ni

Marketing Plan

Submitted by:
Ang, Susan
Qua, Ivy
Guiaco, Deborah
Ang, Charles Adrian
Sy, Ritz Alvin
Tolentino, Kenrich

Submitted to:
Ms. Chan Maribel
Table of Content

I. Executive Summary……………………………………….. 1
II. Current Product/Brand Situation……………………….... 1
A. Industry Study………………………………………….. 1
B. Current Product/ Brand Situation…………………….. 3
C. Competitive Situation…………………………………... 6
III. SWOT Analysis…………………………………………….. 7
IV. Goals and Objectives………………………………………. 8
V. Marketing Mix Strategies and Program………………….. 8
A. Market Targeting……………………………………...... 8
B. Product Development/ Innovation Program………....... 8
C. Pricing Program…………………………………………. 12
D. Sales and Distribution Program………………………... 14
E. Marketing Communication Program………………….. 14
VI. Investment Plans……………………………………………. 16
VII. Evaluation of Result………………………………………… 16
VIII. Appendix……………………………………………………... 17
I. Executive Summary

Zest-o, on its 26 years of existence penetrated the local juice drink manufactured
in 1981 by contract of licensing. They are now the number one juice in the industry
capturing 80% of the market share nationwide.

The primary targets of Zest-o are children aging five to twelve years old. They are
the main and frequent consumer of the product while the secondary targets are the parents
and who consume less than the primary target.

We recommended one new product for Zest-o Corporation, “ZESTEA”. Zestea is

proposed to target those who love to drink iced tea in a more affordable way. And it also
adds new variety to consumer’s choice. Due to the in demand approach of consumer to
iced tea flavor, we make it easy for them to have this iced tea instant drink that can be
bought anywhere, anytime at its low cost and may enjoy the refreshing taste that suits for
all at the same time.

Zesto Corporation will try to keep hold of their lead as the number one juice dink
in the upcoming years. They will try to increase their sales by distributing their products
more and come up with new strategies. Through this they would be able to gain more
customers and attract new ones.

II. Current Marketing Situation Analysis

A. Industry Study:

Fruit Juices

The juice industry (those using natural or artificial fruit flavors) posted
dramatic growth in the past five years. With the consumers becoming more health
and budget conscious as well as improved distribution to the rural areas, the
demand increased. The market has four product types: the ready-to-drink (RTD),
canned, powdered and concentrates. The powdered juice segment comprises
about 60% of the total juice market. Ready-to-drink types such as the doy and
tetra packs are around 35% and the remaining 5% are canned and concentrates.

Product Usage:

Snacks (baon)
Party
Outing
 1
STRUCTURE OF JUICE DEMAND, 2000
Quantity Share
Item (‘000 liters) (%)

Powdered 522,000 60
Ready-to-drink 304,500 35
Doy pack 217,500 25
Tetra pack 87,000 10
Canned 26,100 3
Concentrates 17,400 2

TOTAL 870,000 100

KEY PLAYERS IN THE JUICE INDUSTRY
Category Company Brand

Powdered Juice Sugarland Multifoods Inc. (a) Eight O’Clock,

Ponkana, Cold Mix
Kraft General Foods Inc. Tang, Kool Aid
La Tondeña Distillers Inc (a) Fresh N’ Ripe
Selecta Dairy Products Sunkist
Phil. Health Foods Mfg. Cetrin
Procter & Gamble Phils. Nutri Delight
Liquid Concentrate Foodworld Manufacturing Sunny Orange
Corp.
MV Food Industry Ritchie
Marina Sales Sunquick
Nutrilicious Food Inds., Inc. Nutrilicious

Ready-to-drink (doy Zesto Corporation Zest-O, Sunglo,

pack) Sunburst, Big 250, Plus
La Tondeña Distillers Inc.(a) Fun Chum
Taiyu Food Products Inc. Fruit-C, Jumbo

Ready-to-drink (tetra La Tondeña Distillers Inc. (a) Magnolia, Zip

pack)
Selecta Dairy Products. Sunkist
Coca Cola Bottlers Phils. (a) Hi-C
Hunts-Universal Robina Knott’s Berry Farm
Corp. Fruit Shakes

Canned Juices Del Monte Philippines Del Monte, Today’s

Dole Philippines Inc. Dole, Season
Cenmaco, Inc. Gina
Harman Foods, Inc. Zest-O
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B. Current Product/Brand Situation

Mission:

Our mission is to be the leading manufacturer and distributor of juices,

dairy and related food products that best satisfy the growing needs of the
consumers. This, for use, is the means by which we can effectively participate in
the social and economic development of the communities we serve, promote
professional growth and well-being of our employees, maintain mutually
profitable relationship with our trade partners and achieve growth level equal to or
better than the norms of the food industry.

History:
Zest-O Corporation was established as privately owned Family
Corporation in May 1981 to engage in the manufacture and distribution of food
products in the Philippines. Established as SEMEXCO MARKETING
CORPORATION, the company adopted the name of its flagship brand in 1995
taking pride in the phenomenal success of Zest-O, the No. 1 Juice Drink in the
Philippines.

It started operation with a clear vision to be the leading food and beverage
Filipino company competing with the multination companies. It has always kept
with the ideals of providing quality products at a reasonable price to its clients.

The company pioneered the first ready-to-drink juice drink in flexible foil
pouch (Doy Pack System) with its flair for innovation, Zest-O juice drinks won
the consumers’ patronage and wide acceptance. Over the past 20 years, Zest-O
has earned itself a place in the Filipino culture.

Zest-O Corporation has posted enormous growth over the years. With total
assets of only Php 10.0 Mi. when it started, it continued to grow reaching annual
gross sales of Php 280.0 Mi. in 1987 after 6 ½ years of operation. As the company
continued to venture into different products, sales continued to post double digit
grown reaching total annual gross sales of Php 2.9 B for the year 2000 with a total
asset of 850M.

Aside from Zest-O Juice Drink, the company also markets Sunglo Juice
Drink in the innovative “sexy pouch” and Big 250 fruit drinks. Its latest
acquisition of Plus! Juice Drinks solidify the market leadership of Zest-O
Corporation to 80% of the total market ready to drink juices.
 3
Guided by the company’s philosophy of producing quality products at an
affordable price and making it available to the most number of consumers, the
company has successfully diversified into other products. With its vision in mind,
Zest-O Corporation has ventured in different product categories over the years. It
has successfully entered each product segment both in terms of sales volume and
patronage. Bringing its innovative fervor every time, the company has always
breath new life into each segment it enters.

It has entered in the instant noodles segment with the Quick Chow,
Quickie and Magic brands. Capturing a significant share of the market, it has
captured the third spot in the ranking with its unique product lines. It introduced
unique products such as instant rice noodles.

It has also ventured in the carbonated drinks market. Producing standard

classics comparable to the leading brands at the same time introducing new age
drinks using indigenous raw materials. The company has also positioned itself in
the highly competitive soft drinks market using aluminum cans and PET (non-
returnable plastic) under the brand name of Zest-O Cola, Rootbeer, Squiz, Twist
and Calamansi Soda w/ honey.

Other products being marketed by Zest-O Corporation includes, fruit juice

powder concentrate, tea drinks, canned nectar drinks, and tropical purees.

Zest-O Corporation handles directly nationwide distribution of its products

with its 13 branches nationwide, strategically located all over the country. It also
maintains a strong Sales force divided into Booking, Ex-truck and Wet Market
salesmen. Its client base is in the thousands, directly servicing 80-90% of the total
number of outlets nationwide. At present, the company operates four
manufacturing plants located in Bulacan, Metro Manila and Cagayan De Oro
City.

The next 20 years is a big challenge for Zest-O Corporation to keep up

with the changing market environment and to compete in the global economy. The
company is preparing not only for the local market but also making itself
competitive internationally.
 4
The distribution channel of Zest-O orange juice drink

Harman Foods Corporation (Producer)

|
Zest-O Corporation (Wholesaler)
|
Supermarkets, Grocery Stores, Convenience Stores, Local Distributors (Bulk breaker)
|
Sari-sari stores, School canteens (Retailer)
|
Consumer (Final Consumer)

Target Market (Primary and Secondary)

Primary Secondary
1. Children ages 5-12 years old 1. mothers with kids

The group focused on four out of the six demographics segment because these
four segments which include age, sex, income and location are enough to determine the
target market of the product. The group thinks that the Zest-O orange juice drinks are for
ages 5 and above since the product is a food and belongs to the convenience goods. But it
has been observed by the group that the main focus of the Zest-O orange juice drinks are
for ages 5-12. Most mothers buy these orange juice drinks for the “baon” of their kids.
 5
C. Competitive Situation

Zest-O Funchum Sunkist

Flavor:
Orange, mango, apple, Orange, apple, Orange, apple, mango,
Product grapes, strawberry, pineapple, mango grapes, Tutti Frutti,
pineapple, guyabano, Lemonade, dalandan,
dalandan, calamansi, lycheeapple
mango-orange, mango-
calamasi and mango-
lemon-lime.
Size: Size:
Size: 200mL 250mL
200mL
P5.40 – mango P5.80 – mango P12.00 – mango
Price The rest P4.75 per juice The rest flavor is P5.20 P 11.25 – grape
drink (in Supermarket) P 10.25 – orange
it ranges from P5 to P7
(In retail stores)

Place Supermarket, Supermarket, Supermarket,

convenience store, convenience store, convenience store,
canteen, grocery canteen, grocery canteen, grocery
contests, trade shows, in- T.V advertising, Print ads, billboard, in-
Promotion store displays, samples, magazine ad, in-store store displays,
premiums, discounts, displays
print ads,
TV advertisements
 6
III. SWOT Analysis

Strengths Implications
1. Positive image and Strong brand name 1.it will increased the patronage and loyalty
of the customer
2. Financially stable 2. It will be easier for the company to make
some changes in their products for further
improvement.
3. Low price 3. more people will choose to buy zest-o
because they are more affordable
4. Availability 4.we can increase sales because of more
convenience to customers

Weaknesses Implications
1. Packaging 1. Less attractive
2. Advertisement 2.people may not be reminded about the
product
3. Raw materials 3. the price might increase
4. Indirect selling 4. it might affect in building a strong
relationship with the consumers

Opportunities Implications
1. High population growth rate 1. They can expand their market shares
2. Rapid technological change 2. Because of more advanced technology,
the company will be able to improve their
products and they can also produce their
product faster.
3. High barriers to entry 3. Less competitors
4. internet selling 4. More chances for the company to
increase their sales and obtain more
customers
5.competitors 5. challenges the company to make a better
product

Threats Implications
1. Presence of substitute products 1. The sale of Zest-O juice drink might get
affected and decrease.
2. Economic crisis 2. people will tend to buy cheaper products
3. Wage increase 3. the price might get affected
4. arrival of new product 4. Customer will have more alternatives to
choose
5. increase taxes 5. the price might get increase
 7
IV. Goals and Objectives

Goals

 to maintain strong brand name

 to always provide a best quality products to meets the specific needs of consumer
 to maintain customer loyalty
 Short-term objectives (for the next fiscal year)
 To expand the target market by 5%
 To increase the market share by 5%
 To increase consumer awareness on Zest-O product by 10%
 Medium-term objectives (For the next 2 to 3 years)
 to increase the market share by 10% in year 2009
 to increase 10% customer loyalty by 2010
 Long-term objectives (for the next 3 to 5 years)
 to increase target market by 15% in 2011
 to increase 20% customer loyalty 2012

V. Marketing Mix Strategies and Programs

A. Market Targeting

We are now targeting those people who are health conscious and those who had kids
aged 5-12. For those who are health conscious they can get vitamins from fruit juices. For
those who had kids and busy in their work, they don’t need to mix up the powder juice
when it comes to “baon”

B. Product Development/ Innovation Program

Unique Selling Proposition

For all individuals, Zest-O is the most affordable ready to drink juice that
offers high quality and gives you the vitamin A and C.
 8
Product Positioning

There are a lot of brands in the fruit juice industry, but Zest-O seems to be
the most powerful among the other brands. It is because of its high quality and its
affordable price and also its availability. Zest-O orange juice drinks are bought
routinely because it is a consumer convenient good. It can be found almost
anywhere and these include sari-sari stores, grocery stores, supermarkets and
shopping malls.

Product Features

The Vitamin C and Vitamin A are found in this refreshing drink. Vitamin C
helps the body fight infection like colds and flu and is essential for tissue repair as
well as wound and bone healing. It’s also been proven that a glass of orange
juice each day results in a 25% reduced risk for ischemic stroke. It is also known
to assist the mother’s body in absorbing iron and can help the unborn baby
develop strong bones and teeth. While Vitamin A helps you maintain good
eyesight.

Regular: Zest-o Juice New Product: Zestea

Nutrition Facts Nutrition Facts

Serving Size: 200ml Serving Size: 200ml

Serving Per Container: 1 Amount per Serving
Amount per Serving Calories 100
Calories 100 % Daily Values
% Daily Values Total Fats 0g 0%
Total Fats 0g 0% Saturated Fat 0%
Sodium 0mg 0% Sodium 10mg 0%
Total Carbohydrates 25g 8% Total Carbohydrate 25g 8%
Sugar 25g Dietary Fiber 0g
Protein 0g 0% Sugar 25g
Vitamin A 10% Protein 0g 0%
Vitamin C 33% Vitamin C 100%

Packaging

Old Product
 9

The packaging of the Zest-O orange juice drinks provides promotion of

the products through the labels found on it. These labels include the brand name,
the logo, the image of the oranges (tells what flavor the juice drink is), the
manufacturer, the expiration date and the bar code (speeds up the transaction
process). The text, “Twenty five years Masarap Kasama”, is printed in the upper
left side of the package where it informs the buyers, even the whole market about
its success in surviving the competition in the market. The vitamins present and
natural orange juice content (With Vitamin A&C, contains natural orange juice!)
boldly printed in the pack of the juice gets the attention of buyers, specifically
parents for their children to benefit from it. The chart of nutrition facts can be read
at the back of the Zest-O orange juice foil pack that notifies consumers about the
content of the juice.

The package also serves as protection for the Zest-O orange juice drink.
When these orange juices are shipped, they are placed in a rectangular box (10
pieces per 1 box). The boxes protects the Zest-O orange juice foil packs during
shipment, furthermore the boxes make it easier for storing the product in bundles.
Figure y shows the shipping package of the Zest-O orange juice drinks. With
regards to the packaging of a single Zest-O orange juice drink, the foil pack or
doy pack preserves the flavor of the juice thus prevents it from spoiling. This type
of packaging also prevents the juice from leaking out from the package. The foil
pack is very adaptable to every movement that it doesn’t break easily because it is
flexible yet strong enough.

The enhancements added to the product by the packaging are 1) its

recyclable feature (both the foil pack and the rectangular box), 2) its quality
check, 3) its flexibility which allows the orange drink to be easily squeezed out
from the package when drinking, 4)the non-toxicity of the foil and 5) its ready-to-
drink feature. Like other products, the Zest-O orange juice drinks are packaged
into 4 types: primary, secondary, shipping and label packaging. The primary
package of the Zest-O orange juice drink is the foil inside the doy pack since it is
the package that immediately envelopes the orange juice drink. The foil inside is
non-absorbent so the orange juice drink does not spill out. The foil also prevents
the orange juice from losing its flavor and from spoiling. Figure z shows the
primary package of the Zest-O orange juice drinks. 10
The secondary package of the Zest-O orange juice drinks is the doy pack
or foil pack itself which is the outer covering into which the primary package and
the orange drink is placed. The secondary package (the foil packs) serves as
physical protection of the product. The shipping package of the Zest-O orange
juice drinks is the rectangular box in which 10 pieces of the Zest-O orange juice
drinks are placed. Without this rectangular box, it would be difficult to ship and
store these orange juice drinks. The rectangular box also makes it easier to store
the products and it also serves as additional protection of the foil packs. As seen in
both figure y and z, both packages contain similar labels. The labels consist of the
product design, color, weight, contents, product usage, logo of the brand name,
the name of the manufacturer, the expiration date and other details about the
product (ingredients, nutritional information and etc). Figure xx shows the
labeling of the Zest-O orange juice drinks.

The product design refers to the overall appearance and shape of the
package. The product design of the Zest-O orange juice drinks is innovative due
to the use of doy packs or foil packs. It is shaped like two slanted parallelograms
joined together with an oval-shaped base. An image of the fruit that represents the
flavor of the juice drink also makes the appearance of the product more attractive.
The foil pack contains two distinct colors: the front side is colored blue and the
back side is colored silver. The brand name, brand logo, the ingredients, the bar
code and the product features (natural orange juice and with vitamins A and C) are
located at the front side of the package. Also, the weight of the package which is
200 ml can be found at lower left corner of the package. The manufacturer, brand
name, brand logo, the expiration date, the nutritional facts and other product
features (recyclable, quality check) are located at the back side of the package.

New Product
 11
The new packaging of Zestea will still be in doy pack form, but it will be
more comfortable to use by the customers, because of its aluminum foil like in
tetra pack which in the inserted part of the package, and it also will be more eye-
catching to the people due to its attractive color

C. Pricing Program

The first type of cost is the fixed cost. This is a kind of cost that does not vary in
the production and sales level.

Fixed Cost:

Salaries and Wages

General and Administrative Expenses P 17002959.74
Selling expenses 26287832.23
Gasoline and Oil 3542461.74
Repair and Maintenance 2515067.62
Transportation 496938.67
Representation and Entertainment 2204748.91
Miscellaneous Expenses 3468144.36
Office Supplies 3096557.47
Communication 2592916.82
SSS Contribution 2213968.98
Pag-Ibig Fund Contribution 648210.66
Depreciation Expenses 2300103.42
Power, Light and Water 6575623.76
Security Services 1954710.53
Repack and Packaging 44929091.07
Rent Expenses 2702670.24
Advertising and Promotion 29843472.68

Total Fixed Cost: P 148,907,334.50

The second kind of cost is the VARIABLE COST. This is a type of cost that
varies directly with the level of production.

Total Variable Cost P 1,130,761,714

The third type of cost is the TOTAL COST. This is the sum of variable and fixed
cost for any given level of production

Fixed Cost P 148,907,334.50

Variable Cost 1,130,761,714.00

Total Cost P 1,279,669,049.50

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Computation of Selling Price

Regular Zest-o Juice

Variable Cost = Cost of good sold/Sales

= 1,130,761,714/1,366,372,002
= 0.8275 or 82.75%

Fixed Cost = Total Expense/ Sales

= 148,907,334.50/ 1,366,372,002
= 0.1090 or 10.90%

Variables Cost P 3.93 82.75%

Fixed Cost P 0.51 10.90%
Profit P 0.31 6.35%

Selling Price P4.75

ZESTEA

Mark-up Price = 4.44/ 1- .10

= P 4.9

Objectives

The Zest-o committed to manufacture and to deliver a well competitive product

that can provide consumer satisfaction due to its favorable taste for all.

Mix Strategy

Competition in food and beverage industry is rapidly growing over the years and
Zest-O being the most dominating product in line make food and beverage should
effectively position its product to be able to retain and defend then lead among other
competitors. First way is to continue keeping the excellent and delicious taste of the
product or to develop it more by suggesting and introducing more flavors in their product
line based on their customers preferences although their pricing might increase a little
with a nutrition given by the product, consumer will still prefer to buy these goods
because they can be guaranteed that Zest-O product will attain its satisfaction. And the
second way is by providing a large budget for their promotional strategy in order to
introduce the old and new product swiftly and effectively. It can be through magazine.
 13
D. Sales and Distribution Program

Policies

For a reseller that has achieved its given quota within 60 days, the reseller
will have his 5% discount for his next purchase.

1 week to order, 3 days before delivery, can pay either check or cash (full
payment)
Quota: minimum of 800 boxes within 60 days.

Sales targets by target market or geographic areas

The target market of the Zest-O Corporation is upper, middle and lower
class of the socio-economic group and recommends it throughout the country.

Extent/ Terms of Distribution

Our major selling area, we recommend our product to supermarket

nationwide; convenience store, sari-sari store. So people can easily find and buy
the product.

E. Marketing Communication Program

1. Advertising Program

 Objective
- To inform the people about the new product.
- To remind the people of the existence of the product.
- Enhance the selling power of the company’s product.

 Target Audience
- Zest-O Corporation makes use of poster as their means of communicating
with their audience, because it can view everywhere and it will inform the
people about the new product and will remind the people of the existing
product.
 14

 Creative Approach
- In our poster, we’re trying to introduce a new product, so we made its
background more stylish and eye-catching colors to attract more customers. A
representation of an ice tea that make it refreshing and mouth-watering. We
create a new catching name “Zestea” for it to be easily remembered and
combine the name of the product Zest-o and ice tea.

 Media Planning

Date Publication Size of

Advertisement
October 15, PMC Printing 18” x 25”
2007 Press

2. Sales Promotion Program

 Objective
- To capture many distributors and satisfy customers

 Coverage
- Metro Manila
 15
 Promo Schedule
- For the month of December

3. Public Relations Program

 Objective
- To build a better corporate image
- To associate the brand name with the publics
- To build more awareness of Zest-O product in the publics

 Strategies
- Zest-O comes up with an activity in order to build a strong relationship with
the public. The company plan to donate money in selected charities. They will
also provide juices in some charity program.

 PR materials to be used and costing

- Donating 20,000 pieces of Zestea to Bantay bata 163 on their Christmas party.
- Donated 50,000 pesos to kapuso foundation.
- Donating food supplies worth 30,000 php

 Schedule
- Along December 2007
- “Calamity” when needed

VI. Investment Plans

Promotion and Advertisement expense P 3,000,000.00

GMA Donation P 80,000.00
Cost of juice donated P 88,000.00

Total Cost: P 3,168,000.00

Net income after tax P 18,168,969.35

VII. Evaluation of Result

Zestea marketer committee have decided to start the promotion of this newly
introduce product primarily in NCR on October 15, 2007. so that the new product will be
known by the people before the Christmas season. As a promotion of Zestea we will be
using poster and displaying the new product on the entire supermarket in NCR, after six
months, we will evaluate the sales of the new product (Zestea). If it clicks effectively to
the market we will expand it nation wide.
 16
VIII. Appendices

Sources:

http://www.psma.com.ph/studies/studies/01.%20Analysis%20&%20Projections%20of
%20Domestic%20Demand/08.%20Chapter%204.DOC
Source: CFA-UA&P Estimates
Source: CFA Databank

http://www.expertrade.com.ph/zesto/

http://www.professorhouse.com/food-beverage/beverages/orange-juice.aspx

http://www.bharatbook.com/bookdetail.asp?bookid=11010&publisher=

http://www.professorhouse.com/food-beverage/beverages/orange-juice.aspx

Figure x: The doypack or foil packs used for packaging Zest-O orange juice drink.

Figure y: This rectangular box is the shipping package of the product.

 17

Figure z: This foil is the primary package which immediately wraps the product.

Figure xx: This image shows the labels that can be found in the package of the
product.

The back and the front view of the packaging for the new product “ZESTEA”
 18

Sample picture of the poster

19