Abstract A marketing plan incorporates many factors. Product, price, place, and promotion all need to be evaluated and researched and taken into account. The following is the marketing plan for a new oatmeal product. Marketing Plan: Oatmeal Introduction In marketing there are several parameters that can be managed in order to create a successful product line. The product, place, price, and promotion of a product line needs to meet the needs of a company’s target base. The marketing plan for a new oatmeal product will evaluate all of these factors and create a strategy to promote sales and growth.
Definition of Marketing Marketing is defined differently depending upon who is defining the word. In fact, even the American Marketing Association changes their definition from year to year (Kerin, Hartley, ; Rudelius, 2011). Marketing covers a broad area, including factors such as research, design, and distribution. Marketing involves actions to create a product or service that meets the needs of consumers and bring that product or service to a target audience. Introduction of Product/Service Oatmeal, a cholesterol lowering food, is consumed by a wide variety of consumers.
It is not ethnic, gender, age, or income specific. Oatmeal in its simplest form can be described as the old fashion oats, packaged in the classic oatmeal canister, such as that produced by Quaker Oats (Quaker, 2011). There are many other oatmeal products on the market though. Instant oatmeal is created in several flavors like peaches and cream, strawberry, cinnamon, and brown sugar. Situation Analysis — Marketing Environment Forces Impacting Product/Service . There are many environmental forces that marketing professionals must take into consideration when designing a marketing plan for a product.
Social, economic, technological, competitive, and regulatory environments must be evaluated as they relate to a specific product or service (Kerin, Hartley, ; Rudelius, 2011). The social environment in the United States has gone through many changes over the past decade. Concern for the environment, being healthy, and the idea of getting back to basics has grown rapidly. The social environment has gone from holding value in big, gas-guzzling cars and eating enormous portions to the priceless idea of simplicity. As a whole, our society has made efforts to spend less, become more environmentally conscious, and eat healthier.
The fact that more consumers are making an attempt to make better choices concerning their diet could be used to the advantage of companies producing and marketing food products. The benefits of oatmeal are widely acknowledged, as it has proven to be a heart healthy, cholesterol-lowering, and filling food. Thusly, marketers do not have to stretch the truth or create a complex plan in order to use the state of their social environment to their advantage. The factors that make up an area’s social environment include the population’s age, gender, ethnicity, and income. Obviously this will vary depending upon the location.
For example, the number of elderly in the South are increasing, namely Florida. The elderly, often under instruction from their physician(s), pay more attention to their heart health. A company producing oatmeal could use marketing tools in these areas that target this segmentation base. The competitive environmental force, referring to similar firms offering comparable products that could meet the needs of a specific market, can threaten a company’s success (Kerin, et. al. , 2011). Oatmeal companies are no exception. Oatmeal companies include Quaker Oats, McCann’s, and Glutenfreeda (offering gluten free oatmeal products).
The most popular oatmeal product is oatmeal breakfast cereal, but there are other products such as nutritional bars, cookies, and oatcakes. This increases competition in the oatmeal industry. In fact, even Aunt Jemima is getting into the oatmeal game with oatmeal pancakes in August, 2011 (Cerra, 2011). Companies could combat the threat of competition by predicting new trends before other firms. Pricing is also a major factor in the competitive force (Kerin, et. al. , 2011). Oatmeal is a product that doesn’t warrant much research or consideration before its purchase.
Therefore, unless consumers are convinced that one oatmeal product is worth paying more for than another, consumers may purchase the oatmeal with the lowest price. Companies need to be vigilant of this and keep their prices competitive; not so low that they are no longer profitable and high enough that the product’s quality is recognized. Advances in technology have touched just about every part of our daily lives. The consumers get their news, communicate with their friends and family, and spend their leisure time have all changed because of technology.
In marketing, these changes should be viewed as an opportunity, not a threat. The amount of time adults are spending online is increasing tremendously. Websites such as Google, Facebook, Twitter, LinkedIn, and You Tube, are advertising gems that could reach many target groups. Mobile apps are also becoming overwhelmingly popular, bringing about a new marketing opportunity. In fact, according to the analytics firm Flurry, users are spending 9% more time using mobile apps than they are browsing the internet (Rao, 2011).
Flurry’s June publication released the latest numbers, showing that users spend on average 74 minutes per day on the internet and 81 minutes per day using mobile apps (Rao, 2011). Mobile apps such as Pandora, Angry Birds, and Weather Bug, bring about a perfect opportunity to present a company’s message directly to its intended audience. Marketing Strategy: Target Market(s) ; Positioning Consumer buyer behavior is broken down into a process with five steps: problem recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior (Kerin, et. l. , 2011). Consumers pass through each of the five steps, more or less, before making a purchase decision. Depending upon the level and/or intensity of these stages, consumer behavior is categorized as extended, limited, or routine problem solving (Kerin, et. al, 2011). The purchase decision process for oatmeal products is not as involved as it is for products such as cell phones, cars, furniture, or even clothing. For many consumers, their problem recognition begins with them realizing they are out of oatmeal.
Being a healthy food, however, there is the opportunity to help solve consumers’ problems involving health and dieting. The most crucial step in this process for oatmeal products is alternative evaluation, in which the consumer compares brands for quality, benefits, and value. The purchase decision making process involved with consumers’ choice to purchase oatmeal involves routine problem solving. There is generally little effort made seeking external information and there is no significant financial commitment associated with its purchase.
The marketing strategy for introducing a new oatmeal product will involve the use of several different marketing tools. In order to reach different types of people, marketers put them into groups, also referred to as segmentation bases (Kerin, et. al. , 2011). Each market segmentation base has similar needs and should respond similarly to the marketing efforts of a firm (Kerin, et. al. , 2011). The market segmentation bases that could be targeted in the marketing of a new oatmeal product include health conscious consumers, children and mothers, and the elderly.
Target: Health Conscious. Firstly, health conscious consumers are increasing in numbers in the United States as our society as a whole turns its attention to being healthy. This could be used to the advantage of marketers developing a marketing strategy for a new oatmeal product. The needs of a health conscious market include the quality of their food products. By using the contents of the oatmeal product as a marketing tool, this segmentation base could be targeted. Additionally, the health benefits of the product could be used to entice this group.
Oatmeal promotes heart health and lowers cholesterol, a benefit this group would be looking as they shop for food products to create a healthy diet. Target: Mother and Child. Targeting children in marketing is especially important. Research has shown that children have a strong influence of the purchases of their parents or caregivers (Kerin, et. al, 2011). A new oatmeal product that appeals to children could be very profitable for a company. The needs of this segmentation base includes taste. Children are, more often than not, picky eaters.
Additionally, this group is very receptive to attractive, kid-friendly packaging. Children enjoy hands-on activities. An oatmeal product that allows a child to pick two flavors to create a new combination of flavors which they could mix themselves could be marketed towards children. Using characters that children recognize in advertising and on product packaging can be a very effective way to sell products. When marketing a product that is health for children, it is equally as important to reach mothers. There is value in a product that a mother can feel good about feeding their child.
Taking the position that the oatmeal product is not only good for them, but is also beneficial to feed them in the morning before school, is bound to yield positive results. Target: Elderly. This segmentation base is growing rapidly as the “baby-boom” generation ages therefore has the potential to bring in a substantial amount of profit. The elderly are similar to the health conscious segmentation base, in that many consumers in this group receive instructions from their physicians to add certain foods to their diet to promote health. This group differs slightly, however, in that many elderly consumers are on a fixed income.
Therefore they have an additional need–the benefit of expense (Kerin, et. al. , 2011). A new oatmeal product geared towards the elderly would include marketing products such as commercials showing elderly consumers living an active, healthy lifestyle. Product/Service Overview and Strategies to Consider As customers make their way up and down the aisles of their favorite grocery store, they have many choices to make. Purchasing oatmeal involves limited problem solving. Still, there are factors that may go through the consumers head before they choose which oatmeal they will purchase.
They may consider previous experiences with a particular brand, the price of the product, the amount of money they have available to spend, or even think about an advertisement they saw for a brand (Kerin, Hartley, ; Rudelius, 2011). While having enjoyed a brand’s product in the past is one of the most powerful persuader when it comes to which product a consumer will choose, consumers may still be swayed by other variables. The product’s packaging needs to attract the consumer, resulting in their choice to purchase the new oatmeal product. Attractive colors, fonts, and design will draw consumers towards my brand of oatmeal.
Additionally, since children often influence parents to purchase products, one of the products in the new product line should appeal to children. The packaging should reflect this, using kid-friendly designs, and pictures they will respond to. Additionally, the quality of the product must be excellent and consistent to keep loyal customers coming back for the particular brand of oatmeal. The strategy to produce different types of oatmeal products in the new oatmeal product line so that there is a type that appeals to different types of customers is important.
By creating products that meet the needs of several segmentation bases, the effectiveness of each of these marketing efforts can be evaluated. Having different products will be beneficial and can be used for comparative analysis. Changes to the product line or marketing techniques may need to be made in order to increase the potential for profit. Customer satisfaction is also an important aspect in the marketing strategy for the new oatmeal product. Special attention should be paid to consistent quality that is superior to other brands.
There should be a department dedicated to answering customer’s questions and concerns, and taking comments and complaints. The phone number to reach customer service department should be clearly labeled on every package, along with a statement of intention to keep every customer satisfied and to welcome any comments or questions. This is very important because as a product requiring limited problem solving, oatmeal is often chosen based on a favorite brand and previous satisfaction. Pricing Strategy Pricing objectives and constraints, and the estimated demand for the product must be evaluated.
The firm must take into account the cost of raw materials, manufacturing equipment, employee salaries, marketing, and other overhead, such as utilities (Kerin, et. al. , 2011). In the pricing strategy for the new oatmeal product, one of the main objectives is to create a product that is profitable in the long-run. While maximizing profits over the next two quarters is important, the price of the product at its release will be a promotional, lower price to entice customers into trying the product. Therefore, in the pricing strategy, expected profits over the next two quarters will be lower than the preceding quarters.
So long as our strategy brings in customers during the first two quarters, these customers, as well as new customers, will continue to purchase the product after the period of the promotional price, increasing profits. There are several things that must be taken into account when determining the price of the new product. Firstly, the quality of the product must be taken into account. Consumers must see value in our oatmeal product. In order for our product to be seen with a high level of value, the ratio of the product’s perceived benefits and the product’s price must in balance (Kerin, et. l. , 2011). Consumers that enjoy a high quality product are often willing to pay a higher price because the perceived benefits are higher (Kerin, et. al. , 2011). The pricing strategy for the new oatmeal product will need to be elastic. The market for oatmeal is considered an oligopoly, meaning there are several products which are similar (Kerin, et. al. , 2011). Prices for boxes of oatmeal packets, similar to the new product, vary from $3. 29 to $5. 15, according to Google Shopping (Google, 2011).
The new price shouldn’t be set so low that there is no profit at all, but not so high that customers are unwilling to purchase it. The initial price should be set at a little below the average cost of similar oatmeal products. This is not set in stone, however. The pricing strategy should allow for changes if the product does not meet the expected sales volume. Additionally, the pricing strategy should include increasing the intervals at which financial statements are evaluated. In the event that the product is not selling at the volume expected to attract customers to the new product, the price should be reduced.
This may need to be done more than once during the first two quarters, but should not drop lower than the break-even point. Distribution Channels Marketing channels of distribution are extremely important in marketing as it helps a product reach potential and regular customers. Through intermediaries, or middlemen, producers let their product or products flow from them to the customer (Kerin, 2011). Intermediaries add value by making the distribution process more efficient, effectively minimizing the number of contacts required to distribute a product (Kerin, 2011).
In general, food products change hands several times before reaching the consumer. Oatmeal is a food product that has more distribution options than perishable foods, such as fresh seafood or vegetables (Beaman ; Johnson, 2006). The distribution path for food products begins with the manufacturer, then goes to a broker. The broker acts as a representative for the company manufacturing the product, facilitating sales between manufacturers and retailers (Beaman ; Johnson, 2006). The broker does not actually physically receive or ship the product.
From the broker, the product is sent to food wholesale distributors. The distributor receives the product in preparation for distribution to retailers, the last step in the distribution path. Retailers are responsible for stocking and managing shelves to bring the product to the consumer (Beaman ; Johnson, 2006). The new line of oatmeal products will end up at several retailers, including grocery stores and super department stores. Walmarts that have a grocery department are an example of super department stores. Grocery stores like Safeway, Giant, and Bloom will carry the new oatmeal product.
Before introducing the new product to major retail stores, the product should be tested in small, local retail stores. Consumer response on a small scale will be used to make adjustments to the new product’s packaging, pricing, and even the product itself. After this, the firm will hire a broker who will assist in the launch of the new product for a fee. Brokers on average take around three to five percent commission (Beaman & Johnson, 2006). The broker may also aid in choosing an appropriate distributor; one that has accounts with retailers with which the new product should be sent to.
Integrated Marketing Communications Many communication tools are used in marketing, including advertising in many forms, sales or other promotions, and public relations (Kerin, et al, 2011). These activities are often the responsibility of one or two departments within a company. The advertising department, for example, is responsible creating and managing for various forms of advertising; and the customer service department is responsible for promoting relations with customers. If these departments do not work together in an effort to promote a new or existing product, there may be inconsistencies.
The coordination of these activities is referred to as integrated marketing communication, or IMC (Kerin, et al, 2011). Promotion Mix Strategy Combining advertising, public relations, direct marketing, and sales promotions, often yields better consumer response than using only one of these tools. The technique of using several communication tools to promote a product or service is referred to as the promotion mix (Kerin, et al, 2011). Several techniques will be used in promoting the new oatmeal product line. Advertising will be done through several media outlets including television and the internet.
Mobile applications are used more and more, many of them with advertising banners. This innovative technique may be beneficial when used to advertise the new oatmeal product. In addition to advertising, sales promotions and public relations will be used for the new oatmeal product line. Oatmeal is a product that is not new to grocery stores or consumers. The channel flow strategy that would best fit the new oatmeal product is the push strategy. Consumers expect that their retailer will carry several types of oatmeal products, therefore it is not necessary to direct the promotional mix towards the consumer as the pull strategy suggests.
The company would benefit from convincing retailers to carry the new product. Then, through advertising, sales, and public relations, consumers should be swayed to purchase the new oatmeal product. Message Strategy The new oatmeal product contains quality, whole grain oats. It has many health benefits including promoting heart health and lowering cholesterol. It is a filling breakfast that keeps children full so they can focus at school. These benefits are the main message for the product. The new oatmeal product is the quality breakfast that you can feel good about giving your child.
In your older years, it helps keep you active, healthy, and feeling young. Children love it, and love to make it. While the wording will vary depending on the segmentation base being targeted, the message is the same. The new oatmeal product is a quality, wholesome, and healthy food with many benefits. Promotion Tool #1 Public relations is important to help create an image for the company and the new product that is favorable to customers, potential customers, suppliers, and employees of the company itself (Kerin, et al. , 2011).
Being a healthy food, the new product will be presented to potential customers at events. Family festivals bring opportunities to be present and reach the target audience. Charity events such as the Susan G. Komen Race for the Cure are perfect events to give samples of the new product and fuel the runners and walkers before the race. It would also give the company a positive image to donate a portion of its profits to the charity it is partnering with. Promotion Tool #2 Promotional sales will help boost sales of the new oatmeal product.
As a product with limited decision making required, consumers often choose the better deal or lower priced item. In order for consumers to try the product, the price should be lower than that of other similar products. Once they try and like the product, their post purchase behavior should be monitored. In favorable conditions, the customer would purchase the same brand because they were satisfied with the product in the past. An introductory sale shouldn’t be the only promotional sale though. Periodically the product should be placed on sale to encourage or spark sales.
Promotion Tool #3 Advertising online is advantageous to any company is this technological age. Sites like Facebook, LinkedIn, and Twitter can reach a wide base of consumers. Busy mothers and health conscious consumers can be reached by advertising through sites they are likely to spend time on. Specific mobile applications will be targeted to reach target audiences. Pandora, for example, an internet radio application, is used by many people who work out. Their gym workout could be used as an opportunity to present images and messages from the company promoting the new product.
Conclusion Through addressing all four marketing factors–product, place, price, and promotion–an effective plan will create better circumstances for success. The complex marketing strategy for the new oatmeal product line will reach several target audiences. By using relevant methods of communication, consumers can be reached and convinced that the new product meets their needs. References Beaman, J. & Johnson, A. (2006). A guide for new manufacturers: Food distribution channel overview. Retrieved from http://library. state. or. us/repository/2007/200701021517172/ index. pdf.
Cerra, A. (2011). Aunt Jemima brings oatmeal pancakes to the breakfast table. Retrieved from http://www. drugstorenews. com/article/aunt-jemima-brings-oatmeal-pancakes-breakfast-table. Kerin, R. , Hartley, S. , ; Rudelius, W. (2011). Marketing (10th ed. ). New York: McGraw-Hill Companies, Inc. Rao, L. (2011). Time spent on mobile apps has surpassed web browsing. Retrieved from http://www. socialnetworkingwatch. com/2011/06/time-spent-on-mobile-apps-has-surpassed-web-browsing. html. Quaker. (2011). Retrieved from http://www. quakeroats. com/about-quakeroats/content/quaker-faq. aspx.