique Selling Proposition (USP) DESCRIPTION Variety, Taste, Quality, Availability. Sweet Tooth, Gift, Snack, Refresh mind, Hunger & Dessert. Product specialization, Variety (savory donuts), Availability. Affordable and Best Go Nuts With Donuts.

Table 9 Positioning Strategies & Description

Source: Compiled by Author (2010)

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POSITIONING PROCESS according to appendix 12 would clearly illustrate how to place their brand and product in the minds of customers as this is a major factor to create loyal customers. REFER APPENDIX 12 Positioning Map16

Figure 22 Positioning Map

Source: Compiled by Author (2010)

16

This also refers to Perceptual Positioning Map, which shows consumers perception of their brands versus competing products

on important buying dimensions.

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MARKETING MIX17

PRODUCT18

Product: - Go nuts Cup Cake

Hazelnut Crunch
Walnuts and crunch swimming in smoky choco-hazel frost over chocolate cake.

Double Choco
Star sprinkled chocolate ganache over chocolate cake.

Mexican Mocha
Crazily delicious whipped Mocha butter cream on top of chocolate cake.

Butter crunch Toffee


Almonds and toffee crunch covering moist chocolate cake.

Cookies N Cream
White chocolate cake with cookie bits over chocolate cake.

Chocolate Peanut Butter


Creamy peanut butter Fudge spread over chocolate cake.

Table 10 Go nuts Cup Cake

Source: Go Nuts Donuts corporate website, (2009)

Product Concept To offer an unlike cupcake to target market in Sri Lanka, which they havent tried out and take cupcake to a different stage. (In Authors view point, 2010)

17

Is the set of controllable tactical marketing tool (Product, Price, Place and Promotion) that the firm blends to produce the response it wants in the target market. (Kotler & Armstrong, 2006:50).
18

Is what GNWD offers to the selected target market for attention, acquisition & consumption that might satisfy their needs and wants

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Product Classification Consumer Product Convenience Product, are low cost product thats immediately and frequently purchased, with little planning and bought on impulse. Brand Name

Figure 23 Brand Logo 2

Brand Logo
Figure 24 Brand Logo

Brand Logo

Source: Gonuts with Donuts corporate website (2009)

Packaging & Labeling The cup cakes will come in Single, 6 packs and 9 packs.

Figure 25 6 & 9 Pack Figure 26 Single Pack

Source: Compiled by Author (2010)

Source: Compiled by Author (2010)

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Product Levels

POTENTIAL PRODUCT ** Sugar free cup cakes, Stuffed cup cake, Slider cupcake, Flower cupcake, Mini cupcake & Rose cupcake. AUGMENTED PRODUCT Quality, Delivery, Appearence & variety of recipes EXPECTED PRODUCT Economic, Tasty, Hygenic, Affordable & Variety. BASIC PRODUCT Go nuts Cup cake. CORE PRODUCT Hunger, Refresh mind, Sweet tooth & Dessert.

Figure 27 Product Levels

Source: Kotler & Keller (2006:344)

POTENTIAL PRODUCT **

Figure 28 Potential Product

Source: Google Images, (2010); Compiled by Author (2010)

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POINT OF DIFFERENCES (PODs) Product Variety Tasty Hygienic Availability & Affordable Product Specialized

Table 11 Point of Differences (POD's)

Source: Compiled by Author (2010)

Product Type Imitative Products. This product is new to the GNWD, not to the market. These are also called Me Too products. (In Authors view point) GNWD compnay and their product donuts could be catogorised as a Question Mark with holding low market share in a high growing market, according to Boston Consulting Group Matrix, as referd in the below figure.

Source: Kotler & Keller (2006:40)

Figure 29 Boston Consulting Group Matrix

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At this stage there is high demand for GNWD but low return due to low market share, GNWD has to quickly increase market share or it will become a dog and go out of market. A strategy to increase market share will be to introduce GONUTS CUPCAKES.

Product Life Cycle (PLC) GNWD is in its introduction stage, as it launched its business 9 months ago.
INTRODUCTION GROWTH MATURITY DECLINE

THEORY

ACTUAL

FORECAST THEORY

FORECAST THEORY Peak sales

FORECAST THEORY Falling

SALES

Low

High

Raising

COSTS

High

Average

Average Cost per customer. Raising

Low Cost

Low Cost

PROFITS

Low

High

High

Falling

CUSTOMERS COMPETITORS

Innovators Low High High Moderate

Early Adaptors Growing Number

Middle Majority Stable & begin to decline.

Laggards Declining Number

Table 12 Product Life Cycle

Source: CEO GNWD Companys Internal Briefing (2009)

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Consumer benefits19 There are two kinds of benefits:

TANGIBLE

INTANGIBLE

CONSUMER BENEFITS

Figure 30 Consumer Benefits

Source: Lascu, Lindquist & Sirgy (2003:03)

Tangible Benefits20 In-Tangible Benefits21

TANGIBLE BENEFITS Less Costly Gift

Different pack size.


Figure 31 Tangible Benefits

Food - Dessert & Snack

Source: Compiled by Author (2010)

IN-TANGIBLE BENEFITS

Sweet Tooth

Hunger

Mind Refresh
Figure 32 In-Tangible Benefits

Source: Compiled by Author (2010)

19

Refer to those positive factors that the consumers acquire when they purchase and / or consume the product or service. Consumers or people buy the benefits not the products. (Lascu, Lindquist & Sirgy 2003: 04) 20 Are those that are in some sense measurable.(Lascu, Lindquist & Sirgy 2003:04) 21 Are more associated with the feeling that you experience when owning and/or using a product or service.

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Total Product Concept22

Time Psychological Ring Accessory Ring

Basic Core

Figure 33 Total Product Concept

Source: Lascu, Lindquist & Sirgy (2003:04)

TYPE OF BENEFITS Basic Core Accessory Ring Psychological Ring Time


Table 13 Total Product Concept & Description

DESCRIPTION Tasty, Snack & Hunger. Online Product Menu, Within hours delivery & regular Facebook updates. Hunger & Sweet tooth. Saves time, reduces hunger,

Source: Compiled by Author (2010)

22

Refers to the broader view of the goods and service as a sum of their benefits, or its the sum of benefits offered by products or service. (Lascu, Lindquist & Sirgy 2003: 04)

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PRICE23

Factors Affecting Price Internal FACTORS Company & Marketing Objective DESCRIPTION To establish our position as pioneers and leaders in the market & make the household brand. To become a must have for all our target market. Marketing Mix Strategy Product Place Promotion Costs Food cost should not exceed 30% of retail price. Overall rent should be 10% of total revenue. Wastage must be controlled. Advertising budget should be 2% - 5% of revenue. Find out the tax implications when pricing. Must monitor production costs, wastage daily.

Organizational Consideration
Table 14 Internal Factors Affecting Price

CEO and Managements Accountants.

Source: Compiled by Author (2010)

23

Pricing is the amount money charged for GNWDs product, or the sum of the values that customers exchange for the benefits of having/using the product.

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External

FACTORS The Nature of the Market The Nature of the Demand Competitors Cost, Customer expectation Other External factors Economy Government Inflation
Table 15 External Factors Affecting Price

DESCRIPTION Monopolistic Competition Elastic Demand since not an essential product. Unknown, as its confidential information Moderate Favorable Stable Mild Inflation (CCPI December 2009 4.8%)

Source: Compiled by Author (2010)

PRICING PROCESS

Selecting the Pricing Objective Determing demand Estimating costs Analyzing competitors costs, price, & offers Selecting the pricing strategy Setting the Final Price

Figure 34 Pricing Process

Source: Kotler (2002:458)

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In Step 1, GNWD has to select the pricing objective. Thats To establish our position as pioneers and leaders in the market & make the household brand (Maximum Market Share). (Kotler, Keller 2006 p224)

In Step 2, GNWD has to determine the demand. The product is moderately price sensitive, so an increase in price could lead to a decrease in demand. The Elasticity of Demand for the product in elastic.

Figure 35 Elastic Demand Curve

Source: Compiled by Author (2010)

In Step 3, GNWD has to estimate cost. They have to consider both the Fixed and Variable cost.

FIXED COSTS Caf rents Salary of Employees Administration

VARIABLE COSTS Production Cost of Cup cakes Delivery Cost Advertising Other promotional Campaigns

Table 16 Fixed & Variable Cost

Source: Compiled by Author (2010)

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OVERALL COST ESTIMATION Food cost should not exceed 30% of retail price. Overall rent should be 10% of total revenue. Wastage must be controlled. Advertising budget should be 2% - 5% of revenue. Find out the tax implications when pricing. Must monitor production costs, wastage daily.
Table 17 GNWD Cost Estimation

Source: CEO GNWD Companys Internal Briefing (2009)

In Step 4, GNWD will analyze Competitors Cost, Prices & Offers. The costs are unknown as they are confidential information. Prices of cupcakes of competitors are as follows:

COMPETITORS Fab Pastry Shop Perera & Sons Caravan Pastry Shop Barista Sponge Pastry Shop
Table 18 Competitors Price

PRICES 60 55 60 80 50

Source: Compiled by Author (2010)

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In step 5, GNWD will select a pricing strategy. Since its launching a product GNWD has to use new product pricing strategy, in which use Market Penetration Pricing24. Lastly GNWD will set the Final Price for GONUTS CUPCAKE. This is as follows. SIZE Individual 6 Pack 9 Pack
Table 19 Final Cupcake Price

PRICE Rs 55 (Inclusive of VAT 17.5%) Rs 315 (Inclusive of VAT 17.5%) Rs 475 (Inclusive of VAT 17.5%)

Source: Compiled by Author (2010)

Price according to PLC INTRODUCTION GROWTH MATURITY DECLINE

Pricing Strategy Purpose / Motive

Penetration Pricing

Increase Price

Keep price constant level

Reduce Price

To increase sales and make customers try the product.

To increase profit and revenue as increasing demand

Constant demand, so keep price also constant.

As demand decreases, reduce price and make customer buy.

Table 20 Price according to PLC

Source: Compiled by Author (2010)


24

Setting a low price for cupcakes in order to attract new customers, increase market share and achieve its objectives.

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PLACE25

CHANNEL DESIGN DECISION

Analysing Customers desired service output level, needs of place & determine buying requirements.

Establish channel objectivess & strategy.

Identify marketing channel alternatives.

Evaluate & Contract Intermediaries.

Figure 36 Channel Design Decision

Source: Kotler (2002:494)

25

This refers to the physical space where GNWDs products will be made available for sale for the target market, it

depends on where our target customers are.

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Step 01 In designing the marketing channel, the marketers must understand the service output level desired by the target market of GNWD. There are 5 factors to consider and the buying requirements to satisfy them. FACTORS Lot Size DESCRIPTION Can purchase any number preferred by customer. In individual, 6 & 9 Pack size. Waiting and Delivery Time Delivered with 2 3 minutes take away. Home delivery done with-in 30 minutes. Spatial Convenience Made available in 7 cafs in Colombo and future expansion in other cities. Product Variety Donuts (Sweet, Savory & Seasonal), Cupcakes & Beverages. Service Backup
Table 21 Desired Service Output Level

Home Delivery, Online product Menu, Discussion Forum (facebook)


Source: Kotler (2002:494)

Buying Requirements

INFORMATION

Product variety, Taste, Quality, Hygenic & Price

CONVENIENCE

Available in major cities and shopping malls for customers.

VARIETY

Donuts (Sweet, Savory & Seasonal), Cupcakes & Beverages.

ATTENDANT SERVICES
Figure 37 Buying Requirements

Home Delivery, Online product Menu, Discussion Forum (facebook)

Source: Kotler (2002:494)

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Step 02 While setting the channel objective the following factors have to be considered.

FACTORS Product Characteristics Company Characteristics Characteristics of Intermediaries

DESCRIPTIONS Consumer goods Convenience good & Perishable product. Dynamic, Multi Skilled, Innovative.

None since the product is Food & its perishable.

Competitors Channels Environmental Factors

Direct Marketing & also use reputed retailers. (0 & 1 Level) Stable, Less legal constraints & better infrastructure.

Table 22 Factors affecting Channel Objectives

Source: Kotler (2002:494)

Step 03 In this stage GNWD will identify the different channel alternatives available for them. This is by 3 elements which are as follows:

ELEMENTS

DESCRIPTION

Type of Intermediaries

None since the product is Food & its perishable, so cannot pass to any intermediaries.

Number of Intermediaries Terms & Responsibilities of Channel Members.


Table 23 Identifying Channel Alternatives

None None, since no intermediaries needed.

Source: Kotler (2002:494)

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Considering the above elements and concluding that no intermediaries are needed, the best channel for GNWD will be level 0, where goods are manufactured and directly sold to customers, no intermediaries in between.

GNWD (MANUFACTURER)

CUSTOMER

Figure 38 Selected Distribution Channel

Source: Kotler & Keller (2006:438)

Distribution Strategy currently used by GNWD is Selective Distribution, where products are placed in few outlets in specific geographical area. But in future they have to make it Intensive Distribution by increasing the outlets, in different geographical areas.

Step 04 In this stage marketers will evaluate the benefits and constraints of all possible marketing channels. Since the product is perishable we cannot take into consideration & select all the channels except Level 0.

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Marketing Channel Flow Physical Flow

Suppliers

GNWD Manufacturer

Transporters

GNWD Cafes

Customers

Door Delivery
Figure 39 Physical Flow

Source: Compiled by Author (2010)

Payment Flow

Supplier

Bank

GNWD Manufacturer

Bank

GNWD Cafes

Customers

Figure 40 Payment Flow

Delivery Person

Source: Compiled by Author (2010)

Information Flow

Supplier

Bank

GNWD Manufacturer

Transporters & Banks

GNWD Cafes

Customers

Delivery Person
Figure 41 Information Flow

Source: Compiled by Author (2010)

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Promotion Flow

GNWD Manufacturer

Advertising Agency

GNWD Cafes

Customers

Figure 42 Promotion Flow

Source: Compiled by Author (2010)

Placed Retail Outlets

District Colombo Crescat Mt Lavania Bambalipity Colupity Nugegoda Nawam Mw Odel Dehiwala** Kurunagale ** Kandy **

Place

Main city / Town Kandy City Center (shopping mall) City / Town

Galle **

City / Town ** Cities and Town to be targeted in future.

Table 24 Placed Retail Outlets

Source: Compiled by Author (2010)

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Delivery Road Map

Door to Door to delivery is done within the area of Colombo city and Dehiwala Mt-Lavania. As shown in the below map.

Figure 44 Road Map

Source: Google Earth (2010)

Figure 43 Road Map 2

Source: Google Earth (2010)

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Proposed Channel Alternatives SHORT TERM Increase Delivery Area Online Ordering LONG TERM Franchise Outlets Increase Outlets Expand to other Cities

Table 25 Proposed Channel Alternatives

Source: Compiled by Author (2010)

Place according to PLC

INTRODUCTION Theory Distribution Strategy Selective distribution Actual More into intensive distribution since high demand

GROWTH

MATURITY

DECLINE

Intensive distribution, by increasing cafs since there are high demand for goods

Selective distribution because there is constant demand

Exclusive distribution since demand is reducing

Motive

To provides the goods according to the demand and create awareness about brand & product.

Since there is high demand, and to make available to all customers and raise sales volume.

Due to constant demand, close non-profitable shops and make use of limited resources.

Since the demand is reducing there is no use of selling in all showrooms.

Table 26 Place according to PLC

Source: Compiled by Author (2010)

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PROMOTION26

MARKETING COMMUNICATION PROCESS

IDENTIFY THE TARGET AUDIENCE DETERMINE THE COMMUNICATION OBJECTIVES DESIGN THE COMMUNICATION MESSAGE SELECT THE COMMUNICATION CHANNELS ESTABLISH MARKETING BUDGET DECIDE ON THE PROMOTIONAL MIX MEASURE PROMOTIONAL RESULTS MANAGE IMC

Figure 45 Marketing Communication Process

Source: Kotler & Keller (2006:501)

26

This refers to the activities that the GNWD can make use to communicate the benefits of the products they offer, persuade the target customer to buy it and to remind about the brand. (Kotler & Keller, 2006:501)

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STEP 1: IDENTIFY THE TARGET AUDIENCE

TARGET AUDIENCE Children Shoppers Workers Parents


Table 27 Target Audience

Source: Compiled by Author (2010)

The above identified and selected target audience is according to the STP Process. Major part of audience analysis is assessing the current image of the company. And the first step of that is measure the target audiences knowledge, using familiarity scale, which is as follows:

FAMILIARITY SCALE Never Heard of Heard of Only Know a Little Bit Know a fair Amount Know Very Well
Table 28 Familiarity Scale

GNWD

Source: Kotler & Keller (2006:502)

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Countering to the people who are familiar with the product can be asked how they feel towards is using the favorability scale.

FAVORABILITY SCALE Very Unfavorable Somewhat Unfavorable Indifferent Somewhat favorable Very Favorable
Table 29 Favorability Scale

GNWD

Source: Kotler & Keller (2006:502)

Concluding and Combining the above two scales, the customers view point is as follows

Favorable Attitude

B GNWD
Low Familiarity

A
High Familiarity

Unfavorable Attitude
Figure 46 Favorability & Familiarity Matrix

Source: Kotler & Keller (2006:502)

GNWD falls in the category of B, where its less familiar to people, but those who know it like it. Now they have to gain more attention from people.

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STEP 2: DETERMINE THE COMMUNICATION OBJECTIVES

GNWD should determine the objectives, of what they are going to achieve of doing a Promotion. COMMUNICATION OBJECTIVE Inform customer : About the Cupcakes & their benefits Persuade Customers: To buy Cupcake frequently

Table 30 Communication Objectives

Source: Kotler & Keller (2006:503)

STEP 3: DESIGN THE COMMUNICATION MESSAGE

Figure 47 Communication Message

Source: Compiled by Author (2010)

This message establishes the point-of-difference of GNWD and to position their brand.

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STEP 4: SELECT THE COMMUNICATION CHANNELS Marketers of GNWD must select the best channels to carry the message to the target audience. COMMUNICATION CHANNEL PERSONAL HSBC Call Center, like wise other effective call centers. Schools with large number of Students. Work with Womens Association, Employees Association & Students Association. Use influentials or believable people. Celebrities, High Ranked Students & Best employee of the year. Develop word-of-mouth referrals. Encourage all customers to share their view and recommend others. Establish an Electronic Forum Such as in Networking Sites (facebook & Hi5) to hold online discussion to share their experience. NONPERSONAL Print Media (News papers, Flyers & Magazine), Broadcast Media (Radio & T.V), Electronic Media (Webpage and E-mail) & Display Media (Billboards & Posters) Sales Promotion Business and Sales Force Promotion (contest for sales reps), Consumer Promotion (gift packs) Events & Experience Sponsor Events & Have stalls on : Childrens Day,
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DESCRIPTION

Focus on a particular group of people. Work through community influentials.

Media

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Valentines Day, Mothers day & May Day (Employees)

Table 31 Communication Channels

Source: Kotler & Keller (2006:508)

GNWD should use ATL (Above The Line), that is mass media promotion, since it affects the personal attitudes and behavior. STEP 5: ESTABLISH MARKETING BUDGET This is a critical factor which marketer has to decide on how much they are going to spend. There are several methods to decide, the best would be OBJECTIVEAND-TASK METHOD. There are several steps to set the budget according to this method. REFER APPENDIX 13, for the process in which GNWD could set the budget. REFER APPENDIX 13 MEDIA TYPE Print Media Broadcast Media Electronic Media Display Media Sales Promotion TOTAL
Table 32 Promotion Budget

RELATED COST 1,014,000 1,389,600 120,000 393,000 85,000 3,001,600

Source: Compiled by Author (2010)

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STEP 6: DECIDE ON THE PROMOTIONAL MIX

PUBLIC RELATION SALES PROMOTION

EVENTS & EXPERIENCES

PERSONAL SELLING

ADVERTISING

COMMUNICATION PLATFORM

DIRECT MARKETING

Figure 48 Communication Platform

Source: Kotler & Keller (2006:514)

GNWD marketers should use a combination of the above platforms to communicate with the target market, since different platforms are used by each target market. Certain factors affecting when deciding the mix as follows, this is important to consider for it to be effective.

FACTORS IN SETTING THE MARKETING MIX Type of Product Market

GNWD CHARACTORISTICS

Consumer Market

Buyer Readiness Stage

Awareness Stage, where customers have no knowledge of product, so high promotion is needed.

Product Life Cycle Stage

Introduction Stage.

Table 33 Factors affecting Marketing Mix

Source: Kotler & Keller (2006:516)

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The Best Selected Promotional Mix

Advertising

Print Media (News papers, Flyers & Magazine), Broadcast Media (Radio & T.V), Electronic Media (Webpage and E-mail) & Display Media (Billboards & Posters) Business and Sales Force Promotion (contest for sales reps), Consumer Promotion (gift packs with 6 & 9 Pack)

Sales Promotion

Events & Experience

Sponsor Events & Have stalls on : Childrens Day & children related activities, Valentines Day, Mothers day & May Day (Employees) E-mail Campaign, Corporate Website Use sales force to support a push strategy, by encouraging customers to purchase by convey the benefits.

Direct Marketing

Personal Selling

Table 34 The Best Selected Promotional Mix

Source: Compiled by Author (2010)

Promotional Mix should focus of PULL STRATEGY27, as this is the most suitable for GNWD.

27

Is Promotional Mix Strategy, which is used to focus on customers and promote on them to purchase the product.

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Media type and their respective descriptions on which to promote


MEDIA TYPE Print Media News papers English Workers Sunday Observer & Daily News Tamil Sinhala Thinakaran Dinamina & Silumina Flyers Magazine English Thinakaran Dinamina & Silumina Targeting all target Audience Workers Business Today Broadcast Media Radio English Tamil Sinhala T.V English Tamil Sinhala Electronic Media Webpage Facebook.com GNWD Corporate Website Online news sites E-Mail Display Media Posters Targeting all target Audience Billboards Targeting all target Audience Targeting all target Audience Workers Kiss Fm Soorian Fm Neth Fm Workers ETV Shakthi Tv Swarnavahini Children Funday Times & Chocolate Children Shakthi Fm Neth Fm Children ETV Shakthi Tv Swarnavahini Parents Yes Fm Shakthi Fm Neth Fm Parents ETV Shakthi Tv Swarnavahini Shoppers Kiss Fm Soorian Fm Neth Fm Shoppers ETV Shakthi Tv Swarnavahini Parents Vogue & Hi Shoppers Vogue & Hi Thinakaran Dinamina & Silumina Children Parents Sunday Times & Daily News Shoppers Sunday Times DESCRIPTION

Table 35 Media type and their respective descriptions on which to promote

Source: Compiled by Author (2010)

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How to, what time and the frequency to promote


MEDIA TYPE Time TIME FREQUENCY Number of Days / Times Print Media Sunday Observer Daily News News papers Sunday Times Thinakaran Dinamina Silumina Flyers Business Today Funday Times Magazine Chocolate Vogue Hi Broadcast Media Kiss Fm 8am 12pm 8am 12pm 8am 12pm 10am 10pm 10am 10pm 1000 flyers 1 Day 1 Day 1 Day 1 Day 1 Day 4 Days, 10 times per day Yes Fm 4 Days, 10 times per day Soorian Fm Radio Shakthi Fm 4 Days, 10 times per day 2 Days, 6 times per day. Neth Fm 2 Days, 10 times per day. February 16, 2010 1 6 480 1 3 144 1 6 960 1 6 960 4 2 4 4 4 1 8 9 6 6 4 6 8 18 6 6 4 960 1 Day 2 Day 1 Day 2 Day 1 Day 2 Days 1 Day 2 1 2 1 1 1 2 6 12 9 12 12 6 9 Every Week. For Months Total No of ads 12 96 18 96 48 48 18000

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ETV

10am 10pm

3 Days, 2 times per day.

144

T.V

Swarnavahini

10am 09pm

3 Days, 3 times per day.

144

Electronic Media Webpage

Facebook.com GNWD Corporate Website Online news sites E-Mail

7 Days 7 Days

1 1

12 12

1 1

15 boards 100 5 Panels

7 Days 1 -

1 2 -

12 6 12

1 12 15

Display Media

Billboards Posters Advertising Panel Functional Pillars Bus Stop Shelter

1 -

4 -

12 12

4800 5

1 Pillar

12

8 Shelter

12

Sales Promotion

Complements Toys

200

200

500

500

Table 36 How to, what time and the frequency to promote

Source: Compiled by Author (2010)

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Related Time according to Target Market

Workers Related Time 8 am 7 pm

Children 8 am 10am & 4 pm 6 pm

Parents 8 am 11 am, 3 am 5pm & 8 pm 10pm

Shoppers 10 am 12 pm

Table 37 Related Time according to Target Market

Source: Compiled by Author (2010)

STEP 7: MEASURE PROMOTIONAL RESULTS This stage is important since the marketers have to identify the effectiveness and the outcomes of the communication investment. The marketers have to set some indicator or parameters to identify this. This is as follows: INDICATORS / PARAMETERS Reach & Frequency Recall & Recognition Persuasion changes Cost per thousands Advertising Efficiency Sales Promotion Efficiency
Table 38 Indicators

Source: Kotler & Keller (2006:517)

STEP 8: MANAGE IMC IMC is a concept of marketing communication that integrates various communication platforms to convey the message, without focusing on one, as mentioned in step 5, a combination will be used.

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MARKETING MATERIALS Display Media (Billboards & Posters)

Billboards targeting Workers

Figure 49 Billboards targeting Workers

Source: Compiled by Author (2010)

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Billboards targeting Parents & Shoppers

Figure 51 Billboards targeting Parents & Shoppers

Source: Compiled by Author (2010)

Figure 50 Billboards targeting Parents & Shoppers 2

Source: Compiled by Author (2010)

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Billboards targeting Children

Figure 52 Billboards targeting Children

Source: Compiled by Author (2010)

Posters for all target groups

Figure 53 Posters for all target groups

Source: Compiled by Author (2010)

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Print Media (News papers, Flyers & Magazine) For Magazines & News Papers targeting Workers, Parents & Shoppers

Figure 54 Magazines & News Papers targeting Workers, Parents & Shoppers

Source: Compiled by Author (2010)

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For Magazines & News Papers targeting Children & Parents

Figure 55 Magazines & News Papers targeting Children & Parents

Source: Compiled by Author (2010)

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Flyers targeting all target audience

Figure 57 Flyers targeting all target audience

Source: Compiled by Author (2010)

Figure 56 Flyers targeting all target audience 2

Source: Compiled by Author (2010)

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Electronic Media Corporate Webpage for all target audiences REFER APPENDIX - 14

Figure 58 Corporate Webpage for all target audiences

Source: Compiled by Author (2010)

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Display Panels Targeting all target audiences

Figure 60 Advertising Pillar 2

Source: Compiled by Author (2010)

Figure 61 Advertising Pillar 1

Source: Compiled by Author (2010)

Figure 59 Advertising Pillar 3

Source: Compiled by Author (2010)

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Stalls / Functional Pillar for special events Targeting all target audiences

Figure 62 Functional Pillar

Source: Compiled by Author (2010)

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Bus Stop Shelters

Figure 63 Bus Stop Shelter 1

Source: Compiled by Author (2010)

Figure 64 Bus Stop Shelter 2

Source: Compiled by Author (2010)

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Sales Promotion Complements targeting Workers, Shoppers & Parents.

Figure 66 Complements

Figure 65 Complements 2

Source: Compiled by Author (2010)

Source: Compiled by Author (2010)

Toy gifts targeting Children.

Figure 67 Toy gifts targeting Children

Source: Google Image (2010); Compiled by Author (2010)

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Promotional activities according to PLC

INTRODUCTION

GROWTH

MATURITY

DECLINE

METHODS

Use advertising, personal selling and direct marketing to inform customers about the product

Use advertising, Events & Experience and Direct Marketing

Use advertising, direct marketing and personal selling.

Use sales promotion, direct marketing

EXPENSES

High expenditure has to be done on promotional campaigns.

High promotional expenses have to be done.

Moderate expenses on promotional expenses

Reduced expenses on promotion

PURPOSE OR MOTIVE

To inform and Persuade customers about GNWD.

To inform and persuade customers.

To remind and persuade customers

To remind and persuade customers

Table 39 Promotional Activities according to PLC

Source: Compiled by Author (2010)

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IMPLEMENTATION28 & CONTROL29

The above states the marketing strategy of GNWD to introduce Cupcakes to the market. Then this strategy will be given to the higher authority for review, approvals and feasibility. After approvals, it has to be implemented.

Disciplined Marketing Plan


Figure 68 Successful Marketing Plan

Through Execution

Successful Marketing Plan

Source: Kotler (2002:695)

For implementation to be successful there should always be proper communication & Coordination with all participants at all levels. STEPS FOR SUCCESSFUL PLAN EXECUTION A. REVIEW AND UNDERSTAND ALL ELEMENTS OF THE PLAN

GNWD should have adequate resources & it should be readily available with them to execute the plan. The resources could be as follows:

RESOURCES Land

DESCRIPTION Suitable for manufacturing Cupcakes. Suitable for locating cafes. Suitable for promotion and display of marketing materials.

Labor

For manufacturing Cupcakes, (specialists) Suitable salesperson Suitable marketers for promotion. Suitable team of management

28 29

Is the process that makes the strategy into action, make sure those action are in line with strategy & the objectives are achieved. Are methodologies that make sure all action in line to the marketing strategy.

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Capital

Finance for setting up and meet other launching activities. Production Machineries

Table 40 Resources

Source: Compiled by Author (2010)

Since this launching process is a major part of marketing plan, all departments has to work aligned for success. As mentioned below.

LOCAL PURCHASING DEPARTMENT (PD) IMPORTS

DONUTS MANUFACTURING DEPARTMENT (MFD) CUPCAKE CEO SELLING & DISTRIBUTION DELIVERY

MARKETING DEPARTMENT (MKD)


PROMOTION HUMAN RESOURCES (HRD) ACCOUNTING & FINANCE (AFD)
Figure 69 Functional Structure

Source: Compiled by Author (2010)

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DEPARTMENT

WORKLOAD

Purchasing (PD)

Purchase quality, exact raw materials according MFD & according to budgeted costs of AFD from local and imports.

Manufacturing (MFD)

Manufacture the right quantity & quality cupcakes according to MKD, use right quantity of raw material according to AFD budgets and communicate with PD regarding raw materials.

Marketing (MKD)

Sell the manufacturing cupcake of MFD the right quantity according to AFD. Do promotional activities as planned & budgeted by AFD. Do welltimed delivery to cafes & home.

Human Resources (HRD)

Recruit suitable and right number of employees for PD, MFD, MKD, and AFD. Motivate & evaluate employees and train if necessary.

Accounting & Finance (AFD)

Provide the budgets to all departments. Provide finance for necessary expenditure and find ways to control cost & waste. Make sure all departments meet up the budgets.

Table 41 Departments Workload

Source: Compiled by Author (2010)

Each department has to contribute to each other and communicate with each department at all times and levels.

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B. DEVELOP AN ACTIVITY LIST FOR THE TIME PERIOD

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C. COMMUNICATE THE PLAN FOR EXECUTION The implementation plan and the activities as mentioned in the above Gantt charts, have to be communicated to the important target people who are in charge in implementing, so that all members will know beforehand what they have to do and contribute towards successful execution. TARGET PEOPLE All 5 Functional Departments Media Advertising Agents Suppliers Call Centers Employees Delivery Marketers
Table 42 Target People

Source: Compiled by Author (2010)

D. STAY COMMITED TO THE PLAN Is an important stage marketers must make sure, the execution actions are in line with according to plan. Its also important to make sure the mile stones are achieved and take action if necessary any variation to keep inline. Make sure all resources are committed and made optimum usage. And the objective of the plan is being achieved. Gantt chart will be a tool, help for this stage where they make sure all the activities are in line with the plan, if not take necessary action. All execution needs evaluations, to check the effectiveness GNWD monitor and control marketing activities.
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CONTROLS

MAIN CONTROL ANNUAL PLAN CONTROL

**SUB CATEGORY Sales Analysis

DESCRIPTION Measuring & evaluating actual sales to sales goal.

Market Share Analysis

Identify the Market Share of GNWD.

Marketing Expense-to- Control ensures that the company is not over Sales Analysis. Market-Based Scorecard Analysis. PROFITABILITY CONTROL EFFICIENCY CONTROL Advertising Efficiency Sales-Promotion Efficiency STRATEGIC CONTROL The MarketingEffectiveness Review Marketing Audit Identify the entire organization efficiency according to various departments. A precise examination of company, determining the problem & recommending a plan of action to improve the performance.
Table 43 Controls

spending to achieve sales. Prepare scorecards that reflect performance and warning signals. Identifies the profitability of selling the cupcake in different outlets. Identifies how efficiency sales force is and make improvement. Identify the efficiency of Advertising Efficiency of sales promotion

MarketingProfitability Analysis Sales Force Efficiency

Source: Kotler (2002:698)

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CONTROLS AND THEIR METHODS **SUB CATEGORY Sales Analysis VARIABLES Sales Variance Analysis Micro Sales Analysis Market Share Analysis Overall Market Share Served Market Share Relative Market Share Marketing Expense-to-Sales Analysis. Market-Based Scorecard Analysis. Advertising * 100 Total sales Customer Performance Scorecard Stakeholder Performance Analysis Marketing- Profitability Analysis Sales Force Efficiency Do the Analysis method Average number of cupcake per sales person per day. Average Sales per customer Average Revenue per Sales Force Sales force as a percentage of total sales Advertising Efficiency Advertising cost per thousand Percentage of who became aware & read Consumer opinion on the ads Sales-Promotion Efficiency Percentage of Sales sold on deal Promotion cost The Marketing- Effectiveness Review Identify and analyze each departments marketing strengths. Marketing Audit Identify the PEST & SWOT and recommend a plan of action to improve.
Table 44 Controls & their Methods

Source: Kotler (2002:698)

GNWD can make use of the above control methodology to identify

the variation between the actual results of plan and what has to achieved according to the plan.

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APPENDIX

APPEDNDIX 01 INTRODUCTION Formation L.M.J & Co. is a privately owned company by a Sri Lankan designer called Lalin Michael Jinasena. They have a variety of subsidiary companies which they administer under LMJ group, these are managed by a multinational team of industry professionals, with wide experience in their respective fields. (L-M-J corporate website, 2009)

HOSPITALITY

FURNITURE DESIGN & MANUFACTURE

FOOD & BEVERAGE

GO NUTS WITH DONUTS

L.M.J & Co.

ARCHITECTURE & DESIGN

PROPERTY DEVELOPMENT

ADVENTURE TRAVEL

CONSTRUCTION
Figure 70 L-M-J Group of Companies

Source: L-M-J corporate website (2009)

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APPEDNDIX 02 INTRODUCTION Formation The below diagram illustrates the process which GNWD took to launch its business strategy. This process took 2 weeks for GNWD. By observing overall process we could conclude that its having Marketing Concept as its Marketing Philosophies, where they have done market research (Primary and Secondary research) in their initial stage (getting the idea & experimentation) to get customers requirements. (Gonuts with Donuts corporate website, 2009)
Getting the Idea / Idea Generation

Experimenation / Testing

Create Initial Product Line

Costing & Pricing / Pricing Strategy

Find suitable retail space / Suitable Location

Concept design & Brand Creation

Production process organization & Installation.

Creating Operational policies and procedures

Recruitment + Training of employees

Pilot shop opening / Launch

Setting up Delivery service and Call Center

Figure 71 Formation Process

Source: CEO GNWD Companys Internal Briefing (2009)

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APPEDNDIX 03 INTRODUCTION Formation Go Nuts Donuts opened for business on 11 December 2003 for its valued customers with its first flagship theater store at the Bonifacio Global City in Manila, as GNWD they too had a immense success from the very start. (Go Nuts Donuts corporate website, 2009). Go Nuts Donuts also was acknowledged by the local media and consumers as one of the finest tenderfoot in the Philippine food panorama. Go Nuts Donuts generated spontaneous word-of-mouth hysteria and was covered by local and regional media alike. They also faced excess consumer demand that the firm had to portion the number of donuts sold to customers. There were also customer queues waiting for 2 to 3 hours on a daily basis for the doughnuts, this led to black marketers who were reselling the product for up to 3 times its retail price. (Go Nuts Donuts corporate website, 2009). Go Nuts Donuts is one of the most awarded food companies in Philippines, at present they had received over 20 National awards. (Go Nuts Donuts corporate website, 2009).

GO NUTS DONUTS

DONUTS

PIZZA

CUPCAKES

ICE CREAM

FESTIVITREATS

SPECIALS

MADBREWS

Figure 72 Go Nuts Donuts Product Range

Source: Go Nuts Donuts corporate website (2009)

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APPENDIX - 04 INTRODUCTION Progressions GNWD is moving ahead very rapidly with achieving enormous number of success according to their business objectives and strategy within the short period of launch. There are high approvals of the brand and products by the customers. They too have elongated to various places in Colombo to server their valued customers as mentioned below and also they have increased their number of offerings to satisfy customers and capture value in return.

Crescat Nawam Mw Mt Lavinia

Chicken and Cheese


Butterscot ch & Cookies

BRANCH NETWORK
Nugegoda

HSBC Call center

INTRODUCED DONUT MENU

Spicy Tuna

Fashion Bug

M.D Gunasena

Garlic Bread Donut

Lemon

Figure 73 Branch Network

Figure 74 Newly Introduced Donuts

Source: CEO GNWD Companys Internal Briefing (2009)

Source: Gonuts with Donuts corporate website (2009)

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APPENDIX - 05 - INTRODUCTION - Products Range: Donuts Chicken & Cheese - Filled with chicken, Creamy cheese, Chili
powder, salt, pepper powder and crushed pepper.
NEW

Spicy Tuna - Filled with Tuna fish, crushed tomatoes, chili pieces and powder, pepper powder, salt, vinegar, paprika powder & onion. Garlic Bread Donut - Sprinkled with garlic powder, salt, chili
pieces, dry herbs & olive oil.

NEW

NEW

Strawberry Burst - Dipped in icing sugar & strawberry sauce with


strawberry sauce filling.

Choco Suprise - Sprinkled with chocolate & icing powder filled with
chocolate sauce.

Cappuccino Cream - Dipped in icing sugar and coffee. Choco Profiterole - Dipped in chocolate sauce with custard cream
filling.

Chocoholic - Dipped in dark chocolate sauce. Sweet Cinnamon - Dipped in icing sugar and sprinkled with
cinnamon powder.

Raspberry Delight - Sprinkled with icing powder with raspberry


sauce filling.

Glazed - Dipped in icing sugar & sprinkled with chocolate & mix
vermicelli.

Strawberry and Cream - Dipped in whipped cream with fresh


strawberries.

Hot Pink Love - Dipped in hot pink vanilla icing sugar. Butterscotch & Cookies - Dipped in butterscotch sauce, sprinkled
Figure 75 Donuts

with cookie crumble and cashew powder.

NEW

Source: Gonuts with Donuts corporate website (2009)

Choco Nut - Dipped in chocolate sauce with sprinkled roasted


cashew nuts & chocolate icing filling.

Lemon - Dipped in lemon icing glaze & colored sprinklers filled with
lemon flavored butter icing.

NEW

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APPENDIX 06 - INTRODUCTION Product Range: Beverages

Italian Roasted Coffee


Cappuccino Espresso Cafe Latte Iced Coffee Soft Drinks - Cream Soda, Pepsi, Mirinda & 7up. Hot Chocolate

Tea and Marshmallows


Figure 76 Beverages

Source: Gonuts with Donuts corporate website (2009)

The above two diagram give you an idea about the offerings of GNWD. There are a wide range of donuts with different taste, flavor, sweet and spicy, catering to different customers needs and requirements. They also provide beverages in order to build up a DONUT WITH COFFEE and a CAF trend. (Gonuts with Donuts corporate website, 2009)

APPENDIX - 07 INTRODUCTION - Marketing Philosophy Marketing Philosophy is a system of approach to sell the firms products to the customers. There are several ways for it. The method used by GNWD is Marketing concept. Regular updates in facebook from customers regarding GNWD are a reliable source of information for catering to target markets wants. GNWD was the first to have a commercial group in facebook in Sri Lanka, and they have got the highest number of members too, so this could help GNWD to be updated in volatile market and fight competition. (CEO GNWD Companys Internal Briefing, 2009).

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APPENDIX - 08 INTRODUCTION - Marketing Objectives QUANTITATIVE OBJECTIVES 1. GNWD is having a major objective of increasing their product range or stretching their product portfolio by introducing Cup Cakes by 2010, to the existing customers and to others potential customers, in order to satisfy them. As well as donuts have come to a stage of maturity in their product life cycle, so GNWD have to introduce a new product to maintain their sales, customer satisfaction. (CEO GNWD Companys Internal Briefing, 2009).

2.

To increase market share by 20% in 2011 they have to find other possible markets, such as focus in outstation in Sri Lanka which is more profitable and where there is potential customers and high residents living in there to purchase the offerings. Such as :

POPULATION DISTRICT Colombo Kandy Kegalla Kurunegala Gampaha Ratnapura


Table 45 District Population

CITIES Colombo Dehiwala-Mount Lavinia Gampaha Kandy

POPULATION 672,743 219,827 59,738 121,286 18,113 150,364 121,370

2,456,000 1,380,000 802,000 1,460,215 2,063,684 1,086,000

Kegalle Negombo Sri Jayawardenepura (Kotte)


Table 46 City Population

Source: City population (2009)

Source: City population (2009)

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1.

To increase Brand Awareness by 2011 GNWD could use some proper Marketing Materials such as creative advertising in Bill Boards, Advertising in television, Sponsoring events for childrens activities, other seasonal activities and actively participate is CSR. (In Authors view point)

2.

To increase Sales by 20% end of 2011 they could keep promoting their products more, introduction of Cup Cakes also could lead them to increase in sales. To make sure that they sell 1 million Cup Cakes by end of 2011 they have to assure that the cakes are according to customers wants as donuts and daily target of 1430 should be met, also expansion to other cities could make it possible. To maintain profit a profit level of 20% they should reduce cost and increase sales volume which will be realistic when Cup Cakes introduced and other cities are served. (In Authors view point)

QULITATIVE OBJECTIVES 1. To increase Brand Image GNWD has to be participating in CSR, be ethical in their business activities, have good company policies and do a good marketing campaign to educate customers about their offerings. For brand recalling the marketing team has to create superior marketing campaign. To have some loyal customers GNWD has to maintain quality, provide a variety of products and always keep entertaining customers. (In Authors view point) 2. To retain customer is similar for making customer loyal, so same tactics could be used. Increase Awareness could be achieved by promotion and moving to other cities. Customer satisfaction could be achieved only by giving what customers prefers and require for that a proper market research could do. (In Authors view point)

3.

Introduce Caf trend to Sri Lanka, where people visit caf to have some snacks for their needs, and visit GNWD to have a donut with a cup of coffee. (CEO GNWD Companys Internal Briefing, 2009).

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APPENDIX - 09 MARKETING OBJECTIVES Internal & External factors affecting in achieving the objectives of GNWD are as follows.

Customers

Resources

Economy

EXTERNAL FACTORS

Technology

INTERNAL FACTORS Corporate Culture Staff Aspiration


Competitors Figure 77 Internal Factors affecting Marketing Objectives

Source: Compiled by Author (2010)

Figure 78 External Factors affecting Marketing Objectives

Internal Factors RESOURCES

Source: Compiled by Author (2010)

Threshold Resources

Well

trained

&

experienced

employees,

Customer Focused, Stable finance, Introduce products whenever necessary. Unique Resources Quickly established brand name, Management team with wide experience in other fields, Significant market presence and Outstanding technology. Inadequate Resources
Table 47 Internal Factors & Description

Uncreative

marketing

materials,

Limited

product range, Limited Market served,

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CORPORATE CULTURE Is the mixture of values, beliefs, symbols and myths all companies develop over time and it also shows how the employers and employees feel and act. So when setting and achieving the objectives this has to be considered.

STAFF ASPIRATION Staffs goals or objectives should be met in order for them to be motivated and make them work hard to achieve the corporate objectives. As its the employees who has to achieve the objectives its an important factor to consider.

External Factors Customers are very important factor, they have to be satisfied or delighted in order for GNWD to achieve their respective objectives as they have to sell their offerings to this group of stake holders, if they arent purchasing the product then its a total loss. But GNWD has a good set of loyal customer base, they have to be retained for ever. Economy is the setting which GNWD operate, if there is inflation or a recession it would be difficult to achieve the objective or growth and revenue. According to Sri Lankan inflation (CCPI) rate for November 2009 in 2.8%, this is favorable for GNWD and also there is stable economy even thought there is a World Credit Crunch. Competitor of GNWD isnt much strong compared to GNWD, but there are potential competitors who could come to the market in future because of the attractiveness of market. Technology in Sri Lanka is fine and has all basic infrastructures such as internet, other communication technology for GNWD to do its marketing activities and production in a well manner and achieve its objectives.

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APPENDIX - 10 SEGMENTATION TARGETING POSITIONING (STP Process) Targeting Evaluation & Effectiveness of Segments Measurable & Substantial Population of Targeted Cities according to Age wise BASES VARIABLE TOTAL CITY POPULATION
GEOGRAPHAIC

0 14 years 23.9%

15 -64 Years 68%

65 and Above 8.1%

City & Town

Colombo Dehiwala Mt Lavinia Moratuwa Kandy Negombo Kurunegala

647,100 210,546

154,657 50,320

440,028 143,171

52,415 17,054

177,563 109,343 121,701 28401

42,438 26,133 29,087 6,788

120,743 74,353 82,757 19313

14,383 8,857 9,858 2,300

Table 48 Population of Targeted Cities according to Age wise

Source: City population (2009); Central Intelligence Agency (2009)

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Population of Targeted District according to Age wise


BASES VARIABLE TOTAL DISTRICT POPULATION 0 14 years 15 -64 Years 65 and Above

GEOGRAPHAIC Regions & District Colombo Gampaha Kandy Kurunegala Galle 2,251,274 2,063,684 1,279,028 1,460,215 990,487 482,280 476,269 342,228 374,644 269,614 1,622,592 1,453,017 854,309 988,027 638,308 146,402 134,398 82,491 97544 82,565

Table 49 Population of Targeted District according to Age wise

Source: Department of Census and Statistics Sri Lanka, Population by district, five year age groups and sex (2001:2)

Population of Targeted District according to Gender wise.

BASES

VARIABLE

TOTAL DISTRICT POPULATION MALE FEMALE

GEOGRAPHAIC Regions & District Colombo Gampaha Kandy Kurunegala Galle 2,251,274 2,063,684 1,279,028 1,460,215 990,487 1,151,413 1,007,702 623,966 723,179 481,849 1,099,861 1,055,982 655,062 737,036 508,638

Table 50 Population of Targeted District according to Gender wise

Source: Department of Census and Statistics Sri Lanka, Population by district, five year age groups and sex (2001:2)

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Population of married couple, which could be equal to parents in Targeted District

BASES

VARIABLE

TOTAL MARRIED (PARENTS)

% OF MARRIED (PARENTS) OF TOTAL POPULATION IN DISTRICT

GEOGRAPHAIC Regions & District Colombo Gampaha Kandy Kurunegala Galle 1,053,168 965,569 577,870 697,227 451,845 46.8% 46.8% 45.2% 47.7% 45.6%

Table 51 Population of married couple, which could be equal to parents in Targeted District

Source: Department of Census and Statistics Sri Lanka, Number and percentage of population by district and marital status (2001:1)

Employment Level Number of people employed in Sri Lanka.

ITEM
HOUSEHOLD POPULATION 000 PERSONS Labor Force 000 Persons Employed Unemployed LABOR FORCE PARTICIPATION RATE % Male Female
Table 52 Number of people employed in Sri Lanka

2006
14,834 7599 7104 493 51.2 68.1 35.7

2007
15,048 7489 7042 447 49.8 67.8 33.4

2008
15,079 7569 7157 394 50.2 67.9 34.3

Source: Central Bank Report (2008:96)

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Expenditure of Sri Lankan Households. DESCRIPTION Mean Household Expenditure Per Month Sri Lanka Urban sector Rural sector Estate sector Rs. 22671 Rs. 37978 Rs. 20620 Rs. 12879 VALUE

Expenditure on food and drink per month - Sri Lanka Expenditure on food and drink as a percentage of income -Sri Lanka Food ratio Sri Lanka Urban sector Rural sector Estate sector
Table 53 Expenditure of Sri Lankan Households

Rs. 8105 31.9 %

35.8 % 27.9 % 37.6 % 52.7 %

Source: Department of Census and Statistics Sri Lanka, Summary Information (2006/7: viii)

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Income Level of Sri Lanka DESCRIPTION Mean Household Income Per Month Sri Lanka Urban sector Rural sector Estate sector Median Household Income Per Month Sri Lanka Urban sector Rural sector Estate sector Per Capita Income per month Sri Lanka Urban sector Rural sector Estate sector
Table 54 Income Level of Sri Lanka

VALUE

Rs. 25,414 Rs. 42878 Rs. 22979 Rs. 15724

Rs. 16494 Rs. 23000 Rs. 15783 Rs. 11287

Rs. 6235 Rs. 9989 Rs. 5713 Rs. 3637

Source: Department of Census and Statistics Sri Lanka, Summary Information (2006/7: viii)

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APPENDIX - 11 SEGMENTATION TARGETING POSITIONING (STP Process) Targeting Other Segment(s) evaluating criteria

CRITERIA Market Attractiveness Size

DESCRIPTION

Comparatively large in accordance with above facts and figures.

Expected Profitability

High, since large market & effective potential target market.

Competitors Competitors No direct competitors as donuts specialist, few indirect competitors. New Entrants Availability of Substitutes Power of Buyer and Supplier Present none. Future possible. High (Other sweets & bakery products) Reasonably high

Company Objectives & Resources GNWD Skills GNWD Resources Product Skilled Suitable to cater, as its sourced from various entities.

Table 55 Other Segment(s) evaluating criteria

Source: Compiled by Author (2010)

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APPENDIX - 12 SEGMENTATION TARGETING POSITIONING (STP Process) POSITIONING Process of Positioning


IDENTIFY POSSIBLE COMPETITIVE ADVANTAGE CHOOSING THE RIGHT COMPETITIVE ADVANTAGE

SELECT AN OVERALL POSITIONING STRATEGY


DEVELOP A POSITIONING STATEMENT COMMUNICATING AND DELIVERING THE CHOOSEN POSITION

Figure 79 Process of Positioning

Source: Kotler & Armstrong (2006:218)

IDENTIFY POSSIBLE COMPETITIVE ADVANTAGE To build a good relationship with customer, marketers should understand the needs of customer better than competitors and deliver more value. If GNWD is positioning its product using the described positioning strategies, it must then deliver the promised benefits.

Comparative Advantage

Differentiated Advantage

COMPETITIVE ADVANTAGE
Figure 80 Competitive Advantage

Source: Kotler & Armstrong (2006:218)

For GNWD they should focus on Differentiated Advantage, which produce their offerings differently & better than competitors.
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Competitive Advantages CRITERIA Cost Product offerings Distribution Network DESCRIPTIONS Average but generates high profits Enormous variety, high quality & hygienic. High number of cafs and provide home delivery to customers. Customer Support High, according to members in facebook and loyal customers. Price Specialization Cheap and worth for price Specialized in production and marketing donuts. Brand
Table 56 Competitive Advantages & Criteria

Strong and quickly established.

Source: Compiled by Author (2010)

CHOOSING THE RIGHT COMPETITIVE ADVANTAGE

Out 7 competitive advantages mentioned above, GNWD should choose the ones on which it will build its positioning strategy. It must decide how many differences to promote and which ones.

How Many & Which Differences to Promote?

GNWD should always try to promote more than one benefit to their potential customers, so that all information can be conveyed to the target market and broader segments can be appealed.

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Not all differences are meaningful or worthwhile. Each difference has the potential to create company costs as well as company benefits. Therefore GNWD should select the ways in which it will distinguish itself from competitors. There are certain criteria to be satisfied for the differences to be worthwhile, they are:

CRITERIA Important

DESCRIPTIONS Product Offerings, Price, Distribution Network & Brand these are the factors what customers consider when buying.

Distinctive

Offers a greater variety of products, affordable & available to customers.

Communicable Preemptive

Positioning Strategy should be communicated to customers. These differences are hard to provide by the competitors since it an additional cost to them and dont comprise such resources.

Affordable

The buyers can afford to pay since its low cost against the competitors and worth the price.

Profitable

GNWD could mint profit with it.

Table 57 Criteria for Differences

Source: Compiled by Author (2010)

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SELECT AN OVERALL POSITIONING STRATEGY The consumers purchase goods with the greatest benefits. So GNWD should position their brand on the key benefits as mentioned above 2 steps. The full positioning of a brand is called Brands Value Proposition. There are 5 strategy of winning value proposition. THE SAME FOR LESS MORE FOR THE SAME LESS FOR MUCH LESS

MORE FOR MORE


Figure 81 Value Proposition

Value Proposition

MORE FOR LESS

Source: Kotler & Armstrong (2006:218)

WINNING VALUE PROPOSITION STRATERGY MORE FOR MORE Give the best quality product and benefits at high price.

MORE FOR THE SAME

Give the best quality product and benefits at lower price.

THE SAME FOR LESS

A similar product for a lower price by giving discount.

LESS FOR MUCH LESS

Gives less quality product for the lowest price

MORE FOR LESS

Give the best Quality product for a lower price.

Table 58 Winning Value Proposition Strategy

Source: Kotler & Armstrong (2006:218)

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GNWD can use More for More and More for the Same strategy, so that all customers will be given the best quality products with greatest benefits for their price. This will increase customer satisfaction and make customer delighted.

DEVELOP A POSITIONING STATEMENT Positioning statement refers to a statement that summarizes company or brand positioning. (Kotler & Armstrong, 2006: 224).

To establish our position as pioneers and leaders in the market by: Creating brand loyalty Making our products omnipresent readily available Constantly improving with new products and promotions

Source: CEO GNWD Companys Internal Briefing (2009)

COMMUNICATING AND DELIVERING THE CHOOSEN POSITION Once it has chosen a position, GNWD must take strong steps and communicate the desired position to the target market. All companys marketing mix efforts must support the positioning strategy. Since GNWD has decided to build a position on larger variety, price, availability, and other service, it must first deliver that position. Designing the marketing mix Product, Price, Place and Promotion involves working out the tactical details of the positioning strategy. According to their promised benefits (More for More and More for the Same) they should produce high quality products and deliver it to target market. Its also important to train and have skilled employees to serve the customer in quality. (Kotler & Armstrong, 2006: 225).

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After designing the strategy it should clearly implement the strategy without any change in plan. Once the company built the image it should carefully look after and maintain it, since it can be broken down in no time.

It must also closely monitor and adopt the position over time to match the changes in the market, consumer needs and competitors actions.

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APPENDIX - 13 - MARKETING MIX PROMOTION STEP 5: Establish Marketing Budget 1. Establish the Objectives. OBJECTIVES To increase Market share by 20% in the end of 2011 for GNWD by focusing on other markets. Successfully stretch the portfolio by introducing Cup Cakes by early 2010 To Sell 1.5 Mil Cup Cakes by early 2011.
Table 59 Marketing Objectives

Source: Compiled by Author (2010)

2. Determine the percentage of Target Market to reach by promotion. 85% of the target market should be reached for the promotion campaign to be effective and success. CITIY TOTAL POPULATION (100%) Colombo Dehiwala Mt Lavinia Moratuwa Kurunegala Kandy 177,563 1,460,215 1,279,028 TOTAL
Table 60 85% of the target market to reach

85 % OF TOTAL POPULATION 1,913,583 178,964

2,251,274 210,546

150,929 1,241,183 1,087,174 4,571,788

Source: City population (2009)

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CHILDREN (0 14 Yrs) Colombo Dehiwala Mt Lavinia Moratuwa Kurunegala Kandy


TOTAL (100%) 482,280

PARENTS

WORKERS (50.2%)

SHOPPERS

1,053,168

1,130,140

This could be equal to the value 85% of total population in the table. above

85%
TOTAL (100%)

490,938
50,320

895,193
100,225

960,619
105,694

85%
TOTAL (100%)

42,772
42,438

85,192
95,126

89,340
89,137

85%
TOTAL (100%)

36,072
6,788

80,857
697,227

75,766
733,028

85%
TOTAL (100%)

5,770
26,133

592,643
577,870

623,074
642,072

85% Total of 85%


Table 61 85% of Target Market to reach

22,213 597,765

491,190 2,145,075

545,761 2,294,560 4,571,788

Source: Compiled by Author (2010)

TOTAL 9,609,168 Customers

Source: Department of Census and Statistics Sri Lanka, Population by district, five year age groups and sex (2001:2)

3. Determine the percentage of aware prospects that should be persuaded to try CUPCAKE. Out of aware prospects (9,609,168), minimum of 40% (3,843,667) of the people should try the cupcake of GNWD. According to estimates 40% (1,537,467) of all people who tries the cupcake would be loyal customers. This is the Objective. (In Authors view point)

4. Determine the number of advertising channels. A combination of channels will be used as explained in the STEP 4, according to necessary or the situation. Especially the non-personal communication channel will be used.

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5. Determine their respective Costs individually.

MEDIA TYPE Total No of Ads Print Media News papers Sunday Observer Daily News Sunday Times Thinakaran Dinamina Silumina Flyers Magazine Business Today Funday Times Chocolate Vogue Hi Broadcast Media Radio Kiss Fm Yes Fm Soorian Fm Shakthi Fm Neth Fm T.V ETV Swarnavahini Electronic Media Webpage Facebook.com GNWD Corporate Website Online news sites E-Mail 1 12 12 96 18 96 48 48 18000 8 18 6 6 4 960 960 960 144 480 144 144 1 1

COSTS Cost Per Ad 4,000 2,000 4,000 2,000 1,750 1,750 2 11,000 3,000 10,000 12,000 8,000 200 200 200 150 150 2,500 2,500 30,000 15,000 48,000 192,000 72000 192,000 84,000 84,000 36,000 88,000 54,000 60,000 72,000 32,000 192,000 192,000 192,000 21,600 72,000 360,000 360,000 30,000 15,000 Total

15,000 5,000

15,000 60,000

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Display Media

Billboards Posters Advertising Panel Functional Pillars Bus Stop Shelter

15 4800 5

15,000 5 10,000

225,000 24,000 50,000

30,000

30,000

8,000

64,000

Sales Promotion

Complements

200

300

60,000

Toys

500

50

25,000 3,001,600

TOTAL COST OF PROMOTION


Table 62 Respective Costs

Source: Compiled by Author (2010)

Since mostly non-personal communication channel will be used. Their respective costs are as above.

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APPENDIX - 14 - MARKETING MIX PROMOTION Marketing Materials Electronic Media Corporate Webpage for all target audiences

Figure 82 Corporate Website Design

Source: Compiled by Author (2010)

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REFERENCE LIST

ACADEMIC BOOKS Lascu. D. N, Lindquist. J. D and Sirgy. M. J, (2003), Shopper Buyer and Consumer Behavior, India: Himal Impressions. Kotler. P (2002), Marketing Management, India: Prentice-Hall. Kotler. P and Keller. K L, (2006), Marketing Management, India: Pearson Education. Kotler. P and Armstrong. G, (2006), Principles of Marketing, India: Prentice-Hall.

ONLINE

Central Intelligence Agency (2009), World Fact Book, (Online), available: https://www.cia.gov/library/publications/the-world-factbook/geos/ce.html#top (Accessed on 10-Jan-2010). City population (2009), SRI LANKA, (Online), available: http://www.citypopulation.de/SriLanka.html (Accessed on 10-Jan-2010).

Go Nuts Donuts (2009), Introduction, (Online), available: http://www.gonutsdonuts.com/aboutus_history.php (Accessed on 6-Jan-2010).

Gonuts with Donuts (2009), About Us Company Profile, (Online), available: http://gonutswithdonuts.com/01-06-2009_003.htm (Accessed on 5-Jan-2010).

Gonuts with Donuts (2009), Donuts Menu, (Online), available: http://gonutswithdonuts.com/01-06-2009_002.htm (Accessed on 5-Jan-2010).
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l-m-j (2009), Lalin, (Online), available: http://www.l-m-j.com/page%201.html (Accessed on 8-Jan-2010).

Google Images (2010), Cupcake Images, (Online), available: http://images.google.lk/images?hl=en&source=hp&q=cupcake&oq=&um=1&ie=UTF8&sa=N&tab=wi (Accessed on 10-Jan-2010) Google Earth (2010), Sri Lanka: Colombo City. JOURNALS Central Bank of Sri Lanka (2008), Annual Report, Sri Lanka: Center of Banking Studies. Department of Census and Statistics Sri Lanka (2001), Census of Population and Housing 2001, Sri Lanka: Department of Census and Statistics Sri Lanka. INETRNAL COMPANY BRIEFING Lalin .M. J (2009), CEO GNWD Companys Internal Briefing, Asian Pacific Institute of Information Technology (APIIT), Colombo.

TOTAL WORD: Acknowledgment: Table of Content: Table of Figure: List of Table: Abbreviation: Proposal & Content: Appendix References & Citations Tables: WORD COUNT

10, 771 147 256 490 440 27 100 3677 752 2764 2118

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