Marketing
Plan


La
Golosa
di
Bacco


A.
Loddo

 
 E.
Gradoboeva

 A.
Smilkova


A.
Batticani
 
 E.
Saeva





1. INTRODUCTION
• History and Facts about Pistacchio
2. THE FIRM : Bacco S.r.l.
• Presentation
• Background
3.PROPOSED INITIATIVE

4. THE PRODUCT
• Description and nutritional values

5. THE MARKET
• Five Forces Analysis
• Competition review

6. ENVIRONMENTAL ANALYSIS
• Strenghts
• Weaknesses
• Opportunities
• Threats

7. MARKETING RESEARCH

8. MARKETING STRATEGY
• Clients to be served
• Value proposition (positioning)

9. ACTION PROGRAM
• Marketing Mix : introduction stage
• Marketing Mix : growth stage

10.FINANCIAL AND ECONOMIC ANALYSIS (MARKETING BY THE NUMBERS)

• Demand estimates
• Break even and margin analysis
• The profit and loss statement

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 1.INTRODUCTION

Bronte,
the Italian capital of the pistachio
Sicily is the only Italian region where the pistachio ("pistacia vera") can be cultivated and produced.
Bronte, with nearly three thousand hectares of land dedicated and specialized for this purpose,
expresses principal area of cultivation (80% of the regional surface), with a production that has
peculiar characteristics.
Bronte is the Italian capital of the pistachio.
Represents the principal economic resource of the territory, also because, unlike the product
coming from America or Asia, whose kernel is nearly always yellowish, the brontese pistachio is a
fruit of high value, much appreciated in the European and Japanese markets, for its intense green
coloration.

In Bronte over 30 thousand quintals of pistacchio are picked up every two years (standard
growing time of the fruit) which is sold at about 10.00 to 15.00 Euro per kilo with shell and at 20.00
to 25.00 without it. A production of about 20 millions Euro per year, that represents 1% of the
world production.
Certainly no farmer nowadays can make a living out of cultivating only pistachio.
This activity occupies only a part of the working engagement and supplies only a part of the
income; practically it is a second activity, but essential for the family survival and maybe it is more
the passion than the economic reason to push the farmers to plant evermore pistachio trees (that
shall give fruits only after about ten years).

The green gold of Bronte could certainly be the city's emblem: its longevity, its willpower to
overcome any adversity, even to bear fruits although clinging on lava rocks, reflect somewhat many
characteristics of the brontese people.
A population that is not afraid of hard work, that has always struggled to take home what is
necessary; that over the pistachio has built wealth, culture and its traditions, but also the habit to
respect the territory in which it lives.
It is a precious fruit from ancient and noble origins, always a protagonist in the more refined
kitchens, sought-after for its aromatic and pleasant taste.

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In particular, today is utilized in the sphere of sweets and salami factories (confectionery, salami),
but also in chemistry and cosmetics (well known the active principles of its oil, to beautify the
skin).
The oil extracted from the fruit, particularly delicate, finds application in dermatology for its high
emollient and softening quality.
It was known and cultivated by the ancient Jews and it was then considered a precious fruit: Jacob
says to his sons to try to soften the heart of the Pharaoh Assurbanipal offering to him these gifts:
«… a little resin, some honey, some myrrh, some pistachio and some almonds» (Genesi XLIII,
v.11).
The pistachio (from the Greek Pistàkion) was already known to Assyrians and Greeks as a
medicinal drug, a powerful aphrodisiac and as an antidote against bites of poisonous creatures.
Avicenna, considered the Hippocras and the Aristotle of the Muslim East, in his "Canon of
Medicine" prescribed it against liver diseases and as an aphrodisiac.
During the high Middle Ages were the Arabs that, having taken away Sicily from the Byzantine,
incremented the pistachio cultivation and this had a great expansion in the territory of Bronte. Of
Arab origin are, in fact, the words frastuca and frastucara that respectively indicate the fruit (in
Arab "fustuq") and the plant.

In the sciare (stony ground) of Bronte, in fact, was realized an extraordinary union between the
plant and the lava ground, that continuously fertilized by the volcano' ashes, favored the production
of a fruit that, for taste and flavour, is far superior of the remaining world production.
Here, in a steep and stony land, the brontese peasant has reclaimed and transformed the lava flows
of Etna in an unusual Eden, realizing the miracle of a plant born from the rocks to produce small,
tasty fruits of the highest quality, of a beautiful color: emerald green, sought after and used in
confectionery and gastronomy for their elevated organoleptic proprieties.

The Mediterranean has always been one of the principal exchange centres for the enhancement of
the world alimentary products. Traditionally has been the sea of the taste, of the flavours, of
fragrance, of spice. A peculiar characteristic that has formed the culture, the economy and even the
scenery, changing it deeply and in a way almost irreversible.
Spice in general but also basil, rosemary, pepper, olives, citrus wine and the vine and other
thousands of products and cultivations that have invaded and changed this cultural and geographic
space bringing to goods exchange and also to a cultural comparison maintaining a constant common
value of taste and traditions.

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The products, generally of mid-eastern origin, represent a particular aspect of this patrimony and
have had a remarkable influence in the European and Mediterranean gastronomic culture. Cuscus,
pepper, wine, chestnuts and hundreds of other products derive from progressive and millenary
exchange and the Mediterranean sea has always been its communication space.
Pistachio, an exceptionally antique fruit, known to Babylonians, Assyrians, Jordanians, Greeks,
mentioned even in the book of Genesis and reported on the obelisk erected by the king of Assyrians
around the VI century B.C., is one of the alimentary products included in the gastronomic
patrimony of the Mediterranean people.
Of this precious fruit , brought to Sicily by the Arabs, Bronte represents the principal production
area in Italy.
Iran is the biggest producer of pistachio in the world with a production of 276.000 tons in 2007
(more than 50% of world’s production) followed by United States with 156.000 tons and Turkey
with 70.000.
However this trends are changing in fact in 2008 Turkey resulted the biggest producer with 160.000
tons, followed by Iran with its 120.000 tons and United States with 101.000 tons.
In Europe only Italy, Greece and Spain produce pistachio and they account on world’s total
production for about 5 %.
In Sicily the pistachio grows prevalently in Bronte occupying there about 80% of the cultivable
area, also in Adrano and Ragalna, in the province of Agrigento, particularly in Favara and
Raffadali, and finally in S.Cataldo, province of Caltanissetta. The average biennial Sicilian
production is about 32.000 quintals of shelled product, 80% of which is exported abroad.

2.THE FIRM : Bacco S.r.l.

Presentation

Bacco is the god of wine and of the vineyard, he is good looking and always represented in
company of beautiful muses and goddess.
Grown up by the muses, Bacco is the most erudite of the gods of the Olympus, he is the promoter of
civilization, the inspirer of ritual madness and ecstasy, the god of water, arts and of the art of living.
The parties in its honour got together artists, comedians, painters, sculptors.

5
Bacco, therefore, is not just the god of wine (idea diffused in the middle ages to insult pagans who
would go against the values of the catholic church), but a divinity of different facets, particularly
feared and adored in antiquity.
At the end the combination of our firm with Bacco wants to communicate our ability to offer divine
products, able to conquer the most refined mouths offering moments of authentic pleasure.
This is the mission statement we suggest for the company :
“Effort, experience and passion in the production process are the cornerstones
of our firm, our distinguishing feature in the way we deliver day-by-day
excellence.
High quality of our pistacchio cream “La Golosa” is guaranteed by a focused
sensorial and chemical analysis of the raw materials used as well as by a
modern and efficient production technology.
Everything supported by high hygienic standards of food safety.
We have a Desire: deliver to our customers unique, unmistakable and safe
products under every aspect.
We have an Ambition: the one of being able to cuddle everyone with our taste.
We cultivate an Aspiration: Satisfaction and delight of our clients.
Bacco s.r.l. “Life is Sweet”!

Background

Bacco srl is a limited liability company established in 2004 with a notary deed between three
entrepreneurs from Bronte. The entrepreneurs have been in the pistachio’s business for many years
so their know-how and familiarity with the product make our main source of competitive
advantage. The firm owns a land and a plant building in Via Palermo 47, Bronte, in which it carries
out all its activities. The location chosen is strategic since the pistachio that the firm will transform
comes from the same city where it exclusively grows.

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 3. PROPOSED INITIATIVE: EXECUTIVE REVIEW

The estimated total production of pistachio amounts to 18.770,5 quintals on yearly basis
representing a 1% of the world’s production of pistachio. The company’s current situation doesn’t
look too good since it is still on start-up and most of the money invested is still producing its
benefit. In fact from the balance sheet of 2008 it results that the net profit percentage (net profit/net
sales) is negative –0,017%. Therefore our objective is to turn profit positive in the next few years,
by developing the best marketing plan for the new product “la golosa di Bacco” (a pistachio cream
of unique flavour due to the high quality of the Bronte’s pistachio) and by creating as much as
brand awareness as possible through a substantial advertising campaign. The primary marketing
objective is to create brand awareness and on a later level to reach as much market share as possible
through a penetration strategy - selling 3 millions jars of “la golosa di Bacco”. The primary
financial objective is to achieve next-year revenues of 8,9 million and breakeven by the end year in
which we launch the campaign even if the marketing expenses will be very high. See calculations in
the appendix.

4.THE PRODUCT

This exceptional pistachio spread is the ideal product for any provoking desire: on a slice of bread,
inside a croissant, or more simply to eat it as it is with a spoon. The taste of la Golosa is amazing
and it has all the flavour of a heart of pistachios, selected and transformed with passion.

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INGREDIENTS:
Sugar, vegetable oil and fat partially fractioned,
Pistachio 30%, low-fat powder milk, lactose, milk
protein, emulsifier, soya lecithin.

NUTRITIONAL VALUES (Per 100gr. Of Product):

Valore energetico 538 kcal

2080kj
Proteine 3,18g
Carboidrati 62,20g
Grassi 31,00g

5.THE MARKET

Five Forces Analysis

Before analysing the environment, we should mention that Bacco is the first company to
produce the pistachio spread. It will be considered as a pioneer in this manner, having all the
characteristics of a monopolist. The competitive market environment at the time of launching “La
Golosa di Bacco” will be investigated using Michael Porter’s five forces analysis. It looks into five
major aspects which characterise the market, at a business unit level.

• Buyers’ power – Even though the consumers don’t have any bargaining power against the firm,
the product is still a supermarket one which means that it has to be purchased by the distributors
before reaching the shelves. This means that until the brand has created enough awareness and
the marketing has stimulated enough demand the buyers will have relatively high bargaining

8
 power. The situation can be reversed if the product will succeed and the distributors will demand
high quantities.

• Suppliers’ power – the main raw material is the pistachio nut, which is grown in Bronte, Sicily
by local farmers. As there are few big companies, which purchase the whole production from the
region, farmers do not have bargaining power. They sell at a market price, which is an advantage
for the company as the main production ingredient will have a fair, predictable price.

• Presence of substitutes – Bacco is the only company, which produces pistachio spread. As other
companies have no capability of producing of anything even closely analogous to this kind of
spread, there are no perfect substitutes. However, there are other products, such as the chocolate
spread, which even though do not possess any similarities apart from the functionalist one (using
the spread for dessert and breakfast), can be perceived as close substitutes.

• Barriers to new entry – the strongest barrier to other firms’ entries is the patents obtained by
Bacco. The company has patents over the production cycle of the pistachio spread. A second
important barrier is the limited production of the nut. It is naturally grown in only one region in
Italy. All the production is purchased and absorbed by current companies producing different
kinds of pistachio products. This implies that a new company, which wants to use the nut, will
have to import it from outside Italy, thus raising transport costs.

• Internal rivalry – competition within the industry is likely to be high when entry by new
companies is possible or when substitutes of the product are present. However, here this is not
the case. There are sufficient barriers to new entry and no perfect substitutes of the good. This
results in no competition when it comes to other pistachio spreads. Nevertheless, there are close
substitutes, such as Nutella or jams, which will be big competitors to the company, because of
consumers’ awareness, well-established reputation, and large market shares.

A Review of Competition

Although it was stated in the five forces analysis that the main competition Bacco faces
comes from the producers of peanut butter, jams and other equivalent spreads, whenever one talks
about delicious spread on a slice of bread, by habit, everybody would associate this idea with the
famous Nutella, making this brand the biggest and strongest competitor of Bacco. Due to this
reason, it is important to gather more information about it and analyse its’ strategies in order to
learn something from them. Knowing what your (very successful) competitor is doing can lead to

9
your own success. Hence below the most crucial information is listed about how Nutella is
distributed, its competitors and company’s ethics.

Nutella

The popular brand was registered by an Italian company Ferrero in the end of 1964. The
product proved to be an immediate success in Italian market and soon enough it began to expand
into foreign markets, staring in Europe and followed by America and Asia. The company became
second largest Italian company in terms of turnover in Germany in 1966 and by the end of 1960’s
the company generated a third of its’ turnover from international markets. This is quite impressive
since the art of globalization was not yet very well developed back theni. Currently the product is
distributed in over 75 countries across the globe.

Nutella positions itself in a wide variety of consumer markets, starting initially from breakfast
market and evolving into snack, dessert and school lunch markets. The brand occupies a clear,
distinctive place in those markets compared to competitors. Its logo “What would the world be
without Nutella” is on the lips and minds of millions of people in the world. Nutella reached this
position, by being a pioneer in the market for spreads and being first to introduce the new concept
of chocolate being healthy. It also generated its success because of its thorough advertising and
promotion, which convinced mothers of young children to change their opinions about chocolate.
People stopped perceiving this dessert as junk, as something that is bad for you, and began to view
it as a healthy snack rich in vitamins and minerals. Thus the mothers began to give it to their little
children, students began to buy Nutella as a source of energy and concentration and whole public in
general started to eat the product as a healthier and irresistibly more delicious alternative to other
snack food.

The general annual turnover of Ferrero is 5 million euros and the company has approximately
16,000 employees. Ferrero possesses 31 offices in the world and facilitates 15 production factories,
11 of which are located outside Italy.

Typically it is distributed in glass containers. Initially it was sold in a small jar which was actually
the size of a standard table glass for drinking. This strategy benefited the sales of the product, due to
its convenience, as the glass jars could be used as normal drinking glasses when the spread was
over.

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Besides this, company also has a strategy of making different, customized jars for certain occasions,
such as Christmas, making the jars collectibles. Internationally the product is sold in 200, 350, 400
and 750 grams jars, all made out of glass with the oval shape. To create more costumers appeal for
children and teenagers, the company produces Nutella in 3kg and 5 kg jars.
As well as that, the product is also sold in one-dose plastic containers, usually sold in packs of
three, which is aimed at the school lunch market. All these aspects of packaging are very important,
because it is clear from Nutella’s example, that sales can be generated not only with the product but
also with the idea of all the extra benefits you can get for free from buying one unit of the good, i.e.
a cool customized jar or an extra glass in the house. In people’s minds they are paying a small price
for both: a delicious snack and a new household accessory.

Although Nutella is world-wide famous, it still faces a lot of competition from the domestic
producers of each country where the product is sold (for example: Due Penotti in the Netherlands,
Nutino in Australia and Condon in Ireland).
Typically this implies that “La golosa di Bacco” faces more or less the same competitors, however,
since the company will be concentrating primarily on Italian market in the near future, Nutella
remains the number one competitor.

One of the factors of success for any company nowadays is being ethical. Being ethical to everyone
who comes in contact with your business, be it the shareholders, employees, managers and of
course customers. Since customers are the main group which the company has to satisfy in order to
generate turnover, it is crucial to earn their loyalty and their good opinions about your firm. Ferrero
as a company engages itself in certain projects, which help to increase its good reputation among
public and secures its’ market shares.
One of the examples of such ethics is the company’s strategy for quality.
All Ferrero products, including Nutella itself, are GMO (Genetically Modified Organisms) free and
do not contain any colorants or preservatives. The company is a direct member of ICI (the
International Cocoa Initiative) and WCF (World Cocoa Foundation), which aims at improving the
well-being of the cocoa farming community, and ensuring that the standard of living of these
communities is acceptable.
Besides this, the company is being highly ethical by reaching towards the supply chain free of any
sort of forced child and adult labour. In 2001, it participated in an industry commitment, whose
purpose was to develop standards for certification of cocoa beans making sure that the growth and
the processing of the beans do not involve any sort of forces labour.

11
Such commitment to these organizations leads directly to the development of costumers’ loyalty
and good reputation, as well as keeping the quality of the main ingredient high.

Another ethical strategy used by the firm is concerning the advertising.

Ferrero is a part of the EU Pledge, which is an organization aimed at changing the advertising on
TV, radio, print and Internet to children under the age of 12 in European Union. By being a member
of such organization, the company promises to comply with certain minimum requirements:
• “No advertising of products to children under 12 years of age, except for products which
fulfil specific nutrition criteria based on accepted scientific evidence and/or applicable
national and international dietary guidelines. For the purpose of this initiative, "advertising
to children under 12 years" means advertising to media audiences with a minimum of 50%
of children under 12 years of age.
• No communication related to products in primary schools, except where specifically
requested by, or agreed with, the school administration for educational purposes.”
(www.nutella.com.au)

From looking at these ethical commitments, it is obvious that Ferrero and its’ brand Nutella
captured a lot of costumers in the market due to their image of being socially responsible. Hence
Bacco, as a company, should definitely consider making a similar approach, in order to gain great
reputation quickly.

6. SWOT ANALYSIS

Before any company can enter its market, it is necessary to weigh all the pros and cons that the firm
might face. The best way to undertake this mission is by conducting a SWOT analysis, which is
basically an overall evaluation of company’s strengths (S), weaknesses (W), opportunities (O) and
threats (T). Strengths and weaknesses are the internal factors affecting the firm, i.e. these are
factors that are generated by the firm itself. Opportunities and threats on the other hand, are the
external factors, i.e. the influences that the market environment can have on the performance of the
company, something the firm itself can not control. This section of the report is one of the most
important ones, because it will determine the chances of Bacco’s success in the sweets market.

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Strengths

• One of the biggest strengths of LA golosa di Bacco is its high quality. As was stated
previously, the pistachios are grown solely in one region in Sicily and that region is famous
in Italy for the high standard of the growth and production of the nut. The element that
differentiates our sweet spread from any other one is the fact that the nut is obtained from
this region and this region only. Other companies specializing in production of goods based
on pistachios have to import the nut from countries like Iran. It is precisely because of long
transportation and a lot of handling process that the quality of the nut can be highly reduced.
Since our pistachios are domestically produced and the Sicilian farmers are famous for their
processing progress, the quality of the spread will be superb.
• Another strength of the product is the fact that is it made completely out of natural
ingredients. The world of today is obsessed with healthy living, and the evidence to that can
be seen in supermarkets with the shelves overflowing with low-fat, low-cholesterol, and
low-sugar products. However people still want to have some indulgences in their life and
will still buy sweet foods. Therefore the idea that our product is absolutely natural, without
any additives will persuade the costumer to buy this product when he/she needs a sweet fix.
This aspect of the goodness of the product will also help to gain a lot of costumer loyalty
among mothers who choose the food for their young kids and who always want only the
healthy products for them. Thus La golosa di Bacco will be the perfect option in comparison
with other heavy, fat and sugar laden chocolate/artificial fruit spreads.
• One more factor considered as strength is the presence of already developed know-how by
the firm and the ownership of certain patents. The know-how will help the company to move
quicker among the learning curve thus increasing production further and gaining higher
economies of scale which will ultimately lead to reduction of costs. The patents will help
Bacco to protect itself against any copying by the competitors and might serve as an
additional source of revenues (in terms of royalties), in case if someone else would want to
use the patent.
• Last but not least strength of Bacco is its already well established agreements with the
pistachio farmers in Sicily, who are reducing company’s costs by selling the nuts at a market
price.

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Weaknesses

• One of the weaknesses for the company so far is the absence of the brand recognition or
brand awareness by the target market. Since the spread is an entirely new product being
developed, it might face a lot of strong competition from the existing companies (e.g.
Nutella) who have been already well developed in the market.
• Another weakness of the company so far is the small scale production in comparison to
other major competitors. Because the company only settles on the domestic market and only
in few cities in Italy in the beginning of its course, it might not experience as big of
economies of scale as the other firms. Thus, initially it might be hard to keep up with the
financing of the project.
• One more factor that can affect the firm and the product itself negatively is the idea of the
new product itself. It is not only enough to advertise your product and your name; it is
necessary to convince people to try it. Due to the fact that there has never been such a good
before – pistachio spread, some people can develop a negative bias from only associating
the nut with a spread or solely from the fear of the unknown “exotic” product, making it
very difficult for a company to persuade them to think otherwise.

Opportunities

• As was mentioned previously the desire of healthy lifestyle of modern society can be very
helpful for the development of the product. This change of costumer tastes in this case is
the opportunity for Bacco to introduce its healthy and delicious snack in the supermarkets
with a big chance of success, because more and more people will choose a healthier snack
if it tastes just as good as its counterparty made out of GMO.
• Another opportunity for firm comes from low additional costs such as transportation and
import taxes. Besides that if the main ingredient is grown locally, it reduces the chances of
the product going obsolete (because there is no major transportation involved), of stock
running out and less damaged final products.
• Since the product is produced and distributed domestically, there are fewer problems with
the law; there is no risk of currency exchange rate fluctuations and no problems with

14
 foreign regulations that can lead to big alterations in the organizational structure or in the
product itself.

Threats

• The only threat so far reviewed for this company is the fact that there is a limited supply of
the pistachio nuts. As was mentioned already, Bronte, the region of the pistachio production
is unique in terms of growing the plant. It is already known that besides Bacco, other
companies are also using Bronte’s farmers as a source of pistachios for their own products.
Hence if the number of companies increases rapidly in near future, there might be a scarcity
of the main ingredient and this will be very dangerous for Bacco, as the whole idea of the
spread is the fact that pistachios come from that region.
• Connected to the first threat is the fact that if the number of companies demanding
pistachios from Bronte increases, it will generate a shortage of supply making farmers to
increase the market price and thus increasing company’s costs with it.
• Another threat that the company is facing is the global economic slowdown because of the
financial crisis. Due to the recession the demand for goods and services has reduced,
implying that most of the people today will prefer to spend their money on most essential
products for their living, obviously La golosa di Bacco will not fall into this category. In
case if the company does not have sufficient internal funds to develop and market the
product, it might have to borrow additional capital from the financial institution such as an
investment bank. However once again due to the world-wide current recession the firm
might face difficulties with obtaining it as a lot of investors are feeling pessimistic about the
near future at the moment.

7. MARKETING RESEARCH

Before deciding if it is the right product to launch on the market we undertook a lot of marketing
research in order to gain customer insights and to reveal their preferences and dislikes about the
product.
The process started with exploratory research, in the form of focus groups with targeted segments:
We interviewed in three separate sessions a family, a group of classmates and two children; we
showed them the product and explained the underlying ideas behind it without making them try it

15
so to have a fresh understanding of their first impressions. Interestingly enough, they were very
surprised by the innovation and showed enough curiosity. However, they weren’t very sure about
the quality and they were not sure if they wanted to try it either because of the unusual color for a
food product.
In the second phase of the interview, we gave to the groups a slice of bread with La Golosa and a
spoonful of it. The expressions they made were delighted and the feedback they gave us was
extremely positive. Many people wanted to buy it as an exclusive before commercialization and
they paid up to 7€ for it. This is an important result since, as it represents customer perception about
the value of the product, it sets the price ceiling for it. And in our case it is a very high value,
consistent with our “premium product” positioning, which gives space for possible future high
margins.
The research was leading us to successful results but exploratory research is not enough because
there could have been some bias in the focus groups sessions. Therefore, we decided to build a
survey and distribute it through facebook (which has a high respondent rate, even if the population
is mainly that of teenagers and young adults), to start advertising it and of course to gain on
customers view. The statistics shows that only 9% of the 630 respondents actually knew the
existence of the product, but as high as 71% was interested in knowing more about it.
This research brought us to believe in the potential of the product and therefore we developed a
customer-driven marketing strategy as follows in the next session.

8. MARKETING STRATEGY

In order for a company to launch its product successfully and to incur future profits from its sales, it
is utmost important that the firm defines its market correctly. After all even if your product is huge
and has a high value proposition, it is worthless without the customers. Therefore one of the major
sections of the marketing report will be dedicated to Bacco’s market definition, with the relevant
segmentations and target groups. After realizing which consumers are best to target, we will
procede to Bacco’s position in this market, in a sense of La golosa di Bacco’s value proposition, or
in other words, what makes the spread so irresistible and different from others.

Market segmentation

Since the overall consumer market is too big to capture, it can be useful to divide it into separate
groups according to market variables. Generally there are four major segments:

16
 • Geographic: first of all the market can be divided “on a map”, or Bacco has an option of
how large it wants to be established initially, at the country level, city level or perhaps
internationally.

• Demographic: this segment is larger than the first one because it contains a lot of
subdivisions such as age, income, occupation, family life cycle and family size, as well as
race, nationality and generation.

• Psychographics: the third segment deals with more personal qualities such as social status,
personality of the targeted consumers and their lifestyle.

• Behavioral: last major segment will concentrate on factors such as occasions, loyalty status,
readiness stage, and attitude towards the product. However we will not focus on the last
segment, due to the fact that the product is brand new and therefore factors such as loyalty
are not developed yet and hence are inapplicable.

Targeting

After a lot of brainstorming and thorough thinking, it was decided that Bacco could go for
undifferentiated marketing (mass-marketing). Using such targeting strategy Bacco is focusing on
what is common between consumers’ needs – to make their life sweeter. “La golosa di Bacco” is a
convenience good that is designed to appeal to basically everybody.
Anyways, in order to evaluate which buyers are most probably going to buy the product and have to
potential to become loyal customers, we concentrate on a few target groups namely:

• Geographic: Initially, at the beginning of the project, the targeted group will be the Italian
consumer market. The product will be promoted and advertised in major cities around Italy
to build consumer awareness. We estimated that the maximum quantity of people that could
make the early adopters is 3 million Italians.

• Demographic: “La golosa di Bacco” will aim itself at different age groups including
teenagers (age 12-19) and young people (age 20-30). In itself, the target “young people”

17
 includes high school graduates, students and those who entered the labor market. Besides
that the product will capture the segment of families, or precisely, mothers with young
children who are responsible for their kids’ nutrition.
Since the product is not the cheapest one, it will mostly be targeted at people who earn a
considerable income (approximately from 50,000 euros and higher) and who can afford to
splurge on themselves. This group of people can be referred to as those with the white-collar
professions (managers and other professionals).
Because our product is a sweet spread made out of natural ingredients that do not contain
any rare specific inputs that can be forbidden to consume in certain cultures, religion,
nationality and race do not play an important role in this case.

• Psychographics: Finally, concerning the income to be earned by one of our target groups, we
can distinguish this group even further by defining consumers’ social class, which should be
at least a middle class and/or higher. Once again because the product can be considered as a
general one (in a sense that it is food), the lifestyle or personality does not matter, because
all the people of all lifestyles and attitudes, on a frequent occasion, will want to make their
life “sweeter”.

Positioning

It is important how a company defines their product. What is more important, however, is
how the product is defined by consumers on important attributes – the way it is positioned in their
minds relative to other competing products. A product’s positioning is a complex set of consumers’
perceptions, impressions, and feelings.
The positioning strategy “La golosa di Bacco” is going to use is “more-for-more” – get more
quality, pay higher price. The high quality, natural ingredients and nutrition factors of the spread
make it an upscale product. The relatively high price that consumers are going to be charged is
covering the higher costs of production. If buyers are really appreciating the higher price they pay
for the unique product they get, more-for-more is in general a winning strategy.
There is, however, a vulnerable point in this type of positioning. This kind of strategy
usually tends to invite imitators that claim the same quality for their products for a lower price.
What’s more, products of fine quality are at more risk since the demand for them during economic
downturns is decreasing – consumers think twice before buying expensive goods, which are not of
vital importance for them.

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 In the case of Bacco, only the second vulnerability may be of some importance. The
company should not be afraid of imitators since the pistachios, the core production factor for their
product, are under their control. As they have patented the production and because the growth of
pistachio is in a single small region, Bacco has ensured that they are the one and only company that
is able to produce this kind of product. As for the second, vulnerability, the company must consider
the present economic condition. Italy has experienced a downturn due to the current economic
crisis. However, in general people continue to buy little sweet delights. Bacco says, “Life is sweet”.
Those, otherwise not so vital products, seem to be of great importance for everybody in all times.
Using this logo, the company can form its positioning statement as “To people of every age, gender
and occupation, La golosa di Bacco is the cream that will make your life sweet”.

After defining our proposed marketing strategy, the following step is to metabolize it into a real
course of action, as it’s represented by the marketing mix which is the tool for implementing the
strategy and reaching the customers. We review possible actions for the introduction stage and
some perspectives for the growth stage.

9. ACTION PROGRAM

As the project deals with the marketing of a new product, which will be launched on the
market, the strategies will be explained via two of the stages of the product life-cycle model. We
already have a product, which is ready to be launched, so product development stage will be
skipped. The purpose of the project is to deal with the introduction of the Bacco’s pistachio paste,
so we will concentrate on the marketing strategies, which will create consumer awareness, win a
satisfactory market share, and approach steady sales. These objectives are characteristic of the
introduction and growth stages of the product life cycle until it reaches maturity. This is why we
will focus on the already mentioned two stages.

INTRODUCTION STAGE

The introduction stage of the product life cycle model starts when the product is launched on
the market. It is characterised by low sales and negative profits, because of the heavy investment in

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promotion and distribution. Promotion expenditures should be high, because the main purpose of
the strategy is to create brand awareness among the potential consumers and appeal to the target
market by inducing people to try the product. The people to whom the strategy will be intended are
the innovators, those who would experiment and try new products. The main issue is to capture
their attention through the marketing mix. To sum up, the main objective of the marketing strategies
during this stage will be to create product awareness and to induce consumers to try it.

MARKETING MIX – each of the strategies used will be explained but the four subdivisions of the
marketing mix

• Product - When a new product is launched on the market, it should be basic in the
sense that as consumers are still not aware of the brand, there should be one product
with which they will start associating it with. Furthermore, if a lot of versions are
introduced from the beginning, this requires an even heavier investment in
development and promotion, which would be difficult for the company to handle.
One basic product should be launched, which would later be diversified in order to
appeal to all potential customers’ preferences. This is why Bacco will launch only
one version of “La golosa di Bacco”, the pistachio spread. For the moment there will
not be other products containing this substance. In this way consumers will start
associating the taste, quality, and consistence of the spread with the brand.

• Price - The price which will be set for the product has to aim at attracting new
customers, as the product is new and consequently there are no existing ones. As the
main purpose is to induce people to try the product for a first time, price should be
set relatively low in order to make the product affordable. If it too high no one will
buy it because people would be afraid to spend money for something they might not
like. Value-based pricing is not an option during the introduction stage because it is
impossible to communicate the value of a product, which has just been launched.
This is why “La golosa di Bacco” will be priced according to the cost-based
principle, namely the cost-plus pricing. It consists of adding a standard mark-up to
the costs of the product. The shortcoming is that it does not take into account demand

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 and competitors prices, but it is still widely used, because sellers can be certain about
the costs they incur. The estimated price for this stage will be € 2.99 (see break-even
analysis).

• Distribution/place In marketing our product we will need intermediaries because

they will create greater efficiency in making the good available to our target markets.
Through their contacts, experience, specialization, and scale of operation
intermediaries usually offer the firm more than it can achieve on its own. Our
primary intermediary partner will be GDO (Grande Distribuzione Organizzata)
which is made by producers, wholesalers and retailers acting as a unified system
(VERTICAL MARKETING SYSTEM) who distribute in the Italian territory and
abroad. The most important actors in the Italian market are Auchan, Esselunga,
Carrefour, which are going to be our main clients since they are present in the entire
Italian territory.

• Advertising/sales promotion - In order to create brand awareness promotion should

be carefully planned. In the case of Bacco the promotion mix will consist of
advertising, sales promotion, and personal selling, depending on the stage the
product is in. All tools should communicate the value proposition of the brand in a
consistent and persuasive way, lastingly positioning the product in consumers’
minds.

When introducing the product, one of the best ways to attract people’s attention is the direct
contact. In line with the advertising, during the introduction stage, we intend to hire promoters, who
will have stands in the supermarkets and will ask passing people to try “La golosa di Bacco”. The
advantage in such personal selling is the direct human contact. Apart from advertising, it is a two-
way communication and the induction might be easier. Moreover, people are more likely to try the
product for free rather than having to buy it.

Nowadays people are constantly exposed to all kinds of information through newspapers,
television, and the Internet. They are bombarded with messages about practically everything. This is
why in order to introduce a product, it is important to reach people via these communication tools.
Therefore a company should advertise. The nature of advertising is to try to convince the consumers
of the perceived value they can get if they use a product. Consumers tend to think that publicly

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advertised products are more trustworthy. The shortcoming is that it is a one-way impersonal
communication tool, but this is not a disadvantage when the purpose is to reach a mass market as it
is in our case.

As we want to introduce a new product on the market, it is important to show it to people.

They should be able to see it everywhere they go. This is why the promotion mix strategy used will
be the pull strategy. The marketing activities will be focused on the final consumers who will
demand the product thus inducing the distribution channels to purchase it from the producer.

When starting an advertising campaign several stages should be kept sequent. We start by
setting the advertising objectives. As a new product “La golosa di Bacco” will centre on informative
advertising – the main objective will be to build primary demand and to communicate the customer
value. It should build the brand image and tell the market about the new entry. The next step is to
set the advertising budget, which will be calculated according to the objective-and-task method. It is
the most appropriate method because it entails setting a budget compliant with the objectives
wanted to be accomplished.

It was already stated that the main objectives of the promotion will be to create brand
awareness for the new product and to induce first trials. The tasks associated with these purposes
are two as a start. First, we intend to follow intense promotion showing the product everywhere –
commercials, billboards and advertisements in the internet. The underlying reasoning is that as we
will target different segments of the market, we will need to promote them in different ways. For
example, commercials will be aimed at mothers and young children, because this is one of the
mostly used information tools for them and internet advertising will be aimed at teenagers, because
most of them spend a huge part of their free time online. Second, as a result of the massive
promotion, the task is to induce 20 – 30 % of each target group to try the product for a first time.
This is a realistic percentage because we depend on the curiosity of the people – seeing it
everywhere, hearing about it everywhere, glancing it when you check your e-mail – sooner or later
you will try it. An extensive research provided the approximate costs for each of the tools. The
campaign will be kept for at least one year. Billboards and facebook ads will be present all the time
and TV commercials will be shown twice a day, resulting in a total cost of 107 628 000 €
• 30 seconds on national TV during prime time – approximately € 250 000

• Showing advertisements on facebook - € 28 per day

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 • Billboards into city centre and busses - €630000 /14 days in 30 biggest cities 2300 boards

BUDGET = 365 days x (250 000 ) + (365 days x 28) + (630000x365/14) =

= 107 628 000 € (rounded)

After the budget has been set, it is important to focus on the advertising strategy, namely the
strategy by which the company will achieve its advertising objectives. It consists of two elements –
creating advertising messages and selecting advertising media.

Today advertisements are everywhere. In order to make an impression and to leave a trace
into consumers’ minds the advertising message should be catchy, different, and memorable. The
creative concept of the advertising strategy is simple – “Try me” (in Italian – “Assagiami”). It is
simple, straightforward, playful, easy to recognise. It can fit in all different contexts, which makes it
memorised by young people as well as by the adults. For the execution styles of the message we
chose different backgrounds for the different tools. As commercials will be aimed mainly at parents,
they will be more family-oriented. They will show lifestyle concepts – something people will be
able to refer themselves to – cosiness, warmth, and affection. As billboards will be looked at by a
more diverse audience and internet advertisements will be aimed at teenagers and young people, the
execution style will be slightly different. It will represent an image of a young beautiful girl holding
the jar. The jar will be saying “ Don’t lick the billboard, try me! ”. The ad should be catchy and
playful making youngsters pay attention to it. These two styles complement themselves by saying
that “La golosa di Bacco” is suitable for everyone – children, teenagers, adults, and families.

The consequent element in the advertising strategy is the media selection. The chosen media
types are the national TV, billboards, and facebook. The frequency of the TV commercials will be
once a day during prime time in the evening because is very expensive. The rationale is that during
during prime time whole families as well as young people are exposed to the commercial breaks
during movies or shows. Moreover, the costs for a 30-second time on TV are very high, so we will
try to keep the budget affordable with a relatively low frequency but still a large reach. As
mentioned above the chosen commercial time is the most seen one, covering almost all target
groups. This is why we estimate that this promotion vehicle will reach more than 70 % of the target
market. The billboards and the facebook advertisements will be shown constantly for the whole
period of one year. Billboards will be visible from far away when drivers pass around or when
people just go for a walk, while facebook ads will show up every time someone opens their account.

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GROWTH STAGE

The second stage of a product’s life-cycle is growth stage. This is the period of rapid market
acceptance and increasing profits. The product is already known to the market. Therefore, in this
stage the company is broadening its target market. The early adopters will continue buying the
product and will be followed by some of the early maturity customers who would have heard
favorable word of mouth. As sales volume rises, average costs decline and so profits rise. Naturally,
attracted by opportunities for profit, competitors will try to enter the market. However, as we
already mentioned in the Five forces analysis, Bacco has pretty strong barriers to entry. Its product
is protected by patents so we can assume that competition will not change. No matter of that, in this
stage company is trying to sustain rapid market growth as long as possible.
All in all, in the growth stage company’s objective is to capture more market share and
increase sales. It will do this by launching “la golosa di Bacco” on the international market. We will
take a deeper look into Bacco’s growth stage by examining each part of the marketing mix.

• Product – as we underlined already, “La golosa di Bacco” has unique taste.

In the introduction stage the company was aiming to positioning the product
in consumers mind so that they can correctly and effectively evaluate its
qualities. Considering the hard efforts and investment in the introduction
stage, we will focus more on the growth and features of “la golosa di Bacco”
and leave other product models for now. It is in the plans of the executives to
widen the product line once the product is in its maturity stage so a sto
revitalize its image. Proposed extensions are “La Colomba di Bacco” easter
cake, and “Panettone di Bacco” Christmas cake, as well as “Pesto di Bacco”.
However, the pistachio spread will be launched on the international market.
Therefore, some challenges have to be met. First, the company has to decide on which countries to
introduce the product. Bacco has chosen several West European ones – Germany, United Kingdom,
Belgium, the Netherlands and Luxemburg. Then the company must decide to what extend to
standardize the product. Standardization helps for the building of consistent international image.
However, consumers differ in each country. Therefore, the product has to be modified according to
countries’ appeals. “La golosa di Bacco” has very unique taste so we presume it will appeal equally
likely to all consumers. For now no change on the substance will be made. Packaging will be the

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main challenge. Name and label translation, even the color have to be considered. All in all, product
standardization can produce benefits but Bacco must take into account country specificities and
adapt to them.

• Price – pricing strategy will change. From cost-based principle the company
will shift to market-penetration pricing. In order to match the increase in sales
volume, the company will set lower price to penetrate the market more deeply
and increase sales quickly (the estimated price will be € 2.59 based on the
assumption that the targeted sales volume will be reached). This way, large
number of buyers will be attracted and market share will increase. As we
already explained this will cause unit production costs to decline allowing the
company to gain higher profits.
For this pricing strategy to be effective, several conditions need to be fulfilled. First, the
market need to highly price sensitive so that lower prices can generate market growth. As we have
already proved, the market on which Bacco operates is highly price-sensitive. Second, as sales
volume increase, production and distribution costs must fall. The increased sales momentum will
allow Bacco to trade the product on a lower price to its distributors. They will already be sure about
the product’s success. Third, low-pricing must keep out competition. By lowering the price, “la
golosa di Bacco” has the chance to gain some of the market share of Nutella. Since the target
market of Nutella and Bacco’s product almost fully overlap, the lower price will induce customers
buying more “la golosa di Bacco” probably substituting their purchase of Nutella.
It must be emphasized, however, that Bacco’s pricing strategy in the growth stage will be
actually a mix between market-penetration and promotion pricing. The lowering of the price will be
introduced to consumers as a special discount – marking the product with the “offerta” sign. It will
be a temporarily reduction just for the purpose of generating sales and gaining more market share.
It must be considered that promotion pricing has hidden threads. Usually, this strategy used
too often and/or copied by consumers can create “deal-prone” customers. Those buyers will wait
until discount goes on and only then buy the product. Another, thread is that reduction in price can
erode brand’s name and reduce the damage the value positioning in consumer’s minds. In our case,
however, Bacco has nothing to fear of. The food industry is rarely threatened by those two factors.
The uniqueness of “la golosa di Bacco” is protecting it somehow from the “deal prone” customers.
What’s more, the reduction in price from 2.99 to 2.59 will attract more customers due to the close
competitor’s prices. It is highly unlikely that “offerta” can damage the brand name.

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 Another aspect of the change in pricing strategy of Bacco that needs to be considered is
international pricing. The product will be launched internationally so the company has to decide
what prices to charge in each country in order to reflect local market conditions and cost
considerations. For now, “La golosa gi Bacco” will be introduced in Germany, UK and Benelux.
The rationale for the choice of countries is behind factors like present economic condition,
competitive situation, law’s and regulations, development of wholesaling and retailing systems,
consumer’s purchasing power and probability for product acceptance. Since all the countries have
Euro as their currency, exchange-rate fluctuations are out of consideration. What is more, because
of the European Union, import tariffs and taxes are minimal. Of course some additional costs
cannot be avoided, like shipping costs, insurance, physical distribution. This will cause a slight
increase in the price of the product on the international market, not only due to the increase in costs
but most of all to comunicate the high quality of it. The strategy adopted will position “La Golosa”
as a premium italian product for foreigners seeking the pleasure of the italian cuisine.

• Distribution - For the following years we will try to market “La Golosa” in
international markets starting from northern European countries. The strategy
that we will follow in the distribution process will emulate the one adopted
until now because we already have good contacts with big distributors (GDO)
and the Vertical Marketing System seems to work the best.

• Advertising/Sales Promotions – Instead of attempting to create product

awareness, in the growth stage the company will strive for product conviction
and purchase. This strategy is in combination with lowering the prices in the
same time. In this stage the company’s objective is focusing more the image
of the product and building brand equity; that is positive differential effect
that knowing of the brand name has on consumer response to the product.
Bacco has to meet four consumer perception dimensions – differentiation,
relevance, knowledge and esteem. Differentiation is what makes the brand
stand out. Relevance refers to the feeling consumers have for meeting their
needs. Knowledge is measured by how much information they have on the
brand. Esteem is about the respect and regard buyers have for the brand. By

26
 successfully meeting those four categories, Bacco will have produced strong
customer relationships.
For meeting these criteria, however, the company must continuously communicate the
brand’s positioning to consumers. That is why the advertising campaign for “la golosa di Bacco”
will continue. TV commercials, billboards and Facebook advertisements will still be the base of the
campaign. The only difference will be that now they will be launched internationally. Commercials
will be translated accordingly and the respective national channels will be chosen. Billboards will
be positioned in the major cities of all the countries using the same positioning strategy. Facebook,
as a worldwide communicative source, will present the same ads.
The advertising campaign will create brand recognition, knowledge and may be to some
extend preference. The fact is that in order to maintain a brand, advertising is not enough. Brand
experience is needed. The early adopters, who were the target consumers in the introduction stage,
will already have this experience. However, in the growth stage, we are targeting the early maturity
customers. They are more conservative and more cautious about new products. They need to be
persuaded about products quality. If they see someone else to try it and like it, be it a friend, family
member or just some other people buying it, they will have a stronger incentive to search for it. That
is why, in the growth stage we will focus more on the development of sales promotions. The
difference between the advertising campaign and sales promotion is that first induces consumers to
buy the product, whereas the latter tells them to buy it now. We will target two groups by this
strategy – consumers and retailers.

• Consumer promotions – the objective is to urge short-term customer buying and enhance
customer brand involvement. Together with the advertising, they add excitement and pulling
power to the brand. If consumer promotions are properly designed, this excitement can then
turn to strong customer relationships. Consumer promotions help differentiating the brand
from its competitors. What is more, nowadays buyers have become more deal-oriented so
whenever they see the promotion sign, they are intuitively attracted. Bacco will use price
packs as customer promotion tool. The reduced price will be marked directly on the label.
Another tool the company is going to use are carton girls who will be positioned next to the
products stand in the supermarkets and will point to the product. They will have the logo of
“la golosa di Bacco” saying “Try me” to be in coherence with the advertising campaign.
Further more, the product will be positioned on special stands. Bacco will negotiate with the
supermarkets for a separate individual stand.

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 • Trade promotions – getting retailers to carry more inventory, buy ahead, promote the
product and give the brand more shelf space. As a tool for trade promotions, straight
discount off the list price on each case purchased during the stated period of time will be
offered. Also, advertising allowance will be used to compensate retailers for advertising the
product. This way Bacco will sell “la golosa di Bacco” on lower price to its distributors in
exchange of advertising in their stores or buying larger quantities.
For what concerns the budget of this campaign, it is estimated to be as much as five times
higher than the introduction stage because it will have to cover mainly the same expenses as the
introduction stage but for more countries.

Since the product is new-developed to the market, we do not have a maturity stage. We are
focusing on the launching “la golosa di Bacco” and developing its brand on the market and
therefore we examined the take-off stages – introduction and growth.

10.FINANCIAL AND ECONOMIC ANALYSIS

With the new goals and objectives set by the new campaign, to launch the product, we will need a
substantial investment not only in promotion and advertisement but also it will be required to
acquire a new plant capable of producing 2500 creams per hour. However this, along with the
advertisement expenses, will make our cost structure rigid and our breakeven point further.
As showed from the calculations below we have high fixed costs due to the advertisement campaign
that we will put into action, the campaign will cost us about 100 mln €. Since these costs are related
to the launch of a new product we can spread them in five accounting periods, as stated by the art.
2426 of the Italian civil code. Furthermore, the company will start to make profit after having sold
8.639.993,83 units of the “La Golosa” , this could be achieved in a bit more than 2 years even less if
we are lucky enough.

ESTIMATED PRO-FORMA PROFIT & LOSS – INTRODUCTION STAGE

REVENUE FROM SALES 8,9MLN 100%
COST OF GOOD SOLD 5,8 MLN 65%

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GROSS MARGIN 3,1 MLN 35%

total cost 26.223.344,03

fixed cost 20.101.109,80
variable cost 5.820.000,00

i variable costs hanno un impatto

del 22,19 sui total costs 22,19

contribution margin 0,7781

for a selling
break even dollar sales 25.833.581,54 price of 2,99
break even volume 8.639.993,83

assuming that the company wants

break even for profit to make 2 millions of profit

28.403.945,25 break even sales

9.499.647,24 break even volume

CONCLUSION
May God Bacchus give us his blessing and make us have his pleasure after the success of the
product!!!!

This is a preview of the developed commercial, enjoy.

BILBLIOGRAPHY & REFERENCES:

1) http://www.italtrade.com/showroom/nutella.htm

2) http://nutella.com.au/company/ethics/

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3) http://it.wikipedia.org/wiki/Bronte_(CT)#Il_Pistacchio_Verde_di_Bronte

4) Marketing: An Introduction Gary Armstrong & Phillip Kotler (2009 Pearson International)

5) La filiera del Pistacchio OESAS(Osservatorio sull’economia del sistema agroalimentare

della Sicilia)

6) http://www.igpdecaux.it/site/catalogo/treestep1.aspx

7) http://www.publitalia.it/listino.pdf

8) www.baccosrl.it

9) Internal Financial Data from the company, Studio Batticani.

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