Assignment 1 March 27 2017 Fonterra marketing plan   ELEMENT MARK AWARD COMMENTS Introduction *History *Location 2 Consumer Behaviour *Internal factors *Socialfactors *Situational factors 9 S T P Strategy *Segmentation strategy *Targeting strategy *Positioning strategy 6 Presentation , Grammar & Referencing 3 TOTAL 20 Contents ELEMENT 2 Introduction 2 Consumer Behaviour 2 S T P Strategy 2 Executive Summary 4 1. Introduction 5 1.1 History 5 1.2 Location 6 2. Consumer behavior while buying the flavored milk 6 2.1 Internal factors 6 1. Motivation 6 2. Perception 6 3. Attitude 7 4. Personal needs 7 5. Lifestyle 7 2.2 Social Factors 8 2.3 Situational factors 9 Cultural factors 9 3. STP Strategies 10 3.1 Segmentation strategy 10 3.2 Targeting Strategies 11 3.3 Positioning Strategies 11 4. References 13 Executive Summary This report is about Fonterra, a company which deals with dairy products. Fonterra is launching a new flavored milk in New Zealand market which is orange flavored milk. As businessmen, I have conducted a detailed research on their new product. This report outlines a marketing plan of Fonterra Company. First part of the reports talks about the brief history of the company followed by consumer behavior while buying the new product. The STP strategies are discussed in the third part with proper citations. 1. Introduction Fonterra is a multinational company which deals with dairy products and is owned by 10,500 New Zealand farmers. As of 2016, it made a profit of NZ $834 million and generates a revenue of NZ$ 17.2 MILLION. It currently employs 22,000 employers. Fonterra consist of brands such as Anchor, nzmp etc. It currently contributes to the 30% of the world’s dairy products. (Fonterra, 2017). The mission statement of Fonterra is “To maintain leadership position in the dairy industry”. 1.1 History New Zealand’s (NZ) dairy industry started long back in 1830 when an England missionary travelled to NZ and gifted bull and two heifers which later emerged the starting of a dairy business. After numerous land wars farming of dairy products such as cheese, milk became popular in the nation. Huge consignment of cheese was exported to Australia in 1981 which lead to foundation of co-operative factories in this country. (William, 2017) Due to huge economic and wealth generated by dairy farming in NZ it lead the major co- operative factories to merge together which resulted in the foundation of Fonterra. Fonterra was formed as a result of combining of major dairy co-operatives which was New Zealand dairy group, Kiwi co-operatives dairies and New Zealand dairy board. It’s main aim was to increase the earnings which would benefits the farmers with the falling prices of the products. After three founders of the Fonterra proposed a deal, it transformed the economy of dairy industry in New Zealand. Within one year of launching the brand, it teamed with major firms across the globe and lead to 59% increase in the sales as compared before. 1.2 Location Fonterra’s headquarter is situated in Auckland, New Zealand. It has its other branches in continents such as Europe, America and has stores in Australia, Chile. It exports major of its products to China and other Asian countries. It has 60 stores in New Zealand and generates a revenue of 22$ billion per year. Anchor is the flavored milk brand under Fonterra Company. As of 2015, it has 70 stores locate worldwide. (Our locations) 2. Consumer behavior while buying the flavored milk There are so many factors which limit the buyer to buy some specific products it may be related to cost, quality, place, promotion etc. It is briefly divided into internal, external, situational and social factors. (D, 2015) 2.1 Internal factors There are many internal factors which affect the consumer behavior. Some of them are personal needs, perception, motivation, lifestyle, attitude and learning. 1. Motivation A motivation process is a need that is adequately squeezing to guide the individual to look for the fulfillment of the need. Motivation depends on Maslow's theory of needs. As per Maslow, a consumer tries to fulfill the most imperative need to begin with, which is known as the survival needs or the mental needs. At the point when the essential needs are fulfilled, it stops to go about as a helper and the individual will along these lines attempt to fulfils the following critical need, known as security needs. Base on Maslow hypothesis, it is expressed that a man ought to meet their essential and physiological needs like nourishment, safe house, and garments. It can be connected to milk too whereby a man with low wage will think how to eat nourishment which can satisfy their body need, for example, milk or flavored milk which will give taste as well as nourishment. (D, 2015) 2. Perception A perception of a buyer will influence their purchasing behavior. Two individuals in a similar circumstance with a similar inspiration may act contrastingly in light of the fact that they see the circumstance in an unexpected way. Perception is the procedure by which individuals sort out, select and decipher data to shape a significant photo of the world. In the case of milk, for one person flavored milk can be just a sign of taste, whereas for another person this milk can be judged based on nutritional values ignoring the taste. 3. Attitude The next significant factor that influences consumer buying product is their own particular attitude. Attitude relates to what an individual feels or thinks about something. It is constantly reflected in people's goes about and in addition to their purchasing designs. Once a man attitude is shaped it is difficult to change. On the off chance that a buyer has some sort of negative attitude towards a particular item or issue, it won't be anything but difficult to change that conviction. It is a dependable general assessment of purchasers about an item, administration or organization. Attitude helps the marketers to know consumer behavior while buying the product. The reason why Fonterra’s flavored milk is popular among the buyers is because its investors know its consumer attitude toward their milk. For example taste and quality liked by consumers benefit the business to launch that particular product. (D, 2015) ("Fonterra Launches The Switch to Z Biodiesel", 2016) 4. Personal needs Personal needs are one of the most important internal factor. Buying a certain kind of milk depend upon the needs of a person. Cost, age group constitute to personal need of a person. While children prefer chocolate milk, teenagers may like different milk. So studying age group, purpose of buying specific products is also important in determining the consumer behavior. 5. Lifestyle People coming from the same social class, subcultures and even occupation may have quite different life styles. Life style is a person's pattern of living, understanding these forces involves measuring consumer's major activities, interests, and opinions dimensions. Life style captures something more than the person's personality. The life-style concept can help the marketer gain an understanding of changing consumer values and their buying behavior. People who always consume and wear branded stuff might always want to consume only famous milk brand comparing to people who consume milk despite their famous brand. (D, 2015) 2.2 Social Factors A conduct of customer is likewise impacted by social factors, for example, the family, social parts, status and savings The social factors can influence the reactions of buyers. The social factors are partitioned into three classes: 1. References groups Reference gathering is the conduct of men impacted by numerous little gatherings. Some are essential gatherings incorporates companions, neighbors and family. Some are optional gatherings incorporates religious gathering. For instance, an individual may choose milk in light of their gathering reference. References by the gathering can otherwise call mouth to mouth promoting. The reference gathering may approve the experience confronted by the person. For example, if a neighbor likes certain brand of milk he will tell the person to go for that brand milk. 2. Family Relatives can impact consumer conduct effectively. The family is the most essential customer purchasing association society. Parents make up the orientation of family. The family affects regular purchasing conduct. Buyers are influenced by relative. For instance, the parents ordinarily choose what milk item they need to buy however the youngsters can choose what the flavor is. 3. Role and status A man has a place with some family, gatherings, associations and clubs. The position of a man in each gathering can be characterized regarding both status and role. Status mirrors the general regards given to part by the general public. Individuals regularly pick items that demonstrate their status in the general public. Aside from that, purchasers are likewise influenced by their part they play and the status they hold in the general public. 2.3 Situational factors Situational factors are also called external factors. These are also called temporary conditions that will see how the consumer purchases products. It consists of cultural factors, physical environment. Cultural factors Culture factor consist of culture, subculture and social class. 1. Culture Culture is the set of basic values wants perceptions and behavior learned by a member of society from family and other important groups. The culture is the basic cause of a person's behavior and wants. Every institutions or society has a culture and cultural influences on buying behavior. For example, among one family it is believed that fresh milk has the highest nutritious value among all types of milk. 2. Subculture Each culture contains little sub cultures that are a gathering of individuals with same values. Sub-cultures can incorporate religions, nationalities, racial gatherings and geological districts. Many sub culture makes up essential economy section. For instance, individuals from one nation just acknowledge one kind of milk, it is chocolate milk. So the general population will just purchase chocolate milk and would prefer not to pick another milk flavor 3. Social class Each society has social classes that are moderately lasting and ordered divisions in a society whose individuals have comparable conduct, esteem and interests. For instance, high-class individuals who truly exceptionally worry about their wellbeing particularly their body shape will just purchase low-fat milk rather than different sorts of milk. Social variables have profound impact on buyer’s conduct. The advertiser of the item needs to comprehend the buying behavior of purchaser’s life, subculture and social class. As per the experiment conducted by Dr. Hannah Wanjiku Wambugu it proves that physical environment or the time at which milk is buyed contribute least to the consumer tendency to purchase. 3. STP Strategies Segmentation, Targeting, Positioning is one of the basic models used in marketing. It is related to companies’ competitive method used to compete in the market. (Hanlon, 2016) 3.1 Segmentation strategy Segmentation of market can be done in many ways such as geographic, demographic, psychographic and behavioral segmentation.  Geographic segmentation: To know where the consumers are located. Dividing market into countries, cities based on consumer behavior. It is found that metro area of Auckland has most buyers for Anchor chocolate milk as compared to Rural Auckland.  Demographic segmentation: Dividing the market based on age-group, occupation, income etc. As per the research infants between age group -10 -6 years prefer strawberry milk as company to teenagers between 18-30 year old group who prefer plain milk.  Psychographic segmentation: It is divided based on lifestyle, personality and values.  Behavioral segmentation: based on behavior of buyer (Hanlon, 2016) Out of the four, to launch new flavored milk in the NZ market I have chosen Demographic segmentation strategy which is categorized into: • Age: 20 to 40 years It represents the significant share of the customer base as they are youthful urban working experts with constrained time and a yearning to lead a solid way of life. Middle age and elderly the pack of vitamin milk is exceptionally advantageous for the elderly people. Although this is not the target audience under STP strategy. Gender: Fonterra milk is a sexually unbiased drink situated for any individual who wishes to be healthy. (Fonterra, 2017) • Occupation: Out of all professions such as students, working, retired. It is found that students and working professionals are the consumers which buy more milk. The main purpose of segmentation of Fonterra milk will be to target the group of 20-40 years old people to get maximum return for their product. 3.2 Targeting Strategies In geographic segmentation, Auckland city and surrounding suburbs are the targeting audience as most of the buyers are from this area. In demographic segmentation as already discussed the targeted buyers are working and student professionals in the age group of 20-40 years In situational segmentation it is suggested to attract new consumers with discounts. Due to demographic segmentation chosen, the targeting strategy would be to attract students and young professionals to try new flavored milk by luring them with discounts, loyalty points etc. (Hanlon, 2016) 3.3 Positioning Strategies After segmenting the targeted customers, next step is to position the brand to get the maximum output. The positioning of Fonterra milk is to center one glass of milk to be part of everyday meal plan. The competitive parity for this brand is adding vitamins and nutritional values in flavor milk to differentiate their brand from others and have more advantage of selling by combining nutrition with taste. Overall STP Strategies can be described in a diagram given below Figure 1 STP Strategies (D, 2015) 4. References (2016). "Fonterra Launches The Switch to Z Biodiesel". Auckland: Fonterra Media Releases and News. D, J. (2015). Understand Consumer Behaviour Towards Milk Products Marketing . UK. Fonterra. (2017, 03 18). Retrieved 03 25, 2017, from Wikipedia: https://en.wikipedia.org/wiki/Fonterra Hanlon, A. (2016, 11 08). The Segmentation, Targeting and Positioning model. Retrieved 03 26, 20176, from Smart Insights: http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-targeting/segmentation-targeting-and-positioning/ Our locations. (n.d.). Retrieved 03 25, 2017, from Fonterra : Dairy of Life: https://www.fonterra.com/nz/en/contact-us/all-locations.html William, J. (2017). Phil A History of the New Zealand Dairy Industry. 3-7. Academic and Communication Skills A Writing Task 2 Annotated Bibliography (10 marks) An annotated bibliography requires conducting independent research and evaluating different academic sources. Students are required to find and assess FIVE (5) pieces of writing related to their chosen essay topic, and write a summary (150 -200) words and a short (100- 150 word) review of each. Each text must be presented in the following format. 1. Bibliographic reference (using Harvard Referencing Style). 2. A short summary (150 - 200 words) of the text 3. An annotation (100 words) commenting on the text, and how it relates to your essay topic. Due date: 13 April 2017   Academic and Communication Skills A Student name …………………………………… Student I.D ………………………………………… Annotated Bibliography - Marking Guide Harvard Reference (.5) Summary (1) Short summary of text (100 words) Relevance to topic (.5) Statement (100 words) about how text relates to essay topic. 1st Reference 2nd Reference 3rd Reference 4th Reference 5th Reference Total