Deerside is a mineral water firm that is marketing a premium mineral water from the Republic of Georgia that has minerals known to contribute to colon and intestinal health. The high cost of bringing this water from Georgia to the United States, combined with its curative properties, necessitates a premium position in the market, so that that the high cost of shipping the water can be recouped in the market. There is a unique challenge in marketing this water in that FDA approval is required for any food or beverage product that is deemed to be a dietary supplement. Thus, if Deerside wishes to make claims with regards to the health benefits of the water, it must apply for FDA approval as a supplement. The company can market the water without this approval, but must tread carefully with the wording of its promotions.
There are a number of elements to the implementation plan for Deerside. The first is to set a number of objectives. There are a few different objectives that the company should set. The first is to acquire FDA approval for the health claims associated with the water. From a medical perspective, the minerals that the water contains have already been conclusively proven to deliver the benefits that are claimed, so there is not much that needs to be done with respect to product testing in order to win approval. The second objective that should be set is to identify a distribution strategy for the product. Because Deerfield is going to target the natural foods market with the water as a niche product, the company will need to investigate the best channels to reach this market. The third objective will be to determine an appropriate price point. It is known that the price will be at the high end, but pricing strategy needs to take into account a number of different factors such as cost of production, market penetration, brand perception and the price points of comparable products.
The functional tactics that flow from these objectives are as follows. The first objective can be met by identifying what needs to be done to satisfy the FDA and undertaking those steps. It is important to determine if this is a practical element of the strategy cost-wise. There must be a cost-benefit analysis on this option before its pursuit is decided. If it is, then the steps will be laid out by the FDA. The second objective requires an investigation of the channels that are available. There are a couple of different streams that need to be investigated. The natural foods stream can be used to move the product into natural food stores ranging from the neighborhood shops to Whole Foods. The other stream is through mainstream beverage distributors, often major players that primarily deal in products from major soft drink makers. There may be smaller beverage distributors as well than can make up a more specialized component of this stream. Again, a cost-benefit analysis on the different options in this stream will need to be conducted in order for a decision to be made. The third objective will require visits to natural food shops in addition to online research, in order to determine the state of the competitive landscape. Not only must competing healthful mineral waters be analyzed, but any alternative methods of delivering the specific minerals must also be considered as part of the competitive landscape.
There are action items within these objectives -- points of research, interviews with people in the industry, Internet searches, questions that need to be answered. A trip to Georgia to address that part of the supply chain will need to be made, as will chemical analysis of the water so that the claim with the FDA can be backed with solid evidence. There are dozens if not hundreds of individual action items within the functional tactics that will need to be addressed in order to gather the information, process it and deliver actionable results that will comprise the final marketing strategy for the Deerside water.
In order to ensure that this plan is carried out effectively, there needs to be a deadline and there needs to be a breakdown in task ownership. With respect to deadlines, the first objective will have two timelines. The first timeline will be to make a decision on whether or not to pursue FDA approval as a legal dietary supplement within one month. It will take another 2-3 months beyond that to gain approval. The second objective carries with it a series of smaller deadlines, leading to the same three-month final timeline. For example, the distribution channel options need to be identified within two weeks, so that there remains 2 1/2 months to make a decision and finalize the details. The trip to Georgia should take place within the first month, as these details are critical to the success of the implementation plan. If there are problems in Georgia, Deerside would need to reconsider the entire project so it is best to confirm all of the details on that end early in the process. The third objective should be completed within the first month.
Deerside is a startup, so the management team is small. Thus, the tasks are to be broken down among four team members. One team member will be strictly dedicated to the first objective. This team member will be the person responsible for the legal side of the business, best equipped to handle the rules and regulations associated with the process. An independent lab will be used to analyze the water. When the decision is made with respect to the first objective, it will be made by all four principles. The second objective will have two people working on it -- they will each investigate the two main distribution channel options. They will work together to make the final decision once the research has been conducted. These two will also join the fourth team member in going to Georgia to conduct the business there. The fourth team member will be primarily in charge of Georgia and the third objective. One of the four team members will need to be the CEO and make the final decisions, especially in situations where other team members are not in agreement with respect to the optimal strategy.
The company, being new, has scarce resources to allocate to these tasks. For the most part, research will need to be conducted with phones and the Internet. The trip to Georgia is the most expensive part of the marketing implementation plan, and will be kept short in order to minimize the disruption on the rest of the process. Once the contacts are in place, repeat trips will be likely only once per year perhaps. There may be face-to-face meetings required with major distributors, but there will be attempts to minimize these in order to keep down costs. The total budget for the launch -- not including product costs such as water, transportation and bottling will be in the $100,000 range. There will also be ongoing marketing costs associated with this project. The product is differentiated; it will be expensive, so this price needs to be justified in the minds of the consumers. Ongoing marketing costs are estimated to be in the $10,000 range per month in order to support the product, including a website, social media marketing (e.g. YouTube videos) and publicity.
There are a number of key success factors for this project. The marketing must deliver broad distribution. As a niche product, Deerside's water will need broad distribution to reach its market. The second key success factor will be to find the right price for the product that allows it to be competitive as a bottled mineral water, but to convey the product's superiority. The third key success…
The mineral water market is highly competitive, so Deerside will require a comprehensive strategy in order to excel in the marketplace. There are a number of different theoretical approaches that can be taken in order to understand the strategy that the firm should undertake in order to carve out its niche in this market. Before working with these approaches, Deerfield management needs to understand its product and the consumer