GRADUATE SCHOOL OF BUSINESS LEADERSHIP

MASTERS IN BUSINESS ADMINISTRATION

MARKETING MANAGEMENT

EMBA 708

DESIGN A MARKETING PLAN FOR A HYPOTHETICAL COMPANY OF YOUR

CHOICE USING PR SMITH’S ESOSTAC FRAMEWORK

Table of Contents

...............................................................................................................................................................1
GRADUATE SCHOOL OF BUSINESS LEADERSHIP.................................................................1
MASTERS IN BUSINESS ADMINISTRATION.............................................................................1
MARKETING MANAGEMENT.......................................................................................................1
EMBA 708............................................................................................................................................1
EXECUTIVE SUMMARY.................................................................................................................4
1.0 Situation Analysis........................................................................................................................5
1.1 Current Market Situation.............................................................................................................5
1.2 Current Market Description & Competition Review...................................................................5
 1.3 Product Overview........................................................................................................................5
1.4 Company Structure...................................................................................................................6
1.5 Mudhakwi Vision and Mission Statement...................................................................................6
1.5.1 Mission Statement................................................................................................................6
1.5.2 Vision and Mission Analysis................................................................................................6
1.6 Mudhakwi Beverages SWOT Analysis........................................................................................7
1.7 PESTEL Analysis........................................................................................................................8
1.7.1 Political.................................................................................................................................8
1.7.2 Economic..............................................................................................................................8
1.7.3 Socio – Cultural....................................................................................................................9
1.7.4 Technology...........................................................................................................................9
1.7.5 Ecological.............................................................................................................................9
1.8.0 Industry Competitiveness: Porters’ Five Forces Model..........................................................10
1.9 Sales..........................................................................................................................................11
2.0 Customer Analysis.........................................................................................................................12
2.1 Market Share.............................................................................................................................12
2.3 Competitor Strength & Weakness..............................................................................................12
3.0 Marketing Objectives.....................................................................................................................13
3.1 Key Success Factors..................................................................................................................14
3.1.1 Growth Strategy..................................................................................................................14
4.0 Marketing Strategies......................................................................................................................14
4.1 Product.......................................................................................................................................14
5.0 Marketing Tactics..........................................................................................................................16
5.1 Branding....................................................................................................................................16
5.2 Packaging..................................................................................................................................16
5.3 Price...........................................................................................................................................16
5.4 Promotion..................................................................................................................................17
5.5 Place..........................................................................................................................................17
6.0 Action Programs............................................................................................................................18
7.0 Controls.........................................................................................................................................20
7.1.0 Budgetary Control..................................................................................................................20
7.1.1 Management by Objectives.....................................................................................................20
7.1.2 Manufacturing Standards....................................................................................................20
8.0 References.....................................................................................................................................21
EXECUTIVE SUMMARY

Mudhakwi Beverages plans to dispatch new product line which will be a brand augmentation.
The new product line known as Mudha Compo, will offer upgraded benefits, contrasted with
the current product offering. It has an upgrade timeframe of usability, better texture and has
an improved picture on account of the packaging utilized.

The Mudha Compo is required to draw in another age of shoppers, focusing on the 18 to long
term's age. The current Mudha Core buyer profile is 30 to 45 years in the low pay bunch. The
current consumer is delegated strugglers, overwhelmed by the joblessness, independently
employed and individuals who accomplish modest work. Be that as it may, the new Mudha
Compo should catch the more youthful age who, by temperance of openness try to better
themselves. It will also cater for the elderly and it is also gender sensitive.
An examination directed to test market the Mudha Compo demonstrated 88% plan to buy,
with Mudha Compo adequacy at 78%. This presents gigantic freedoms for the business. A
selling cost between $0.65 - $0.80 was satisfactory to the customers. In any case, at costs
above $0.8, request appeared to decrease dramatically. The suggested retail cost is $0.76,
accepting a retail gross net revenue of 27%.

The advancement technique will fixate on imparting the improved Mudha Compo benefits,
like clean packs, smoother surface and long-time span of usability. Communication channels
will be run through the print media, social media, open air or community road shows and
community radios.

The new Mudha Compo is required to add gradual volumes and not rip apart on the current
Mudha Core offering. Subsequently its selection is delegated as part of the Mudhakwi’s
volume growth strategies.

It is against this background that the new product will be launched, with an opportunity to
increase the shelf life and offer other enhanced benefits to the brand.

1.0 Situation Analysis

1.1 Current Market Situation

Mudhakwi Beverages was incorporated in the year 2012 and it specialises in the production,
sales and distribution of alcoholic beverages in Zimbabwe. It is the leading alcoholic
beverages producer in the country. The company is led by a group of professionals with
diverse expertise and skills in various fields including Finance, Marketing, and Engineering
among others. The company has manufacturing plants in the country’s four major cities and
with the Head Office in Harare. It has implemented backward and forward integration to
support its value chain to sustain its operations and meet the demands of the customers.
1.2 Current Market Description & Competition Review

The alcoholic beverage industry in Zimbabwe is dominated by major players among them
Delta Beverages, Ingwebu Breweries and Go Beer among many. The traditional beer is
enjoyed by most consumers across the country’s regions. The brand has set up and kept up
market authority in the misty brew market. Mudhakwi's present market situating
methodology puts it at the actual top of the fragments in terms of market inclusion. All the
major competing companies have representation in all the major cities and towns. Our major
thrust as a business is to be close to our clientele and share their happiness and in turn grow
the Mudhakwi brand name through satisfying our valued customers.

1.3 Product Overview

The current Mudha Core is a live product, which implies that it keeps aging subsequent to
yeasting. This gives the product a trademark froth yet has impediments as for time span of
usability, 5 days all things considered. Since it keeps on maturing, acid creation prompts
product deterioration. This is the essential motivation behind why the business runs 4 major
plants from one side of the country to the other, to consider dispersion inside the short space
of the Mudha Core’s timeframe of usability. At present the item is sold in 2L returnable
plastic container, 1L plastic bottles and draft. Value range is US$1 across the reach.
1.4 Company Structure

Source Document: www.mudhakwi.co.zw

1.5 Mudhakwi Vision and Mission Statement

We are and look to stay a coordinated all out-refreshment business, overwhelming all areas of
the traditional drink market in Zimbabwe.

1.5.1 Mission Statement

To develop the worth of the business in genuine terms on a practical premise. We will
accomplish this through offering our clients remarkable assistance and through thorough
consideration regarding the wellbeing of the business consistently. Thusly we will try to
improve the value we make for every one of our partners.

1.5.2 Vision and Mission Analysis

Mudhakwi Beverage's vision can be named an objective vision that tries to merge its market
position through strength. The organization recognizes this status and fantasies about keeping
up that administrative role. The vision likewise indicates the market as home-grown where it
will lead its business in Zimbabwe, explicitly playing in alcoholic drinks market.

Anyway the vision to some degree confines the business for instance where it expresses the
business will be an alcoholic beverage producer and distributor. It implies that ought to there
be a market shift towards non-alcoholic beverages, for the time being the business may not
endeavour there, except if the vision is returned to. Again by indicating the market as
explicitly Zimbabwe, the organization is limited to working in the home-grown market. For
the time being sends out are not piece of the vision, which restricts the organization in
investigating different freedoms, for instance around there. This is particularly obvious,
particularly with the looming opening up of lines in a streamlined commerce region.

For the time being this is by all accounts functioning admirably as the organization
endeavours to fulfil home-grown need. Anyway with the establishment of fast, high
innovation hardware, the organization may later on need to look past public boundaries to use
overabundance limit

The above involves that the vision and mission of any association should be open and
considers adaptability at whatever point the call is expected to expand and wander into new
sections or business interests.

The organization mission supports the need to guarantee that partners get an incentive for
their speculations. It likewise centres around client care as one of the drivers of achievement.
This affirms that the organization is client driven. In this the organization noticed that the
worth it gives ought to be feasible, which calls for consistency in execution in all cases.

1.6 Mudhakwi Beverages SWOT Analysis

Strengths Weaknesses
 Strong brand equity  Short product shelf life – high
 Natural taste of product distribution costs
 Healthy  Inconsistent product quality
 Returnable 2 L container – cost  Limited pack offering
effective  Poor sealing of the 1L pack
 Excellent graphics on 1L,  Aesthetically the 2L is poor
 Sharing concept - beer that allows  Bulky 2 L pack – not convenient as a
socializing carry away pack
 Extensive distribution network  Deposit system on the 2 L pack
 Adulteration of draught beer
Opportunities Threats
 Extend shelf life  New one way packs by competitors
 Increased activity in the category by
  Widen pack offering choices competitors
 Introduce flavor variants  Abuse of containers by consumers
 Packaging smaller quantities e.g.  Non – adherence to health warnings
1.25L, 750ml, 500ml legislation ( SI 25 of 2001)

1.7 PESTEL Analysis

This section provides an analysis of the external environment which is usually beyond the
company’s control and at times ends up impacting negatively on company performance. The
PESTLE strategic management framework analysis is an acronym for political, economic,
social, Technological, Legal and Ethical (Grant, 2010).

1.7.1 Political

Political factors include government regulations and legal issues and define the rules under which
firms must operate. Rowe (2008) classified rules and regulations such as tax policies, employment
laws, safety regulations, environmental regulations, trade restrictions and tariffs and political stability
as some of the political factors which can force significant changes in industry practices and strategic
directions.

Mudhakwi Beverages is exposed the below are political factors influencing its performance

 Increased duty on all imported raw materials

 Increase on tobacco and alcohol taxes
 Legislation on health warnings on alcoholic beverage containers (SI 25 of 2001)

1.7.2 Economic

Gross domestic product, interest rates, exchange rates and inflation rate are some of the
examples of economic factors (Rowe, 2008). Some of the factors that are directly linked the
beverage industry include, availability and cost of energy, the cost and availability of service
infrastructure. These factors do affect the purchasing power of potential customers

 Multi -currency system in place,

  RBZ foreign currency auction system
 Low disposable incomes
 Low capacity utilization of industry equipment (less than 50%)
 Inflation rate 130%
 Power and water supply cuts
 30% increase in power tariffs
 High bank lending interest rates
 Increasing fuel costs
1.7.3 Socio – Cultural

Social factors include attitude, values and beliefs, culture as it pertains to attitude towards
work, savings and investment, demography which relates to the size and structure of the work
force, population shifts and aging and the social structure which deals with market
segmentation (Rowe, 2008). Consumerism and fashion fads, product safety expectations and
income distribution are amongst the factors that have a direct bearing on the beverage
industry.

 Population approximately 15 million

 Highly literate population at 91%
 HIV epidemic 14.3% prevalence
 COVID-19 pandemic
 Melt down of social services provision (health, sanitary, education)

1.7.4 Technology

Thompson and Strickland (2003) reckon that technological changes can dramatically alter an
industry’s landscape giving birth to the production of new or better products at lower cost.
They further assert that technological developments can also bring in changes in capital
requirements, the minimum efficient plant sizes, vertical integration, benefits and experience
curve effects. This could in turn improve productivity and add value to the customer. The
availability of information systems has also been a major environmental driver impacting
upon the beverages industry. The quest has been driven by the need to streamline business
processes to ensure flexibility and responsiveness in their service delivery systems. New, fast
and efficient manufacturing processes have been developed in the industry such as the use of
ICT in production methods, customer relationship management and inventory management
(Sauer and Willcocks, 2003).

 Opportunity for internet driven business transactions

 Consumers have increased access to social networks
 Automated production equipment

1.7.5 Ecological

 Pressure from Ministry of Environment to manage packaging waste

 Inconsistent rainfall patterns over the last 5 years
 Increased activity by the Environmental Management Agency on effluent discharge

1.8.0 Industry Competitiveness: Porters’ Five Forces Model

The model was used to assess the industry competitiveness as promulgated by Michael Porter
for Mudhakwi Beverages.

Threat of new entrants (Low) Threat of substitutes (High)

 Extensive distribution  Pricing of lagers close to

network is a barrier to new opaque threatening product
entrants sales
 High initial plant set up  Availability of lowly priced,
costs highly intoxicating brands
 Technological advancement e.g. ZED, bronco

Existing rivalry (High)

 Intensive competition in the

industry – dominated by
Ingwebu, Delta and Go Beer
 Price wars in the market

Bargaining power of buyers (High) Bargaining power of suppliers

(Medium)
 Many buyers who can
collectively resist price increases  Many suppliers of maize-
(e.g. when IL rose from $0.50 to major ingredient. However
$0.60 sales plummeted +/- 50%) price is state controlled
 Low switching costs  Few packaging, yeast
suppliers who can collude on
prices
The industry is generally competitive among the existing players. New players will be
restricted by the seemingly high plant set up costs and the extensive distribution networks
necessary to cover the nation sales. Pricing of the product is a key component to attainment
of sales, in a market flooded with cheap low quality substitutes and equitably priced products
competing with our new Mudha Compo product.

1.9 Sales
Currently annual sales of Mudhakwi are +/- 3.0 m hectolitres down from an FY2019 peak of
4.5m hl. Projections for the current year FY2021 are 3.5m hl, with the launch of the
Mudhakwi compo product.

Table I

Mudha Core Volumes in Hectolitres

Year FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

Hl (m) 3.172 3.797 4.037 4.099 4.582 3.0

Fig 1

Mudha Annual Volume Trends (FY15 –FY20)

Source: (Internal documents)

The trend can confirm the assertion that the business is on the decline stage on the PLC –
characterized by the following:

 Decline in sales
 Decline in profitability
At this stage the producer or marketer of goods has an option to discontinue the product or
reinvigorate it. As a business, Mudhakwi ambitions are to continue marketing the Mudha
Core product, whilst introducing the Mudha Compo product so that it can improve on its
market share and achieve volumes growth for the operations.

2.0 Customer Analysis

The majority of the current Mudha Core drinker is in 35-45 age range, in low to medium
income bracket. They are mostly self-employed, blue collared workers, who prefer to drink
with friends. The current driving concept for the product is the sharing concept that
reinforces the socializing aspect of the brand. This is well supported by the pay-off line
“Mudha Core, the people’s choice” They drink from bottle stores, bars and at home. The
majority of the drinkers, according to a recent research drink throughout the day closely
followed by those that drink in the evenings. This has implications on what time the product
should be in the market.

2.1 Market Share

Producer National Matabeleland Midlands Mutare
Mudha Core 70 43 87 70
Go- Beer 2 - 13 -
Ingwebu 8 47 - -
Delta 20 10 8 30

2.3 Competitor Strength & Weakness

Ingwebu

Strengths
  Access to Bulawayo local outlets – protected by Municipal by – laws
 Consistent product quality
 Brand well accepted in the region (legacy of the brand association with Ndebele
culture)
Weaknesses

 Poor distribution network

 Inadequate fleet
 No autonomy in management some decisions approved by City council/Municipality

Go – Beer

Strengths

 Access to local outlets

 Good pack quality
Weaknesses

 Distribution confined to Midlands only

Delta

Strengths

 Visible in their local market

 Nationwide representation
 High quality product offering
Weaknesses

 Aged fleet for distribution

 Bureaucracy due to tall structure
3.0 Marketing Objectives
The major objective on launching the product will be to create awareness and encourage trial
of the product. As the campaign progress the objectives will shift to increasing brand loyalty.

 Achieve 8% contribution to sales

 Increase product awareness by 30 % in FY21
 Maintain >27% gross margin

3.1 Key Success Factors

 Efficient distribution network

 Installation of new plant
 Specialist R&D support services
 Dedicated sales force
 Adequate funding for new technology /plant

3.1.1 Growth Strategy

According to Igor Ansoff, a business can adopt one of the following as part of its growth
strategy.

Product Category

Existing New

Existing
Market Market penetration Product Development
(Mudha Core)
New
 Market Development Diversification

In this case, the business has opted to introduce a new product in an existing market, thus
following the product development strategy. The product is new in the sense that it is an
enhanced formulation with enhanced benefit.

4.0 Marketing Strategies

4.1 Product

Mudhakwi uses strategies to differentiate its ‘products from its competitors to gain
competitive advantage. The company’s products include finished beverages in form of
opaque beer. The new product mudha compo is being packaged in plastic bottles of 1, 25
litres, 750mls and 500mls which is user friendly to our market. This is intended to make the
product more acceptable to a new generation of consumers which include the younger, the
older generation and low income consumers. The product has enhanced texture and shelf life
of more than 14 days, but fundamentally mudha compo has not departed from the current
taste of mudha core. Feedback on research showed a 78% acceptance for the product.
The Product Life Cycle (PLC) contains four stages. The introduction stage is the stage in
which the new product is launched, distributed and made available to the market in
Zimbabwe. The main objective is to create product awareness and trial. To entice trial, heavy
sales promotion is necessary. The growth stage is characterized by the rise of sales and
attracts more competitors in the market. The main objective at the growth stage is to
maximize the market share. The maturity stage is the period when the products’ sales growth
reaches its peak. At this stage the main objective will be to maximize profit while defending
the market share. Subsequently, the sales growth levels slowdown in the decline stage
because of the market saturation. It is essential that the product does not deviate very much
from the current variant Mudha Core, as it will be basis on the success of mudha compo. As
sales decline, there may be need to introduce flavored variants of the product, to excite the
market further and offer variety.

5.0 Marketing Tactics

5.1 Branding

According to Kotler (2000) defines a brand as a name, term, logo, symbol that identifies the
product. It is a seller’s promise to deliver a specific set of features, benefits and service
consistently to consumers. The new product to be launched will be a brand extension of
Mudha Core. This is when a new product is launched with an existing brand name.

This strategy works well if the existing brand has high equity and the new product benefits
from the association. However, if there are negative sentiments about the current product, the
new product can be affected negatively. In this case the Mudha Core is well accepted and has
high recognition. In 2015, the brand was among the top 10 brands in Zimbabwe, in a survey
conducted by the Marketers Association of Zimbabwe (MAZ, 2015)

5.2 Packaging

Packaging should always appeal to the customer. The major decision to be made about this
product pack is the packaging concept, essentially what the pack is supposed to do for the
product. In this case the pack is supposed to project a superior image and offer convenience.
The material used must be able to withstand high pressure as a result of carbonation which is
necessary for preservation. According to the study done by Research International in July
2014, the most preferred pack is the 1L (60%), followed by 2 L at 34%. On launching the
product, it will come initially in a 1,25 L, 750ml and 500ml.

Label decisions must include the health warnings on alcohol, ingredients and volume.

5.3 Price

Results of the research by Research International indicated that the consumers are willing to
pay between $0.60 - $0.80 for a 1L unit of the product. Demand curves showed that demand
fell steeply at any price beyond $0.80. The price is cost –plus based. The price also
communicates the premium status of the product. In line with current policy, discounts will
be offered to trade at 10%. Credit facilities are offered to approved customers, currently at 3
days. The product will assume a 27% gross profit margin on the recommended retail price of
$0.78. (See appendix 1).

5.4 Promotion

The major promotional objective is to create awareness of the product and gaining
acceptance. Promotion of the new product will include advertising on national television,
radio, print, posters and outdoor advertising. Communication mix should tout the enhanced
product features such as increased shelf life, smart and hygienic packaging, fresh, better taste
and convenience. The product promotion can also leverage on the existing events such as the
OK Grand Challenge, Mudha traditional dance competition, and talent search programmes
for upcoming musicians. This will allow for brand connect and awareness.

5.5 Place

Place refers to decisions about channels of distribution. The product will be distributed using
the existing channels as the existing products. Currently channels used are direct deliveries to
retailer, through wholesalers or stockists. These channel members will need support with
respect to signage, point of sale materials, posters and media adverts to announce product
availability. Selection of channel members will be based on reputation, accessibility, location
and performance. The pictorial diagram below depicts the channels of distribution:
 Manufacturer

Wholesaler

Wholesaler
Retailer

Stockist

Retailer

Retailer

Consumer

6.0 Action Programs

The following activities are identified as programs that need to be executed to ensure
successful implementation of the plan.

 Pre- launch- advertisements on billboards, posters, local television, radio, invite

councilors, youth leaders and chiefs to be part and parcel of the launch.
 Product launch – invite key trade and channel members and celebrities like Macheso
to perform live show wearing T/Shirts branded with himself drinking Mudha compo.
 Merchandising – displays in shops, Posters on trees around the community, point of
sales materials and fliers
  Market activation e.g. happy hour where customers who buy say 2 packs once during
the allocated hour win caps, T- shirts and also gets another free drink.

6.1 Financial Plan

FY21 FY22 FY23

Mudha Compo (hl) 360 000 750 000 1 000 000
Mudha Core (hl) 3 600 000 3 800 000 4 000 000
Total (hl) 3 960 000 4 550 000 5 000 000

Revenue Generated

FY21
Sales 28 080 000
Cost of Goods 13 114 800
Gross Profit 10 306 800
Less Expenses 4 000 000
Net Profit 6 306 000
Notes

Budgeted annual sales – 360 000 hectoliters

Cost of producing 1 hl - $36.43

Expenses – include promotions, travel and accommodation, communication

7.0 Controls
7.1.0 Budgetary Control
Expenditure will be assessed using the variance analysis frame work. The variance analysis
framework is applied where budgeted performance of each item is compared to actual and
corrective action taken.

7.1.1 Management by Objectives

Annual, quarterly and monthly sales targets are set. Performance is tracked against with, with
reasons for not achieving targets and action plans to address. Sales personnel are assigned
targets by territories and performance measured against these.

7.1.2 Manufacturing Standards

Manufacturing will be guided by product specifications to ensure product consistency which
is key in this product range.
8.0 References
1. Research International (2011) Feedback on Test Marketing Trials

2. Financial Costing (2011)

3. Kotler P (2000) Marketing Management, Millennium Edition, 10th edition. Prentice

Hall Inc

4. Thompson, A. A., & Strickland, A. J.111 (2003). Strategic Management: Concepts

and Cases.13thed. New Delhi: Tata McGraw-Hill Publishing Company Limited.

5. Sauer, C., & L. Willcocks. (2003). “Establishing the Business of the Future: The Role
of Organizational Architecture and Information Technologies”, European
Management Journal, 21 (4), 497 –508.
6. Rowe, Michael (2008, Introduction to Policing
7. Grant, R.M. (2010). Contemporary Strategy analysis, Seventh edition. John Wiley &
Sons Ltd: U.K
8. Research International in July 2014.
9. Marketers Association of Zimbabwe (MAZ, 2015).
9.0 Appendix 1 Retail Price (source: internal documents)

  Retail Price

  1 LITRE PET

   

WHOLESALE PRICE 62.99

Levy at 3 % 1.60

WHOLESALE - BEFORE VAT AFTER EXCISE 61.39

OUTPUT VAT 15% 8.22

NET SELLING PRICE 53.18

COST OF PRODUCTION 9.08

PACKAGING COST 25.51

TOTAL NON GROUP COST 34.59

ROYALTIES 0.61

Primary Distribution cost 3.68

GROSS PROFIT 14.29

GP % 27%

RRP 0.76

Assumptions

1. The Mudha Compo retail margin has been assumed at 27%

2. Average distance for Primary Distribution is 600km all round trip at $1.65 per km

3. Mudha Compo will be incremental volume and not cannibalise any of the existing packs