advertising and promotion report marketing plan kick smoke gum

7/30/2019 Advertising and Promotion Report Marketing Plan Kick Smoke Gum

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Bahria University

Islamabad

MARKETING PLAN

KickSmoke Nicotine Gum

SUBMITTED TO Naila Masood Business Communication

SUBMITTED BY Muhammad Salman Khan, Ahmed Khawar, Ali Waqas,Rashid Iqbal, Faizan Afzal, Arif Ashraf

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TABLE OF CONTENT Page

1. Executive Summary 042. Current Situation - Microenvironment 04-05

o economy

o legalo governmento technologyo ecologicalo socio-culturalo supply chain

3. Current Situation - Market Analysis 06-07o market definitiono market sizeo market segmentationo competition and market share

4. Current Situation - Consumer Analysis 07-08o participantso demographicso psychographicso buyer motivation and expectations

5. Current Situation - Internal 08-09o company resources

financial people time skills

o objectives mission statement corporate objectives financial objective marketing objectives long term objectives

6. SWOT 09-107. Marketing research 10-12

o information requirementso research methodology

secondary Data Collection

primary Data Collection

survey Research

experimental Research

interviewingo research results

8. Marketing Strategy - Product 13-19o product mix

Place

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Promotion

Packaging

Variety

Product Item

Producto product life cycle management

Market introduction stage

Growth stage

Mature stage

Saturation and decline stage

o new product development

Idea Generation

Idea Screening

Concept Development and Testing

Marketing Strategy Development

Business Analysis

Product Development

Test marketing

Commercializationo Brand name, brand image, and brand equityo product portfolio analysis

B.C.G. Analysis9. Marketing Strategy - segmented marketing actions 19-20

o by producto by customer segment

10. Marketing Strategy - Price 20-21o pricing objectiveso pricing methodo pricing strategyo price elasticity and customer sensitivity

11. Marketing Strategy - promotion 22o promotional goalso promotional mix

Personal selling

Sales promotion

Advertising

12. Marketing Strategy - Distribution 22-23o geographical coverageo distribution channelso Physical Distribution

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Executive Summary

We are trying to launch KickSmoke nicotine gum in the Pakistani market.KickSmoke nicotine gums are basically gums to help people addicted to the habit ofsmoking, in getting rid of it. We are targeting teenagers, parents and older peoplewho want to quit smoking and also those who have been prescribed to quit smokingbecause of its harmful effects.

The primary objective is to achieve the break even point in two years time. We wantto launch a mass marketing campaign to target the masses. By keeping losses aslittle as possible we want to achieve 10 million RS. revenue by the end of the secondyear.

Mass advertisement and promotional campaigns will be launched to createawareness in the people.

Current Situation - Microenvironment

Economic

Pakistan, with a population of about 16 million people has undergone aremarkable macro economic growth during the last few years but the main and thecore problems of the economy are still unsolved. Inflation is one of the coreproblems. The inflation in the year 2010 has recorded to be the highest according tothe Federal Bureau of Statistic. In April 2010, the Pakistan inflation accelerated atits fast pace and the inflation is still increasing. The consumers are mostlypessimistic about the economic conditions of the country as the economy is going indownward direction these days.

People waste large sums of their income on their addiction of smoking. Our productis going to be cheap and will help them do away with this problem.

Legal

The new government has made some changes in the legal and regulatoryissues in which firms work like the sales tax on items being increased from 15% to16% etc but there are no current legal restrictions on the current product that we

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want to launch as it is a product made for the social welfare of the people of thecountry.

Government

The government is trying its best to rid the country of this bad habit and theministry of health has been creating awareness regarding the hazards of smoking.The cigarette packs are also labeled with warning regarding smoking is injurious tohealth. It wants to introduce such products in the market which will help the peopleto quit smoking. It has already applied restriction on the sale of cigarettes to peopleunder the age of 18. The government has banned the advertisement of cigarettes onmass media and also smoking in public places is outlawed.

Therefore we expect that the government will support us in the production andpromotion of our product and give us added subsides so that KickSmoke costs

lesser to the end users.

Socio-cultural

The people of Pakistan are getting health conscious day by day. They aregetting aware of their duties in order to maintain the healthy environment. Furthermore the government is also taking several steps to educate people that how it isimportant for the people to live in the healthy environment.

KickSmoke is a product that will support the social economy of our country becauseany kind of addiction in our Islamic society is taken in a very negative way and is

prohibited. In the current situation every other person in our society smokes.

People try to hide this bad habit and in some point of their life want to quit. But theprocess of quitting is very hard and not for the feeble hearted. The addiction oftobacco is very hard to break as your body starts demanding nicotine and tobacco.

This is the main reason why we believe that our product will be effective.

Supply chain

The cigarette industry has a very intensive supply chain that is delivering

cigarettes all around Pakistan. They will not allow their distributors to carry ourproduct as our product is basically a major indirect competitor.

On the other hand Pakistan has quiet a few companies who are in the distributionbusiness and carry out the distributions for other companies. One of thesecompanies could be a possible option for us when we consider the supply chain anddistribution channels of our product.

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Current Situation - Market Analysis

Market definition

In a country with the population of 18 billion, both men and women rangingfrom the age of 16 onwards smoke. The main purpose of our product is to rid thecountry of this menace of smoking. The market of KickSmoke is both men andwomen. We want to make this product a house hold product that should be readilyavailable at every home and work place. So are market comprises of people whodont smoke i.e. parents who dont want their children to get addicted to this badhabit. And it also consists of the smoking populations which include both men andwomen ranging from the age of 16 onwards. Especially the following:

People aging from 16 to onwards.

Married women prescribed to quit smoking.

People prescribed to quit smoking.

Market size

Of the total population of 18 billion people about 22 million people smokeand it would be a safe estimate to say that around 80% percent know and agree thatits a bad habit and 50% percent of these say that they want to get rid of it. All thesepeople make up our market size.

Pakistans total cigarette market is around 78 billion sticks. Our market size isbasically all the people that smoke and these are all people who can be targeted.

Market segmentation

The market is going to be segmented on the bases of

Age

Gender

Income

We want to make three types of chewing gum with the strength of the KickSmokegum of three potencies to cater for smokers of different usage.

Light

mild

strong

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Vanilla (Sugar Free)But the major focus of our company is to market KickSmoke in such a way thatevery household has it and uses.

Competition and market share

We dont have any such competitor as we are basically doing socialmarketing and cigarettes are not our competitor per say.

Our minor competitor could be the gum companies. Market trends show thatpeople want to quit smoking but they dont have an alternative to get rid of thetobacco addiction.

Current Situation - Consumer Analysis

Participants

The participants of the buying are the sole people who smoke. These are thebasic target audience. These include teenagers, women and men. Patientsprescribed to quit smoking, and parents wanting their children to quit smoking.

Demographics

People who smoke

Ages Percentage18-24 28.5%25-44 25.7%45-64 22.7%

[greater than or equal

to]659.3%

The product we are going to market basically is for the following personnels.

AGE: 18 to 60Maybe for the old smokers it would be difficult for us to induce nicotine

chewing gums as chewing might be a problem for them but convincing is alwayspossible.

GENDER: both male and female, especially male.

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FAMILY LIFE CYCLE: whole of the families would be targeted trying to makeour product a household product.

INCOME: People having all incomes would be targeted; gum would be producedboth for elite class and low class keeping in view the quality of the gum.

Buyer motivation and expectations

The mere fear of death alone is the biggest buyer motivator for the purchaseof our product.

Our product is a social serving product so higher motivation amongst consumers isrequired. Expectations are quite normal as the product is unique and awarenesscreated would depend upon the greatness of expectations and motivations. We feelthat we have an advantage to motivate people regarding our product.

Current Situation - Internal

Company resources

Financial

Financially we are strong as the product is innovative and theinvestors are quite interested in our products future. Therefore greaterinvestments are available as compared to our requirements.

People

Pakistan is a country filled with cheap labor. All kind of skilled peopleare available here at a cheaper rate as compared to other countries, thereforewe have the advantage of producing our product at a much lower cost ascompared to other countries producing the same product hence in the endwe have also export advantage.

Skills

Skills are also enough to perform the production process. Once theprocess of production will be started, it is hopeful that it will run smoothly.

Objectives

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Mission statementBe the main supplier of anti smoking products.

Corporate objectivesTo hold and maintain a monopoly in the anti smoking products market

Financial objective

We want to achieve the break even point by the end of the next year.

Marketing objectives

To bring awareness of the KickSmoke gum to the masses

Long term objectives

Launch other anti smoking products like inhalers, strips etc. We also want tointroduce new flavors in the long run.

SWOT Analysis

Strengths

It will be the market leader as its a new product

Financially strong very strong

Socially attractive / could become a status symbol

No side effects

Government support

Its cheap and affordable

Studies have shown that using a nicotine gum can double the chances ofstopping smoking

Many people do not like to smoke and chew gum at the same time. In this

way they will be able to have both benefits from a single gum

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Weaknesses

Weak delivery chain

You may still be tempted to smoke.

People might misunderstand it as being a medicine and not go for it.

This method is unsuitable for people who wear dentures.

Opportunity

A large market which can be captured

There is a lot of diversification in the potential customers

Operational efficiency can be attained once we start

Threats

Its a new product so we have a little bit of risk in the beginning.

Maybe people would not quit smoking.

MARKETING RESEARCH:

Marketing research involves the identification, collection, analysis, anddissemination of information.

Information Requirements:

Product market research serves several goals. The required informationabout the new product is collected. Armed with good information on what thecustomers actually want is a key to success. Marketing research involves theidentification, collection, analysis, and dissemination of information. Throughmarketing research work we gather, record and analyze various data andinformation about customers, competitors and markets.

Nicotine gum is a type of chewing gum that delivers nicotine to the body. It is usedas an aid in smoking cessation and in quitting smokeless tobacco. The nicotine isdelivered to the bloodstream via absorption by the tissues of the mouth.

Before launching Nicotine gums in Pakistan, the following information is gatheredbefore conducting the marketing research. A whole research plan is developedabout the marketing research.

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Research Methodology:

Secondary Data Collection:

Before going through the time and expense of collecting primary data, wecheck for secondary data that previously may have been collected for otherpurposes but that can be used in the immediate study. Using online databases, aresearch can be conducted. We will find about the use of cigarettes in Pakistan andwill also get the information about the popular brands. We can analyze from thebrand, the class of majority people who are involved in smoking. Pricing can bedone according to the class of those people. We will also search for the other quitsmoking therapies and their effectiveness in Pakistan for a suitable comparison.

Primary Data Collection:

We need to collect the following data

The average of smokers in Pakistan

Average of regular and occasional smokers and quitters.

What class of people are usually involved in smoking

Which cigarette brand is mostly used

Attitude of people towards Nicotine replacement therapy

This will be done by:

Observational Research:

Includes observing the behavior, actions and attitudes of different smokers.

Men involved in smoking

Women involved in smoking

The majority age group that smokes

The people that are involved in smoking; businesspersons, students, middleclass workers, employees, housewives

The pricing of cigarettes

The number of people that are trying to quit smoking

Survey Research:

Surveys are carried out in universities, educational institutions, and localpeople and online.

Experimental Research:

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Experiments are conducted. Free samples of Nicotine gums are thendistributed among some regular smokers who are trying hard to quit smoking.[Nicotine inhalers, sprays and sublingual tablets are also given as a sample]

Interviewing:

Marketers and researchers will be having interaction with local peoplerepresenting smokers.

From smoking students in some institution and their willingness to quit

Research Results:

Table: Percent of Various Age Groups Who Currently Smoke

Ages Percentage18-24 28.5%

25-44 25.7%45-64 22.7%[greater than or equal

to]659.3%

A survey was conducted in Agha Khan Medical University earlier this yearaccording to which nearly 24 percent of male and 16 percent of female collegestudents are regular smokers in Karachi. In Islamabad, the prevalence is evenhigher, with 28 percent of young people smoking.

A majority of middle age men who started smoking in teenage want to quit

smoking.

In some universities and other organizations, free samples of Nicotine gums andinhalers are distributed. Some people were firstly reluctant because these gums alsoinclude nicotine that is the basic reason of addiction. But in contrast to cigarettes,one can get rid of nicotine gum addiction. The user will use nicotine gums as areplacement of cigarettes for several months and then will gradually quit the use ofgums. Cigarettes can be viewed as a "dirty" and dangerous method of deliveringnicotine, while Nicotine replacement therapy is a "clean" and safe method ofdelivering nicotine in the body.

The order of smoking found from an online survey is:

Students > Employees > Middle class workers >

Businesspersons > Housewives & others.

Gold Leaf, Gold Flake, Marlboro and Benson & Hedges are currently best sellingbrands in Pakistan.

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Marketing Strategy Product

Our marketing strategy is basically aimed at executing and communicatingour value proposition to our intended target market.

Product mix

Product

KickSmoke is a chewing gum that is going to be used by users to rid them selfof the habit of smoking. The product has three varieties with different flavors. Theyvary in terms of strength. The varieties are strong, mild, and light.

The products have three different flavors chewing gum.

Mint, strawberry, chocolate and Vanilla (for sugar patients).

Product Item: KickSmoke Nicotine Gums.

Variety

There are four types of varieties

Mint

Chocolate

Strawberry

Vanilla (Sugar Free)

Packaging

The L-Pack is a packaging breakthrough significantly improving portability,

convenience, and product protection and consumer information while lowering

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environmental impact in comparison to existing solutions. Its unique design

combining primary and secondary packaging provides optimum product protection

as well as a quick and easy access to the product thanks to a dynamic blister flip

motion during L-Pack opening. A leaflet attached inside the pack ensures continual

availability of information to consumers.

Place

KickSmoke will be available at all the medical stores. We want it to beavailable in all the stores that have cigarettes available at them. We want to buildour distribution channels and our long term aim is to make have a distributionchannel as large as these tobacco companies.

Promotion

We have a new product and it is in the stage of where we need to createawareness in of the product in the people. We will be launching a mass promotioncampaign so that we can make the maximum of people aware of our product.

We are in awareness stage of the AIDA and we want to target all the people of thecountry. It needs to be kept in mind that most of our population is illiterate so wecan not just restrict our promotion campaign to the news paper.

We want to use advertisement on TV to capture these people. Our message is goingto be simple to understand and will not require too much of thinking in order tounderstand it. People usually watch news channels. This is why GEO is bestmedium for people who have cable at home. But it also needs to be kept in mindthat not many people have cable at home so we want to run our commercials onPTV too.

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We want to promote our products at hospital and medical stores. We will be puttingup posters at all the major stores of the country. Doctors will be given free samplesof the product so that the can prescribe it to their patients.

Product Life Cycle Management and New Product

Development Process:

Product Life Cycle Management:

Market introduction stage

- The new product will be introduced in the market.

- Cost will be normal because the concept is new in Pakistan and such kind of

gum was not available before.

-Sales may be low because the product is new and people do not have muchawareness about nicotine quit smoking gums but hopes are high.

- The marketer will have monopoly because these gums are not introduced before

in the country.

- Demand is to be created.

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- Customers will be prompted to buy the new product. Awareness will be created

by advertising.

Growth stage

- Costs will be reduced to increase the sales of the product.

- People interested in quitting smoking will become aware of nicotine

replacement therapy and will buy and suggest the product.

- Profits will increase.

- There will be danger of competition with some new players in establishing

market.

- Prices to maximize market share will be created by advertising.

Mature stage

- Costs will become low the market will be well established and there will be no

need for publicity.

-Sales volume will rise.

- There will be increase in competitive offerings.

- Prices will tend to drop due to the proliferation of competing products

- Brand differentiation, feature diversification, as each player seeks to

differentiate from competition with "how much product" is offered.

- Industrial profits will go down because of competitors.

Saturation and decline stage

- Costs become counter-optimal.

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- Sales volume decline or stabilize.

- Prices, profitability diminish.

- Profit becomes more a challenge of production/distribution efficiency than

increased sales.

New Product Development Process:

Idea Generation:

Ideas for new products can be obtained from basic research using a SWOTanalysis (OPPORTUNITY ANALYSIS), Market and consumer trends, company's

R&D department, competitors, focus groups, employees, salespeople, corporate

spies, trade shows, or Ethnographic discovery methods . The idea about nicotine

replacement therapy is generated. Nicotine cause addiction and it is difficult for a

smoker to quit smoking due to this addiction. If Nicotine is introduced into the

body by any way other than smoking, it can fulfill the users requirement of nicotine

and will keep him away from the hazardous effects of smoking.

Idea Screening:

The following questions are to be kept in mind during idea screening:

Is the customer in the target market having benefit from the product?

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Nicotine gums will be introduced in Pakistani market for the first time. The

number of smokers is increasing every year and is a cause of many health problems.

People are becoming aware and are interested in quitting smoking. Nicotine

replacement therapy is the easiest way to quit smoking if the person using it has

some will power too.

Is it technically feasible to manufacture the product?

It is feasible to manufacture the products because the techniques of production

are available.

Will the product be profitable when manufactured and delivered to the

customer at the target price?

The product will be profitable due to its uniqueness and benefits.

Concept Development and Testing:

- The target market is detected i.e. smokers in Pakistan.

- The benefits are analyzed.

- The reaction of the consumers is kept in mind.

- The costs for the manufacture of the product are known.

-Testing the Concept by asking a sample of prospective customers what theythink of the idea. Some people might question against the nicotine therapy. The

solutions and answers to their queries are kept in mind.

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Marketing Strategy Development:

- The target market is mostly comprised of men and a few women. Majority of

smokers are young people aging from 15 35. Middle class and lower classpeople are mostly dependant upon cigarettes while upper class people smoke

cigars as well as cigarettes.

- The product planned price is determined for nicotine gums.

- The budgeting, sales and profit goals are determined.

Business Analysis:

The prices of currently sold cigarettes in Pakistan would be compared.

Estimation of sales and profit will be done.

Product Development:

The concept of the product is converted into the final product. After goingthrough all the previous stages Nicotine Gums are launched.

Test marketing:

The product before getting introduced in the market is firstly tested. Sample of

Nicotine gums are distributed among some people who want to quit smoking. The

effects and results are analyzed by test marketing.

Commercialization:

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Launch the product: The new product is introduced in the market.

Product advertisements and other promotions: Product advertisement and

promotion is done in order to enhance the sales.

Branding:Brand Name

KickSmoke is the name that we have chosen for our product. The philosophybehind choosing this name was that smoking is a habit that is very hard to give up.Once you start smoking this habit sticks and you have to force yourself / kick it outof your life.

KickSmoke is a name which we feel is easily recallable and will stick in the minds ofthe people.

Brand image

The brand is new and there is need to build the brand name of image ofKickSmoke. We will be showing big celebrities like Shoaib Akhtar using KickSmokeand saying how this product helped him get rid of his cigarette addiction etc.

Marketing Strategy Segmented Marketing Actions:

By Product:

Nicotine gums are available in the following flavors:

Mint Flavor

Chocolate Flavor

Strawberry Flavor

Vanilla (Sugar Free)

The KickSmoke Nicotine gums are available in two potency levels 2 and 4 mg.

By Customer Segment:

Target smokers

Aging 18+

Mostly men as among smokers 80% men smoke in Pakistan

KickSmoke Nicotine Gum is available in 2 milligram (mg) and 4 mgstrengths. Usually, the 4 mg strength is recommended if you smoke 20

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cigarettes or more in a day or are a smoker who has not been able to quitsmoking using the 2 mg strength. Otherwise you should use the 2 mgstrength.

Advertising:Advertising will be done by keeping the smokers in mind. A smallpromotion campaign can be launched to create awareness about the use of nicotinegums for quitting smoking. Advertisements will be made in a way to attract youngcustomers.

Marketing Strategy - Price

Pricing objectives

The pricing objectives are that the nicotine gums should be affordable andcheaper then the cigarettes.

maximize long-run profit

maximize short-run profit

increase sales volume (quantity)

increase market share

discourage new entrants into the industry

match competitors prices

obtain or maintain the loyalty of customers

enhance the image of the firm, brand, or product

create interest and excitement about a product

discourage competitors from cutting prices

social, ethical, or ideological objectives

get competitive advantage

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Pricing method

(eg: cost plus, demand based, or competitor indexing)

When it comes to buying our product the buyer is going to compare the priceof having to buy a pack of cigarette to by the KickSmoke nicotine chewing gum. Wewant to set out price lower then that of cigarettes. This is why we want to usecompetitor indexing method. We want to use the competitor indexing method usingthe cigarettes as a standard and then pricing our product lower then these products.

Pricing strategy

Initially we want to use the penetration pricing strategy because we have tocapture a segment and want to market the product to the masses.

The product has two potencies. The price is set according to the potency and theflavors are of the same price.

Product PriceKickSmoke 2mg with 10 pieces

each(strong,mild,lite)80

KickSmoke 4mg with 10 pieces

each(strong,mild,lite) 120

If a person smokes 10 cigarettes a day he can eat one piece of the chewing gumwhich is why we have kept the values as such keeping in consideration the price ofcigarettes.

Price elasticity and customer sensitivity

Price elasticity is the variation of the price to the quantity demanded to thevarious in price. This is a cheap product and the variation in price would obviouslyaffect the customer demand. Making the price too less will give the customers thinkthat the product is a cheap one and its quality is inferior. If the price is too highthen the customers will not by it.

Marketing Strategy - promotion

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Promotional goals

KickSmoke is in the introductory stage of the product life cycle. At this stageKickSmoke needs a massive promotional campaign to bring awareness, develop

interest and make the potential buyers make the buying decision. Our product is inthe awareness stage which is why we want to use heavy promotion to createawareness in the people and interest in these people.

Promotional mix

Advertising

Advertisement is going to be making in three basic channels target threedifferent audiences. We will be running our advertisement on GEO and PTV totarget most of the target market is above the age of 25. These are people whopresumably like watching news channels.

The other half of our market is teenagers who like to watch movie and musicchannels. For this segment we will be running our advertisement on MTV Pakistan.

Sales promotion

We will be giving incentives to the middle men. These middle men are

actually the channel members. By doing so, these sales people will promote ourproduct over the other products. These sales men will be given commission on thenumber of packs of KickSmoke sold.

Personal selling

We want do personal selling to the doctors and to the hospitals.

Marketing Strategy - Distribution

Distribution (or place) is one of the four elements of marketing mix. Anorganization or set of organizations (go-betweens) involved in the process ofmaking a product or service available for use or consumption by a consumer orbusiness user.

Geographical coverage

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We want start by introducing our product in the four capital cities ofPakistan and then increasing our geographical coverage from there onwards. Theproduct will be initially available in the major cities of the country Islamabad,Karachi, Lahore, Peshawar and Quetta. The product will be available at places likeMalls, Medical stores, Shell Tuck Shops, small shops, bakeries etc under the brandname of KickSmoke.

Distribution Channels:

Companies can sell through a single channel or through multiple channelsthat may include:

Direct/sales team: Nicotine gums will be directly sold to the people who areinterested in getting them.

Direct/internet: A website would be launched with all the information regardingprice, usage, packaging and other things about nicotine gums.

Physical Distribution:

Physical distribution is the actual movement of products from a producer toconsumers. It includes customer service and order processing. It is giving the rightproduct to the right consumer at right place at right time. Targeted costumers willbe attracted, and will be provided the services by the sales team.

advertising and promotion report marketing plan kick smoke gum

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