Marketing plan

Auto-Cook Marketing Plan

Mission Statement:

Auto-Cook is the environmentally-friendly solution to all those who do not know how to cook. We aim to provide consumers with a flexible and convenient device that will meet your needs. This affordable investment will provide buyers with high quality and the satisfaction they deserve.

Smart Objectives

Short-Term – 1. To generate at least £50,000 profit by the end of the first

year. 2. Receive a customer satisfaction of 80% in the first year, via

primary research. 3. To sell at least 2000 units by the end of the first year.

Mid-Term – 1. To generate at least £100,000 profit by the end of the 3rd

financial year.2. Increase market share by the end of the 3rd year to at least

10%.

Long-Term – 1. Expand the business into European retailers by the end of the

5th year of trading.2. Double profit from mid-term objective to £200,000 in the 5th

financial year.3. Receive a customer satisfaction of at least 90% at the end of

the 5th financial year.

Environmental Scanning PEST Political Economic Social Technological

Positive Strong poundsterling will be beneficial for Auto-Cook. Good exchange rates creates low production costs and this will allow efficient and productive trading to take place, saving the business money.

Busy lifestyle ofdemographic group we aregoing to target will increase thechance of rising the number of sales. Heavyschedules ofstudents andfull-time workers willmake Auto-Cook suitable forthis target market. The product is quick, idealand convenient in meeting these consumer’s needs.

Auto-Cook being able to functionfrom smart phonedevices significantly improves the chances of customers buyingit. Most consumers that will be able to afford Auto-Cooktend to have a smartphone and this is a influencing factor when trying to catch the consumers interest.


Negative No license will make the task of marketing the product extremely difficult. Auto-Cook will not be sold at popular retailers like (Tesco,Argos) and therefore consumers will be lessaware of theproduct as big retailers will not be promoting Auto-Cook. If this werethe issue, the likelihood would resultinto a decline in the potential number of sales.

Unemploymentrate in the UK has dropped to 7.1%. More of the population will have less or no disposable income and this will mean that they will not be able to afford Auto-Cook. This must betaken into consideration as consumers will be moreprice sensitive and cautiousof spending on a luxury item.

It is a social trendfor people to eat out at restaurants.This alternative will providedirect competition and will therefore have a negative impact on the consumers attitude to purchase Auto-Cook. Despite Auto-Cook being an option, consumers may prefer going to theRestaurants as meals arecooked and offers are used to attract them.

As product will be very high-tech, technological challenge will cause a commercial issue. Research and Development will be very expensive and this will cause issues in makingAuto-Cook practical and affordable for consumers.

SWOT ANALYSIS

Strengths

1. Auto-Cook will be able to meet the needs and wants of consumers. The demographic groups that have a busy lifestyle, will particularly find Auto-Cook useful as this will provide them with a solution to their time management problems. Auto-Cook will also appeal to those who cannot cook and may not particularly want to spend money at a restaurant or have a ready-made meal.

2. Auto-Cooks ability to cook a variety of meals makes the product cultural. This will be a strength as the device will attract a diverse background. This creates more opportunities for Auto-Cook to be globalised and recognised around the world.

3. With Auto-Cook, the goal is to provide a very good quality product. Making the product high quality will enhance the devices performance and life. The durability of the product will allow potential buyers of Auto-Cook the opportunity to makean investment rather than having to buy new saucepans and pans every year.

Weaknesses

1. High production cost will prove to be a weakness. As Auto-Cook will be technically very advanced, the research and development costs will be high and this will make it difficult for us to make practical and affordable versions for consumers.

2. Another weakness that was identified was the products reputation. As Auto-Cook is a new innovative idea, the society will be unaware of the product and this decreases the chances ofsales and increases the risk level.

Opportunities

1. The target market is a massive opportunity. A broad and diverse target market will provide Auto-Cook with the chance to increase its market share around the globe and build a firm


reputation as Auto-Cook will be able to cook a variety of meals (British, Indian, Chinese, Turkish, etc).

2. The opportunity to sell through well established, respected and popular retailers like (Tesco, Argos, etc) will strengthen Auto-Cooks image and therefore this is a perfect opportunity to influence the consumers interest and sell more units.

3. Finally, Auto-Cook has the chance to set a lifestyle trend. If successful and popular, the society and media will be building up its reputation and more and more consumers will start becoming interested in Auto-Cook, which will then eventually become a trend.

Threats

1. Auto-Cooks biggest threat is the direct competition thatalternatives provide. Restaurants and ready-made meals may proveto be the biggest issue for Auto-Cook. Consumers may find this amore suitable option at certain times and this could potentiallyhave a negative impact on Auto-Cook.

2. As Auto-Cook will be very costly to produce, this will mean that the product will be expensive and this is a serious threat. How many of the consumers will actually be able to afford Auto-Cook? If consumers cannot afford Auto-Cook this willhave a direct impact on the ability to achieve the goals and objectives.

Market Research

In order to better understand our potential costumers we gathered primary research using a market research survey. The demographics of our survey sample consisted mainly of young people who were students. This may make our results biased as wewere not able to get a varied sample size, however this also benefited us as students were one of the areas that we wanted totarget and our market research was able to provide evidence for this. According to our market research only 16% of respondents claimed to have ‘very good cooking skills’ and only 3% respondedsaying they had ‘expert cooking skills’.

This

showsthat the majority of our respondents claimed they had average or below cooking skills. Also when responding to the question “On a scale of 1 to 5 (5 being the highest, 1 being the lowest) how frequently do you find yourself with little time to cook your meals due to a busy lifestyle?” 63% of people responded with 3 or more. This shows that we can both target our product at people whohave little knowledge of cooking and those who do not have enough time cook their meals.


We

have identified that a potential disadvantage of our product is that people may be worried that the product will not improve theirtraditional cooking skills. According to our market research, 21% of people responded that this would put them off our product, 38% responded that this would not put them off and 41% of people responded that they were unsure. The percentage of people who would be put off is not significantly high and those that are unsure may change their opinion once the reputation of our product has improved.

When asked what would they currently do if they found themselves with no time to cook their meals, 27% responded fast food restaurant, 31% responded takeaway, 28% responded ready meal, 43% responded light meal/ snack and 9% responded other, including reheating a frozen meal or skipping the meal all together. The aimof this question was to find out what our main competitors would be. The results show that we would have a variety of competitors, light meals, ready meals, takeaways and fast food restaurants being the main alternatives to our product.

72% of people questioned responded saying that they would use the smartphone and tablet device connectivity. This shows that adding this feature would be a worthwhile investment for our product.

We

askedour respondents what features of our product they found the most attractive. The results were very varied, with the most popular option being ‘ease of use’ with 67%, followed by ‘less mess from using less kitchen equipment’ with 55% and ‘cooking speed’ with 53%. This shows that the attractive features of our product would be the speed of the process (cooking time and less time cleaning up) and the simplicity of our product. This further confirms that targeting our product at people who do not have a lot of cooking knowledge and a lot of time to cook their meals is a sensible approach.


When asked how much they would be willing to pay for our product, the most popular answer was under £150 with 53%, 18% responded saying £151-£200 and 10% responded saying £201-£250 and £251-£300.We will further discuss these results in the pricing section of our marketing mix.

Finally, we asked how much our product appealed to the respondentson a scale of 1 to 5. This received a fairly positive result with 91% of people responding with either 3 or higher. This confirms that our proposed idea has the potential to succeed and attract customers.

Market Segmentation

Demographic segmentationWe have identified 4 areas that we would like to move into

University students and 18-24 young people. As a research shows that 49% of 18-24 people do not how to cook and only 28% of students prepare their main meal every day. (Devine P,ect., 2006) Also this group people probably very busy on studying or Searching job so that they can use Auto Cook for sparing time on cooking. However, the problem is those people probably cannot afford the relative high price. Therefore, we are still considering to release a fair price product or student-discount price strategy to solve this problem.


Busy peopleBusy work means that little time would be spent on preparing meals, therefore these people will be looking for a healthier and convenient way to reject ready meal and fast food. (Devine P,ect., 2006) One problem of this demographic is reducing time on preparing food had become a trend that some busy people are used to eating sandwich or ready meal but lack of awareness of their health. Therefore we will promote this point by encouraging them to be vigilant of this trend and advertising our product to some extent.

Large householdsLarge households also could be our demographic. Preparing meals for a large household is a difficult work, also cleaning kitchen is so tired for them. As a kind of kitchen equipment, Auto Cook isconvenient and can be easily cleaned, it is more likely to be popular for large households.

Disable people and old generationAuto Cook would be very useful for disable people and old generation. Our product aims at making life easier, it could not only provide convenience for these people, but also the receipts from mobile phone application could guide them to cook healthy food to preserve health.

Psychographic segmentation:

Moreover, we have listed 2 main areas in psychographic

Reducing Time on preparing foodResearchers have found that British people have reduced time spenton cooking and generally the eating habits have got worse over thepast three decades. ( Wilson J, 2013) This trend would be a chancefor us to settle in the UK.

No cooking skill According to our research, 16% people do not have any cooking skill and 28% people have some cooking skill, also our secondary research indicated that 25% parents never teach their children howto cook and 87% children do not know how to cook a simple meal. (UKTV Food., 2007) Also, there is around 1/6 British and 28% American have no cooking skill. (McDougalls Flour, 2007)

Geographic segmentationAs Auto Cook is starting up we have decided to emphasis on promotion in some biggest cities in the UK, such as London, Manchester and Birmingham, since both of these cities are potential. However, we will not intend to set up business overseasat the moment, because it will cost a lot of money and require a lot of market research which would take long time.

Behavioural segmentation:We have decided not to look at behavioural segmentation. It is difficult to segment customer’s behaviour and their brand loyalty.

Targeting:

For our product we will be using the strategy of differentiated marketing by creating a separate marketing mix for our ‘Business to business’, and our ‘Business to Customer’ segmentations.

Before we do our promotion, we will spread awareness about our product keeping ‘AIDA’ in mind. We have to introduce our product to our target market before we can bring their interest into it. For awareness campaign, we will create our pre-launch product video explaining the main concept of the product, how it solves the problem for many, and how it works. We will publicize it on popular social networking websites using their advertising options. Online video and awareness campaign strategy suits our business model as it is very cost-efficient compared to the mass-market communication, and it will be targeted mostly among our selected segmentation.

Once we have run the awareness campaign successfully, we will be moving towards the next step, our ‘Launch Event’. One of the main purposes of this event would be to target our B2B segment. We willbe providing booklets with all the information that a firm would want to know about our product and our company. Press conference during the launch event will help us catch the interest of a larger audience, introducing our brand to them.

Positioning

The product is innovative thus the technology that it contains


hasn’t been used before which makes it the only product in the specific market, but if we consider ‘electrical appliances for kitchen’ there are other brands who have a higher brand value because of their fine quality and the number of different products.

According to our research survey, 53% of the people answered they would want to pay less than £150 for this product, while the second most voted answer was £150-£200. To maintain a high end quality and keep the company in business we would have to keep theprices somewhere between £200-£250, which will decrease the sale but increase the customer satisfaction and brand image.

One of the main reasons why our product is worth the money is because it’s designed to be reliable and lasts 3-5 years in good condition. Moreover, we will be providing the service of customer care and 1 to 3 year warranty plans.

Branding Perception:

We will be focusing on creating our brand image as a ‘Helping Technology Centre’. By maintaining the fine quality of our products we can increase our brand value and the trust of the customers.

With the increase of cooking shows and knowledge, people in UK aremore aware of healthy diet and thus they prefer eating at home butmany of them either find it difficult to cook or have very less time for cooking, (Euromonitor.com, 2014). Making the most of this, we can create our brand awareness through TV Cooking shows and advertisements during them to give our potential customers a good brand image.

Electrical Market:

De’Longhi UK Ltd maintained it’s lead in the market of food preparation appliances in the UK in 2013 by keeping the total volume share of 34% (Euromonitor.com, 2014). The reason for it’s success is their strongbrand recognition and continuous innovation in the field. Another brand that is popular for their kitchen appliances is ‘Kenwood’, that is already working with De’Longhi UK Ltd in manufacturing some of the kitchen appliances, making the quality standards very high and covering most of the market.

What makes our product different from them is our USP. Even though they cater most of the market but to most of the customers our product will beappealing as even if they have little or no knowledge of cooking, they can easily follow the steps and try different kinds of food. Another advanced option that our product offers is the ability to connect the cooking machine to smart phones, which helps them to control the device, and provides information of on going operations.

Thus, we do not have any competition threats at the moment, but differentbrands will try to create something as similar as our product. We can hold the right to our innovation for a few years through signing a patent, but still we will need to keep up with the innovation, more products, and technology to create a strong position in the market.

The position we are aiming for in ‘Food preparation appliances, is as given below in the chart.

Price

Technology

Kenwood

Auto Cook

DeLonghi.

Panasonic

Low High

Low

High


We have positioned our brand high in terms of technology and slightly higher than average brands in terms of price. The reason for the price being higher than average is to maintain the qualityand technology better than the competitors. High quality and technology will be a very effective tool in boosting our brand image.

Bibliography: Euromonitor.com. 2014. Food Preparation Appliances in the United Kingdom. [online] Available at: http://www.euromonitor.com/food-preparation-appliances-in-the-united-kingdom/report [Accessed: 9 Apr 2014].

Reliability:

One of the main reasons why our product is worth the money is because it’s designed to be reliable and lasts 3-5 years in good condition. Moreover, we will be providing the service of customer care and 1 to 3 year warranty plans.

Attractiveness:

The unique selling point of our product is the advanced technology, easy to use and solution to a problem that many peopleface in everyday life. This product is designed to ‘help’, and that is one of the most attractive part about it.

Branding Perception:

We will be focusing on creating our brand image as a ‘Helping Technology Centre’. By maintaining the fine quality of our products we can increase our brand value and the trust of the customers.

Ansoff’s Matrix

Market penetration As an innovative product, Auto Cook will be concentrating on electrical appliance market. However, this market is quite mature,objectively, it is difficult for our company to grow our business.Therefore, we will emphasis on advertising to increase sales, also, we will compete through discounting and voucher at growth stage.

Market developmentThe core competence of Auto Cook is its innovativeness. We intend to sell AutoCook online. Further, we will be expanding our market to sell AutoCook overseas after our product become maturity in theUK market.

Product developmentWe will provide the best service for our customers, such after-sale service and free-repair service. In addition, we will developa mobile phone application for our customers, this application would strength AutoCook’s function. Moreover, we will keep developing Auto Cook and release new edition.

DiversificationThis is the most risky way to develop our business, if our business is successful in the UK market, we probably consider to


move into catering area.

Marketing Mix

Product:

Auto Cook as an electrical appliance aims at providing an incredible cooking experience for customers. It is made of stainless steel thus it could work for 3-5 years in good conditionand could be cleaned easily. We also will provide after-sale service to customers and guarantee 2 years warranty period. And as a kind of smart appliance, Auto Cook has several smart features, for example, a timer can make time efficient, a segregator can automatically separate food waste to make food healthier

In addition, we also will design an application for mobile phone devices, customers can not only get information of the product andour company, but also they can download a cook guide from this application. This will very beneficial as Auto-Cook will also be alearning tool for customers.

Place:

Online sale: Auto Cook is expected to sell online through retail websites (such as Amazon, Argos) and our own website.

Supermarket: Auto Cook also would be sold in supermarket (such as ASDA, Sainsbury). This sector is quite important for our company, as a kind of innovative kitchen equipment, it will be difficult topromote our concept at growth stage. Therefore supermarket is an ideal place that we could sell Auto Cook and promote it to our potential customers.

Electrical appliances store: Electrical appliances store is the most important sector where we are expecting to enlarge our marketshare in the UK, Auto Cook is more likely to be attractive in the appliances store as it is different from other kitchen equipment.

Process:

Production plantAt the company’s growth stage, we will set up a British based factory to produce Auto Cook. After we turned into maturity stage,the product will be manufactured in Asian countries, such as Vietnam, for reducing manufacturing cost. However, some important components will still initially be manufactured in the UK.

Warehouse In order to satisfy the customers’ demand, we will rent a warehouse to keep sufficient stock.

After-sale serviceWe will set up an office in the UK, so that we can build a list ofconsumers and get consumers’ response immediately in order to improve our product and service.

Delivering systemAlthough the transaction of Auto Cook is mostly done online, for the transaction on our website, we still need to cooperate with a distribution company such as Royal Mail to deliver our product. Also the delivering system will track every transaction and ensurethat whether the product is delivered or not.

Supervisory systemThis system aim at supervising every links in business and ensure that whether the company is on good operation. We will primarily


concentrate on following sectors:1. Production 2. Sufficient stock3. Quality of Auto Cook4. Customer’s feedback

Promotion:

Advertising:

Every year certain amount of budget would be locked for TV, Radio and Magazine advertisements, as they will reach most of our targetmarkets if placed at the right timing. For Example: Product ads during the cooking shows.

Pre-Launch Promo:

As our product is innovative as well as a solution for so many people who find it difficult to cook, we will launch a pre-promo on TV and the Internet announcing about it’s release. We can further promote the pre-launch promo by advertising it on Facebookand Google Ads.

Product Placement:

This strategy will also suit our product and give it a further boost if our machine is used in cooking shows or cooking YouTube blogs. Product placement is usually really costly but promotes theproduct effectively.

Live Demonstrations:

We will be doing live demonstrations at ‘food expos’ and ‘fairs’. We will also be visiting Universities and related events.

Warranty Promotion:

Our product is electronic thus people are scared it would stop working. As a solution to this problem we will be providing 1-3 years long warranty and customer support, which would pull people towards ‘Auto-Cook Machine’.

Public Relations:

After the announcement of our launch and Pre-Release Promo we willhold a press conference where we will give details about ‘Auto-Cook’, e.g ‘How does it work’, ‘How much it will cost’, etc. We will be inviting executives from most of the major retailers to build healthy business relationships. Partnering with major retailers will boost our company’s sales.

Food Festival:

We will sponsor or organize a food festival annually which would include different recipes from all around the world, cooking competitions, cooking appliance expos, etc. This will give us an opportunity to promote ourselves around potential customers. This will also help the company build an image that we celebrate diversity in food and also that we are not trying to make people lazy by giving them an easier option to cook.

Personal Selling:

In the first month of the launch, we will place our product promotional stalls in malls and big retailers like Asda, Sainsburys, etc. A number of trained salesmen will be hired to do this job.

Pricing

We will use a price skimming technique for Auto-Cook. We will start the price at £299 and then lower it by £50 after the first year to £249. We will then maintain the price at £249, we believe this strategy is best as it allows us to create a high quality image for our product. This strategy will allow us to gradually engage new markets as our product reputation will grow. Only 9% ofpeople questioned in our market research said that they would pay more than £299 for our product. Even though we want to create a high quality image for our product, due to our market research results we believe it would be unwise to charge higher than this price.

PeopleAll employees of Auto-Cook who come into contact with potential consumers will be effectively trained on the details and values ofour product. This is necessary to create a positive brand impression. This is especially important as we plan to use live


demonstrations to promote our product. It is essential that all employees will be able to effectively communicate with and answer any questions that the potential consumers may have to ensure a positive consumer relationship.

Physical Evidence Our product will be manufactured in a factory. During live demonstrations of our product all employees will wear a uniform that will display our brand logo. The product will also be packaged efficiently with the same brand logo. The box will contain the product, a power cable and a manual. We will create a website with the same branding scheme throughout. We will also have be active on social media websites and will upload video tutorials of how to use our product onto YouTube.

Financials

In order to fund the production of Auto-Cook. We plan on raising the financial resources through several sources. We have estimateda required budget of approximately £200,000, which will be coveredby:

Personal Funding – Personal savings will be injected into the start-up cost.

Bank Loan – We intend on receiving a loan from the bank with the security of asses (house, car, etc.)

Government Grant – Contribution from the government will also be used to support the funding of Auto-Cook.

By referring back to the financials of Auto-Cook. We have estimated that when taking all expenses into consideration, it will cost us £91 in order to manufacture one unit. We intend on selling each unit for £299.99, if all estimated 2000 units are sold throughout the year, this will generate an estimated £600,000revenue. However with all expenses taken into consideration, the profit expected at the end of year one is approximately £70,000. In relation to our short-term objectives in year one, these figures show that the objectives are on target to being achieved, as the smart objective states that we intend on making at least £50,000 profit in the first year.

Project Plan

Conclusion

Bibliography:

Euromonitor.com. 2014. Food Preparation Appliances in the United Kingdom. [online] Available at: http://www.euromonitor.com/food-preparation-appliances-in-the-united-kingdom/report [Accessed: 9 Apr 2014].

Devine, P., Lloyd, K. and Gray, A. 2006. Food shopping and preparation. University Student Food Attitudes and Behaviour Survey, 3 (3.2), p. 7.

Mail Online. 2014. Can't cook won't cook Britain: Cooking time has HALVED since 1980. [online] Available at: http://www.dailymail.co.uk/news/article-2590578/Cant-cook-wont-cook-Britain-Amount-time-spent-cooking-UK-HALVED-1980s-people-survive-diet-sandwiches.html [Accessed: 9 Apr 2014].

Uktv.co.uk. 2007. Good Food Channel. [online] Available at: http://uktv.co.uk/food/news/aid/582080 [Accessed: 9 Apr 2014].

Wilson, J. 2013. . Food Practice Key Themes. Review of evidence on consumer food-related behaviours that impact on sustainability: Final Report, 6 (6.1), p. 19.

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