1. Terms of Reference 1.1. Recover volumes and achieve growth for Supligen 2. Executive Summary 3. Business Mission 4.

EXTERNAL MARKETING AUDIT 4.1. MACRO ENVIRONMENT 4.1.1. POLITICAL/ LEGAL ENVIRONMENT 4.1.1.1. Jamaica is a constitutional parliamentary democracy described by BBC as being politically stable with two major political parties. Following the gaining of independence from the United Kingdom in 1962 political power in Jamaica has alternated between the two major political parties, the Peoples National Party (PNP) and the Jamaica Labour Party (JLP). 4.1.1.2. The Jamaican government protects the local milk industry with high import duties of 25% discouraging the imports of milk based products. 4.1.1.3. The government fiscal policy has seen the implementation of new tax measures in early 2010 increasing the value added tax charged on consumer goods by 1% from 16.5% to 17.5%. New tax measures also included the charging of VAT on domestic and commercial use of electricity and on automotive fuel. 4.1.2. ECONOMIC 4.1.2.1. Services account for more than 60% of total GDP for the island with remittances and tourism accounting for 20% each. Bauxite and Alumina exports have been the primary foreign exchange earner for the Jamaican economy. The recession lead to a 15% decline in remittances and a 11% decline in tourism. The reduced demand for aluminium in 2009 saw the

suspension of three of the four bauxite operations. According to the Jamaica Observer dated January 27, 2010, Jamaica lost US$908 million in 2009 following the closure of the operations. 4.1.2.2. With the fourth highest debt burden and a high debt to GDP ratio of 130%, the Jamaican government has been forced to delay infrastructural investment as nearly fifty percent of government spending has been focused on servicing debt. In February 2010 faced with mounting interest charges on local debt the Jamaican government took part in a Debt Exchange programme.. In addition to reducing the governments burden it should also reverse the trend of high interest rates that have stifled local investment. 4.1.2.3. Jamaica suffers from the lowest economic growth in Latin America experiencing -4% GDP growth in 2009, -0.6 in 2008 and 1.4% in 2007. Reinforced with the challenge of high unemployment of 14.5% Jamaica suffers from high crime rates including drug related gang violence. 4.1.2.4. With the dependence on imported oil and food Jamaica is very sensitive to changes in exchange rate. Aggressive devaluation has forced prices up and consumers have been forced to reduce consumption as price increases outpace and salary increase. 4.1.2.5. In February 2010, the Jamaican government entered into arrangement with the IMF for a $1.27 billion loan. The loan will help the government manage its mounting debt problem, kick start the economy to achieve growth and develop social programmes. 4.1.3. SOCIAL

4.1.3.1. The Jamaican population is 2,825,928 with a 0.98:1 ratio of male to female gender. Every year about 20,000 Jamaicans immigrate to the United States and this along with a low population growth rate of 0.78% keeps Jamaicas population low. 4.1.3.2. The services sector is the main employer employing 64%, manufacturing 19% and agriculture with 17%. These trends encourage urbanisation with 57% of the population living in urban centres. 4.1.3.3. High crime continues to plague Jamaica particularly in Kingston and Montego Bay. This crime is fuelled by the international drug trade. 4.1.3.4. Education is free up to the tertiary level and is compulsory by law that children below the age of 16 should attend school. The literacy rate is 87.9% and 16.4% actually achieve tertiary level education. 4.1.4. TECHNOLOGY 4.1.4.1. The technology used in the production of SUPLIGEN is old, however the setup cost is high. 4.2. THE MICRO ENVIRONMENT 4.2.1.COMPETITIVE RIVALRY 4.2.1.1. Supligen competes in the 5500 ton (USD$XXX) liquid meal supplement market, other players in the market include Nutrament, Ensure and Big Bamboo Irish Moss. Similar to Supligen, Nutrament and Big Bamboo are in cans with similar volumes, while Ensure is in a plastic bottle. All players in the market communicate the nutritional strength of their products. Supligen and Big Bamboo are locally manufactured and have a very strong male image. In addition to their nutritional benefits consumers use both to

as chasers for alcohol. Ensure and Nutrament are imported and have a more medicinal image. 4.2.1.2. Supligen and Ensure are the only two players with communication campaigns. Supligens strategy is to be the preferred liquid meal supplement for working class men to be their best at every stage of their day. Conversely Ensures strategy is directed at women and trying to reposition from the medicinal image to every day nutritional beverage. 4.2.1.3. Supligen is the market leader with 80% market share. It has held this position for over 20 years with at its peak had over 90% market share. The market has been declining since 2005 sliding from 6000 to 4700 tons in 2009.
4.2.2. POWER OF BUYERS

4.2.2.1. Buyers have little power as there is strong differentiation between Supligen and the other players in the market. Supligen differentiates itself from the other players in the market through regular product innovation involving proprietary ingredients that offer consumers added value. These proprietary ingredients are communicated using communication campaigns. Supligen is also the only player with annual consumer promotions and consumer events to strengthen their relationship with buyers. Ensure differentiates itself from Supligen and Nutrament by being lactose free, however its 40% premium price to Supligen and 20% premium to Nutrament makes it out of reach of the average consumer. 4.2.2.2. Even though buyers are price sensitive they have limited power as Supligen has been able to maintain consumer preference and prevent switching to the

20% lower priced Big Bamboo by offering more flavours and better value to buyers. 4.2.3. THREATS OF SUBSTITUTES 4.2.3.1. Supligen is faced with threat from other product groups such as powdered beverages, energy drinks and alcoholic tonic wine which are very active in the market. These new product categories have a more contemporary image; Supligen is constrained by the packaging format (tin can) which it has been using since its launch. Energy drinks offer instant energy, powdered beverages which target the at home consumption are cheaper, the alcoholic tonic wines in addition to the alcohol offer the perceived benefits of traditional roots. 4.2.4.THREAT OF NEW ENTRANTS 4.2.4.1. Owing to its close proximity to North America and its open ports Jamaica receives many imported products. All imported milk based products including liquid meal supplements are charged customs duties of 25%. Being locally manufactured Supligen has a price advantage in a very price sensitive market. The size of the market, compounded with the high energy costs and well organised trade unions, makes it unattractive for new entrants to manufacture locally. 4.2.5. SUPPLIER POWER 4.2.5.1. The power of suppliers are limited as the ingredients use in the production of Supligen are standardised and the Nestle is able to use its size to negotiate preferential terms with suppliers. 5. INTERNAL MARKETING AUDIT 5.1. OPERATING RESULTS

5.1.1. m 5.2. STRATEGIC ISSUES 5.2.1. MARKETING OBJECTIVE 5.2.1.1. Supligens current marketing objectives are to increase loyalty among Supligen consumers by 10% resulting in a 5% increase sales. The strategy involves constant product development to launch new products to amaze existing customers. 5.2.2. TARGET MARKET 5.2.2.1. Men and women who have hectic lifestyles and are not always able to have proper meals on time and need energy to always perform at their best. 5.2.2.2. The primary target for Supligen is working class men 18 to 45 years of age who have busy hectic lifestyle, and jobs that are physically strenuous. 5.2.2.3. The secondary target market is women 18 -45 who have busy lifestyles. 5.2.3. COMPETITIVE ADVANTAGE 5.2.3.1. Through its regular product testing and competitive benchmarking Supligen has been able to maintain its competitive advantage of a better tasting product with nutritional superiority compared to others in the market. 5.2.4.CORE COMPETENCIES 5.2.4.1. The core competences of Supligen are the strong research and product development capabilities of Nestle. These are also supported by the strong distribution network and outstanding sales structure. 5.2.5. POSITIONING
5.2.5.1. Supligen is positioned as the best tasting nutritious drink that gives me the

energy to go through my hectic days.

5.2.6.PORTFOLIO ANALYSIS 5.2.6.1. An examination of the market share of Supligen and the rate of market growth reveals that Supligen is a cash cow. The challenge is to protect Supigens existing volumes and market share. 5.3. MARKETING MIX EFFECTIVENESS 5.3.1. PRODUCT 5.3.1.1. Supligen is a great tasting liquid meal supplement that is available in four flavours. It is packaged in easy open cans that allow consumers to have it on the go whenever they want it. The fast paced lifestyles of Supligen consumer require them to have high energy levels to conquer all the challenges of their day. Supligen is fortified with Actigen-E a proprietary ingredient that helps consumer get more energy from the food they eat over an extended period of time. In addition to the various flavours Supligen is also available in a Soya variant for lactose intolerant consumers. 5.3.1.2. Newer slimmer cans and resealable plastic bottles have entered the market, this challenges the appeal of our large can to the target market. 5.3.2. PRICE 5.3.2.1. The pricing strategy for Supligen is to be slightly premium to maintain its high value perception while maintaining high profit levels. Being focused on the C, D socio economic group pricing is important as consumers can opt to migrate out of the category to powdered beverages, therefore SUPLIGEN maintains a 20% premium to Big Bamboo and leaves the super premium segment to Ensure which is a significantly smaller segment. 5.3.3. PROMOTION

5.3.3.1. The promotional mix for Supligen includes advertising through the use of traditional media radio, tv, print. Outdoor is largely used to remain top of mind across the island especially in high traffic areas. The placement of advertising is done based on the preferences of the main target market, the types of programmes that are watch, and listened. Entertainment is important for the target and as such event sponsorships are another important element in the communication mix. To support the traditional media social media has been added to the mix to target the younger segment of the target and to support promotions which are implemented annually to reward consumers and keep excitement around the brand. 5.3.4. PLACE
5.3.4.1. The product is retailed in all channels where the target market is available.

Distribution is essential to the success of the brand and Supligen has been able to gain distribution not only in the traditional and modern trade but also in the alternative trade channels including bars, gas stations, barber shops, schools and sports grounds.

High Price Redbull Ensure Supligen Nutrament

High Quality

Big Bamboo

Low Quality

Low Price 5.3.5. MARKETING STRUCTURES 5.3.5.1. The Marketing Structure involves a Marketing Manager and a Consumer relationship marketing department, and the sales department which is managed by a Sales Manager. The Marketing Manager is responsible for the management of the brand which includes setting strategies to achieve consumer objectives which such as consumer demand, market share, brand recall and new product development. To do this he is assisted by consumer relationship management department which gathers data about the consumer and assists in the execution of consumer activities. The execution of activities in the retail outlets are executed through a trade marketing team which works with the marketing and sales department. Devise and

execute the marketing plans and all activities focused on the consumer. with the aid of the consume relationship marketing 5.3.5.2. Market intelligence is gathered regularly through the use of quarterly trade audits to monitor the retail trade and the activities of the various brands in the market and to determine market share. Semi annually brand health tracking studies are conducted and these examine the consumer perception of the brand in comparison to the rest of the market and to competitors. 5.3.5.3. Other forms of research include home visits to experience how consumers interact with the brand. As needed usage and attitude studies are conducted to examine consumer trends around the product category and the product specifically. Consumer research is also utilised to test communication campaigns before and during to measure the campaign effectiveness. 5.3.5.4. The marketing systems involve the use of SAP CRM. SAP CRM is an enterprise customer relationship management system that is used for planning, measuring and evaluating the marketing activities conducted in the year. The system guides objective setting, it also allows for the effective pre and post evaluation of programmes which serve as a learning log for future activities. 5.3.5.5. The SAP CRM system helps to measure the effectiveness of marketing programmes by giving sales data daily. The data is available at a high level or can be manipulated to reveal the appropriate level of detail, whether geographically, by sales person, by outlet, by group of outlets, or channels. The data provided is used to plan and track the performance of promotional activities. The data also allows for the early detection of changes in the market

6. SWOT ANALYSIS 6.1. STRENGTHS 6.1.1.Supligen has strong distribution and brand recognition among the target market. 6.1.2.Supligen is perceived by consumers as the best tasting liquid meal supplement on the market. It is also considered to be of a very high quality and this is further supported by the Nestle credentials. 6.1.3.Being locally manufactured Supligen avoids customs duties and enjoys the loyalty of consumers. 6.1.4.Proprietary branded benefits that differentiate Supligen from its competition. 6.2. WEAKNESS 6.2.1. The can is perceived by consumers as aged when compared to the slimmer aluminium cans and plastic bottles. 6.2.2.Only twenty-one percent of Supligens target market are loyal while sixty nine percent regularly repurchase Supligen. 6.3. OPPORTUNITIES 6.3.1. Extend Supligen into powdered formats to cater to the growing lower income segment of the population. 6.3.2.Convert the sixty nine percent of Supligen users who are regular users to become loyal users. 6.4. THREAT 6.4.1. Increasing production costs due to destabilisation of local economy. 6.4.2.Removal of import duties increasing the ability of imported liquid meal supplement to better compete on price. 6.4.3.New energy drinks in the market are redefining consumers expectation of energy drinks.

7. MARKETING OBJECTIVES 7.1. STRATEGIC THRUST 7.1.1. To continue the growth of Supligen we will pursue market penetration strategies. This will be done through converting the regular Supligen consumers to become loyal Supligen users and eventually advocates. Moving consumers along the purchase funnel from repurchase to loyalty will translate to increased consumption of Supligen and reduced chances of switching to other brands. 7.1.2.We will also pursue a product development strategy by sub-segmenting the existing 18-45 male target into two groups and developing a new product for the 18-28 age group while maintaining the core product for the 29 45 age group. This will please the Supligen consumer and enable Supligen to grow consumption by attracting new users to the brand. 7.2. STRATEGIC OBJECTIVES 7.2.1. Supligen will continue to grow by increasing sales and market share. This growth will come from the new product which will be developed to satisfy the youth sub-segment, while the core product will maintain its sales. 8. CORE STRATEGY 8.1. TARGET MARKETS 8.1.1. Supligen will target men 18-45 year old with hectic life styles who because of their hectic lifestyle will need a beverage that can give them energy to keep them performing at their best. Supligen not only gives them energy but is great tasting and gives satiety. 8.1.2. The target market will be segmented into two segments. The first of which is the 18-29 year old high energy student or business executive who not only needs energy to keep them through their day but also needs to be mentally sharp at all

times. The second group are 30-45 year old men with hectic lifestyles and need energy to keep them going when they are unable to have a proper meal. 8.1.3. Supligen is the brand of choice to provide the energy and nutrition that they need when they are busy and on the go. It is important to maintain men as the target for the brand so as not to alienate existing consumers and to remain relevant to existing user. 8.1.4. The secondary target audience will be women 18-45 who also have hectic lifestyles. Women who have hectic lifestyles have the similar need for energy on the go. 8.2. COMPETITOR TARGETS 8.2.1. Supligen will target Nutrament as its competitor to challenge and take market share from. Nutrament is closest to Supligen in product offering and positioning, making it easier for Supligen to dominate. Supligen will support its dominance through communicating its superior quality and value of Supligen. Supligen will also target Redbull which is perceived as being of poor quality and of high price but can threaten Supligens position in the market due to its promise of instant energy. 8.3. COMPETITIVE ADVANTAGE 8.3.1. Supligen employs a differentiation strategy which involves highlighting its competitive advantage of best taste and nutritional profile. Through monadic testing Supligen was compared to the other players in the market and seventy percent of consumers preferred Supligen based on taste. This study is done annually along with nutritional profiling where all the players are compared based on nutritional attributes.

8.3.2. To sustain its competitive advantage Supligen will maintain a close relationship with consumer. Through maintaining this close relationship Supligen will be able to quickly identify opportunities for the brand to further satisfy consumer needs. 9. MARKETING MIX 9.1. PRODUCT 9.1.1. The core product will be Supligen maintaining its current position as a great tasting nutritionally enriched milk drink that gives you the energy you need to keep going even when you do not have the chance to eat a proper meal. Supligen is currently available in 3 flavours, Vanilla, Malt, and Peanut and for the lactose intolerant we offer a Vanilla flavoured Soy based option. 9.1.2. Enriched with vitamins and minerals, protein and carbohydrates Supligen helps the busy consumer perform at their best, the promise is further supported by Actigen-E a proprietary ingredient that helps your body release more energy from what they have consumed, giving them the energy they need to sustain them through their day. 9.1.3.Supligen backs up its promise of a high quality product with a product replacement policy of three for one on every consumer complaint. 9.1.4. Supligen will develop a new variant Supligen Engage. This coffee flavoured product will maintain Supligens core offering of a liquid meal supplement based on milk enriched with vitamins and minerals with the added value of Caffeine and Gingko Biloba. This will be targeted at the 18-29 the demographic who is now being targeted by the caffeine based energy drinks. This is designed to defend Supligens position versus the caffeine based energy drinks. The choice of name Engage will resonate with the high energy male target audience

who wants to remain engaged. This combination will provide the nutrition that Supligen is known for along with the benefit of mental stimulation from the Caffeine and Gingko Biloba. 9.2. PROMOTION 9.2.1. The media budget for would be allocated to targeting both segments of the target market. Seventy percent of the budget would be allocated to Supligen Engage and the remaining thirty percent to the core Supligen range. The greater spend on the Supligen Engage is necessary to create awareness for the new product, conversely the core product will need less communication to maintain its top of mind. Supligen will communicate with its target consumers through a combination of media that reach the consumer wherever they are. Advertising would be utilised to gain the mass coverage that would be required to inform consumers of the new Supligen Engage. In Jamaica television is the medium that has the highest reach therefore this would be used in the launch stages of the campaign targeting the male oriented programmes such as sports and entertainment. Radio and print will also be used to provide frequency. 9.2.2. To accelerate the acceptance of the Supligen Engage direct marketing activities such as sampling campaigns will be conducted where young men congregate such as on university campuses, gas stations at sporting and entertainment events. The sampling campaigns will be augmented by flyers communicating the benefits of Supligen Engage versus caffeine based energy drink, Remain in control with Supligen Engage without the crash. 9.2.3.The internet will play a primary medium in the campaign for Supligen Engage allowing consumers to upload photos of themselves being Engaged. They will also be able to download Supligen Engage computer wall paper graphics; ring

tones while taking part in other on line activities. This medium also allows for more information to be communicated about the product and for feedback to be garnered from consumers. 9.2.4. The core Supligen consumer will be targeted by loyalty programmes such as loyalty card and reward programmes to attract the regular users and convert them into loyal users. The core range will also be supported by public relations campaigns highlighting the nutritional superiority of Supligen and the benefits to consumers. 9.2.5.flavoured To continue our relationship with the 18-45 year old men Supligen will adjusts its communication activities to target the various segments within its primary target. 9.2.6.To attract the new users it will

9.2.7. 9.2.7.1.
9.2.7.2. http://www.state.gov/r/pa/ei/bgn/2032.htm

http://www.edc.ca/english/docs/gjamaica_e.pdf https://www.cia.gov/library/publications/the-worldfactbook/geos/jm.html http://news.bbc.co.uk/2/hi/1190968.stm#media