Organic Canned Borscht in the U.S. Marketing Plan

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1 Organic Canned Borscht in the U.S. Marketing Plan Prepared by: Yulia Idemenko IdemenkoFTP1

2 2 P age Table of Contents 1. Marketing Plan Executive Summary Means- End- Chain Consumer Segments Consumer Archetypes Competitors Marketing Mix Analysis PEST Analysis Marketing Mix Analysis Sample Marketing Communication pieces References... 20

3 3 P age 1. Marketing Plan Executive Summary Market Assessment Market Facts/Trends: o There is no such flavor of organic soup currently available on the market. o More and more people tend to change their dietary preferences and, as a result, eat healthier (organic) foods and be increasingly concerned with the health benefits and consequences of what they consume. Competition o Trader Joe s Organic Lentil Soup Trader Joe s is a well- known brand that is loved my many consumers, including our target segments. Trader Joe s offers great quality organic products at very reasonable prices. The can of Organic Lentil Soup, an ethnic soup that serves as our direct competitor, is only $1.99. Hurdle: being able to match the price and quality o Health Valley Organic No Salt Added Minestrone Soup an organic ethnic soup without any salt added and with good nutritional values. In addition, Health Valley also offers regular Minestrone and Low Sodium Minestrone soups, which gives customers options to choose from. This product can be bought online as well as in some selected stores. Hurdle: being able to come up with different varieties of borscht (No Salt Added, Low Sodium, Fat Free etc.) to match selection of Health Valley Organic products. PEST o Rising health awareness and growing demand for organic products is good for industry players that meet the growing demand. o Declining per capita disposable income (as one of the effects of the current recession) increased the demand for canned products (industry revenue grew 1.6% and 1.7% during ). However, as per capita disposable income grows, the revenue is set to decline at average annual rate of 0.5% over the five years to 2017.

4 4 P age Market Goals and Measurements Business Unit Financial Goals o Sales of $2million in Y1, $4 million in Y2, $5 million in Y3 Strategic Marketing Goals o To build our customer base o To introduce our products to big supermarket chains, in addition to smaller health food stores o To further build brand equity and brand identity o To reach our financial targets Tactical Marketing Goals o To establish brand awareness as well as a brand identity o To introduce our products to health food stores o To partner up with other companies to cross- promote our products o To get a suitable spokesperson to endorse the brand Marketing Budget $20 million Targets: Target Segments by Name and Characteristics: o The I Love Borscht Consumer: Already familiar with borscht and may have a cultural attachment May be of Eastern European origin or familiar with Eastern European culture and cuisine Longing for the taste of borscht familiar from childhood Eating borscht is an experience that brings back their childhood memories, the sense of belongingness and nostalgia. May have travelled to Eastern Europe or have Eastern European friends Working professionals who know how to cook but who may not necessarily have a few extra hours at their disposal to make borscht from scratch

5 5 P age Concerned with the quality of food (organic is preferable) Convenience is important o The Curious Easter Consumer: Daring consumers who are not afraid to try something new May have heard the name borscht before but never had a chance to taste it Known for being the first out of their friends to try different unusual foods and cuisines When they notice a newly advertised product at a supermarket, they have to try it On- the- go Okay with eating something out of the can (as long as it tastes good and it is healthy) Well- traveled (hence, the adventurous spirit of trying new foods). Persona Profile by Name and Description: o The I Love Borscht Consumer: Her name is Olga. She is 27 years old. Olga is originally from Kiev, Ukraine and she moved to the U.S. six years ago. Currently, she resides in Brentwood. She is single. The rest of her family is back in Ukraine. The last time she visited home was three years ago. Olga is well- educated - she holds a master s degree and speaks four languages. She works as an accountant for one of the major corporations and travels a lot for work. She misses her family and her mother s cooking. Every once in a while Olga goes to a Russian store to get products from home, particularly borsch, but recently, due to her busy work schedule, she does not have time for it. When she stays in town, she loves to go to local farmers market to buy organic fruits and veggies. Olga knows how to cook and she loves a home- cooked meal but her constant travelling does not leave much room for cooking. When she is travelling, however, she prefers to eat healthy. She is looking for a product that would have a homey taste, that would contain good quality ingredients, that would be convenient to prepare and convenient to find in major supermarkets (and not just particular Russian stores that she has to drive to).

6 6 P age o The Curious Easter Consumer: His name is Greg. He is 31 years old, single. Greg is originally from Pacific Palisades and currently lives in Santa Monica. Greg works as a real estate agent. His hobbies include weight- lifting and surfing. He is well- educated and well- travelled. When Greg was a student, he did a backpacking trip through Europe. Greg likes to plan his next vacation around a new trip destination. When he travels, he does not need to have modern conveniences as long as he gets to experience a local way of life. When Greg is in California, he likes to try different unusual foods and cuisines, be it either at a restaurant or something unusual he picked up from a supermarket. Reaching Targets Positioning Statement o There is no such flavor of organic canned soup currently available on the market o It has a unique ethnic taste o It is appealing to younger people who are on- the- go, who are tired of eating the same thing and who are concerned about what they eat Key Messages o To cater to our first market segment (the I Love Borscht consumers), the message would need to entice the memories connected with eating borscht. Thus, the message would be the following: Borscht in a can memories on your plate! o For our second market segment (the Curious Eater consumers), the message would need to entice excitement and adventure when it comes to eating borsch as well as bring up the freshness of this product. Thus, the message would be the following: Mmm borsch! Conveniently in a can, fresh on your plate!

7 7 P age Media Selection o Since both of our target markets are busy individuals who are probably don t have time to watch TV, the emphasis would be made on social media. Additionally, print ads will be used. Sample Marketing Communication and Spokesperson: Sample Marketing Communication Spokesperson o Mila Kunis (who is originally from Ukraine) or Anton Yelchin (American actor who was born in Russia) could endorse the brand. Both of them have Eastern European roots, they are young and adventurous. Their personalities should resonate with both of our target market segments.

8 8 P age 2. Means-End-Chain Attributes: Concrete: The can is glass and it can be opened by twisting the cap (no can opener required) The contents of the can is liquid The soup has red color and contains beets, meat, beans and other vegetables. Abstract: Borsch is a delicious & nutritious soup Soup needs to be warmed up on the stove or in microwave Benefits: Functional: Organic borsch represents a healthy alternative to meals that can be quickly prepared such as other types of canned soup, cup of instant noodles, frozen meals etc. Borsch satisfies hunger Canned borsch represents a quick meal, easily prepared in minutes Psycho-Social: If you have Eastern European origin, eating borsch will connect you with your heritage/home/ancestors Eating borsch will show people that you are an adventurous person and that you are not afraid of trying something new Eating borsch will give you the feeling of satisfaction, the one that you get from eating a home- cooked meal. Values: Instrumental: Eating borsch brings eating enjoyment The product promotes the sense of adventure (new flavor of soup.. let s try it!), the sense of security (organic borscht that is made with the freshest ingredients without MSG) and confidence (customers who feel sick or under the weather, supporting the all- American belief that you have to eat soup during that time, would feel good and confident that they have made the right choice eating this soup). The nutritious values of borsch makes people feel good about themselves

9 9 P age Terminal: Eating borsch brings the sense of belongingness and nostalgia (for customers with Eastern European roots) Eating borsch paves the way for people to try other cuisines and to be more adventurous 3. Consumer Segments 1) The I Love Borscht Consumer: These consumers are already familiar with borscht and may have a cultural attachment associated with it. Such as, these consumers may be of Eastern European origin themselves who are longing for the taste of this red delicious soup that was once prepared by their grandmothers. For them, eating borscht is an experience that brings back their childhood memories, the sense of belongingness and nostalgia. The I Love Borscht consumers could also be people who are familiar with Eastern European culture and cuisine either through travelling to that part of the world (and trying borscht there) or through Eastern European friends and/or roommates who at some point introduced them to borscht. These consumers are working professionals who know how to cook but who may not necessarily have a few extra hours at their disposal to make borscht from scratch. These consumers are also concerned about the quality of food. Organic is preferable and convenience is important for them. 2) The Curious Eater Consumer: These are the daring consumers who are not afraid to try something new. They may have heard the name borscht before but never had a chance to taste it. The Curious consumers are people known for being the first out of their friends to try different unusual foods and cuisines. They are the people who, while walking down the aisle at a grocery store, notice a newly advertised product that they had never tried and buy it. These consumers are on- the- go. They would much rather prefer to go to a sit- down restaurant for a meal but, due to a lack of time, are okay with eating something out of the can (as long as it tastes good and healthy). This segment of consumers is also well- traveled (hence, the adventurous spirit of trying new foods).

10 10 P age 4. Consumer Archetypes 1) The I Love Borscht Consumer Archetype: Her name is Olga. She is 27 years old. Olga is originally from Kiev, Ukraine and she moved to the U.S. six years ago. Currently, she resides in Brentwood. She is single. The rest of her family is back in Ukraine. The last time she visited home was three years ago. Olga is well- educated - she holds a master s degree and speaks four languages. She works as an accountant for one of the major corporations and travels a lot for work. She misses her family and her mother s cooking. Every once in a while Olga goes to a Russian store to get products from home, particularly borsch, but recently, due to her busy work schedule, she does not have time for it. When she stays in town, she loves to go to local farmers market to buy organic fruits and veggies. Olga knows how to cook and she loves a home- cooked meal but her constant travelling does not leave much room for cooking. When she is travelling, however, she prefers to eat healthy. She is looking for a product that would have a homey taste, that would contain good quality ingredients, that would be convenient to prepare and convenient to find in major supermarkets (and not just particular Russian stores that she has to drive to). The other brands that Olga uses:

11 11 P age 2) The Curious Eater Consumer Archetype: unusual he picked up from a supermarket. His name is Greg. He is 31 years old, single. Greg is originally from Pacific Palisades and currently lives in Santa Monica. Greg works as a real estate agent. His hobbies include weight- lifting and surfing. He is well- educated and well- travelled. When Greg was a student, he did a backpacking trip through Europe. Greg likes to plan his next vacation around a new trip destination. When he travels, he does not need to have modern conveniences as long as he gets to experience a local way of life. When Greg is in California, he likes to try different unusual foods and cuisines, be it either at a restaurant or something The other brands that Greg uses:

12 12 P age 5. Competitors Marketing Mix Analysis New Region United States The United States has a big Eastern European community. Based on 2010 data, more than 4.8 million European immigrants reside in the United States, representing 12 percent of all immigrants. About 44 percent of them (2.1 million people) are from Eastern Europe. 1 Additionally, the cities with the biggest Eastern European Diasporas include Los Angeles, Chicago, Philadelphia and others. Such cities have ethnic stores that sell foods from Eastern Europe but they may not necessarily be widely accessible. Due to a large number of immigrants from Eastern Europe and a demand for Eastern European foods in the U.S., United States represents as a perfect market for introducing borscht in a can that will be widely available in supermarket chains. Competitor 1 Trader Joe s Organic Vegetable Lentil Soup Product Trader Joe s offers a variety of organic soups, including lentil vegetable soup, which offers an ethnic appeal. The product is in the 14.5 oz aluminum container and is fully cooked and ready to be heated for a quick meal in minutes. Price Trader Joe s does not do any price reductions. This soup is constantly priced at $1.99. Promotion Trader Joe s does not do any promotions. Their products never go on sale that is part of their business model. Even when it comes to advertising, Trader Joe s only uses its Fearless Flyer where it describes some of their products and radio commercials. Place This soup is sold exclusively at Trader Joe s stores. Currently, there are 395 stores in the U.S. 1

13 13 P age Competitor 2 Health Valley Organic No Salt Added Minestrone Soup Product Health Valley Organic has a wide variety of organic soups, including No Salt Added USDA Organic Minestrone. The product is available in aluminum 15 oz cans. It is a good source of fiber (3g) and antioxidant vitamin C (15%) and an excellent source of antioxidant vitamin A (70%). Price The product can be purchased online directly from the company s website for the following price: 2 Pack, oz: $7.78 (3.89/Unit) or 12 Pack, oz: $44.35(3.70/Unit). The price for a 6- pack from Walmart.com is $20.94 (or $3.49/Unit) Promotion Health Valley Organic does not offer any coupons or other promotions from its website. There is, however, an option on the website where customers can provide their to receive news and promotions. Additionally, customer can get Place Health Valley Organic products are available in selected Vons supermarkets, and some other smaller health food stores. In addition, this soup can be bought online, directly from the Health Valley Organic website and other websites, including on Walmart.com

14 14 P age 6. PEST Analysis Political Economic Social Technological There are numerous food and health regulations, aimed at maintaining high levels of food hygiene and safeguarding the community against health scares associated with poor food safety, which requires a lot of documentation and licenses for the manufacturers. Various federal environmental regulations and statutes, such as the Clean Water Act, Clean Air Act, Pollution Prevention Act and Resource Conservation and Recovery Act, create more stringent guidelines for the way processing facilities handle their products and dispose of waste to protect the environment. These requirements such as printing new labels to add The effects of the recession declining per capita disposable income increasing demand for canned products (industry revenue grew 1.6% and 1.7% during ). However, currently the industry is in the state of decline (as per capita disposable income grows, the revenue is set to decline at average annual rate of 0.5% over the five years to 2017) High unemployment rate (people tend to prepare food from scratch) Prices of vegetables go up (as the price of vegetables increases, industry profit margins decline) Declining per capita fruit and vegetable consumption (as personal consumption of produce grows, demand for the industry's products When economy is bad, people tend to consume more prepared soups and stay away from restaurants. The opposite goes for the times when economy is good. At the same time, when unemployment is high, consumers are more likely to prepare meals from scratch at home rather than buy prepackaged goods for consumption on the go. As such, when unemployment declines, demand for the industry's products grows. Changing dietary preferences people tend to eat healthier (organic) foods and be increasingly concerned with the health benefits and consequences of what they consume Due high unemployment rate, those are employed tend to work more hours, which leaves Canning and processing are undertaken in highly mechanized factories. Labor is used in a much smaller role and is expected to further decrease with the introduction of new technology. The level of technology change is low. Packaging methods are important sources of efficiency gains for industry operators (the more automated processes become, the less prepared food producers have to spend on human labor. Further, the closer they are to canning facilities, the lower are the costs for industry operators) Introduction of light weight transport trucks to allow a greater weights of soup to be transported (used by Campbell Soup).

15 15 P age specific information can be costly to implement and sustain, eroding margins for players. The federal pollution prevention principles and the subsequent development of clean technologies are also viewed as ways to provide cost savings, improve product quality and firm s public relations. Tariffs imposed on prepared soups imported into the United States range from a low of 2.5% to a high of 3.2%, offering some protection to domestic manufacturers. increases and vice- versa) The depreciation of the US dollar made American goods relatively less expensive to international buyers. This allowed the industry's export market to expand from 7.6% of revenue in 2007, creating a small opportunity for operators that extend internationally. Rising health awareness and growing demand for organic produce good for industry players that meet the growing demand The number of industry participants has fallen and is expected to continue falling over the next five years Increasing input costs less revenue Increasing external competition (canned fruit, microwavable meals etc.) less time for going out or preparing their own meals. As a result, they choose to eat food that can be prepared within minutes (and without leaving the office). This behavior is also true when it comes to low unemployment rate (more people are employed increased business activity less free time in which to prepare meals at home or visit restaurants)

16 16 P age Hurdle: Adhering to all the federal and local laws and regulations to avoid penalty fees and noncompliance Keep maintaining competitive advantage over imported soups Hurdle: Withstanding both internal (coming from the existing industry players) and external (coming from indirect competitors) competition Maintaining profits, especially since the input costs are rising, per capita fruit and vegetable consumption is declining, and per capita disposable income is rising Hurdle: Adapting to the change in consumer dietary preferences, lifestyles and attitudes by offering better- quality foods Developing an effective advertising campaign that could change America's perception of industry products (since prepared soups are not regarded as healthy ones) Hurdle: Keeping up with the technology change (especially when it comes to competition) Figuring out a way to further reduce labor costs (through automation) 7. Marketing Mix Analysis Product The product itself is innovatory (no other major soup company offers this flavor of soup, in addition to it being organic, that is widely available in big supermarket chains). In addition, vegetarian variety of borscht (organic, without meat) would be introduced to attend to vegetarian customers tastes and Low Sodium and Fat Free varieties may be rolled out later on. Price Price would be around $2- $3. Promotion Social media for creating buzz and brand awareness will be heavily utilized. A sweepstake campaign (The I Love Borscht campaign) will be created where customers could get a chance to win a trip to Eastern Europe if they share their favorite memory connected with borscht and/or their first experience trying borscht. Print ads will be used as well There also will be various tastings at the supermarkets. In addition, Mila Kunis (who is originally from Ukraine) or Anton Yelchin (American actor who was born in Russia) could endorse the brand. Both of them have Eastern European roots, they are young and

17 17 P age adventurous. Their personalities should resonate with both of our target market segments. Place Big supermarkets, healthy food stores (e.g. Wholefoods) Innovations: Partner up with sour cream company (since borscht is usually consumed with sour cream) like Daisy Sour Cream or organic sour cream company (e.g. Horizon Organic) and cross- promote the product, partner up with Subway or Olive Garden for their soup of the day Partner up with orphanages or other charities to benefit them (say 5% of all proceeds would go to Russian or Ukrainian orphanage)

18 18 P age 8. Sample Marketing Communication pieces

19 19 P age

20 20 P age 9. References US Department of Agriculture US International Trade Commission US Bureau of Labor Statistics

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