CRMK200/MGCR352 Marketing Group Project - Winter 2106 OBJECTIVE This group project is intended to provide an applied/real-world orientation to your course learning. INSTRUCTIONS This is a progressive assignment and should be completed according to the schedule indicated below. Teams will receive feedback and approval on their proposed product after the Class #6 portion of the project. No other official feedback on work drafts will be provided (although general guidance from the professor can be sought) throughout the term. Please note and adhere to the page limit and formatting requirements assigned to each project component. Failure to comply will result in significant mark deductions. Within the page limitations, make sure each response is complete. THE TASK Each group will function as marketing consultants hired by a major food company to either develop (invent) or source from another country a candy/snack to add to their existing product line to introduce into the Canadian market. As consultants, teams must plan the marketing operations for the new product in detail for the first year of operations, and complete a three-year Profit and Loss Statement. The marketing operations must be restricted to Canada only, and the launch must be national in scope. The Candy/Snack category, as listed in PMB (Print Measurement Bureau database), consists of many potential product areas. The new product for the project MUST come from one of the following: hard candy/mints, chewy candies, chewing gum, nuts/seeds, chocolate/candy bars, potato chips, pretzels, snack/party mix, corn/tortilla chips & cheese snacks, popcorn, rice cakes/corn cakes/potato crisps, instant soup/meal in a cup/bowl, meal replacement/nutritional drinks/bars, low calorie sweeteners. Groups may choose to source an existing product not currently available in the Canadian market or invent their own hypothetical/imaginary beverage, based on trends in the Canadian marketplace. NOTE: It is not necessary to have the actual physical product (real or imaginary) for the project. PROJECT COMPONENTS & TIME LINES 1. Team Finalization (Class #4) The list of team members must be submitted to your professor in class. A maximum of five students will constitute each team. Please include the students' e-mail addresses on the list submitted. 2. Description of Product and Rationale for its Introduction(Class #6) - This is the only report to be handed in prior to the final written report. (Two pages maximum, excluding appendices. Use 1\" margins, double spacing, and font size 12) A) Provide a brief description of the product, including pricing strategy (high/med/low), distribution strategy (i.e. grocery stores, health food stores, online...) and promotion strategies. B) Justify your plan by providing quantitative data such as size of market, past growth trends, future growth trends, user demographics, consumer trends and competition. This data can be found in the data sources which will be presented to you by the librarian in class #4. Quote them in your summary and reference them to an appendix. At a minimum, you must use the following secondary data sources: - Passport GMID/Euromonitor for Industry/Competitive Data o Headlines o Trends o Competitive Landscape o Prospects o Last Five Years Growth (Volume, $ and %) o Company and Brand Market Shares o Distribution Channels o Next Five Years Growth (Volume, $ and %) Use this data to do the following: o Justify entering a market that has grown and is expected to continue to grow o Understand major market trends o Identify the key competitors o Look at future prospects o Design distribution channels for your product - Print Measurement Bureau (PMB) for Consumer Data o Usage Rate of Product Category o Demographic Profile of Users Use this data to do the following: o Identify what percent of the population use these products o Identify target market(s) by looking at the demographic characteristics of the heaviest or lightest users Attach the data sources as appendices to your two-page summary. Highlight in yellow the exact data or text you have referenced in your summary. At this point of the project, Passport (GMID)/Euromonitor and PMB are the only two required data sources. For your complete project, you should also consider referencing the following databases, access to which will be explained by the librarian: - IBISWorld, Marketline and statista for industry data Statistics Canada for consumer data Marketline, Mergent Online, Hoover's and Proquest for competitive data 3. Macro-Environmental Impact (Complete by class #7 to stay on track) Using Figure 3.2 (page 74) as the focus of your response, describe to what degree and in what specific ways each of the six components of the 'macro-environment' is likely to impact the sales of the product you are introducing. As specifically as possible, clearly state the factor, whether it is an opportunity or threat to the marketing of your product, and how and why it has an impact on your plans. Include an analysis of your key competitors, and your relative strengths and weaknesses. 4. Sales Forecast (Complete by class #8 to stay on track) A) Estimate the unit and dollar sales of your product for each of the first three years. Forecasting a new product's sales is extremely difficult. There are two suggested methods you can use: a) TOP-DOWN METHOD: Start by choosing an estimated realistic market share (i.e. 0.5% or 1% or 2%) based on the size of your market and the market shares of competitors. That will give you a unit and dollar forecast for the first year. Then, estimate your growth rates for the second and third years. (Use the same market size numbers you identified in Passport/EM in Part 2.) b) BOTTOM-UP METHOD: Estimate the number of distribution points (stores) your product will be in and figure out a realistic sales per day per store. Then multiply that out by 365 days a year and see what you come up with. When you arrive at about the same number using either method that should be your forecast. B) Summarize your forecast in the text and put the detailed calculations in an appendix. 5. Segmenting/Targeting/Positioning (Complete by class #9 to stay on track) A) Identify two potential, viable mutually exclusive consumer target markets for your product. Make sure that at least three different segmentation variables (see Table 8.1 on page 246 of the text) are represented in your descriptions of each segment. Clearly state the size of each and explain how it was calculated. B) Select one of the two potential target markets you have analyzed. Justify your choice. State the positioning strategy, including a complete positioning statement, being sure to provide justification. A positioning map is a plus. 6. Marketing Mix & Complete Plan (Complete by classes 10 through 12 to stay on track) Outline specific strategies and tactics for each marketing mix element (that is, the 4 P's). Support your response in each instance. Within each of the 4 P's: Clearly identify the strategy you are using and make sure you take the decisions required for each area. State the rationale for every decision taken. Use the corresponding chapters in the text as a guide for each of the specific areas to be covered. In many cases, the rationale is as important as the decision itself. Strategies to be elaborated are: - Product/Packaging/Branding Strategies - Pricing Strategies - Distribution Strategies - Promotion Strategies (IMC Mix of Advertising, PR, Personal Selling, Sales Promotion and Direct) Show how you would specifically execute each strategy; that is, what major tools and tactics will be required for your strategy to be effective. For example, if as part of your Integrated Marketing Communications you are recommending advertising, state the type of media (e.g. magazines), what type of magazines (e.g. womens', sports, etc.), media timing, message content and structure, as well as the rationale. Do not split up the report sections among group members. This leads to a lack of consistency and conflicting recommendations. A marketing mix is designed to execute the product's positioning. Thus the consistency, cohesiveness and logic of the mix are part of the criteria used in assessment. The decisions required for each of the 4 P's also serve as preparation for the final exam. 7. Financial Analysis A 3-Year P & L Statement projecting sales, costs and profits must be included. See the template included on MyCourses and use this as a guide. You can change the cost categories to fit your situation. Also included should be a break-even analysis in units and dollars. Estimate costs as best as you can. Do not waste a lot of time trying to refine them too precisely. Reasonable estimates based on logical assumptions are acceptable. 8. Peer Evaluations (Class #13) Your contribution to the group will be evaluated by your group members. Students must complete the Group Peer Evaluation Form posted on MyCourses and submit it in Class #13 with their project. Starting with 100 points, groups must decide together how to allocate the points to group members to reflect their individual contributions to the group work. The professor reserves the right to adjust individual grades based on this allocation. This form must be submitted to the professor just prior to the in-class presentation. If there is no agreement by all group members as to the allocation, then all members of the group must meet with the professor after class on the night of their presentation to resolve the issue. Failure to submit a form signed by all group members on time will result in a grade of \"Incomplete\" being submitted for the course. Groups are strongly encouraged to maintain a group log specifying attendance at meetings, work assigned and to whom, due dates, and completion dates. In the event of lack of participation by a member, the group may be asked to submit the log or evidence (such as e-mails and submitted work), prior to that student's grade being adjusted. TERM PROJECT: WORK COMPLETION SCHEDULE Class Team Task Actions Required 1-3 Team Formation Inform your instructor informally 4 Teams Finalized Team List Submitted 6 Product Description and Rationale - You must get instructor's approval before 2 pages maximum excluding proceeding past this step of the project. appendices 7 Macro-Environmental Impact 8 Sales Forecast 9 Segmenting/Targeting/Positioning 10 - 12 Marketing Mix 13 Oral Presentation Submit written project and your signed peer evaluations WRITTEN REPORT The complete written project must be submitted at the last class. A) REQUIRED FORMAT (using 1\" margins, double spacing, and font size 12- Times New Roman or Arial - no narrow or condensed fonts): Title Page with Team Members' Names & ID Numbers (1 page) (Not part of the page maximum) Executive Summary (1 page) (Not part of the page maximum) - An Executive Summary should touch on every key aspect of your plan, including topline sales and profit numbers. It is a condensed one page summary of your plan. Table of Contents (1 - 2 pages) (Not part of the page maximum) Product Description and Rationale (2 - 4 pages) - If you did it well, you can use the description and rationale from Part 2. The description is of the product itself and the rationale is the numbers and trends you identified in your project proposal (market size, growth rates, consumer trends, user demographics and competitive factors). Macro-Environmental Impact (4 pages) Sales Forecast (2 pages) Segmenting/Targeting/Positioning (2 - 4 pages) Marketing Mix (Maximum 6 pages) - Product/Packaging/Branding Strategy - Pricing Stratgey - Distribution Strategy - Promotion (IMC Mix) Strategy Financial Analysis (Not part of the page maximum) Bibliography - MLA format for this section only (No limits) (Not part of the page maximum) Appendices - including a List of Appendices and all supporting documentation - see additional specifications below (No limits) (Not part of the page maximum) The maximum length for the written report is 20 pages excluding title page, executive summary, table of contents and appendices. B) ADDITIONAL SPECIFICATIONS AND REQUIREMENTS Report must be a well-organized document that is bound together with appendices and sections properly labeled. Papers not bound into a cohesive presentation will not be accepted. Include a copy of your oral presentation slides in the binder. Please copy two slides per page. Color is preferred but black and white is acceptable As it is a business report, students are expected to incorporate pertinent headings, subheadings, tables, charts and/or exhibits in the report in order to facilitate readability. Each table, chart or exhibit must be properly identified (titled and numbered), and its significance must be discussed in the main body of the report. Exhibits, charts, and tables do not count as part of the maximum number of pages. Do not place material in tables which should be part of the main body of the report to avoid editing to meet page length requirements. It is expected that all work be grammatically correct with no spelling or typographical errors. Excessive errors, disorganized presentation style and poor writing will result in grade reductions. If the group wishes a corrected copy returned to them, two written copies of the project must be submitted, one in a self-addressed envelope with sufficient postage affixed. Only the file copy, which is retained by the instructor, need contain copies of all reference material. All work is due on the assigned date at the beginning of the class on the assigned due date, and no exceptions will be made. LATE REPORTS WILL NOT BE ACCEPTED NOR WILL THEY BE GIVEN CREDIT. C) APPENDICES REQUIREMENTS Create a Table of Contents for the Appendices Each appendix must be identified by number and name, as well as listed in the Table of Contents. A copy of ALL pertinent secondary data pages (e.g. databases, articles, tables from Statistics Canada, web pages, books and any other sources) used for analysis or referred to MUST BE INCLUDED in this separate appendix at the end of your report. You do not need to include an entire database; rather, just the pertinent pages will do. Highlight the relevant sections of each document in yellow. Put market share and sales forecasts calculations in the first appendix. Put the 3-Year P&L Statement in the second appendix. It is critical that you extract and discuss the key findings from your calculations into the main body of your project. Similarly, in the main body of your project, clearly direct the reader towards the supporting calculations, where appropriate. ALL facts in the report must be substantiated except those that are obviously common knowledge. Groups should establish a master file of all documents consulted for the project to facilitate the final assembly process. GOOD LUCK! Product Description and Rationale Description: Our product is an energy boosting gummy that provides a large boost of energy without the heavy crash. This product will contain small doses of caffeine while containing organic extracts from ginseng, honey and citrus fruits which are the main boosting elements of our product. This will provide a convenient boost for our customers, while tasting great and conserving well in a fast and easy chewy gummies. Packets will have individual servings making them easy to store for later consumption and sharing among colleagues and friends needing a kick start to their day. Each packet will vary in flavour, size and nutrition intake, depending on our customers' needs. It will contain some caffeine, but the organic boosters will be the main source of energy which will be able to maintain the intense energy levels and slowly dissipate, without the crash. We would appeal to gamers, workers, professionals and athletes searching for that explosive burst of energy to take them to success. We will price our product higher than standard gummy snacks, yet still be affordable for students looking for a quick energy boost, so a medium price range should be ideal. Since our product is more focused towards adolescents due to their high demand for quick energy boosts, our product will be sold behind the counter in stores such as grocery stores, convenience shops and various specialty stores. We would also heavily promote our online sales due to the amount of increased online purchases by adolescents and young adults. GMID: Trends: Sweet and savoury snacks are showing continued growth amongst younger generations which is most likely due to the lack of effort needed for preparation. Healthier snacks have also been growing in popularity primarily due to the increase in health consciousness amongst individuals. Competitive Landscape/Distribution Channels: Our products accessibility is important, which means distribution to convenience and grocery stores would be ideal since they hold a big portion of this market as seen on Table 7 . However due to the competitive landscape of the chewy candy industry, as well as how our product differs from the rest, it would be ideal to have our product distributed to various specialty stores. Online availability is also important, since it has slowly been growing over the past few years Prospects/Company and Brand Market Shares: Sweet and savoury snacks are anticipated to record a 2% of CAGR both in retail volume and quality terms, and by 2020 it will surpass $3.4 billion. It is proceeded amongst more youthful customers, and makers will keep on competing with each other by enhancing both the flavor and wellbeing properties. Based on Tables 5 and 6, since 2011, there has been a decrease in company shares of sweet and savoury snacks however a growth in brand shares are likely to be shown during the past 4 years. Last 5 Years Growth: Based on the data from Table 1, we can clearly see that yearly selling volume is rapidly on the rise. Also, the market value has had better growth compared to any other categories of snacks except for crisps, which went from $256.39M in 2011 to $328.64M in 2015, which represents 15.82% of growth within 5 years for this category alone. Next 5 Years Growth: The forecast for the next five years is looking very profitable. Data for the next 5 years show that the market will continue to grow. The sales volume will increase and it's expected to reach 24.24 thousand tonnes by 2020. Consequently, if the volume increases, the sales value itself will also increase. In fact, the sales are expected to go from $328.64M in 2015 to $400.36M in 2020. Finally, if we analyse the market's growth in general, we will notice 23.61 % volume growth in total by 2020 and 21.82% constant value growth in total by 2020. PMB: In terms of the category of chewy candy, 56.5% of people didn't ate chewy candy in the past 6 months. In the past 7 days, 43.4% ate any chewy candy, 21.4% are considering light users and 4.1% are medium. Our goal is raise awareness of the benefits of our product, since many people don't eat chewy candy. For the demographic profile, 34,4% of the survey are between the ages of 12-34 and 23.3% are between 35-49