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Three Year Marketing Plan

VIEWS: 354 PAGES: 16

  • pg 1
									        Three Year Marketing Plan—Blue
          Mountain Spring Water, Inc.

 INSTRUCTIONS
 Throughout the semester you will complete assignments that form different
 segments of a final project you must submit at the end of the course: a
 marketing plan. These assignments are part of your written assignments.
 Your marketing plan will feature Blue Mountain Spring Water, Inc.
 Information about Blue Mountain is contained in this document, which you
 should use as a guide for completing your assignments and as a template
 for assembling your finished marketing plan at the end of the semester.
 When it comes time at the end of the semester to submit your marketing
 plan, download and use this document as a template for your work. Follow
 the notes and instructions provided when completing your work.




Executive Summary
Blue Mountain Spring Water’s three-year marketing plan has been created by
its owners to secure additional funding for growth and to inform employees
of the company’s current status and future direction. Since our launch five
years ago, Blue Mountain has experienced excellent revenue growth and
increased market penetration. However, expansion outside our regional
market is vital to Blue Mountain’s future success.



NOTE: Complete as part of Written Assignment 11
As described in appendix B of the textbook, the executive summary—although it
appears early in the plan—is typically written last, after the details of the marketing
plan’s sections have been completed. After you have completed your marketing
plan’s details, complete the Executive Summary as it pertains to your marketing
plan.

Executive Summary




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Company Description
Located in the western Pennsylvania mountain region, Blue Mountain Spring
Water was founded five years ago by entrepreneurs Sam Chambers and Brad
Phillips. Chambers earned an undergraduate marketing degree and worked
several years in the carbonated soft drinks (CSD) industry for a producer of
all-natural, flavored iced teas. Phillips earned an undergraduate degree in
chemistry and worked for companies in the bottling and recycling industries.
Phillips had an opportunity to assume ownership of his family’s 20 acre farm
(known as Blue Mountain Farm), which contains a protected natural spring
with an unlimited supply of spring water. Phillips and Chambers, life-long
friends, agreed to pool their experience, constructed a bottling facility on the
farm and founded Blue Mountain Spring Water, Inc.

Chambers and Phillips incorporated the technologies of micron filtration,
ozonation and the application of ultraviolet light in the bottling process.
Thus, no residue, taste or odor is left in the bottles. This pristine bottling
process and the unique blend of minerals from the natural spring determine
the clean, fresh taste of Blue Mountain Spring Water. These elements created
a bottled spring water product that is delicious, refreshing, and appeals to
healthful consumers of all ages.

Blue Mountain Spring Water is currently sold in 500 ml, 750 ml, 1 liter and 2
liter sizes. Each bottle type is ergonomically shaped for easy carrying and
contains 30% less plastic versus comparable size CSD beverage containers –
which conforms with the company’s goals of being as eco-friendly as
possible, while manufacturing healthful products and contributing to local
conservation programs.

Blue Mountain Spring Water is currently sold at select natural food markets,
gourmet supermarkets and local stores throughout western and central
Pennsylvania, as well as border-state areas. Recent distribution growth
includes college and university campus stores. In order to penetrate these
market segments and maintain its high-quality image, Blue Mountain has
chosen not to distribute to mass-market and discount retailers. Although Blue
Mountain Spring Water appeals to healthful consumers of all ages, we have a
strong following among active consumers between the ages of 18 and 49.
Increased growth is trending in the 65+ age group and with parents of active
children under the age of 18. Our core customers understand the differences
between ‚purified‛ and ‚spring‛ water, thus appreciating the benefits of
drinking Blue Mountain Spring Water, versus ‚tap‛ or ‚purified‛ products.
Blue Mountain’s website has promoted these benefits and presented general



                                   MP-2
facts about water, in order to educate consumers and retailers. However, the
website could be revised to improve its effectiveness.

With the exception of 2008, Blue Mountain Spring Water has achieved double
digit sales increases in each year since its founding, which are more than
double the increases experienced by the total U.S. bottled water market. The
economic downturn of 2008 affected sales revenues in many industries. But
while the total bottled water market experienced a decrease of 3% in sales,
Blue Mountain Spring Water’s sales increased 7% in 2008. The increase can be
attributed to the loyal customer base that enjoys the high quality and
reasonable price of Blue Mountain Spring Water. Currently, we are working
to achieve increased sales through expanded distribution and new product
applications – which Blue Mountain Spring Water will be able to support in
its current bottling facility. If future bottling capacity is required to meet
future sales demands, the facility can be expanded without acquiring
additional real estate.

Blue Mountain Spring Water is committed to creatively producing and
marketing high quality, reasonably priced spring water products for active
consumers to enjoy. We are also committed to producing our products in an
eco-friendly environment, while exploring improved recyclable or
biodegradable bottles and packaging.
The marketing plan will outline how Blue Mountain Spring Water intends to
introduce new products, expand its distribution, increase its customer base
and give back to the community.


Blue Mountain’s Mission and Goals
Blue Mountain’s mission is to be the leading producer and marketer of
bottled spring water in its (current and future) distribution areas, for health-
conscious, active consumers of all ages. Blue Mountain wants to educate
people about the benefits of drinking its spring water and protecting water as
a natural resource. In addition, Blue Mountain strives to preserve the natural
environment through support of recycling programs and integrating
manufacturing to reduce its carbon footprint.




                                   MP-3
INSTRUCTIONS: Complete as part of Written Assignment 11
Determine values for X and Y in Financial Goals and complete goal 3. Include
additional goals as appropriate for your marketing plan.


Financial Goals
   1. Obtain financing to increase customer base, expand distribution, and
      introduce (X) new product line(s). [determine value for X]

   2. Increase revenue by (Y %) per year. [determine value for Y]

   3. Donate…[provide details]

   4. [add additional goals as appropriate]




INSTRUCTIONS: Complete as part of Written Assignment 11
Determine values for Z in Nonfinancial Goals and complete descriptions for goals 1
and 2. Include additional goals as appropriate for your marketing plan.


Nonfinancial Goals
   1. Introduce (Z) new product line(s) – [determine value for Z]



   2. Enter new geographic markets – [ provide description ]



   3. Source plastic materials for bottles that further reduce our products’ carbon
      footprint.



   4. [add additional goals as appropriate]




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Core Competencies
Blue Mountain will use its core competencies to continue achieving a unique,
sustainable competitive advantage.       Currently, Blue Mountain’s core
competencies include: a recognizable, high-quality branded product; a loyal
customer base among active consumers in its current regional market; and a
reputation among retailers as a reliable bottler with excellent customer
service that increases consumer awareness of our products. Blue Mountain
will build on these core competencies through targeted marketing efforts, in
order to achieve company goals.


INSTRUCTIONS: Complete as part of Written Assignment 11
Include additional information, a summary, etc. relating to Core Competencies, if
desired/appropriate for your marketing plan.




Situation Analysis
Blue Mountain’s marketing environment presents excellent growth
opportunities, as well as some challenges that the company intends to meet
successfully. Following this discussion is a SWOT analysis of Blue
Mountain’s strengths, weaknesses, opportunities and threats.

In the five years since its founding, Blue Mountain enjoys significant
strengths while optimistically targeting new opportunities. Our growing,
loyal customer base, strong fiscal management, intense quality control and
unlimited spring water resource, place Blue Mountain in an excellent growth
position. In addition, our founders’ combined experience creates a significant


                                   MP-5
understanding of both the technical and marketing aspects of the bottled
water industry. But, as Blue Mountain expands distribution and product
lines in new markets, the company must continue recognizing the scope of
our business and guard against market-share erosion from large competitors
in the spring water category. Targeting and educating active consumers that
understand and prefer the benefits of natural spring water will protect Blue
Mountain from encroachment by competitors in the purified water category.

Blue Mountain‘s expansion must also consider our bottling facility. Although
Blue Mountain has an unlimited supply of natural spring water, our current
bottling capacity is finite. Currently, Blue Mountain can triple bottling
capacity without considerable re-tooling of the facility. However, that
capacity would eventually be affected when increasing product lines. Thus,
as Blue Mountain increases distribution and products, we must coordinate
increased bottling capacity with growing production needs. The Blue
Mountain compound has adequate space to build an extension to our
bottling facility, but financial planning must include the possibility of
construction, if required. Based on the current relationship between sales
revenue and bottles produced, Blue Mountain would reach maximum
bottling capacity when approximately $9 million in annual sales are
achieved.



SWOT Analysis
Strengths
      Blue Mountain’s talented founders understand the product and target
       market due to their technical and marketing experience.

      Blue Mountain has achieved increased distribution at several levels in
       its regional market, while consistently increasing annual revenue.

      Our company has no debt and is poised for significant growth.

      An unlimited water resource and a self-contained, state-of-the-art
       bottling facility, ensures excellent quality control.




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Weaknesses
      Blue Mountain’s founders may lose sight of the company’s business
       scope as it expands.

      Blue Mountain is relatively unknown outside of its regional market.

      Expansion could potentially create cash flow problems and require
       additional employees.

      Blue Mountain’s bottling facility may require physical expansion
       when sales eventually exceed capacity.




INSTRUCTIONS: Complete after receiving feedback for Written Assignment 2,
question 3.
After receiving your mentor’s feedback from your completed written assignment 2,
make any necessary corrections or adjustments and list your Opportunities and
Threats here.


Opportunities




Threats




Competitors in the Bottled Water Market
Bottled water producers sell over $11 billion worth of products in the U.S.
each year. Consumers have demonstrated a strong thirst for bottled water
that will continue in the future. A high level of interest exists for products
that consumers perceive as a healthful alternative to other beverages. In
addition, domestic non-sparkling water is the largest and strongest category,



                                   MP-7
representing almost 96 % of total volume last year. The retail premium PET
(polyethylene terephthalate) segment - consisting of individual servings of
non-sparkling water in PET bottles - continues to drive the category’s
development, enjoying more than a 60% share of total bottled water volume
sold.

The U.S. bottled water market is comprised of many competitors in the local,
regional and national markets. National leaders of the purified water
segment include: Pure-Life (Nestlé Waters North America), Aquafina
(PepsiCo) and Dasani (Coca-Cola). However, Nestlé Waters North America
(the nation’s largest producer of bottled water) has purchased - and markets -
several regional brands with strong name recognition. Regionally, with some
geographical overlaps, these brands are: Arrowhead (West); Ice Mountain
(Mid-West); Ozark (Southwest); Deer Park (Mid-Atlantic and South); Poland
Spring (New England); and Zephyrhillis (Florida). Thus, consumers may
believe they are buying from a regional company versus a multinational
corporation that also sells purified water. Blue Mountain’s leading regional
competitors are Poland Spring and Deer Park. Regardless, Blue Mountain
offers consumers the best quality bottled spring water available, at an
affordable price.

Convenience store and supermarket chains that sell their private brand of
spring water influence local markets, but are often limited by the resources of
a variety of suppliers. In addition, some regional bottlers also provide direct
delivery service of 3 and 5 gallon containers (and dispensers) to homes and
businesses. Technological innovations in designing and printing bottle labels
have created growth in a new niche. Namely, some spring water companies
sell their water brand with customized labels for promotional use at
tradeshows, universities and events. With a minimal investment in printing
software, bottlers can, for example, provide an individualized, promotional
product of branded spring water to smaller retailers at an affordable price. As
described above, potential continued growth for the industry continues to
look positive.

While there are many competitors in the industry, Blue Mountain has
achieved success by: targeting consumers that desire spring water versus
purified water; creatively marketing the taste and health advantages of Blue
Mountain Spring Water; educating consumers about recycling and the
environmentally friendly facilities that produce a clean fresh taste; and
expanding distribution through dependable relationships and excellent
customer service.




                                   MP-8
INSTRUCTIONS: Complete as part of Written Assignment 11
Are there additional competitive factors in the bottled water market that are
appropriate for your marketing plan? If so, list them here.




Target Market

INSTRUCTIONS: Complete after receiving feedback for Written Assignment 5,
question 2.
After receiving your mentor’s feedback from your completed written assignment 5,
make any necessary corrections or adjustments and enter your Target Market
discussion here.




                                   MP-9
The Marketing Mix
Details of Blue Mountain’s proposed marketing mix are outlined in the
following discussion.


Product Strategy
Currently, Blue Mountain Spring Water is available in 500 ml, 750 ml, 1 liter
and 2 liter sizes for individual unit sales (e.g. the refrigerated section). The
500 ml bottle is also available in consumer 12 or 24 packs, the 750 ml in 12
packs and the 1 liter bottle may be purchased in consumer 6 packs. Each
bottle type is ergonomically shaped for easy carrying. The 2 liter bottle is
primarily used at home by families. In response to customer suggestions,
Blue Mountain is planning to launch an 8 oz size, designed with kids in
mind. A perfect size for a lunch box or a quick drink on the go, the ‚Junior‛
fits easily in cup holders and has a non-tip design. Retail pack availability for
the ‚Junior‛ has not yet been finalized. Additional market research shows
positive reception of a 1.5 liter size and increased inquiries from segmented
retailers about custom labeled products.


INSTRUCTIONS: Complete as part of Written Assignment 11
Insert additional products or product strategy to complete this section of your
marketing mix.




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Distribution Strategy
Blue Mountain Spring Water is currently sold at select natural food markets,
gourmet supermarkets and local stores throughout western and central
Pennsylvania and border-state areas (Ohio, New York and West Virginia).
Recent distribution growth includes college and university campus stores.
Opportunities for increased revenue exist within the regional areas and
through geographic expansion.



INSTRUCTIONS: Complete after receiving feedback for Written Assignment 8,
question 2.
After receiving your mentor’s feedback from your completed written assignment 8,
make any necessary corrections or adjustments and enter your Distribution
Strategy here.




                                  MP-11
Promotional Strategy
Effectively communicating with consumers and retailers is essential for Blue
Mountain. Information about the company, our products and spring water in
general, is provided via the Internet, direct mailings and personal contact.
Blue Mountain strives to promote the value and benefits of its high-quality
spring water products. Our slogan ‚Blue Mountain is Nature’s Fountain!‛
has received high recognition ratings by consumers and retailers.



INSTRUCTIONS: Complete after receiving feedback for Written Assignment 7,
question 1, and Written Assignment 9, question 2.
After receiving your mentor’s feedback from your completed written assignments 7
and 9, make any necessary corrections or adjustments and list your Promotional
Strategy here.




                                  MP-12
Pricing Strategy
As previously described, Blue Mountain offers consumers the best quality
bottled spring water available, at an affordable price, which requires
competitive awareness. Our products are competitively priced, relative to
other premium spring waters, but less than imported spring waters. Blue
Mountain has successfully achieved its goals through carefully planned
growth and by not offsetting high sales volumes with low prices.




INSTRUCTIONS: Complete after receiving feedback for Written Assignment 10,
question 1.
After receiving your mentor’s feedback from your completed written assignment 10,
make any necessary corrections or adjustments and insert your Pricing Strategy
here.




                                   MP-13
Budget, Schedule and Monitoring
Since Blue Mountain Spring Water began five years ago, it has enjoyed
consistent annual sales increases. The figures below depict historical sales
revenue and projected sales, including product line expansion, budgeted for
the next three years.


                                  Sales Budget

Historical

2005          2006               2007            2008             2009
$750,000      $1.5 million       $2.75 million   $2.95 million    $3.75 million



Projected


INSTRUCTIONS: Complete as part of Written Assignment 11
Considering the other components of your marketing plan, insert your Projected
Sales for the next three years here.


2010                         2011                          2012
$                            $                             $




                                     MP-14
Expansion Schedule
The timeline for expanded distribution and the introduction of new products
is described below. Blue Mountain will closely monitor the implementation -
and evaluate the performance - of the following tasks.



INSTRUCTIONS: Complete as part of Written Assignment 11
Considering the other components of your marketing plan, complete the timeline for
expansion for the next three (3) years.


Year 1
      Launch of the “Junior” (8 oz. bottle) in retail packs of…

   

   

Year 2
   

   

   

Year 3
   

   

   




Based upon industry trends, Blue Mountain anticipates continued growth in
the future and has no plans to exit the market. We are committed to remain
an independently owned private company. Therefore, Blue Mountain will
avoid mergers and public stock offerings. As discussed in this plan, Blue
Mountain intends to increase its market presence with controlled growth.




                                    MP-15
INSTRUCTIONS:
If you wish to add any additional information to your marketing plan, or write a
summary, you may do so here, but it is not required.




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