BSB 126 MARKETING PLAN

NAME: GABREILLA MCSWEENEY STUDENT NUMBER: N9422765

TOTAL WORD COUNT 1,649

I. Situation Analysis

Lewis Roads Chocolate Milk has taken the New Zealand market by storm by launching a

quality natural milk product by forming the “perfect marriage” between Lewis Roads full

cream milk and Whittaker’s 5 Roll Refined Milk Chocolate to enhance the flavour and taste

beyond anything else in today’s market (Astley, 2014).

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

Australia.

The Key Macro Environment factors for this product are demographics and social trends

with competitors being the most influential macro – environment forces to be considered.

Demographics allow comparison between generational cohorts, gender and income allowing

Lewis Road to easily identify and target their specific audience. Social trends shape

consumer values and influence the purchasing decisions of the individual. By understanding

their customers’ social trends, Lewis Road is provided further insight into their customer

base and future product consumption and development. Appendix 1 shows milk sales by

type (million litres) over a number of years. The trends for flavoured milk have been

upwards with fresh flavoured milk increasing from 7% to 10%. (Dairy Australia , 2014)

The Flavoured Milk Industry in Australia consists of many brands of flavoured milk. Lewis

Road will need to consider this extensive competition when entering into the milk industry in

Australia. When reviewing competitors, Lewis Road must consider price, packaging, flavours,

size and varieties. Appendix 2 highlights the Flavoured Milk Industry competitors currently in

Australia.

Appendix 3 is the SWOT analysis that was conducted and revealed a variety of strengths,

weaknesses, opportunities and threats for the introduction of Lewis Road Creamery’s Fresh

Chocolate Milk to the Australian market. One of the major strengths is that Lewis Road has

combined with Whittaker’s Chocolate. Both companies are well known and provide quality

premium products. A major weakness is that Lewis Road only has one flavoured milk

available at present. However, this presents an opportunity for further development of milk

flavours. Another weakness is that Lewis Road has previously struggled to keep up with the

customer demands for their chocolate flavoured milk.

II. Marketing Goal

To attain 15% market shares of Lewis Road’s Creamery Chocolate Milk the Flavoured Milk

Market, in Australia within two (2) years of launching the product.

III. Marketing Strategy

Target Customers

The Flavoured Milk Industry target market has historically been males aged 18 to 24 years

(WordPress, 2012). Lewis Road produces premium products aimed at a niche group of

sophisticated and older people in New Zealand (Freya, 2014) . By considering quality over

quantity, Lewis Road Creamery is confident the drink will appeal to people who do not

consider themselves drinkers of flavoured milk and will offer a more sophisticated and

natural range of flavoured milk (FMCG, 2014). This drink will appeal to people who do not

consider themselves drinkers of flavoured milk because it is made from New Zealand’s

organic milk. The milk is permeant free, Palm kennel expeller (PKE) Free and then combined

with real and rich chocolate unlike most flavoured milks. A lot of milk companies add

permeant free back into their milk which essentially waters it down, customers want their

milk to be as close to the product which comes out of the cow as it can be, and that is what

Lewis Roads fresh chocolate milk achieves (Wendyl, 2014) .

For Lewis Road Creamery’s Chocolate Milk to be a success and for them to meet their goal,

the target market for Lewis Roads Fresh Chocolate Milk has to be segmented to focus on a

particular market. Table 2 below displays the target customer profile for Lewis Road

Creamery’s Chocolate Milk.

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

Gender Female

Age/Demographic 27-35 years

Geographic Brisbane, Australia

Occupation Mother- working professional

Hobbies Enjoys cooking, lifestyle shows and social

media

Marital & Family Status Married with Children

Status Middle class

Income Higher income

The segmented market for Lewis Roads Chocolate Milk is primarily white collared

professional females aged 27-35 years earning a higher income with their children being the

secondary market. Since the chocolate milk is sold at a premium price, children and

teenagers may not be able to afford the milk themselves but by targeting mothers they

provide a spin off to the other products as well as increasing the volume of sales. Many

females in average households are keen to purchase a Dairy product they think is a superior

quality. It can be seen as a family treat or be given to guests or used for cooking.

Value Proposition

Lewis Roads Chocolate Milk is the best product for mothers searching for a quality product

for their family as it offers a superior flavour without the additives and excessive processing

found in Moove flavoured milk. Moove consists of added sugars and cocoa powder instead

of chocolate.

Positioning statement = Combined with Whittaker’s’ 5 Roll refined creamy milk chocolate,

Lewis Road Creamery delivers a delicious velvety chocolate milk like no other available

within the Australian market.

Lewis will be the first in the market with these benefits and therefore gain an advantage

(Grewel, 2015, p. 276).

Despite the fact Lewis Roads Chocolate milk will be more expensive than Moove flavoured

milk, customers will be willing to pay more because they recognise the product consist of

real chocolate and premium milk.

Lewis Roads Organic Jersey Milk is the first 100 percent Jersey milk to be available. Jersey

milk is renowned for being richer and creamier in taste and texture as well as an organic

whole milk that is free from permeate and palm kernel expeller. It delivers a top quality

product that surpasses standard milk with the benefit of being a healthier choice (Scoop

Media , 2013). Both the primary and secondary target markets would benefit from this as

females are often health conscious and in search of an alternative for their children from the

unhealthy processed milks currently on the market. The target customer perception of Lewis

Roads Chocolate Milk and Moove’s Chocolate Milk is represented in figure 1.

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

Milk

Price

(Low)

Price

(High)

Flavour (Processing – add in products)

Flavour (Natural ingredients)

$3.20 = 600ml

$2.55 = per L

$3.78 = per L

$3.69 = 300ml

$6.49 = 750ml

IV. Marketing Tactics

Product

Lewis Road will launch with a 300ml and 750ml bottle in fresh Chocolate Milk flavour (Astley,

2014).

In order for customers to have variety, new flavours will need to be established. By

producing and introducing more flavours Lewis Roads customers will have a wider range of

choice and future sales will increase. To develop their flavoured milk range they will need to

consider current competitors range and expand their premier quality range. Further flavour

development would enable Lewis Road to explore compatible companies with natural

flavours as undertaken with Whitakers. Co-branding could be explored with Capilano to

combine Australia’s favourite honey to create a natural quality flavour like their chocolate

flavour (Grewal, 2015, p. 253).

Price

The pricing strategy for Lewis Roads Chocolate Milk is crucial. It is built around the 5 critical

components of pricing including competition, costs, company objectives, customers and

channel members.

The current cost price will need to be monitored to ensure that profits are retained whilst

maintaining a quality premium price point. Enhanced by quality flavours the product will

remain in the niche high end market. This pricing structure is essential for further

development of high end flavours sourced throughout Australia. Current pricing also aligns

with the company objectives of maintaining their products as “tastes like nothing else on the

market”. This would be impossible if they resorted to cheaper additives and flavours. Though

there are brands like Norco and Maleny Dairy that offer quality milk at higher prices, Lewis

Road offers a superior product with a more sophisticated look. Accordingly it will be sold in

300ml for bottles for $3.69 and a 750ml bottles for $6.49 (Astley, 2014).

Distribution

In New Zealand Lewis Roads currently distributes their fresh chocolate milk through the

major supermarket chains and speciality grocery outlets. in New Zealand. They also supply

the product through a national fuel station company.

In Australia, Lewis Road will intended to follow the similar distribution system that it has in

New Zealand and will look to distributed their chocolate milk via the major supermarket

chains in Australia being Coles and Woolworths. It will also to distribute the product at

higher end groceries such as the Standard Food Market Company that supplies high end top

quality produce (Must do Brisbane , 2014).

In the initial stages, the product will be shipped in bulk from New Zealand and packaged in

Australia. Once sales of the product reaches a target level, Lewis Road will then look to

engage an Australian processer to make the product or will look to establish their own

processing facilities in Australia.

Promotion

The promotion objectives for Lewis Roads Chocolate Milk are to be able to sell the chocolate

milk in Australia and gain a greater customer base whilst keeping up with customer demand.

Lewis Road has AUD$ 50,000 to spend on an integrated marketing communications (IMC)

plan in order to achieve the promotional objective (Grewal, 2015, p. 424). Lewis Road must

employ a variety of marketing techniques to ensure the right message is communicated

through the right medium and to the right audience (Olenski, 2014). Table 2 provides an

example of the objective and task method that Lewis Road will use for their Chocolate milk.

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

Objective Task Media Cost

For Lewis Roads to be able

to sell their Chocolate Milk

in Australia and gain a

greater customer base

whilst keeping up with

customer demand

Negotiate with Woolworths

to advertise a point of sale

display in 25 stores to have

free taste testers for

customers to taste and also

have bottles for purchase

available to customers.

Cost per store - $2,000

The advertising method is both a pull and push strategy. By using this form of advertising it

will be informative advertising for Lewis Road Creamery and customers. It will help create a

level of brand awareness whilst moving the consumer through the buying cycle to make a

purchase (Grewal, 2015, p. 435). By having free sample taste testers it uses persuasive

advertising to motivate consumers to try the product before they purchase and therefore

help influence their purchasing decisions. It will also allow Lewis Road to judge how

consumers in Australia respond to their chocolate milk compared to consumers in New

Zealand. The above task will be complimented with a national media commercial that will

reach a wider customer base.

V. References

BibliographyAstley, M. (2014, October 30). Lewis Road Creamery ups choclate milk production 4000%

after 'unprecedented demand'. Retrieved April 27, 2015, from DairyReport.com: http://www.dairyreporter.com/Manufacturers/Lewis-Road-Creamery-ups-chocolate-milk-production-4000-in-a-month

Australian Bureau of Statistics. (2011). Family Composition by income comparison for parents/partners. Retrieved May 2, 2015, from Australian Bureau of Statistics: http://stat.abs.gov.au/Index.aspx?DataSetCode=ABS_CENSUS2011_T26

Capilano, Australians Favourite Honey. (n.d.). Australians Favourite Honey. Retrieved May 2, 2015, from Australians Favourite Honey: http://capilano.com.au/

Dairy Australia . (2014). Drinking milk sales. Retrieved May 2, 2015, from Dairy Australa : http://www.dairyaustralia.com.au/Markets-and-statistics/Production-and-sales/Milk/Drinking-Milk-Sales.aspx

FMCG. (2014, September 29). A match made in heaven. Retrieved April 27, 2015, from FMCG Business: http://www.fmcgbusiness.co.nz/2014/09/29/match-made-heaven/

Freya. (2014, October 19). Liquid Gold: Lewis Road Creamery and Whittakers Chocolate's Co-branding success . Retrieved April 27, 2015, from Freya Hill Eassays about now: http://www.freyahill.com/?p=851

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

le, J. (2014, October 17). Chocolate Milk craze hits Kiwi Shoppers . Retrieved April 27, 2015, from The Australian: http://www.theaustralian.com.au/news/latest-news/chocolate-milk-craze-hits-kiwi-shoppers/story-fn3dxix6-1227093878776

Lewis Road Creamery New Zealand. (n.d.). Chocolate Milk. Retrieved from Lewis Road Creamery New Zealand: http://www.lewisroadcreamery.co.nz/choc-milk

Matters, J. (2014, November 23). Sunday insight: We've all gone chocolate milk mad. Retrieved from The New Zealand Herald: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11363083

Must do Brisbane . (2014). The Standard Market Company Newstead . Retrieved from Must do Brisbane.com: http://www.mustdobrisbane.com/eat-drink-specialty-foods-gourmet-grocers/standard-market-company-newstead

New milk provides closer to farm gate taste experience . (2013, October 21). Retrieved May 2, 2015, from Scoop Brisbane Independent news: http://www.scoop.co.nz/stories/BU1310/S00725/new-milk-provides-closer-to-farm-gate-taste-experience.htm

Olenski, S. (2014, October 14). 5 Inexpensive Ways to Promote A Product Launch . Retrieved from Forbes: http://www.forbes.com/sites/steveolenski/2014/10/14/5-inexpensive-ways-to-promote-a-product-launch/

Scoop Media . (2013, October 21). New milk provides closer to farm gate taste experience. Retrieved May 2, 2015, from Scoop Business Indepent news: http://www.scoop.co.nz/stories/BU1310/S00725/new-milk-provides-closer-to-farm-gate-taste-experience.htm

Wendyl. (2014, November 23). Wendyl wants to know: Lewis Road Creamery Fresh Chocolate Milk $3.69 per 300ml . Retrieved from The New Zealand Herald: http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=11362542

WordPress. (2012, April). Pepsico . Retrieved from Product Launch : https://gregoryjhatten.files.wordpress.com/2012/04/product-launch.pdf

VI. Appendices

Appendix 1

Appendix 2 Competitor Analysis

Products Varieties of milk type (E.g. Skim, Full cream etc.)

Company that makes the product

Packaging Size Pricing Flavours

Shake n shake

Full cream, HI-LO and SkimOnly full cream for flavoured milks

Shake n Shake

Milk cartons for flavoured milk

600ml $2.89 -Vanilla-Chocolate – some vanilla added-Choc -honeycomb-Rocky road

Breaka Full Cream Milk

Breaka Milk cartons

300ml500ml600ml750ml1L2L3LSizes varies depending on the flavour

600ml = $2.80 -Chocolate-Iced coffee-Strawberry-Banana-Lime-Caramel latter (limited edition)

Moove Reduced fat milk

Moove Milk bottle and Cartons

600ml1L6 pack 1.2L

$3.20 600ml$2.55 per L$3.78 per L

-chocolate-strawberry

Oak Full Cream MilkSome light milk options and no sugar options

Oak Milk bottles and Cartons

300ml600ml750ml2l500mlSizes varies depend on the flavours

300ml = $1.80600ml = $2.79

-Chocolate-Chocolate light-Iced coffee-Iced coffee no sugar-Strawberry-Vanilla malt-Banana-Egg nog-The max choc mint-The max Molten Caramel-light chocolate- light strawberry-light banana

Dare All full creamExcept raw with no added

Dare Arabica and Robusta coffee

Milk Bottles 500ml 500ml =$2.70 -Double expresso-mocha-expresso-dare raw

sugar, 1% fat

Iced Coffee

Reduced Fat

Farmers Union

Milk Cartons

600ml $3.30 -coffee

Ice Break

Full creamNo added sugar milk

Ice Break Bottles 500ml750ml1.25L2L

500ml= $3.00750ml = $3.80

-ice break-ice break no added sugar- ice break loaded-ice break extra shot

Rush Low fat milk - 99% fat free and 30% less sugar

Rush Bottles 500ml 500ml = $3.09 -iced latte-iced chocolate-iced vanilla malt-strong iced coffee

Just Natural

98% fat free

Pauls Bottles 500ml 500ml = $2.95 -malt, honey and chocolate-iced coffee-banana and honey

Mighty Cool

Low in fat(easy for children over 3 years)

Norco Pop top plastic bottles

250ml 250ml= $1.78 -strawberry-chocolate

Classic Full cream milk

Dairy Farmers

Bottle 300ml500ml2L

500ml = $2.20 -chocolate-strawberry-Iced coffee

Appendix 3 SWOT Analysis

Strengths Weaknesses

Lewis Road Creamery flavoured milk is

more expensive per unit therefore

creating a niche market

Lewis Road Creamery and Whittaker’s

chocolate are both well-known and

respected companies

Launch of the Chocolate milk product

follows the successful introduction of the

brand’s award winning premium butters

in 2012 as well as artisan butter and

organic milks and creams in 2013

Fresh Chocolate Milk comes in 2

recyclable sizes 750 ml at $6.29 and 300

ml at $3.59

Due to the fact Lewis Road Creamery has

combined with Whittaker’s Chocolate,

both companies will be able to advertise

the product which will enhance

advertising and distribute costs

Stock shortages have already been

experienced in NZ

Consumers in Australia may prefer to

support local dairy industries and may

not wish to buy this product

Lewis Road Creamery may need to

consider changing their price structure

for Australian consumers who may be

unwilling to pay premium prices for

flavoured milk

Potential increased costs and overheads

of shipping the product and packaging in

Australia may not be worth the added

costs and eventual profits

Health conscious people may be less

inclined to purchase the product due to

the full fat content of the product

The product is only available in 1 flavour

at present

This product is more expensive than the

flavoured milks already being sold in

Australia

Opportunities Threats

Investigate future possibilities of on-line

bulk selling for the product

Opportunities for first mover advantage

in the flavoured milk industry as a more

Cost competitiveness could be

problematic as the majority of brands

within the Australian flavoured milk

industry are based on commodity

prestige quality product

Establishment of the product in an

overseas market may increase the

likelihood of sales for the company’s

existing and future products e.g. butter,

ice-cream

Consider making the Fresh Chocolate milk

in different flavours and also in a low fat

milk form

Customers who develop loyalty towards

the new Fresh Chocolate Milk will be

excited about the prospects of new ice-

cream products that are to be developed

As Lewis Road Creamery would be

targeting the Australian market there will

be a larger consumer base

pricing.

Brand loyalty already exists to a number

of brands in the flavoured milk portfolio.