Marketing Principles Flavored Milk

Question: Discuss about theMarketing Principlesfor Flavored Milk. Answer: Segmentation for Farmers Own Milk Geographic In every part of Australia, consumption of flavored milk increased strongly over the first half of 2016. However, over the second part, consumers are switching to chocolate-based flavored powder drinks due to the affordable price. In 2015, consumption of milk products increased by 11% in Australia (Unahanandh and Assarut 2013). It expected that, in the upcoming years, demand of milk products will increase by 20% in most of the parts of the country. Demographic Aging population of Australia is expected to affect both food consumption and patterns along with total demand. The percent of people who are over 85 has increased from 0.7 percent in 1990 to 1.5 percent in 2014 (Schleenbecker and Hamm 2013). It is expected that this will rise between 5 and 6.6 percent by 2050. Now, aging population does not like to have flavored milk. They look for plain milk that is nutritious and good for health. Farmers Own Milk is such a product that can become leading milk product in Australia in upcoming years (Johnson et al. 2013). On the other hand, it is the culture of Australian people to consume milk at a huge rate. Farmers Own Milk can also target teenagers and children in the country. However, Nestle is already there which a way more popular organization is. Psychographic Australian dairy industry is struggling in spite of the rising demand of milk among the people. This is happening as the dairy farmers are not getting what they need to continue their work. As a result, in order to save the farmers, some milk manufacturing companies are contacting directly with the farmers. This is motivating consumers to buy branded milk. They are hoping that if they buy branded milk, more of their money will make its way to dairy farmers (Koeman and Bialkowski 2015). Farmers Own Milk is such a product where the management buys directly from the farmers. Therefore, the chances are high that consumers will buy the product frequently. Benefit Farmers Own Milk brand is a fat free milk product that is exhibited as a health product. Initially it looks like this product is not able to provide any benefit as its average price is $3 where average price of other milk products are $2 (Klerkx and Nettle 2013). However, one major benefit of this product is its direct relationship with the farmers. Woolworths management announced that they are providing more than fair price to the farmers. Camperdown Diary processes the product won a gold medal at the Australian Dairy Association Industry Awards for Farmers. Usage Rate Farmers Own Milk is a new product developed and marketed by Woolworths. Since its launch, the organization has not provided any report related to the product. However, from the initial data it can be said that this product is vastly used by the consumers. After its launch in 2013, Woolworths is continuously expanding its availability through its stores. This product is available across 194 stores in Southern Queensland (Zervou 2013). Therefore, it can be assumed that consumers like this product and it is helping Woolworths to enhance their revenue. Targeting Based on the segmentation of the dairy market in Australia, it can be said that management of Farmers Own Milk must target aged population of the country (Wrenn et al. 2014). There are several reasons behind it. Those reasons are hereby mentioned below. Market Size: It is also already mentioned that by 2050, nearly 5-7% people of Australia would be over 85 years old. On the other hand, number of Australian people aged 65 is expected to increase from 3 million to 7 million in 2040 which is nearly 25% of total population (Australia 2014). If Farmers Own brand can capture this segment of the market then they will be gain huge profitability. Less investment: Elderly people do not fall for unique and attractive themes of advertisements. They will buy what they believe is best (Dutt and Kashyap 2013). If Woolworths can capture this segment of the market, they will not have to invest a lot on commercial ads. Positioning Strategy It means price, Product, promotion and place. Woolworths can use two positioning strategies for Farmers Own Milk. One is product other is place. The product is itself unique as it is the only dairy product where the organization deals with the farmers directly without any middle man. This will attract the customers to buy this product as the consumers are willing to help the dairy farmers of the country (Vanhonacker and Verbeke 2014). Place because milk is an extremely famous food in Australia. Companies like Nestle is already there, but people are trying to buy from those companies where farmers are treated properly. Therefore; the chances are high that Farmers Own Milk will have a competitive edge over Nestle. References Australia, D., 2014. Australian Dairy Industry.Dairy Australia. Available online: www. dairyaustralia. com. au/Industry-information/About-the-industry. aspx. Dutt, R. and Kashyap, A., 2013. Impact of consumer behaviour on decision making towards mobile phones in India.Business review (GBR), p.91. Johnson, L.W., Ringham, L. and Jurd, K., 2013. Behavioural segmentation in the Australian wine market using conjoint choice analysis.International Journal of Wine Marketing. Klerkx, L., and Nettle, R., 2013. Achievements and challenges of innovation co-production support initiatives in the Australian and Dutch dairy sectors: a comparative study.Food Policy,40, 74-89. Koeman, J., and Bialkowski, J. P., 2015. Cross-Hedging on the Milk-Derived Product Market.Available at SSRN 2639958. Schleenbecker, R. and Hamm, U., 2013. Consumers perception of organic product characteristics. A review.Appetite,71, 420-429. Unahanandh, S., and Assarut, N., (2013). Dairy products market segmentation: The effects of country of origin on price premium and purchase intention.Journal of International Food Agribusiness Marketing,25(2), 122-133. Vanhonacker, F., and Verbeke, W., 2014. Public and consumer policies for higher welfare food products: challenges and opportunities.Journal of agricultural and environmental ethics,27(1), 153-171. Wrenn, B., Loudon, D. and Della Bitta, A., 2014.Consumer Behavior: Putting Theory into Practice. Textbook Media Press. Zervou, A.S., 2013. Financial market segmentation, stock market volatility and the role of monetary policy.European Economic Review,63, pp.256-272.