Marketing Plan for Miller Inc  Term Paper
- Length: 20 pages
- Sources: 10
- Subject: Business
- Type: Term Paper
- Paper: #79496921
Excerpt from Term Paper :
As a result of huge growth, the company's management may lose focus of the scope of their business.
Miller Inc. has a highly centralized hierarchy of management and lacks the managerial backup to promote creativity amons the employees.
Single-sourcing which is the characteristic of Miller Inc. could be a recipe of disaster should the supplier fail. Contingency plans for supplies need to be considered.
The constrant production nature of the product leads to huge strains on personnel and machinery.
Product line and client base lack diversification.
While the small number of staff promotes camaraderie, unfortunately, it also impedes growth and development.
Miller Inc. is reactive rather than proactive in its marketing efforts. This is as a result of its heavy reliance on mass-media advertising for obtaining new business.
The current facilities of Miller Inc. are crowded thus there is little room for expansion of workforce or equipment.
The bakery industry is growing as evidenced by the increasing sales.
There are gaps that exist in the market that need to be filled.
Miller Inc. has a chance to expand across the whole U.S. into new markets and market segments.
There are a growing number of new entrants into the bakery industry who are bringing in strong competition.
Consumers are looking for innovative products in the baking industry thus making it hard for Miller Inc. To keep up with product innovations.
Relationship with distributors, suppliers and retailers are at risk of poaching by being offered better deals by competitors
Theft of trade secrets through unauthorized copying is impossible to control and could lead to the company losing important information.
The competition is quite strong but Miller Inc. has managed to gain enough competitive advantage to maintain a market share of a minimum of 45% in the cities which it operates. The remaining portion is divided among many other different firms. Jubilee Bakery holds the largest market share after Miller Inc. At 30% and thus is the biggest threat to Miller Inc.
Data on the annual performance for the bakery industry isn't available as a result of many of the investors in the industry being private investors who are unwilling to release information on the financial performance of their companies. However, estimates have it that the bakery industry is worth over 10 billion U.S. dollars.
The consumers of bakery products are usually looking for new products which make the common and boring breads a little bit more interesting. Therefore, when a company comes up with a new product, the others have to try as hard as possible to develop a similar product in order to keep up with competition. A good example of this was when Jubilee bakery came up with sweet bread which led to Miller Inc. having to do some dirty tricks in order to regain competitive advantage through developing their own sweet bread products.
2.4 Product Offering
The product on offer is bread which is a bakery product. The company packages breads in 800, 400 and 200 grams which range from white, brown and sweet breads. While other competitors offer similar products, none has the 200 grams product which is mostly for households with one or two members. This 200 grams product was developed after a survey showed that a lot of bread goes to waste as a result of individuals not being able to eat a full loaf of 400 grams. This is what led to Miller Inc. developing the 200 grams product. The 400 grams product is for larger households with between 4-6 members while the 800 grams product is for families with 7-10 members.
All these breads come in three different designs. There is the round or barrel bread which is popular for restaurants and hotels for appetizers. Second is block bread for individuals who want to slice the bread themselves and finally there is sliced bread for those who want bread in slices. Sliced bread can also be used to make sandwiches.
2.5 Keys to Success
One important thing to note about the consumers of bread is that they are always looking to enjoy their favorite products without having to overspend. Therefore, the incorporation of feedback from the consumers into the products of Miller Inc. is extremely important. Additionally, the company needs to decentralize its activities in order to allow more specialized decision making.
2.6 Critical Issues
Miller Inc. anticipates that operations in the bakery industry will continue being profitable for the foreseeable future. The company has no plans to exit this market. The company plans to increase its presence in the market as per this marketing plan. With the expansion into the new market segments, there is a need for the company to merge other small companies in order to reduce the number of competitors and also gain competitive advantage. Therefore, as the company continues to expand, they will need to do mergers and acquisitions with the smaller companies in order for them to reduce the competition and also gain competitive advantage in the new market segments.
3.0 Marketing Strategy
The mission of Miller Inc. is to be the leading provider of bread products in all markets in the U.S. Miller Inc. wants to inspire people to literally fall in love with bread and to enjoy it more often both in and outdoors. Miller Inc. also has a mission to give investors a good return on their investment and it intends to build the necessary competencies in order to be able to do this.
3.2 Marketing Objectives
1. Spend $1,500,000 monthly for advertisement in terms of billboards, television advertisements, radio advertisements and others. This amount represents 10% of the current sales of Miller Inc. And per the budget policy of Miller Inc., 10% of its monthly revenue which currently stands at $10,000,000 is spent on advertising.
2. Spend $500,000 in promotions, competitions and other promotional services.
3. Design catchy radio jingles and television advertisements to promote consumer awareness.
4. Sponsor events such as sports tournaments and others so as to promote brand recognition, consumer awareness and hence drive sales.
5. Sell 100,000 units of Miller Inc.'s bread products per month in the new markets for the first month with an increase of 10% units every month.
6. Generate well over $4,000,000 in sales from the new markets by the end of the first year.
7. Increase sales of Miller Inc.'s bread products by 100% by the end of year 2.
8. Maintain revenue stream from Miller Inc.'s bread products in the new markets at a minimum of $10,000,000 per year from year 3 with an increment of $5,000,000 per subsequent year.
9. Return investor capital and debt financing by the end of year 3.
10. To increase brand recognition and strength by increasing market share by 3% over the next 12 months.
3.3 Financial Objectives
Miller Inc. has enjoyed a steady increase in its sales for the last 12 years that it has been in operation. With the introduction of sweet bread three years ago, the company has been able to double its revenue and profits. With the timeline for expansion of its bakery facilities into the Southern parts of the country, the company will be able to increase their revenue by about 10% per year.
The company is currently debt free except for mortgages on their bakery facilities. About 80% of the accounts receivable are billed during the last three months of the calendar year. Seasonal billing of accounts in addition to the additional travel of their accounts and sales staff during the peak season of summer usually pose a huge challenge to the company in terms of making sure books of accounts are in order.
The company currently needs cash to fund its expansion and this makes it inevitable for the company to borrow significant amounts of money to cover for its expansion activities. However, these loans are expected to be paid back within 2 years. The company also hopes to increase its revenue and profits by approximately 10% each year as a result of the expansion in market segments.
3.4 Target Markets
By placing focus on the commitment to service and quality, Miller Inc. has effectively managed to implement a successful differentiation strategy in a marketplace that is quite diverse. The ability for the company to differentiate its product has contributed greatly to superior returns for the company. The company's target market consists of individual consumers and institutions such as schools, hotels, restaurants, etc. Miller Inc. has a good distributor network to make sure that they are able to supply their products far and wide. In terms of individuals, the active consumer of Miller Inc.'s products is between the ages of 7-45 years of age. These are people who enjoy eating bread. The target market is not affected by household income in any way since it is a low priced product with very low profit margins in order to keep the final price low.
In terms of geographical distribution, Miller Inc.…