Marketing – Frucor Beverages

Assessment Task 1 – Marketing: Devise a Marketing Plan for a business of your choice – Frucor Beverages Ltd Marketing plan for Frucor Beverages Ltd Executive Summary

An executive summary provides a brief description of current issues facing the business. It provides an overview of the goals and strategies that are to be featured in the marketing plan. A short summary of the main recommendations to be presented in the plan is also provided.

My name is ________, and I am a Marketing Consultant for ABC Marketing. I have been contracted by Frucor Beverages Ltd to devise a marketing plan for their brand ‘V Energy Drinks’, which will coincide with the opening of a specialised, 24-hour ‘V’ branch in Moore St, Liverpool, along with a brand new product line. This specialised V store will only sell energy drinks, as part of a new marketing strategy. With this marketing plan, Frucor Beverages Ltd aims to increase its current market share, particularly among young adults and older generations. It also aims to increase overall revenue, and to build a better and more recognisable brand in the Australian community (brand awareness). Frucor Beverages Ltd is aiming to make V synonymous with energy drinks, and to strengthen its position as the market leader in the energy drink market. This marketing plan is designed to achieve the goals outlined by Frucor Beverages Ltd. The following marketing plan will include: a situational analysis, market research, establishment of market objectives, identification of the target market, development of market strategies, implementation, monitoring and controlling, and to produce a new product line, aimed at both young adults and adults alike. A new product, aimed at young adults called ‘V Pulse’, will be marketed exclusively to people aged 13-17, and to people who are conscious of the negative effects of energy drinks. The product will consist of the same great taste of the V energy drink, but with substantially less amounts of guarana, caffeine, taurine, and food acids, to create a more suitable product for children under the age of 18, and energy drink sceptics. Regular or excessive consumption of V Pulse will not have any adverse health effects on consumers, therefore children and adults of all ages will be able to purchase the product without worrying about negative side effects of large energy-ingredient consumption.

Another new product, called ‘V Shock’, will be marketed to people aged 18-45, targeting businesspeople and others who need that energy boost throughout the day. This product will too be similar in taste as the original V energy drink, but rather than less amounts of energy ingredients, the product will contain more (approximately double). The product will be targeted to those who need an energy kick during the day. Due to the high amounts of energy ingredients, consumers will be cautioned to have a maximum of 500 mL per day, to negate any negative impact from regular consumption. Bold, large labels will be placed on all V Shock drinks, as well as on all promotional material, i.e. posters, TV advertisements, billboards etc., in order to ensure consumers are aware of the effects of high energy-ingredient consumption. These new products, along with a strategic marketing plan, will increase the market share, revenue, and brand awareness of the V product.

Purpose of the marketing plan To provide an operational marketing plan that will coincide with the new product line, and to increase the overall revenue, market share, and brand awareness of the V range of products.

Description of the business Frucor Beverages Limited is a private Australasian beverage company, founded in 1962, and headquartered in Auckland, New Zealand. It was acquired by Suntory of Japan in October 2008, from its previous owner Danone of France for over €600 million. Frucor is the market leader in energy drinks throughout Australasia and the second-largest non-alcoholic drinks company in New Zealand. Frucor employs more than 900 people across New Zealand and Australia, and its brand portfolio not only includes the V energy drink, but also fruit juices, fruit drinks, energy drinks, waters and soft drinks. The company is well known for its V energy drink launched in 1997. In 1999 Frucor became the exclusive bottler for Pepsi products in New Zealand. In 2000 Frucor launched V in the UK and Ireland manufactured in the Netherlands. In 2001 Frucor acquired the Australian fruit juice company Spring Valley.

The needs the business will satisfy The benefits sought by customers in an energy drink can be divided into three distinct categories. Customers associate energy drinks with:

• Energy – as obvious as it sounds, consumers purchase energy drinks to give them a boost throughout the day. The V energy drink is completely marketed around the “energy boost” aspect of the drink, and as such, customers associate the product with revitalisation, and performance improvement.

• Thirst – consumers purchase energy drinks, or drinks in general, in order to quench their thirst. The refreshing look and taste of V energy drinks indicates that not only is it an energy drink, but it can also be consumed as a way of relieving one’s thirst.

• Taste – consumers associate the V energy drink with the refreshing taste of guarana, taurine, and various berries. Consumers purchase the V energy drink, not only for the energy boost and thirst factors, but also because it simply tastes good, which is something any drink must achieve to satisfy its customer base.

V energy drinks achieve these objectives at an outstanding level, and this marketing plan will only seek to improve the energy, thirst, and taste aspects, of the V product line.

Products and Services the Business Will Offer to Satisfy These Needs Frucor Beverages Ltd will:

• Offer a new variety of V drinks, to satisfy consumer tastes on a wider scale.

• Open new, specialised 24-hour branches (with the first in Liverpool), to provide an endless amount of V energy drinks, at any time.

• Negotiate deals with other businesses, so that more locations will sell the V products. This provides easier access of the V products, which will no doubt boost revenue, brand awareness, and market share.

• Offer friendly and prompt service.

• Sell V mugs, offering customers cheaper refills, and creates a better business-consumer relationship.

• Promote a more environmentally-friendly business, including the inception of reusable mugs, as well as more efficient energy use in creating the V energy drinks and cans.

• Various payment options, including EFTPOS and major credit cards.

• By achieving these goals, consumers will have a much better experience when purchasing, and consuming V energy drinks. More locations, a wider variety, and environmentally-friendly practices, will achieve a greater satisfaction for the consumer.

Competitive Advantage Frucor Beverages Ltd’s competitive advantage is derived from a number of individual factors including:

• The refreshing and punchy taste of the drink gives it an advantage over other energy drinks, that are bitter or unpleasant in taste.

• Due to the new, wider variety of energy drinks available, the V energy drink will appeal to people of all ages, not only those old enough to drink it.

• Specialised branches that will open in various locations across the nation, will give the V energy drink an advantage over other energy drinks, as specialised branches are the first of its kind in Australia.

• Due to the fact that more locations will now offer the complete selection of V energy drinks, consumers will find it more convenient to purchase the products.

• Specialised V mugs will give customers a cheaper and more efficient way of consuming the V energy drinks.

• Consumers who purchase a V mug will be open to receive refills at any specialised stores, for a lower price, increasing customer loyalty.

• Being the current market leader for energy drinks in Australia, V is highly accepted by the majority of Australians.

• The high-awareness of the V brand and prime marketing (including all forms of advertising) make consumers more inclined to purchase the V energy drink over other options.

The brand awareness and strategic marketing of the V energy drink, as well as specialised branches, more locations, and a wider variety of energy drinks, shows that V has a sizable competitive advantage in the energy drink market.

Sustainability of the Competitive Advantage Sustaining the competitive advantage V currently controls, involves keeping the good aspects of the product – as well as the marketing – intact, and changing what doesn’t seem to be resonating with the consumer market. A periodic change of current products, or introduction of new products (as seen with V Pulse and V Shock), as well as a change in marketing campaigns, helps sustain the current competitive advantage, as consumers will have an image of the V brand as being fresh, up-to-date, and contemporary, which will incline them to purchase the V product. Keeping the competitive advantage means doing better than the existing competition; Frucor Beverages Ltd, and the V brand, achieve this by:

• Changing or introducing new products to keep the brand fresh and exciting (as stated above).

• Providing a wider variety of products that resonates with more consumers, in order to increase the market share.

• Opening specialised branches, to show consumers that Frucor Beverages Ltd is dedicated to providing its customers with better and more convenient service than its competitors.

• Changes in marketing campaigns; advertising is crucial to maintaining the competitive advantage, and the V brand cannot rely on previous campaigns and become complacent; marketing campaigns must change in order to keep current customers interested in the product, as well as attracting new customers.

Mission Statement To provide a refreshing and tasteful energy drink that appeals to a large demographic.

Market The energy drink market has slowly become more and more competitive over the past few years. In 2003, the V energy drink had a market share of 53% in Australia. Since then, V has managed to sustain the market leader position; however, many energy drink brands have risen to prominence, and have proven to be tough competition for V as a brand. The main competitors in the energy drink market include:

• Red Bull – by far the biggest competitor, being a mainstay in the energy drink market since its inception in 1987.

• Monster Energy – introduced five years after the V energy drink, Monster Energy is another major competitor in the market

• Rockstar – another major competitor, although criticisms of the product’s caloric content has negatively impacted its growth

• Mother – one of the main competitors in the market, Mother’s relaunch in 2008 proved to be successful among consumers, and has proven to be a tough competitor.

Situational analysis SWOT

The first key element to a situational analysis is the analysis of a business’s performance, through its strengths, weaknesses, opportunities and threats. A business can determine how well their business is performing by examining and determining these factors, which clearly outline what the business is doing well – strength, what the business can capitalise on – opportunities, what the business can improve on – weaknesses, and what the business needs to be wary of and must avoid – threats. By outlining these core aspects, a business’s success can be projected, and controlled.

Strengths A business’s strengths are what they are doing well in. It could be any aspect of the business’s operations that are performing at a high level, from customer service to product quality, to brand awareness and profit margins. Frucor Beverages Ltd is a high-performing business, which is evident in its success through its product line. The V brand has many strengths, including:

• Market share leader in the energy drink market – V energy drinks have the highest market share of all energy drinks, which is a definite strength. Being the market leader indicates that the majority of consumers prefer your product compared to competitors’ products, which is perhaps the most important strength the V brand has.

• Profit/revenue

• Brand awareness – the V brand is very well known

• Intensive distribution of its products – V energy drinks are located in practically every store, which boosts sales as well as brand awareness

• Mass market approach of V products – there is only one V drink, which can be beneficial when marketing. Consumers are not bombarded with choices, but are rather provided with a single drink of a high standard. This can make marketing simpler, as only one product needs to be advertised, and it can be advertised to everyone, not just one group in society.

The situational analysis provides the business with an opportunity to examine its current position with the market. The business will examine such areas as:

• The market share of its product

• Future trends within the market

• Strategies used by competitors

• Changing consumer tastes and preferences

There are two key elements to a situational analysis when presenting a marketing plan:

• SWOT

• Product lifestyle

• Ability to market through digital media – not many companies can afford to advertise on TV and on the internet, but Frucor Beverages Ltd certainly has enough finances (thanks in part to the V energy drink) in order to allow consistent marketing of its products.

• Multiple forms of packaging – V energy drinks come in various forms, including aluminium cans, glass bottles, and PET bottles (recycled plastics). This appeals to a variety of consumers, and allows them to purchase the packaging that best suits their lifestyle/activities. If a consumer is concerned about the environment, they may purchase the PET bottle, etc.

Weaknesses A business’s weaknesses can be quite harmful to a business and its success. Therefore, it is important that a business is able to take a step back, analyse its own weaknesses, so that improvements can be made to better the business and its products. If a weakness is not rectified over a long period of time, it can dramatically reduce sales and product performance in the market, and ultimately cause cessation of the business. The V brand has some weaknesses that can be improved upon, or rectified, including:

• Stale marketing campaigns – over the past few years, branding of the V energy drinks has changed very little, and as a result, marketing campaigns have changed minimally as well. Although the V energy drink is performing well in terms of sales, the marketing campaign still needs to be changed periodically, so that the consumer doesn’t become bored with the advertising, and consequently, bored of the product. Marketing campaigns need to be changed every so often in order to ensure the brand is not seen as stale or stagnant.

• Extremely limited product line – although above it was said that this can at times be a good aspect of a brand, it can also impact quite negatively on sales. Although the one product is marketed to everyone (i.e. a mass market approach), it most likely will not appeal to everyone in society, and this is where product differentiation is needed to bring in more consumers and to increase the already exceptional market share. This marketing plan will introduce new products, so this weakness will most likely be resolved in the very near future.

Opportunities The opportunities a business has to expand or improve its business can be crucial for success. This is why it is imperative that opportunities are clearly outlined so that they can be capitalised on. The opportunities the V brand has include:

• Opening specialised branches solely to sell and promote V products – one aspect of this marketing plan is that it will introduce specialised branches that sell only V products; in a way, this is capitalising on an opportunity that has not yet been explored in the market.

• Introducing a new product line – the V brand has an opportunity to introduce a new product line through this marketing plan.

Threats Threats of a business can be detrimental to its operations, and subsequently its success. A business’s threats need to be determined so that they can be avoided. The threats for the V brand include:

• Four direct competitors in the market – as stated before, Monster, Mother, Red Bull, and Rockstar are all direct competitors to the V energy drink. The competitors are all major brands which are definite threats to the business. At any time, one of the brands can take over V’s position of being the market leader; therefore, the V brand needs to be wary of its competitors/threats.

• Changes in consumer tastes and preferences – consumers may eventually change what they desire in an energy drink, which can be a threat to V’s success. Changes in taste, or even consumer awareness of what is contained in the drink, can result in consumers choosing a different brand to fulfil their energy drink needs. This can be a direct threat to V.

Overall, the V brand has far more strengths and opportunities than weaknesses and threats, as seen by its outstanding success over the past decade. Despite this, the business must still be conscious of what they can do better, in order to improve the business overall.

Product lifestyle The product lifestyle can be alternatively described as the product or business life cycle. It refers to the product’s or business’s position in the marketplace. It examines its position by looking at changing trends, innovation, product prices, sales and profit margins, to determine at what stage the product or business is currently at. There are four phases to the product life cycle: 1. Establishment

2. Growth

3. Maturity

4. Post-maturity

• Post-maturity can then be divided into four sub-categories:

• Decline

• Renewal

• Steady state

• Cessation Currently, the V product is in the post-maturity stage. Its sales have been stagnant for an extended period of time, and the business may become complacent, or even go into decline if the product isn’t renewed. Fortunately, the business is looking to update and refresh their current product by introducing a new product line, as stated before, and by updating marketing campaigns and giving them a fresh feel. This will ultimately result in boosted sales, and revived business operations. A new product line will require the involvement of all core aspects of the business (Marketing, Accounting & Finances, Human Relations and Operations), and will revive the business and improve performance. By determining at what stage their product is currently in, the business can decide on the best course of action in order to renew or improve the business and its products.

Establishing market objectives

The objectives of a business provide the framework for the business to develop a series of activities and operations that aim to achieve those objectives. In essence, the objectives, or goals, guide the activities of the business. It is important that the goals be flexible so they can be adapted to the changing nature of the business environment.

When establishing market objectives (more commonly known as goals), businesses often use the SMART approach in order to set the business’ objectives. The SMART approach includes:

• S – specific – the objective needs to be clear and precise and relate to specific elements of the business

• M – measurable – the business needs to develop controls that are effective in measuring the extent to which the goal has been achieved

• A – achievable – the business needs to have the financial and human resources required to achieve the goal

• R – realistic – the objective should not be based on unreasonable expectations; that is, it must be possible for the business to achieve the objective

• T – time – the time frame within which the business hopes to achieve the goal must be determined.

This marketing plan for the V brand has been devised to achieve the following marketing objectives:

• Maintain position of market leader, as well as increase percentage of market share by attracting new customers.

• Increase sales by 5 per cent over the next year, and by 10% over the next 5 years.

• To increase the product mix, through the introduction of a new line of products.

• To implement marketing strategies targeted at increasing the number of consumers between the ages of 13-17, as well as 40 and above – this will be achieved through the implementation of the new product line, that will allow the business to target new markets in order to attract consumers who have not previously purchased its brand.

Identification of the target market

A target market is a group of consumers whom a particular product has been developed. The business hopes that these people will buy the product when it is made available in the marketplace.

Identifying a product’s target market is crucial to the product’s success over time. If a business targets the wrong (or less appropriate) market, the product will have diminishing sales with no chance to flourish in the market. For example, if a wrinkle cream is targeted to younger women, it will have substantially less success than if it was targeted at older women. This is why identifying the best possible target market is essential in order to maximise sales and profit. Currently, V products are targeted toward a more younger target market, roughly between the ages of 16 and 30. For this particular product, the target market of 16-30 is very appropriate, as the

consumers in this particular demographic are interested in consuming energy drinks, thus allowing the product to gain substantial success in the market. This poses a problem however, as the majority of society (younger than 16, older than 30) are not being targeted to buy the V products, which alienates about 80% of the market. In order to maximise sales, the product needs to appeal (be targeted towards) a wide group of people – in this instance, people between the ages of 13-50+. By increasing the target market, more consumers will purchase the product, which result in boosted sales and revenue. To achieve a wider target market, the product line consisting of V Pulse and V Shock will be targeted to opposite ends of the spectrum, to ensure the majority of consumers are targeted through the marketing campaigns. V Pulse, which will contain minimal amounts of energy ingredients, will be targeted to those under the age of 18, as well as those over the age of 40, so that they will not encounter any adverse health effects through regular consumption of the drink. V Shock will target the opposite end, those who need a large amount of energy ingredients to complement their daily activities. This drink will contain approximately double the amount of energy ingredients (with the same great V taste), in order to penetrate the energy drink “junkie” market. By targeting such opposing ends of the spectrum, the market share of V products will increase substantially, as a wider demographic is being focused on, in regards to the selling of the product. The regular V energy drink targets the young-to-middle aged group; V Pulse targets both the young as well as the old; and V Shock targets the middle-aged energy drink “junkie” that needs that extra kick throughout the day. Through the implementation of a wide range of products, each product will be targeted towards a different segment in the market, which will boost market share of V products to almost a level of ‘monopoly’ (complete market share) in the energy drink market. Marketing strategies

Once the strategies goals of a business have been set and the organisation has established specific market objectives, the business must develop appropriate marketing strategies. The success of these strategies is crucial if the business is to achieve its objectives.

In order to develop successful marketing strategies for a particular product, a business must look at the ‘marketing mix’ in order to come up with a successful product. The marketing mix combines four elements in order to create a successful product in the market.

These four elements are: 1. Product 2. Price 3. Promotion 4. Place

Product The product element of a marketing mix refers to the good or service the business intends to prove in the marketplace, i.e. what they intend to sell. In order to achieve this, a business must consider the product’s quality, image, logo and packaging, as well as where the product will be positioned against competitors’ products; whether the product will be up-market or a discount product. The V products are well known for their established quality, image, logo and packaging. In this sense, when introducing a brand new product into the market, the business’ image will retain all of these qualities in the consumer’s mind, as the product comes from the same business. To introduce a new product, the only thing that needs to be changed is the packaging of the product, i.e. whether the colour or design of the packaging will change. Everything else is already established for the product, therefore, creating a new product to be sold in the marketplace will not be very challenging, as the products are relatively similar, and the business’ reputation will transferred to the new product.

Price Determining an appropriate price for a product is very crucial when it is being established in the marketplace. Price the product too high and consumers will be reluctant to purchase it; price the product too low, and consumers will perceive the product to be of poor quality. This is why the appropriate pricing of a product is essential to its success in the marketplace. In regards to the energy drink market (or even the drinks market), a lot of the products are priced very similarly, depending on the size of the drink. Sometimes the prices change, but on average the prices are similar. Inserting a new product into the market won’t be as tough for the V brand, as they already know the perfect price for their products, and can base their knowledge off previous products onto any new product that is being established. For example, if they choose to do so, the new product line consisting of V Pulse and V Shock may be priced the same as regular V drinks, leaving little doubt in the consumers’ minds about the drink’s quality, or its impact on their wallets.

Promotion The element of promotion of the marketing mix, is the process of creating and maintain consumer awareness and interest towards a particular product. The intent of promoting a product is that it will make consumers feel as if they ‘need’ the product, ultimately resulting in its purchase. Companies may choose to promote their products through radio or TV and newspaper advertising. Less conventional (yet just as if not more effective) forms of advertising include mobile phone text messages, email, the Internet, and publicity stunts (these forms of advertising are referred to as ‘below the line’). Word-of-mouth advertising, as well as the packaging on the products, are other, more discrete, forms of advertising. V energy drinks are mainly advertised using ‘above the line’ or more traditional forms of advertising – predominantly TV advertising, as well as radio. The TV advertising of V products often consists of a comedic approach, one involving cockroaches, and their ‘need’ for the V drink, which is crucial as stated before. It is an interesting an unconventional form of advertising that ultimately achieves its purpose. However (also stated before), little has changed since this campaign’s inception, and

every good campaign needs to be changed periodically, in order to maintain consumer interest in the product. Over the next 12 months, finances going towards promotion will be increased by roughly 10 per cent, which is needed to revive the business during the post-maturity phase.

Place Place is another important element of the marketing mix, as it refers to the level of availability of the product around the country. V products are found in practically every shop that offers drinks to be purchased, which can be described as ‘intensive distribution’ of the product, i.e. it is found in the majority of places. The amount of places that sell your product is directly proportionate to the amount of sales, as having more places where the product is sold will result in more sales, and thus boosted revenue. Particularly now with the opening of specialised V branches, consumers will be more inclined to purchase V products.

Monitoring and controlling

It is important that a business develops method that management can use to determine the extent to which the implemented strategies are achieving the desired outcomes. Businesses monitor the progress of their operations through controlling.

A business can monitor or evaluate how well the marketing strategies are performing by a process called ‘controlling’. Controlling is the process of comparing actual results with the results that the business had planned to achieve. It allows management to determine whether the organisation is achieving its objectives and the reasons why the objectives are, or are not, being met. The three common forms of analysis and control used by a business when monitoring the performance of its marketing plan are:

• Sales analysis

• Market share analysis

• Marketing profitability analysis

Sales analysis Sales analysis examines the sales of a particular product among different customer groups (age, income and location). When a product has a wide range of products, it can use sales analysis to determine which products are underperforming, and may need to be deleted from the product mix. By comparing actual sales against those forecasted, a business is able to examine how effective its marketing strategies have been. A sales analysis can be extremely helpful, particularly when introducing a new product, to evaluate how well it has done in terms of sales. Hypothetically, after three months, sales projections of V Pulse and V Shock are determined to be:

V Pulse V Shock

After 1 month 50 000 100 000

After 2 months 80 000 50 000

After 3 months 120 000 30 000

If we look at the table, we can see that V Pulse started off poorly in sales, but then rose over the next two months. V Shock however started off strong, but then decreased dramatically over the next two months. By controlling its marketing strategies, V can now analyse the results, and determine that V Pulse is worth keeping on its product line, whereas V Shock isn’t. From here, V can either choose to change the V Shock product, or eliminate it entirely. Keeping in mind that changing a product might not always work, as consumers are not always willing to give businesses a “2nd chance”. By using sales analysis as a form of controlling, the business can determine which products or strategies are not working, and can either rectify, or eliminate it entirely.

Market share analysis Market share analysis involves examining the sales performance of the business and comparing it with that of its direct competitors. This way a business can determine whether a new product line is helping overall sales, or not. This allows management to determine whether the marketing strategies implemented by the business have increased the number of customers the business has and to which extent the customers have come from competitors. V could use the market share analysis to determine how well the products are performing, and can compare it directly to the sales of competitors to evaluate its worth or value in the marketplace. By using the market share analysis, businesses can in a sense control its market share, by looking at what is and what isn’t working.

Marketing profitability analysis Marketing profitability analysis evaluates the financial (such as profit and sales) and non-financial (such as brand awareness and customer satisfaction) benefits that have been achieved by a marketing plan against the costs of implementing the plan. This process basically determines whether the overall benefits are worth the cost that is being put into it. If a company introduces a multi-million dollar campaign, but very little changes in terms of sales or customer satisfaction, the campaign is considered not to be successful. With V’s new marketing campaign, they can compare the benefits of the new product line/advertising campaign with the costs put into it, to determine how profitable it is. As it is a form of control, the business can always make changes to better use its resources for the marketing campaign, so that both financial and non-financial benefits are achieved.

Discuss the ethical and legal aspects which this marketing plan must consider. Ethical and legal aspects of any business/marketing plan can be detrimental if not addressed properly. It is widely recognised that a business needs to be aware of ethical and legal factors affecting their marketing plan, as a business which is exposed for not abiding by the law or is misleading towards its stakeholders, can damage its reputation, branding and image in the marketplace, and in society. The four major ethical and legal aspects that this marketing plan must consider include:

• Deceptive and misleading advertising

• Price discrimination

• Environmentally responsible products

• Engaging in fair competition

Deceptive and misleading advertising

Advertising is a very powerful form of promotion, as it takes the business and its products directly to the consumer. Due to this, some businesses attempt to use advertising in a way that is unfair, deceptive and misleading to the consumer, and often contains false information about a product or its benefits.

Businesses that engage in deceptive and misleading advertising often do it in order to gain ‘quick sales’ or promote their product in a false way, that more often than not become exposed and ruin the business’ reputation. A perfect example of a business that has engaged in deceptive and misleading advertising is Ribena, the blackcurrant cordial. Their claims that Ribena contained ‘4x the amount of Vitamin C in oranges’ were proven to be false and misleading, which led to the company being not only fined, but losing customer loyalty, sponsorship deals, and most importantly, sales. Due to their misleading actions, Ribena plummeted in sales, and lost the majority of sponsors and its’ consumer base. Frucor Beverages Ltd. is aware of the consequences of misleading advertising, both in regards to sales and the business’s reputation. Under the Competition and Consumer Act, the main issues involving deceptive advertising that the V brand needs to be aware of include:

• Giving misleading information about V’s features, content and place of manufacturer

• Overstating the product’s benefits

• Offering discounts and benefits that do not exist V must be very accurate when stating the ingredients of the V energy drink, because as seen with Ribena, incorrect labelling/information can figuratively destroy a product in the marketplace. V must also state the adverse effects the V drink can have to those of young or old age, pregnant women, or people suffering from an illness. V must also state a ‘recommended’ consumption of its drinks on the can, to ensure that consumers are aware of the amount they can consume on a daily basis. V avoids deceptive and misleading advertising, and ensures that all consumers are aware of the drink’s adverse effects, and the recommended daily consumption. In this sense, V is effective when communicating in a truthful and accurate manner.

Price discrimination

Price discrimination refers to the process of a business giving preference to some retail stores by providing them with stock at lower prices than is offered to the competitors of those retailers.

Price discrimination is another legal aspect of the marketing plan that must be avoided. Often when businesses distribute a product, they may wish to provide it to certain retailers at a different price than others, whether it be at a higher or lower cost. Under the Competition and Consumer Act, price discrimination is illegal, and must be avoided at all costs. Price discrimination can be seen as unfair and unethical, as a business can target another business by increasing their prices, and thus creating unfair competition. The smaller business may be targeted, and could result in them being forced to pay much higher when other businesses are offered lower prices. This is due to the uncompetitive nature that price discrimination brings, and can often disadvantage smaller businesses with less influence in the marketplace. As a result, all V products must be sold to retailers at the same fixed price, in order to avoid the legal consequences of price discrimination.

However, V products sold in bulk quantities may be discounted, as it is not illegal to do so. This way, V can still create good relationships with retailers willing to sell the product in large quantities, as well as avoid discriminating against otherwise smaller-scale businesses.

Environmentally responsible products Particularly in today’s day and age, the ethical importance regarding the production of products and its impact on the environment is becoming more and more crucial. Businesses creating environmentally responsible products are often praised for being environmentally aware, and often achieve better sales than direct competitors that aren’t “environmentally-friendly”. The world is becoming more knowledgeable about limited resources, and the need for recycling and reusing materials is higher than ever. Businesses that can create products through some form of reusable or recycled material are seen as conscious and ‘caring’ businesses that are willing to change their operations in order to help preserve the environment. When producing V energy drinks, Frucor Beverages Ltd. must be aware of the impact on the environment. Particularly when making the aluminium cans that contain the V product, the business must be aware of recycled material, such as aluminium, in order to reuse materials, and preserve the environment. Creating aluminium produces CO2, or carbon dioxide, which is detrimental to the Earth’s atmosphere. By using, or reusing old aluminium cans, the business can help cut down the amount of carbon dioxide being produced, and thus becoming environmentally responsible. V must also encourage its consumers to properly dispose of the can, so that it can be recycled for future use. The main environmental concern when creating V products is the production of the can, as well as its proper disposal.

Engaging in fair competition Engaging in fair competition with other competitors is another big ethical issue, and is very important in maintaining a good image of the business. When a business is able to engage in fair competition with other competitors, the business gains respect from other competitors as well as from members of the community, and as a result, their image and status is improved. On the other hand, businesses that undercut other businesses and ‘play dirty’ in a sense, are seen as malicious and money-grubbing, which ultimately results in a damaged reputation and less sales due to a damaged relationship with its customers. The main practices of unfair competitive behaviour include:

• Misleading advertising regards the products of a competitor

• Price-fixing between two or more major competitors in the market with the aim of reducing competition

• Long-term loss leader – price strategy by undercutting smaller competitors in the short term, forcing them to engage in a price war

These tactics are often regarded as unfair and conniving, as they often result in damaging other businesses either financially or non-financially, in order to improve their business in the minds of consumers. Businesses should rather focus on their products, operations and consumers’ tastes in order to improve the business, rather than undercut another business. V currently has four major competitors in the market, and engaging in fair competition is important to create a sense of ‘good ethics’ within the business. If V attempts to undercut another business, they may risk losing thousands of customers due to their unfair practices. Fair competition can also help

in creating a competitive environment, where businesses attempt to outdo one another, by continuously improving their products. This ultimately results in a better product for the consumer, and healthy competition within the market. Ultimately, engaging in fair competition is the best way for a business to create better relationships with their consumers and stakeholders, and even their direct competitors.

Conclusion This marketing plan has been designed specifically for V in order to increase their revenue, market share, and brand awareness. If the marketing plan is followed in a logical order, and all operations and objectives are effectively achieved, all aspects of the business will be improved. As long as the business is able to identify its’ strengths, weaknesses, opportunities and threats, achieve the marketing objectives, identify the most appropriate target market, and implement and control marketing strategies, the outcome will be highly successful. The business must also be aware of legal and ethical factors in order to improve the business’ reputation, and avoid legal consequences. Overall, the marketing plan will be successful if followed and implemented correctly.

Bibliography Websites

• http://en.wikipedia.org/wiki/V_(drink)

• http://www.v-energydrink.com/index.aspx

• http://en.wikipedia.org/wiki/Ribena#Vitamin_C_content Books

• Business Studies HSC – Cambridge University Press

• HSC Business Studies – Topic 2: Marketing