Marketing Plan Assignment

Overview of Project A team consisting of five was asked to carry out a marketing review of a company that is based in Jamaica. The aim of the review is to analyze the marketing directions and activities of the company by: 1. Describing the product 2. Identifying Its Target Market 3. Determining Segmentation Profiles For Its Customers And Prospects 4. Describe Ways In Which The Product Has Been Positioned And To Assess The Effectiveness Of The Positioning 5. Identifying Key Competitors, Positioning And Market Share 6. Identifying The Ways In Which The Product Is Advertised Or Promoted 7. Determining (Through ‘Grass Roots’ Customer Research) If Customers Needs Are Being Met By The Product And Addressed Through Current Marketing Initiatives 8. Identifying The Channels Of Distribution Used 9. Commenting On The Effectiveness Of The Company’s Overall Marketing And Sales Strategies 10. Recommending Alternative Positioning And/Or Other Marketing Changes You Would Implement To Increase Sales For The Company Being Analyzed.

The company chosen is Grace Kennedy Limited and its product Grace Instant Rice a product of Grace Foods Limited which is an arm of the Grace Kennedy Limited.

Overview of Grace Kennedy Limited Grace Kennedy is one of the Caribbean's largest and most dynamic corporate entities. The company started in Jamaica in 1922 as a small trading establishment and wharf operators. It has expanded and diversified over the years, changing from a privately-owned enterprise to a public company listed on the stock exchanges of Jamaica, and Trinidad & Tobago. Today, the Grace Kennedy Group comprises a varied network of some 60 subsidiaries and associated companies located across the Caribbean and in North and Central America and the United Kingdom. The company is divided into two divisions; GK Foods and GK Investments and the Group’s operations span the areas of food processing and distribution, banking and finance, insurance and remittance services, together with an investment in building materials retailing. In 1995, Grace Kennedy developed a 2020 Vision, their main objective being to transform themselves from a Jamaican trading company to a global consumer group with roots in Jamaica.

After more than 15 years on this journey, the company is substantially larger and stronger, measured by their growth in revenues, productivity, profits and market value. Grace Kennedy’s mission continues to be:

“To satisfy the unmet needs of Caribbean people wherever we live in the world.” (Adapted from www.gracekennedy.com)

Grace Foods & Services Grace Foods & Services is GK Food Division local marketing and distribution arm. This company distributes the range of Grace branded food and non-food products in Jamaica. Grace Foods & Services focuses on product development, procurement of products in and outside of Jamaica, as well as marketing and distribution of a wide variety of Grace-owned food and non-food items in Jamaica. Grace Kennedy’s Food Division has been mandated to realize a certain percentage of profits from new products therefore there is a thrust by Grace Foods & Services to find that unique need of consumers and develop products to satisfy those needs. Some recently launched new products are; •

Grace Earth Chef Veggie Meals

•

Grace Blends, a range of functional sorrel based beverages,

•

Grace Quick Cook Porridge, real Jamaican food fast,

•

Grace Instant Soup and,

•

Grace Instant Rice

The Product Grace Instant Rice

Background Grace Foods & Services has marketed branded packaged rice for many years and believe that instant rice , in convenient disposable bowls, provides consumers with another fast, delicious and affordable alternative. The success of cup noodle and cup porridge among targeted consumers led Grace Foods and Services to believe that there is a growing consumer demand for meal solutions that are quick, easy to prepare, nutritious, affordable and tasty.

Based on research conducted by Caribsearch in 2007 rice is a highly consumed staple in Jamaica. Rice consumption was found to be a few times per week at 43%, daily 32%, once a day 14% and once a week 11%.

Grace Instant Rice can be consumed on its own or with other readily available foods such as Grace Mackerel, Grace Corned Beef or even Grace Tuna as a meal or ‘stop-gap’. Grace Instant Rice is offered in three flavors, Cheesy Instant Rice, Spinach Rice and Seasoned Rice. The product is priced at $102.00 plus GCT (one cup)

Market Segmentation Market segmentation can be can be defined as dividing a market into smaller groups with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.( Kotler & Armstrong, 2010) Consumers differ in their wants, resources, buying attitudes, buying practices and location. Market segmentation allows companies to divide heterogeneous markets into smaller market segments that allow them to reach these consumers with products and services that satisfy their unique needs. They focus their attention on the market segments that they can serve best and those that would be most profitable to them.

Segmenting Consumer Market There is no single way to segment a market. A marketer has to try different segmentation variables alone and in combination to find the best way to view the market

structure. A number of variables may be used to segment the market. These variables include geographic, demographic, psychographic and behavioral variables. Geographic segmentation includes dividing the market into geographical units using variables such as nation, states, region, countries, cities, or neighborhoods. Demographic segmentation variables include age gender, education level, income levels, religion, race, nationality, family size and generation. Demographic segmentation is considered to be the easiest way of segmenting a market. Psychographic segmentation variables include Social Class, Life style and Personality. Behavioral segmentation variables include Occasions, Benefits, User Status, User Rate, Loyalty Status, Readiness Stage and Attitude towards the product.

Segmenting the Market for Grace Instant Rice A combination of variables is used to segment the consumer market for Grace Instant Rice. The variables most suited in segmenting this product are: Demographic variables – Age, Education, Social Class •

Primary (young professionals ages 21-35)

•

Secondary (university students ages 18-24)

•

Children (7-11), and children (12–17)

Education Level •

Tertiary

Social Class •

Middle to Upper

Psychographic variables- Lifestyle,

•

Active Lifestyle

•

Time conscious

•

Single/cohabiting couples

•

Teens preparing their own meal

Behavioral •

Benefits sought ( convenience)

•

User Rate

•

Attitude towards product

The Bases for Segmenting the Market for Grace Instant Rice using Demographic, Psychographic and Behavioral Variables A consumer research commissioned by Grace Kennedy through Caribsearch found that convenient products mostly consumed are: cup soup (51%), fast food (51%) and to a lesser extent instant cup porridge (16%). It was found that the majority (84%) consume these products at home, 16% at work, 8% at the hairdresser, 8% at events and 3% on the road. As well, it was established that 60% have these products at any time, 20% at dinner, 14% at breakfast, 9% at lunch time and 6% as a snack. The age groups consuming these products are adults 20-59 (65%), teens (30%) and children 5-12 (24%) and reasons for consuming are convenience 57%, taste 42%, product quality 28%, satisfy hunger 20%, price 19% and brand 13%.

This data indicates consumers’ need for quick, easy to prepare, economical and filling alternatives in food, it is believed that the market for instant rice is sizeable, the product taste meet target levels. This information is also useful in determining the age group, the life style and reasons for consumption of consumers who would be interested in this convenience product. The price point ($102 per unit) of the product would make it unattractive for consumers in certain market segments hence the selected middle to upper social class.

Effective Segmentation for Grace Instant Rice Instant Rice does not currently exist or is insignificant in major markets. A category exists in China in the cup. The size of related instant cup meals categories is large such as instant cup soup approximately 600,000 to 1.4mil cases of 12 per year and cup porridge 70,000 to 90,000 cases of 12 per year. The total metric tonne of rice is 93,100. (Information retrieved from GraceKennedy Ltd). The market therefore is substantial. This category of rice does not exist in any huge way in the market segments.

Table 1

Estimated Annual Rice Consumption Cup Rice Metric Tons (0.06%) Cases equivalent J$ (assume DSP J$843 rice) US$ @ 90

58 (using 12x67g) 72,139 $60,813,433 $675,705

The table above speaks to the measurability and substantiality of the market. The market is profitable enough based on the estimated annual rice consumption and the projected earnings. The market is differentiable. The groups of people are distinguishable. Within this segment for example there are young professional, university students and children of a certain age, (as mentioned in the demographic breakdown). The market is assessable as young professionals, University students and children of the specified age can be found in nearly all parishes in Jamaica. In recent years there has been significant increase in the number of privately run educational institute in all parishes in Jamaica. Effective programs can be designed to attract and serve the selected segments. Grace Foods and Service has a cooking program run by Grace Kitchens which takes them into schools, giving them the perfect opportunity to introduce this product.

Grace Kitchens Television program is also another program which already has the attention of the group of consumers being targeted. Grace Foods and Services is a sponsor of The RJR radio-cation program which goes into high school and colleges to entertain and educate. A number of programs already exists that can attract the selected segments suggesting that they are reachable. The segments selected therefore are actionable. GraceKennedy has a mandate to produce a certain level of new products within a certain time frame; as a result there is budget allocation for new product development and so the necessary resources are available. The segment selected are in keeping with the company objectives as there are already producing Grace Instant porridge, has similarly packaging to Grace Instant Rice which appeals to a similar market. The technology and competencies that is needed to effectively serve the selected market segments are available.

Market Targeting Market targeting is a term that is broadly used to describe the process of identifying groups of consumers who are most likely to purchase a specific good or service. There are several different approaches to this process, with some of them allowing for a broad cultivation of a market, while others are focused more on identifying markets that are small but somewhat lucrative. Most businesses no matter the size engage is some form of market targeting as part of their efforts to attract secure and maintain customers.

Targeting Strategies Undifferentiated Marketing or (Mass) Marketing can be defined as a market coverage strategy in which a firm decides to ignore market segments differences and go after the whole market with one offer. ( Kotler & Armstrong 20110) Differentiated Marketing is a coverage strategy in which a firm decides to target several market segments and design separate offers for each. (Kotler & Armstrong, 2010) Concentrated Marketing is a market coverage strategy where a firm goes after a large share of one or a few segments with one offer. (Kotler & Armstrong 2010) Customized Marketing is a market coverage strategy that tailors a particular product to the specific needs of an individual customer. Customized marketing is generally practiced by companies whose products are very expensive or unique, such as custom home builders or airplane manufacturers .Customized marketing is considered to be the ultimate form of target marketing.

Targeting Strategy for Grace Instant Rice The concentrated Marketing Strategy is employed for Grace Instant Rice. The product is unique in that it satisfies a particular need of a particular group of consumers; that of convenience. The product packaging speaks to ease of preparation, it is presented in a ready to eat format, just add boiling water and the product can be consumed in 10mins. The product is unique by the variants offered; seasoned rice, cheesy rice, and spinach rice. These variants are chosen as the flavors are familiar to our Jamaican and Caribbean people all around the world. Some amount of market development is expected in the Caribbean, the USA, and The UK in keeping with GraceKennedy’s mission “to meet the needs of Caribbean people wherever we live in the world.” The price of the

product moves it away from particular segments of the market while keeping it affordability to a particular group of people. The distribution channels selected for this product is selected based on its primary target market. (Major supermarkets including tuck shops and canteens in universities and schools, where it targeted consumers shop as opposed to wholesales or other distribution channels) This product is geared towards consumers looking for quick, easy, hearty meal solutions to complement their active lifestyle; even though it is good for all members of the family at lunch, dinner as a quick side dish or snack or as “gap filler “anytime. The product is consumed in homes, offices, on construction sites and in schools.

Positioning Strategy After the organization has selected its target market, the next stage is to decide how it wants to position itself within that segment or segments chosen. Positioning refers to ‘how organizations want their consumers to see their product’. What message about the product or service is the company trying to put across? How the company wants consumers to perceive their product or service? What strategies would be adopted to reach this perceptual goal? Grace Instant Rice is positioned on product uniqueness, quality and convenience. The product unique features and benefits, particularly the innovation of instant rice in a cup is a key positioning feature. The position of the product is further enhanced by the fact that the product bears the trusted Grace brand. The Grace brand enjoys brand equity and is known for producing and distributing quality products satisfying unique needs of consumers for more than eighty nine years.

Positioning Statement A positioning statement highlights the benefit of the product or service to the target customer. It further highlights what the company does differently from the competition, and why the customers should believe it. This positioning statement has been coined for Grace Instant Rice. Positioning

‘Tasty Jamaican Rice and Soup that makes my life easier.’ ‘StopGap Anytime’ Nutritional Benefits:

• Seasoned Rice: o Good Source of two Essential Vitamins o With added vegetables and protein • Spinach Rice: o Good Source of two Essential Vitamins o With added protein, pumpkin and spinach

“Tasty and convenient, easy to prepare quality meal on the go; Grace Instant rice, Jamaican style done right, because we care.”

Key Jamaican Competitors There is no direct competitor to the Grace Instant Rice as the table below indicates. Brand

Size

Flavours

Price plus tax Rice: Indirect Competitors in Foil Pouch 25 to 30 mins prep time New Orleans style: Rice Pilaf, Spanish Rice, Jambalya Mix, Dirty Rice, Red Beans & Rice, Fish Fri, Crab Boil Creole Mustard, Creole Seasoning and a $158.45Zatarains 6.3oz – 8oz reduced sodium range $295.75 $76.9712oz $147.88 San Francisco Treat: Chicken & Garlic, Chicken, $285.45Rice-a-Roni 160-195g Spanish Rice and Fried Rice $301.05 Curry Rice, Yellow Rice, Hoppin’ John Rice, Paella Rice, Fiesta, Mexican (with & without Tomato & Onion), Rice & Black Beans, Pinto Peas, Red Kidney Beans, Pigeon Peas, Rice Primavera, Mushroom & Onion, Broccoli & Cheese, Goya 8oz or 227g Chicken Vermicelli $253.35 Vigo Yellow Rice, Black Beans & Rice, Red Beans & Rice, Mexican, Jambalya, Rice & 5oz Lentil Pilaf and Paella. $132.3 8oz $348.3 10oz $252.45 16oz 376.65 Restaurants Island Grill Callaloo, Pumpkin, Rice & 12oz Peas $100 Juici Beef 12oz Rice & Peas $80 KFC Mashed Potato or Potato 12oz Salad $140 Others Cup Porridge Oats, Cornmeal, Green 1.94-2.82oz Banana, Oats Banana $64-$75

Pack Yield

3 cups or 24oz

3 cups or 24oz

2½ cups or 20oz

4 cups

12oz

Competitors Positioning and Market Share: The positioning and market share could not be ascertained as there are only indirect competitors as indicated in table above. Product Promotion Grace Foods and Services have designed effective initiatives to build awareness of this product by: Event sponsors in order to build awareness. • Print and broadcast advertising • “Wet” and “dry push” in outlets. (Wet push is actual preparation and tasting of product, while dry push is giving of samples). •

QUESTIONNAIRE We are Upper Level students at the University College of the Caribbean pursuing a Degree in Business Administration. We are seeking your assistance in completing a research project to determine whether or not customer’s needs are being met by the Grace Instant Rice that is on the market. The information provided will not be used for any other purpose but for the completion of this project. The results will only be presented in an aggregated form. Respondents’ identities will not be revealed in any publication or presentation of the results of this survey. The information gathered will be kept confidential. Your input and time is greatly appreciated and valued

1)

Are you a consumer of Grace Kennedy’s product? Yes

No

2)

Have you ever bought the Grace Instant Rice?

No

Yes

If yes or no, why? ________________________________________________________

3)

Which flavour did you have? Spinach

4)

How satisfied were you with the product? Very satisfied

5)

Cheese

Satisfied

Seasoned

Dissatisfied

Would you recommend this product to others? Yes

No

If yes, or no, why? _____________________________________________

6)

Do you think the price is relatively reasonable

7)

If you have bought and eaten the Grace Instant Rice, please state whether or not it met or surpass your expectations.

Yes

No

___________________________________________________________________________ ___________________________________________________________________________

8)

In your opinion, do you think some improvements could be done to the Grace Instant Rice? If yes, please state ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

9)

Gender: Male

10)

What age group do you belong?18-25

Female

25-35

35-45

45 & Over

END OF QUESTIONNAIRE THANK YOU FOR YOUR ASSISTANCE WITH THIS QUESTIONNAIRE

Distribution Channels

•

Regular trade (supermarkets, groceries, wholesales)

•

Schools and other institutions

•

Gas Stations and Pharmacies

•

Van sales

9) The Effectiveness of the company overall marketing and sales strategies.

Recomendations Increase market budget for new products Look at non traditional distribution channels Paint shops Billboards

New market strategy The Possibility of pursuing partnership with fast food outlets such as Island Grill, Tastee Patties.

A committee was formed comprising university interns to manage social media network such as face book, twitter, etc. resulting in instant communication of product in an attempt to tap into the global market.