TABLE OF CONTENT

1. Executive Summary2. Introduction to the organization3. Situation Analysis4. Marketing Objectives5. Introduction to initiative6. Marketing objectives for initiative7. Product plan8. Pricing plan9. Distribution plan10. Promotions plan 11. Marketing expenses budget 12. Evaluation & monitoring mechanisms

EXECUTIVE SUMMARY

Ole Springs Bottlers identifying an immerging need of consumers is

preparing to launch a new herbal drink to the Sri Lankan carbonated soft drink market. This

will be an innovative product offered to practice undifferentiated targeting. At present Ole

offers products basically targeting the youth. Other than Ole plus- the newest addition to Ole

product range, Zingo and Arshik almost all the other products are targeted on youth. There

fore this new herbal drink is a good initiative to change the direction of Ole.

The idea was generated for this new product development identifying the

high preference of consumers towards nutritious foods and beverages. High demand for

instant and semi processed herbal beverages is evident in Sri Lanka at present. But both

carbonated (CSD) and non carbonated soft drink markets have failed to effectively cater this

need of consumers. Even though there are few manufacturers of herbal drinks in the market

they have been unable to fulfill consumer’s needs specially due to poor quality of their

products. Ole new herbal drink is designed to fill this gap in the market.

This new offering is marketed under the name Ole AAYURR. It is offered as

a less carbonated drink. It combines exclusive features that give a unique identity to the

product. Those will differentiate the product in the eyes of consumers over other competitive

products. This is targeted on the whole market from teenagers to middle aged. The main aim

of targeting the whole market is to garb consumers of all segments and eliminate the risk of

been only in the youth segment.

As mentioned above the primary objective of the new herbal drink is to

expand the target market of Ole and grab consumers in other market segments that company

has not catered yet. The product aims to contribute to a 3% increase in market share within

the first year with a targeted sales volume of 0.6 million cases (24 bottle cases). The product

aims on contributing for a 10% increase in company profit by 2011.

Market skimming will be practiced with this new product. Following

the pricing strategy of the company it is priced at an optimum level. Existing distributional

channels are used for distribution. More attention will be paid with respect to promotions for

the product. Since it is a new product to the Ole range more advertising will be needed to

successfully market the product.

This report consist the marketing plan for the new herbal drink Ole

AAYURR. All strategic and tactical plans are discussed with a sales forecast and a forecasted

budget in following sections.

INTRODUCTION TO THE ORGANIZATION

Ole Springs Bottlers is a wholly owned subsidiary of the Maharaja Group of

companies. It is the third largest player in the Sri Lankan carbonated soft drink(CSD) market

with a market share of 20%. The company was originally established in 1967 under the name

Berec Ceylon Limited to manufacture batteries. But it was subsequently inoperative for a

period of time. In 1992 the company was re-christened as Ole Springs Bottlers and

reactivated for the purpose of bottling Pepsi Cola. Presently it is the exclusive Sri Lankan

franchise for Pepsi range products. In November 1999 the company started the production of

Ole brand soft drinks to cater the Sri Lankan market.

As a subsidiary of the Maharaja Group of companies Ole operates under

the group’s guiding philosophy “The Courage to be Different”. It doesn’t have any

specifically defined corporate or financial objectives. Pepsi Cola Inc set targets for Pepsi

range products in terms of volume and profit. The company works on achieving these targets

annually. The company’s main aim is to give best products whether it is a Cola or another

flavour to the consumer and offer value for money.

At present Ole caters the Sri Lankan carbonated soft drink market with both

Pepsi and Ole range products. Ole’s current product range includes 10 of its brands and 5

Pepsi Cola brands. Ole brand include Ole Cream Soda, Ginger Beer, Zingo, Arshik, Ole

Apple, Ole Nelli, Ole Soda, Ole Plus and Ole instant Lemon and orange. Pepsi, Mirinda, 7-

Up, Duke Soda and Mountain Dew are the Pepsi brands offered by the company. Ole’s whole

production takes place within the factory premises at Ranala. This factory can provide on the

basic needs easily, what’s that, to get standard water, easy access to electricity and available

labors. Concrete for Pepsi brands are directly bought from India from the Pepsi India

Company. Pepsi brands are produced according to manuals and procedures give by this

Pepsi. Inc.

With these products Ole has been able to gain the third largest market share

against other competitors and achieve a stable position. Within its sixteen years of carrier in

the Sri Lankan market the company has performed very well. Ole products have won hearts

of Sri Lankan customers over its competitors who have been in the market for a long time

because of its high quality.

SITUATION ANALYSIS

This section presents an organizational analysis with respect to the internal and external

environment combined with a SWOT analysis. This clearly provides an idea about the

present situation of the company and suitability of its operations to existing market

conditions.

Strengths Good brand image –

It’s very difficult to establish a good brand image amidst such intense

competition. But Ole has been successful on that. It has won the consumer’s trust via good

quality. Even though Ole has been catering the market only for ten years with respect to other

giant competitors who have been in the market nearly 100 years it has gained a stable

position with 20% share of the market.

Well established distribution channels –

Ole has 65000 distribution outlets island wide which are efficiently supplied

by 59 distributors. And also different kinds of outlets such as super markets, A, B and C class

outlets and contract outlets are supplied at the same time. As the company considers

distributors as a part of the business and look after them well to make them happy they have

been able to build a strong distribution network within the country.

Innovative products- Ole has been releasing innovative products from time to time to the market. Understanding the real preferences of customers through continuous market research

practices Ole launched new products to satisfy such consumer needs. Ole was the first to

launch an Apple flavoured carbonated soft drink in Sri Lanka as well as in the region. Also it

was for the first time in Sri Lanka a soft drink such as Ole Arshik was launched aimed on

Muslim community.

Creative and efficient advertising staff –

The advertising campaigns conducted by this staff have been very successful so far

compared to other beverage companies. Especially TV commercials have been very popular

among public due to their creative and enthusiastic nature. So much focused advertising

activities will be a great help to market our herbal drink.

Pioneer of PET bottles

Ole is the pioneer of PET bottles in the carbonated soft drink market. At present

consumers prefer PET bottles than glass due to convenience. Therefore this has created some

kind of an advantage over the company.

Weaknesses Market skimming most of the time –

Ole always has attempted to set somewhat high prices for their products to

communicate quality and cover up costs. Due to this Ole has lost the segment of customers

who always seek the maximum benefit for the lowest price.

Target markets–

Ole has always launched their marketing activities targeting the youth. Most of

Ole products are targeted on the youth with almost one or two products on other market

segments such as teenagers, sportsmen. This is one of the major weaknesses of the company.

This has restricted the expansion of the consumer base to some extent.

Less advertising efforts-

Even though the company conducts effective advertising campaigns still they

are not using mass media for the maximum level. They should have paid more attention on

advertising more on television. Less advertising through mass media has had some negative

effect on the sales of OLE PLUS because most of the people are still unaware of this product.

Opportunities Less herbal drinks in the market –

Most of the companies have focused on marketing flavored carbonated drinks.

And also those who sell herbal drinks also haven’t tried to create an herbal drinks market.

Most of the excising herbal drinks are low quality products marketed under less popular

brand names. Even though consumers prefer to have herbal drinks they hesitate to buy such

products due to their low quality. There fore there exists a high demand for a high quality

herbal drink.

Perception and trend of consumers –

People now know about the demerits of flavored drinks and how the

chemical ingredients of them badly affect human health. So there is an emerging preference

of consumers for less carbonated nutritious local tastes.

Suppliers of herbal items –

There are a lot of farmers who are willing to supply the firm with herbal items

for low prices. The manufacture of herbals is emerging as an important small – medium scale

industry in Sri Lanka. In recent past different programs have been initiated within the country

focusing on strengthening the cultivation and conservation of herbal plants. Benefits of such

programs can be gained in the near future.

Opportunity to expand to the Northern & Eastern provinces

The company has an opportunity to expand its market in north and eastern

parts of our country because the civil war inside the country will be finished in the near

future.

International market –

Ole has not still entered the international market. There are many opportunities for

Ole to enter the international market with its products. Ole can increase revenue with

incoming foreign exchange by entering such a new market.

Threats Competitors –

Elephant house and Coca Cola are the two major competitors in the market ahead

of Ole. These two players have been in the market for a long time and therefore they have a

stable customer. They too have similar products like that of Ole and therefore a huge

competition exists in the market. Other than these two there are some

minor players too in the market. All these create a competition for Ole. There are one or two

herbal drink producers too in the market. With the increasing customer demand for herbal

and nutritious drinks there is a potential for these companies to increase their operations in

the future. If so they will capture some market share and create a threat for the company.

Innovative products of competitors

Competitors introduce innovative products from time to time with the aim of

expanding their market share. Some significant products were introduced by major

competitors during previous time. These affect sales of the company

World economical situation

The slump in the world economy could have a negative effect on peoples spending.

Since soft drinks are not essential products they will hesitate to by them in such a situation. If

so the company will not be able to enjoy expected profits from the product.

MARKETING OBJECTIVES

Ole Springs Bottlers follows the guiding philosophy of Maharaja Group of

companies “THE COURAGE TO BE DIFFERENT”. It doesn’t have a separate mission or

objectives for the organization or neither for separate departments at present. This has created

some kind of a disadvantage for the company. To endure in this highly competitive market,

it’s really important to have specific objectives specially a marketing objective.

The main marketing objective of Ole for next three years will be to IMPROVE the competitive position in the market with expanded target market and to MAINTAIN the

obtained position in long term. Future operations will be targeted on improving the market

share by 15% within next 3 years and gaining a more stable position in the market. By

achieving this target Ole can easily be the market leader for carbonated soft drinks. This will

be done through expanding the current target market and introducing some new products to

the existing market segment. Currently Ole has heavily targeted the youth segment of the

market and most of the products are offered for this segment. Much attention will be paid in

the future to expand this target market up to teenagers and middle aged people and practice

more undifferentiated targeting with some new products.

Ole hopes to increase allocation for promotional and advertising costs by

10% within next three years. It will be really helpful for Ole to survive in this highly

competitive market as advertising plays a major role in winning consumers hearts. At present

Ole is not paying much concentration on advertising. This has created some negative effects

for sales of our newest product OLE plus. So in future the company will move on more to

advertising campaigns. With all these efforts Ole wishes to improve the company profit by

30% by 2011.

INTRODUCTION TO INITIATIVE

As an initial step of achieving above mentioned marketing objectives

successfully Ole has decided upon catering the Sri Lankan herbal drink market with a new

herbal drink. This drink will be a New Product introduced to cater a segment of the soft drink

market in which Ole has been operating over previous years. There fore it is a new product

development to the existing market.

As identified by the above stated SWOT analysis Herbal drink industry is emerging as a successful commercial venture in Sri Lanka as well as in the world. With an

emerging trend of people in moving towards natural and nutritious food and beverages there

is a tremendous preference of consumers for nutritious beverages. As preparation of herbal

beverages at home is time consuming people demand for instant and semi processed herbal

beverages. Therefore a high demand for instant herbal beverages is evident in the market. But

producers in the market have been unable to cater this huge need. There are very few herbal

drinks in the market at present and even those have failed to create a stable consumer base for

herbal drinks due to poor quality and some other reasons. Lak peyawa and Morawaka medito

are the two most preferred brands among them. Due to this imbalance between demand and

supply there exists a good opportunity for another player to enter the herbal beverage market

with a quality product. Ole will be entering the market to fill this gap.

None of other major competitors have yet paid their attention on developing

an herbal drink preferred by consumers. Even though Ceylon Cold Stores have Lak Peyawa

as an herbal drink it has not succeeded in meeting consumer need. CCS has not even made

any changes to the product to modify it according to customer preferences. So the threat that

can emerge because of competitors is really little for a new herbal drink. It will be a good

competitor for innovative products of other companies.

It has been found from some surveys done by some external parties that

herbal beverages are preferred by persons of all age groups and mostly by the middle aged

group. One of Ole’s marketing objectives for next five years is to practice undifferentiated

segmentation by expanding its target market more from youth to other divisions. So this will

be the most suitable product to practice that strategy. There fore this product will be targeted

on young to middle aged consumers. With the high demand for herbal drinks in the market

the company wishes that this will make a significant contribution to increase company

profits.

MARKETING OBJECTIVES FOR THE PRODUCT

When consider about existing product range Ole offers 15 different products

to the soft drink market. Most of these products are specially targeted on youth except few

products. Ole’s main youth targeted products are Pepsi, Mirinda, 7Up, Mountain Dew, Duke

Soda, Ginger Beer and Soda, Cream Soda, Nelli and Apple, orange and lemon (Carbonated

fruit drinks). OLE plus basically targets sportsmen while Zingo is offered to pre- teen and

teenage segments. There aren’t any products targeted on every segment in the present product

range. Therefore target for this new herbal drink will be all carbonated soft drink consumers.

Following are the main objectives of Ole new herbal drink

The primary objective of introducing this product is to expand Ole’s target

market. Since this is a product preferred by every segment of the market by expanding the

target market the company will be able to gain high profits in long term. As mentioned earlier

at present Ole mainly targets the younger generation. There fore the company has lost a

considerable amount of consumers. With this product Ole can easily grab those consumers

and gain a stable position in the market over competitors.

As the company wishes to increase budget allocation for advertising in

coming years more advertising efforts will be put on advertising the new herbal drink. This

will be another major objective of the product. The company is experiencing some kind of a

disadvantage due to less promotional efforts at present. There fore this new product will

highly concentrate on promotional efforts to eliminate this disadvantage.

One of the objectives of the company for next three years is to improve the

market share by 15%. Ole herbal drink aims to expand the target market and contribute for

10% expansion of the market share within next three years. Within the first year it is targeted

to get a 3% increase in the total market share with the new herbal drink. Targeted sales

volume for the first year is 0.6 million cases (24 bottle cases). The main financial objective

for the first year is to keep losses at a minimum level and cover the initial costs incurred for

the product with this sales volume. By the second year the company targets to increase the

sales volume up to 1.5 million cases. With all these efforts the product’s main target is to

increase the annual profit by 10% at the end of 2011. All tactical plans implemented to

achieve these objectives are discussed in relevant sections.

PRODUCT PLAN

Ole new herbal drink is the newest addition to the ole product line developed

to cater Sri Lankan herbal drink market. This is an innovative product developed identifying

the emerging demand of consumers. Basic levels of the product in terms of features attached

are as bellows.

Core - A drink to Quench thirst B as ic - Herbal drink with less carbonate composition Ex p ected - High nutritious composition

The new herbal drink is offered under the name Ole AAYURR. It is branded under Ole name

as a manufacturer’s brand and is aligned with other products under umbrella branding. Since

Ole has a good brand image in the market among customers this strategy will help the

product to easily capture the market. Most of the herbal drinks in the market aren’t in good

quality and consumers have a dab image about them. If the new product is offered with a

totally different name they may sometimes reject the product due to this bad perception about

existing products. Using the Ole brand name the product can easily show it’s identity to

consumers and Consumers will prefer the product without any hesitation as they trust Ole

brand name and its good quality.

Ole AAYURR has many unique features against competitor’s products. As other herbal drinks in the market do not have such features these Unique Selling Propositions (USP) will add more value to the product and differentiate it amongst competitors. Name-

The new herbal drink is offered with the name Ole AAYURR. The name is

spelled as AAYURR rather than AYUR to avoid mispronunciations. And also the repetition

of first and the last letter gives some kind of a different feeling to consumers. The name it self

will create an initial idea about the product in customers mind. It can easily grab the

consumer’s attention and gives the idea that it is something related to herbals. Specially in Sri

Lanka people highly value the Ayurvedic system of medicine. This name will attract such

customers easily.

Ingredients-

The new drink will composite with three herbals; coriander, Iramusu and

welmee. This composition gives a unique taste to the product. None of the existing products

in the market has such a composition. Most of them are produced using only one herbal. The

carbonate proportion is less in this with respect to other Ole brands. Less carbonate

composition allow consumers to experience the real taste of herbals.

Container(Bottle)-

The Bottle has a unique design. It is designed in a way that consumer can

easily hold the bottle with his hand. This shape will attract customer attention easily. Initially Ole AAYURR is offered in 330 ml PET bottles only.

STRATEGIES FOR PLC STAGES Development-

Some test marketing will be done within this period. A huge poster campaign is

planned to be conducted to make consumer little bit aware about the up coming product. This

will be mainly done using billboards. This advertising effort is focused on giving some kind

of a hint for consumers about the product and making them curious.

More effort is put on making distributors and sellers aware about the new

product. They will be given with details about the product so that they can make consumers aware and collect consumer’s ideas. Some marketing researches will be conducted to see the direction of

consumer demand and to evaluate suitability of the product to meet the demand. These researches are

mainly aimed on gathering details about consumers taste preferences.

Introduction-

The product will be released with all above mentioned features. All the unique

Features will make it easy for the product to grab consumer’s attention and

attract them to purchase the product.

Price skimming is practiced with this new herbal drink. The product is priced at a premium

level taking into account prices of other drinks in the market. One of the main targets of this new product is

to cover all initial costs during the first year. There fore pricing at a premium level will help to easily cover

these initial costs. This is further discussed on pricing plan.

The product will be offered to two selective areas Kandy and Colombo at the initial stage. As the

product has some new features it is really important to identify customer preference to the product. There

fore initially the product will be offered to these two areas only. After analyzing the performance of the

product in these two areas the distribution channel will be expanded later to all 65,000 outlets and many

more in the future.

But consumers will be offered with free drinks in some selected temporary outlets in few main cities. This campaign is mainly conducted in outstations

other than Colombo and Kandy. Then the company can see consumer’s reactions towards the product in

those areas and arrange distribution accordingly.

The main aim of promotion at this stage is to create consumers aware about the product. More

effort will be put on promoting the product to the general public mainly through advertising.

Growth-

Distribution channel will expand to other areas too. The product will be introduced first to

urban areas and then to suburbs and rural areas. Special attention is paid to increase distribution to

Northern and Eastern provinces in this stage. By introducing the product to these areas at this stage the

company can expand the customer base. And also if these customers reject the product the company can

easily cover the loss.

A brand Ambassadors will be used for promotions in this stage. Such a promotion campaign

will help to gain more brand loyalty from customers and built a stable customer base. The company can

easily afford such a campaign with increasing profits.

The company is not wiling to make any price changes. Since the product is priced at a premium level an increase in price will loose customers. Maturity- The company hopes to develop another one or two herbal drinks with difference