Case study

Strategic marketing planning for a supplier ofliquid food packaging products in Cyprus

Demetris Vrontis

Marketing Department, School of Business, Intercollege, Nicosia, Cyprus

Harry KogetsidisDepartment of Management and MIS, Intercollege, Nicosia, Cyprus, and

Andreas StavrouHenley Management College, Henley-on-Thames, UK

AbstractPurpose – This paper aims to provide a strategic review of the marketing function for a Cypriot company operating in the liquid food packagingindustry (for reasons of confidentiality the name of the company is withheld). The paper focuses on the dairy market, where the company does not havea very strong market position, and illustrates how through an analysis of the environment (internal and external audit) the company’s strategic directionand marketing plan can be designed more effectively.Design/methodology/approach – The paper adopts a case study approach with primary research through in-depth interviews with managers of thecompany under investigation.Findings – The paper concludes that, by undertaking to rectify its weak marketing function, the company can develop capabilities that will lead to afully integrated relationship with all its customers and significantly improve its market share.Originality/value – The value of the paper lies in providing a new case study that highlights the importance of making the marketing function a moremarket/consumer oriented process that bridges the gap between strategic change and industrial complexity and instability.

Keywords Business environment, Marketing planning, Management strategy, Strategic marketing, Dairy products, Cyprus

Paper type Case study

Introduction

The aim of this paper is to provide a strategic review of the

marketing function for a Cypriot company operating in the

liquid food packaging industry. The company was established

in the early 1980s and the purpose of its business is to provide

marketing and after-sales services of its products to local

liquid food manufacturers in Cyprus. As the company

promotes and sells carton packaging and filling equipment

for liquid food, its success depends partially on how well it

provides its services. In this context, marketing activities are

viewed as an important element in achieving the objectives of

the company.The development of this case is based on a number of

assumptions, which are summarised in Table I.

Marketing planning

According to Fifield and Gilligan (2000), marketing planning

is a process of:. analysing environmental, competitive and business factors

affecting business units and forecasting future trends in

business areas of interest to the enterprise;. participating in setting business objectives and

formulating corporate and business unit strategy;. selecting target market strategies for the product-markets

in each business unit;. establishing marketing objectives; and. developing, implementing and managing program

positioning strategies for meeting target market needs.

This process is illustrated in Figure 1.

Situation analysis – environmental scanning

Situation analysis is the first and one of the most important

stages in marketing planning. This is because “a company’s

‘strategic fit’ with its environment is central to its strategy.

Further, effective strategies cannot be developed without

The current issue and full text archive of this journal is available at

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Journal of Business & Industrial Marketing

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q Emerald Group Publishing Limited [ISSN 0885-8624]

[DOI 10.1108/08858620610672623]

A teaching note is available from Dr Vrontis Demetris at:vrontis.d@intercollege.ac.cy

250

firstly analysing the environment in which the company

operates” (Vignali et al., 2003, p. 15). It is suggested that

environmental scanning of both the external and internal

environments is a necessary prerequisite stage to strategic

formulation (Vignali and Vrontis, 2004). The factors that

should be analysed in an internal and external audit are

illustrated in Figure 2.

External analysis

The external environment is made up of forces over which a

company has limited, if any, control and covers both the

macro-environment and the micro-environment. The macro-

environment consists of forces such as social, legal, economic,

political and technological (SLEPT) factors – within this are

included factors such as demographics, green issues and

larger societal forces. The micro-environment includes

environmental constraints, such as the structure of the

market, suppliers, customers, trends of the market and

competition (Vignali et al., 2003).The environment for companies operating in the liquid

food industry is constantly changing. Therefore, it becomes

critically important to identify opportunities and threats when

formulating strategy for the purpose of gaining competitive

advantage.

Microenvironment political, economic, social,

technological (PEST) analysis

Political factors include:. new laws to promote an open-market economy that

encourages competition;. the accession of Cyprus to the European Union in May

2004 aligned many laws with those of the EU; and. a possible political solution to the division of Cyprus will

enable free movement of people and goods and thus

increase trade.

As regards economic factors, Cyprus is considered an

industrialised economy with GDP growth (see Table II).

Table I Assumptions made

Environment Assumption(s)

Business segment Product lifecycle of milk will continue to grow over the short to medium term (1-5 years)

Adjacent business in the food sector will jump onto the “value added” product segment

Competitors No buy-out of the company by another dairy manufacturer with competitive/alternative packaging

Social Spending power of Cypriots will continue

Increasing awareness of health and fitness issues

Economic and trade Euro rate will remain stable against the CYP

Political Political solution to the Cyprus problem: the North will not grow at the expense of the South

Figure 1 The marketing plan process Figure 2 Situation analysis

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Social factors include:. increasing awareness of health and fitness issues;. a change in legislation to increase child allowances (see

Table III);. the birth rate has been falling steadily in the last 15 years;

and. increased awareness of environmental issues will support

the carton against less environmentally friendly packages,such as plastic, glass and cans.

Technological factors include:. information technology continues to become cheaper and

has more practical applications; and. the internet is becoming accessible to more Cypriot

households.

Market trends and dominant market segments of the

industry

The Cypriot consumer is turning away from less healthydrinks, such as beer and carbonated soft drinks, and towardsdrinks that are perceived to be more healthy, such as milk,juice and water. This trend supports the increasing health andfitness awareness of Cypriots identified in our PEST analysis.The dominant market segments in the liquid food industry inCyprus are shown in Table IV.

The dairy market

The total dairy market for liquid milk in Cyprus isapproximately 65 million litres with a per capita

consumption of 42 litres, compared to an average of 63

litres per capita in Greece, 96 litres per capita in Portugal, and

115 litres per capita in Spain. The country’s entry into the

European Union and the changing lifestyle of Cypriots

indicate an increase in the consumption of milk drinks,

possibly to the level of other Western European nations.

Dairy industry players (customer and prospects)

The Cypriot dairy industry is dominated by three large

manufacturers of dairy products. Table V shows the products

offered by the three companies (for reasons of confidentiality,

the names of the three dairies have been withheld). As can be

seen in Table V, the three players operating in the dairy

industry have focused on short life products, mainly in family

packaging (one-litre size). The competition in this market

segment is quite fierce. In contrast, the portion pack segment

has been left with only a few product offerings (mainly

flavoured milk).

Market share total revenue

Table VI shows how the market share of the three dairies has

changed between 2002 and 2004. From Table VI, we can

assume that the market is going through significant

competitive change despite the oligopolistic characteristics

of the industry. Considering that competition is fierce in the

family pack market, the carton is facing strong pressure from

the plastic bottle. Driving plastic bottle growth is its recent

launch (in 2001), its convenience of opening and its

differentiating characteristics compared to the long

established carton.

Table II GDP growth (millions of CYP)

1999 2000 2001 2002

GDP (at constant prices) 4,601 4,838 5,039 5,151

Rate of growth (per cent) 5.0 5.2 4.1 2.2

Source: Hellenic Bank (2002)

Table III Child allowance (effective 2003; in CYP)

One child 200

Two children 400

Three children 1,200

Four children 1,600

Five children 2,000

Note: Prior to 2003, only families with four children and more received childallowance equal to CYP 200 per child

Table IV Beverage split (million litres)

Description 2001 2002 2003

Juice/soft drinks/nectarsa 30 31 32

Milk/dairy based drinksa 61 63 65

Bottled water 42 45 49

Beer 39 41 40

Soft drinks (carbonated) 56 55 54

Coffee drinks 6 7 8

Source: RAI Consulting Services (2003)Note: a The company investigated in this case is active in these segmentsonly

Table V Competitors in the Cypriot dairy industry (2003)

Shelf life

(days)

Dairy

1

Dairy

2

Dairy

3

Fresh pasteurised white milk, full

fat 4 £ £ £

Fresh pasteurised white milk,

semi-skimmed 4 £ £ £

Fresh pasteurised white milk,

skimmed 4 £ £ £

Fresh pasteurised white milk,

skimmed, enriched with calcium 4 £ £ £

Lactose reduced 4 £

Goat’s milk 4 £

Fresh pasteurised post-flavoured

milk 4

Chocholate milk 60 £ £

Banana milk 60 £

Table VI Market share (per cent) of the three dairies

2002 2003 2004

Dairy 1 27 26 23

Dairy 2 52 45 48

Dairy 3 20 27 27

Others 1 2 2

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The company’s competitors

The battle to capture market share is between three players

(the names of the companies have been withheld for reasons

of confidentiality): the company under investigation (offering

the products of its corporate parent) and Competitor 1, both

of which supply cartons, and Competitor 2, which supplies

plastic bottles. Table VII compares the global turnover and

operating profits of the three companies over the period 2000-

2001. The company’s corporate parent is one of the biggest

companies competing in the juice and milk markets in

Cyprus.

Porter’s five forces

It is now important to identify the competitive forces for the

company through a structural analysis of the industry. This

can be illustrated through Porter’s (1985) five competitive

forces illustrated in Figure 3.

Threat of new entrantsFor the moment, the relatively small size of the milk market as

compared to other European countries and the establishment

of a local office have raised barriers to entry. The threat is

considered low at present.

Industry rivalryRivalry is considered medium because the overall market isgrowing at a pace that means focus is on gaining new market

share rather than taking market share from competitors.However, when the life cycle of white milk products reachesthe maturity stage, competition will intensify. For Dairy 1, the

customer of the company investigated in this paper, industryrivalry is fierce in the litre package size.

SuppliersThe company under investigation gets its supplies from itscorporate parent. The local company has no influence or

negotiating power on purchases as these are set centrallyirrespective of local conditions. Therefore, the strength of thesupplier is considered high and it is anticipated that it will

remain so in the future.

SubstitutesThe plastic bottle is the main substitute to the carton in themilk beverage market. The ability to see the product and the

convenience offered has gained favour with many consumers.However, with environmental issues gaining in importanceand the difficulty in recycling plastic, this threat may

deteriorate in the future.

CustomersWith only one customer in the dairy industry buying cartonsfrom the company investigated in this paper, high switchingcosts have created a lock-in situation. This will remain the

same over the next four to six years, until the equipment isfully depreciated.Currently, the overall market attractiveness is rated as

medium, but it is anticipated that this trend will move towardsmedium/high in the future.

Internal analysis

“The internal audit examines the company’s own resources

and supplies suggestions as to the company’s strengths andweaknesses” (Vrontis and Vignali, 1999, p. 394). Internalconsiderations are mainly controllable by the company and

therefore companies should do their utmost to avoid anyproblems arriving from them. It is evidently proven thatproduct development and strategic formation are based on the

internal organisational capabilities. Internal audit examinesthe company’s own resources and supplies suggestions as toits strengths and weaknesses.

The relationship between the company and Dairy 1

The company investigated in the paper enjoys a goodrelationship with Dairy 1, trying at the same time tomaintain high satisfaction and loyalty levels. This has mainly

been achieved by the use of sales/technical people, who haveover the years aimed to build and develop a good relationship.The company’s relationship with Dairy 1 is illustrated in

Figure 4. The aim of the company is to maintain this “apostle/loyalist” position in the future.In relation to McDonald et al.’s (2000) model (see

Figure 5), since 1969 the relationship has progressed fromthe basic stage to the cooperative stage and today comfortably

sits in the interdependence stage. The characteristics of therelationship at this stage are as follows:

Table VII 8 The company’s competitors

2001 2000 %

Corporate parent: based in Sweden/SwitzerlandTurnover (e, millions) 7,650 7,505 þ5

The company investigated in this paper is the local sales office and

supplies Dairy 1

Competitor 1: based in NorwayTurnover (e, millions) 528 505 þ5

Operating profit 34 214

No sales or support office in Cyprus; supplies Dairy 2

Competitor 2: based in FranceTurnover (e, millions) 933 1,025 29

No sales and support office located in Cyprus, but there is a

representative

Figure 3 Five forces model

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. trust from top management;

. trust between technical and sales departments;

. partnership and cooperation instead of a supplier/buyer

relationship;. mutual dependence and satisfaction; and. a high level of information exchange.

Marketing mix

Given the small size of the company and the small number of

employees, little attention is paid to this function, which can

be considered a serious weakness. The market manager makes

all marketing decisions on an ad hoc basis. In terms of the

seven Ps, and considering that the company provides a service

to its customer(s), the following applies:. product – developed at corporate level, quality offered is

considered to be very high;. price – Set at corporate level and applies to all European

countries;. place – dairy producers’ plant;. promotion – very limited promotional techniques, high

use of brochures; and. people – market manager provides all the necessary

marketing information obtained through the company’s

intranet, staff are very professional and customer-centric,

regular contacts and visits with tangible evidence support

professionalism.

Within the company, there is a tendency not to store

marketing information in any database or file. As a result, the

managing of marketing information is not shared, which can

cause frustration.

Package portfolio – portion pack size

Figure 6 illustrates the company’s main package portfolio for

portion-size packages.

Product life cycle (PLC) analysis

At this stage it is useful to examine the product life cycle

(PLC) of the company’s product portfolio. This is illustrated

in Figure 7. Although it is very difficult to predict the length

of each stage of the PLC, what is clear is that the four

products are at different stages, with one being at the stage of

decline (Product D), one at the stage of maturity (Product B),

one at the stage of growth (Product A), and one just being

introduced (Product C).

The Boston portfolio matrix (BCG): portion packs

Following our PLC analysis we can apply the BCG matrix to

examine the range of the company’s products portfolio against

segment growth, segment volume and the relative market

share of the company in the packaging material segment

(relative to the nearest competitor). The different products

and their position on the BCG matrix are shown in Figure 8.

Map to market

Figure 9 is developed to show the product route to market. At

present, the marketing activities of the company stop at the

producers.

SWOT analysis

Deriving from the internal and external environmental

scanning, the company should highly consider the

development of the strengths, weaknesses, opportunities and

threats (SWOT) analysis. As can be seen in Vrontis (1999),

this is vital if companies want to capitalise on their strengths,

minimise any weaknesses, exploit market opportunities as

they arise and avoid, as far as possible, any threats.Further, it is advisable to the company to utilise the SWOT

analysis to its benefit. Marketers should convert weaknesses

into strengths, threats into opportunities, and understand that

Figure 4 Level of customer loyalty and satisfaction

Figure 5 Collaboration and relationship

Figure 6 Portion package portfolio matrix

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strengths are only meaningful when used to capitalise upon

opportunities. This is illustrated in Figure 10.On the balance of issues, the company’s strengths outweigh

its weaknesses and can take advantage of the opportunities in

the market whislt avoiding the threats to it. To achieve this,

the company needs to gain valuable marketing experience by

working much closer with its customer in the dairy market.

Achieving this, means intergrating elements of its value chain

activities, such as marketing, with those of the customer in an

explicit process. A better understanding of down stream

activities in the value chain will allow, through its customer, to

motivate changes in the entire value chain.To avoid increasing competition from plastic bottles and

other carton suppliers, the company needs to exploit the

environmental friendliness of the carton and link this to

consumer trends in health and fitness needs of consumers.

Figure 7 Product lifecycle of the four products

Figure 8 Boston Consulting Group matrix: portion packs Figure 10 SWOT analysis

Figure 9 The company’s route to market

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This can be done by focusing on the portion package byoffering the consumer value added products.Although the potential increase in the birth rate will lead to an

overall increase in milk consumption, its impact on the industrywill not be felt for at least two to three years, when children startto consume fresh milk as opposed to powdered milk.

Business objectives

The business objectives set by the company are as follows:. to grow packaging material by 15 per cent in two years;

and. to score a 4.5 in the customer satisfaction (CS)

programme in 2004 and 4.7 in 2005, where 1 isdefector/terrorist and 5 is apostle/loyal (see Figure 4).

Further information on the company’s customer satisfactionprogramme for 2003 follows in the next section.

Customer Satisfaction (CS) programme

Customer Satisfaction is a programmme initiated by thecompany’s corporate parent in order to determine howsatisfied customers are with the company’s products andservices. It is implemented in all European market companies.Selected customers are chosen for the programme andinterviews with five or six top/middle managers areundertaken by independent consultants. Each managerinterview will score from 1 to 5 (with 1 being the lowestand 5 being the highest scores) in the business areas shown inTable VIII.

Marketing objectives

The marketing objectives set by the company are as follows:. to introduce one premium portion package in 2004;. to increase sales of portion packages by 20 per cent over

two years; and. to score at least 4.5 and 4.7 in the marketing support

activity on the customer satisfaction programme in 2004and 2005, respectively.

Marketing strategy

Marketing strategy is the broad statement of the way in whichthe organisation sets out to achieve its objectives and to driveits tactics. Included within this would be a series of decisions

on the markets in which the organisation will operate, the type

of products/services it will offer and the basis of the

competitive stance. Marketing strategies are the means by

which objectives will be achieved. They reflect the company’s

best opinion as to how it can most profitably apply its skills

and resources in the marketplace and they are inevitably

broad in scope.The Ansoff matrix (see Figure 11) helps to identify the

company’s product and market growth strategy. The company

is looking to grow through “market penetration”, i.e. to

expand sales with existing packaging solutions for “value

added” liquid foods in the dairy market, thereby taking

advantage of the increasing awarness of health and social

issues identified in the PEST analysis. Market penetration

carries the lowest risk for the company, as the focus in on

current products in current markets, where knowledge and

experience is the highest. But which product portfolio is

setting the optimal option for the company?In order to target the “value added” milk segment in

portion pakcages the company will need to offer a “premium

package” and, according to the package portfolio analysis, this

means promoting Product A’s package, which is the

company’s premium portion package. Further investment

should take place in Product C as well. Investment for both

products (A and C) should arrive from profits made by

Product B, which is currently a very profitable cash cow. It

follows from the BCG matrix examined above (see Figure 8)

that an opportunity exists to move Products A and C from the

question mark quadrant through the star in the short term

and eventually to the cash cow quadrant in the medium term.According to Porter’s three generic strategies model (see

Figure 12), the company currently pursues a “broad

differentiating” strategy, where Product B’s packages achieve

superior value to the market as a whole. By promoting

Table VIII Customer satisfaction

Business area Score in 2003

Customer servicea 4.3

Marketing support activitiesa 4.1

Pre-order to billing activities 4.5

Lead time 4.1

Operational efficiency 4.0

Technical support 4.6

Innovation of products 4.6

System value for money 4.0

Environment 4.0

Strategic alignmenta 3.9

Average score 4.2

Note: a Impact of marketing activities

Figure 11 Ansoff product/market matrix

Figure 12 The three generic strategies

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Product A’s package with its high perceived value by

consumers, the company will be able to pursue a “focused

differentiating” strategy allowing it to minimise its risk of

being overdependent on Product B packages.

Segmentation and the company’s segmentation model

It is discussed that a potential growth segment would be an

“enriched” milk-based product for the health and fitness

consumer. The primary objective of the segmentaiton model

shown in Figure 13 is to help the identification of the

company’s target groups. The model is divided into four

primary target groups and three basic milk types.From the above segmentation model, consumption of milk

increases at the children stage but as children get older, their

consumption declines. One major reason for this is that there

are a wide variety of alternative drinks, such as Coca Cola,

juice, water, etc. The company investigated in this paper aims

to offer an alternative to these drinks that will be:. milk-based but with added juice (a new concept for

Cyprus);. without gas;. nutritional;. enriched; and. convenient.

In other words, the company should aim to move the

consumption line of milk upwards to a higher level.

Market targeting

A systematic approach to evaluating the four target goups

identified in the segmentation model can be seen in Table IX.From our analysis the most attractive target groups are:

. young adults (most health conscious); and

. teenagers/youngsters (young and dynamic and most

physically active).

These target groups are the most likely to support what is

possibly a completely new product concept for Cyprus,

designed to fit with their lifestyles and needs.Looking at the target groups behaviour from a theoretical

point of view and according to Maslow’s hierarchy of needs

model, Cypriot consumers are looking more and more to

statisfy their social and individual needs.

Tactics

The identification of the market segment and target groups

implies that the company will need to enchance its current

relationship with Dairy 1 to the highest level of cooperation

and trust. Therefore it will need to move up from its current

“interdependent” stage on McDonald et al.’s (2000) model to

the fully “integrated” stage.In addition to the services offered at the current stage, the

company should pay particular emphasis to the following

aspects:. more focus on explicit marketing as a service;. quick delivery of marketing plans;. support the customer in implementation and control; and. marketing training.

These additional services will help to reinforce to the

customer the high level of profesionalism and commitment

there is for their success.The marketing mix/tactics are developed for the main

benefit of Dairy 1 and efforts have been made to improve the

marketing service. The basis for its formulation is derived

from the company’s SWOT analysis, its objectives and its

Figure 13 Segmentation model

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two-year period strategy. It is suggested that a concentrated

targeting strategy is followed, where one marketing mix is

developed and aimed at two target groups/segments, as

identified in Table IX.

Product profile

Below is a suggested profile for a “value added” product that

could be suited to Dairy 1’s target consumers. However, this

needs to be validated through consumer tests.(1) Product description and ingredients:

. milk and juice blend enriched with calcium and

vitamins;. light but pleasant flavour;. light colour;. good taste and after taste; and. not too sweet.

(2) Positioning:. new drink generation (breaking new ground);. new sub-brand; and. modern, healthy and convenient alternative.

(3) Value proposition:. trendy;. rebuilds energy;. healthy; and. choice of flavours (after first season).

(4) Consumption occasion:. during hot days (rehydration, product with 75 per

cent water content);. during or after sport activities; and. mid-morning pick-up.

(5) Packaging:. new modern shape;. easy opening and straw for convenience; and. environmentally friendly.

The company’s target groups are already subconciously aware

of milk being one of the most important sources of calcium.

So, through the company adding more calcium to its

products, consumers will be able to draw the conclusion

that the new products offered are even healthier than plain

white milk.Regarding the other ingredients (i.e. juice and vitamins),

these are easily understood and easy to relate to for the

consumer. There are no negative associations attached to

either, as consumers generally know that juice and vitamins

are “good for you”.Overall, all the ingredients in this product are understood

by consumers and do not need any specific educational

campaign, therefore reducing the risk of non-acceptance.

Although Dairy 1 can use its established brand to signalconfidence in consumers for the launching of this product,there is a need to position the product more clearly in theminds of the company’s target groups. Therefore, therecommended strategy here would be to introduce a sub-brand with clear links to the core brand as a way ofdifferentiating Dairy 1’s product portfolio. In time, all theelements of the marketing mix will work together in acoherent pattern to create its own brand equity and identity.

Promotion

The development of a sub-brand will require individualisedpromotion to position and strengthen it. To achieve this,Dairy 1 will need to part with the generic advertising/promotion campaigns of the past and undertake tocommunicate the need for the product as follows:. healthy start to every day;. convenience, easy to open and quick to consume;. understand the health benefit; and. trust the brand.

To be successful all elements of the communication mix willneed to focus on pushing buyers through the following AIDAstages:. awareness;. interest;. desire; and. action.

In order to achieve this, the company must concentrate on thefollowing areas:. advertising – television commercials, cinema spots,

newspapers/recipies and health guides, teenager/adultmagazines, bill boards, leaflets;

. sales promotion – key supermarket sampling, point ofsale-material;

. public relations – sponsoring of at least 2-3 local sportsevents, donations to charities; and

. organisations – all Dairy 1 staff to receive samples andpromotion cards to hand out to relatives and friends.

Advertising and product sampling are considered to be veryeffective in going through the AIDA stages.

Pricing

Dairy 1’s pricing strategy will need to be consistent with itsproduct profile and value propostion. Figure 14 shows theprice strategy recommended – a “premium price” strategy.This strategy is based on what the market can accept, ratherthan on a simplistic cost-plus basis. Figure 15 indicates theretail price landscape of most of the products that can beconsidered as alternative choices in Cyprus. It is

Table IX Target group selection matrix

Rating (1 to 10) Total 5 W 3 R

Factor Weight Children Young teens Adults Elders Children Young teens Adults Elders

Health conscious 35 3 5 8 5 105 175 280 175

Dynamic/fit 25 2 9 8 3 50 225 200 75

Price sensitive 20 0 8 8 2 0 160 160 40

Convenience 15 3 8 9 3 45 120 135 45

Environmental 5 0 2 5 5 0 10 25 25

100 200 690 800 360

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recommended that a selling price of CYP 0.42 (supermarket

price) is charged.

Place

Dairy 1 covers the following points of sale:. 100 per cent of large supermarkets;. 90 per cent of small/medium supermarkets;. 70 per cent of small village shops;. 95 per cent of bakeries; and. 55 per cent of impuse outlets, such as kiosks.

To reach the target group, Dairy 1 will need to strengthen its

distribution reach to more kiosks and impulse outlets and add

the following impulse outlets:. sports centres; and. health and fitness gyms.

Implementation and control

The total investment to implement the proposed budget plan

is CYP 1,345,000. The proposed budget plan covers the two

years of the company’s marketing plan. Full details are shown

in Table X. It is also suggested that the marketing plan is run

as a project by Dairy 1, with a suggested structure as shown in

Figure 16. The steering committee would include high-level

executives who will oversee the project. It would be necessary

to have a project sponsor from the steering committee to

ensure commitment across the company, with the managing

director at Dairy 1 being a good choice. The project manager

would be the key stakeholder, and it is suggested to be the

marketing manager from Dairy 1. Finally, the project team

would consist of a small group of other key stakeholders that

would be required to implement the project.The project manager would need to monitor the following

key success factors:. consistent marketing mix;. good co-operation and communications between key

stakeholders;. buy-in of key stakeholders; and. project sponsor commitment.

The success of the launch might fall short of the expected

results for many reasons, indicating that contingencies would

Figure 15 Various drink portion pack prices in 2003

Figure 14 Price strategy

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need to be decided. Some of these reasons, together with

possible corrective actions, are shown in Table XI.

Conclusion

This paper has focused on conducting a strategic review of the

marketing function for a Cypriot company operating in the

liquid food packaging industry and has shown that the

company can improve significantly on its current 23 per cent

market share by concentrating on its marketing function.

By undertaking to rectify its weak marketing function,

through the delivery of a marketing plan, the company can

develop capabilities that will lead to a fully integrated

relationship with all its customers. This can lead to the

maximisation of its potential to take advantage of the

opportunites in the external environment whilst minimising

the threats it faces.Understanding of the customer value chain and conscious

awarness of consumer trends will enable the company to:. have closer co-operation with customers on marketing

issues;. save time and costs, thus enabling the company to

motivate changes in the value chain;. increase the company’s service level and its customer

satisfaction score while raising barriers to entry to

competitors; and. turn the marketing function within the company from a

implicit to an explicit process.

The company’s marketing function would then become a

more market/consumer orientation process than before and

hereafter will contribute to bridging the gap between strategic

change and industrial complexity and instability.

Application questions. Assess and evaluate the company’s strategic direction.

What are your strategic recommendations in order for the

company to achieve its objectives and be more successful

and profitable in the future?. Prepare a proposal illustrating how the company should

try to avoid threats in the industry and take advantage of

Table X Budget plan

Activity Responsibility Year 1 Year 2 Total

Company research pre-launch Marketing managera 10,000 3,000 13,000

Product development Quality control managera 15,000 5,000 20,000

Advertising Outside agency 250,000 150,000 400,000

Sales promotion Sales departmenta 10,000 10,000 20,000

Public relations Marketing managera 5,000 5,000 10,000

Product/ingredients Quality control managera 300,000 250,000 550,000

Consumer feed back Research company 5,000 5,000 10,000

Retail discounts Salesa 40,000 40,000 80,000

Product waste Productiona 8,000 9,000 17,000

Distribution Salesa 100,000 75,000 175,000

Extra ordinary costs Marketing managera 25,000 25,000 50,000

Total cost 768,000 577,000 1,345,000

Note: a Dairy 1 staff responsible

Table XI Possible problems affecting the new launch

Reason Corrective action

Product taste is disliked Modify product taste after research or re-enter with new flavours

Timing of communication/launch inadequate Reassess time plan and re-launch

Competitors launch before Review and possibly increase promotion activities

Product is not available Inadequate supervision of network supply during launch. Improve availability

No repeat purchase Find out why through consumer feedback research and revise product strategy

Despite corrections, sales do not improve Kill the product

Figure 16 Project structure

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market opportunities. Your response should be given on atactical level (marketing mix elements).

. Design a detailed promotional approach for the company.

. A clear strong brand positioning creates strong customerloyalty and a clear differentiated position in the marketsegment. What issues should the company consider whendeveloping a positioning strategy for the brand whilsttrying to grow in the market?

. The company faces many challenges in the marketenvironment. Identify and discuss the marketingconcepts, tools and issues it will need to use to addressthe end user segment and develop itself in the marketplace.

References

Ansoff, I. (1957), “Strategies for diversification”, HarvardBusiness Review, September/October, p. 114.

Fifield, P. and Gilligan, C. (2000), Strategic MarketingManagement, Planning & Control and Analysis & Decision,The Chartered Institute of Marketing, Butterworth-Heinemann, Oxford.

Hellenic Bank (2002), Cyprus in Figures, Hellenic Bank,Nicosia.

Heskett, J.L., Jones, T.O., Loveman, G.W., Sasser, W.E. Jrand Schlesinger, L.A. (1994), “Putting the service profitchain to work”, Harvard Business Review, March/April.

McDonald, M., Rogers, B. and Woodburn, D. (2000), KeyCustomers – How to Manage Them Profitably, Butterworth-Heinemann, Oxford.

Porter, M. (1985), Competitive Advantage: Creating andSustaining Superior Performance, The Free Press, NewYork, NY.

RAI Consulting Services (2003), Services Retail Audit Report,RAI Consulting Services, Richardson, TX.

Vignali, C. and Vrontis, D. (2004), Global Marketing andExport Management, Foxwell and Davies, London.

Vignali, C., Vrontis, D. and Vranecevic, T. (2003), MarketingPlanning. Analysis, Strategy and Tactics, Foxwell and Davies,London.

Vrontis, D. (1999), “Bass plc – an assessment, evaluation andrecommendations of their strategic approach in enteringforeign beer markets”, International Marketing Review,Vol. 16 Nos 4/5, pp. 391-405.

Vrontis, D. (2003), “McDonald’s – the impact of the externalenvironment on its international marketing operations –standardisation, adaptation or adaptstandation?”,International Journal of Management Cases, Vol. 6 No. 2,pp. 30-40.

Vrontis, D. and Vignali, C. (1999), “An entry strategy reportfor Dairy Crest in Germany: a theoretical application ofmatrix marketing”, British Food Journal, pp. 393-408.

About the authors

Demetris Vrontis studied in the UK and obtained a BSc(Hons) degree in Business from the Manchester Metropolitan

University (MMU), a PGCE (HE) from MMU, a VTC from

Henley Management College, an MBA (Distinction) from the

University of Hull and a PhD in International Marketing from

MMU. From 1997 to 2003 he worked at the Manchester

Metropolitan University Business School (MMUBS) in the

UK, where he led and directed two of the University’s

postgraduate programmes. Currently, Demetris is the Head of

Marketing Department at Intercollege University in Cyprus

and Director of the Institute for Retail Studies. Demetris is a

founder member of CIRCLE – the Centre for International

Research for Consumers and Location and their

Environments (a strategic alliance made by seven

Universities from different countries). The aim of the

alliance is for its members to collaborate and cooperate in

publications and research grants, undertake research and

provide consultation to a number of national and

international companies in both consumer and trade

markets. Other activities include being an external examiner

and moderator for Nottingham Trent University (in its

cooperation with a number of Greek Business Schools in

Athens, Thessalonica and Heraklion) and a visiting professor

at a number of universities around the world. Currently he is

an associated faculty for Henley Management College, a

Visiting Professor for Vorarlberg University in Austria

(Master’s level) and a Visiting Fellow at Leeds Metropolitan

University in the UK. Demetris teaches marketing and

international marketing at both undergraduate and

postgraduate level and supervises undergraduate and

postgraduate research students, both in Cyprus and abroad.

His prime research interest is on international marketing

planning and marketing strategy, areas that he has published

widely on in refereed journal articles and presented papers to

conferences around the world. He is also the author of seven

books in international/global marketing and strategic

marketing planning and the editor of the EuroMed Journal of

Business (EMJB).Harry Kogetsidis was a Lecturer in Business Systems at the

University of Luton in the UK between 1994 and 2002. In

2002 he joined Intercollege University in Cyprus, where he is

an Assistant Professor at the Department of Management and

MIS. His prime teaching and research interests are in

management and business forecasting. Harry has written and

delivered forecasting courses at both undergraduate and

postgraduate level, trained UK managers in forecasting

methods and taught in a number of MBA programmes in

Europe. His interests also include developing distance

learning material on forecasting. He has published a

number of papers on management and management science

in international journals and has presented his work in

conferences around the world. Harry is a member of the

International Institute of Forecasters and of the British

Operational Research Society.Andrew Stavrou is an MBA Student at Henley

Management College, Henley-on-Thames, UK.

Strategic marketing planning

Demetris Vrontis et al.

Journal of Business & Industrial Marketing

Volume 21 · Number 4 · 2006 · 250–261

261

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