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Strategic marketing planning for a supplier of liquid food packaging products in

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DOI: 10.1108/08858620610672623

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 Case study

Strategic marketing planning for a supplier of

liquid food packaging products in Cyprus
Demetris Vrontis
Marketing Department, School of Business, Intercollege, Nicosia, Cyprus
Harry Kogetsidis
Department of Management and MIS, Intercollege, Nicosia, Cyprus, and
Andreas Stavrou
Henley Management College, Henley-on-Thames, UK

Abstract
Purpose – This paper aims to provide a strategic review of the marketing function for a Cypriot company operating in the liquid food packaging
industry (for reasons of confidentiality the name of the company is withheld). The paper focuses on the dairy market, where the company does not have
a very strong market position, and illustrates how through an analysis of the environment (internal and external audit) the company’s strategic direction
and marketing plan can be designed more effectively.
Design/methodology/approach – The paper adopts a case study approach with primary research through in-depth interviews with managers of the
company under investigation.
Findings – The paper concludes that, by undertaking to rectify its weak marketing function, the company can develop capabilities that will lead to a
fully integrated relationship with all its customers and significantly improve its market share.
Originality/value – The value of the paper lies in providing a new case study that highlights the importance of making the marketing function a more
market/consumer oriented process that bridges the gap between strategic change and industrial complexity and instability.

Keywords Business environment, Marketing planning, Management strategy, Strategic marketing, Dairy products, Cyprus

Paper type Case study

Introduction Marketing planning

The aim of this paper is to provide a strategic review of the
marketing function for a Cypriot company operating in the
liquid food packaging industry. The company was established
in the early 1980s and the purpose of its business is to provide
marketing and after-sales services of its products to local
liquid food manufacturers in Cyprus. As the company
promotes and sells carton packaging and filling equipment
for liquid food, its success depends partially on how well it
provides its services. In this context, marketing activities are
viewed as an important element in achieving the objectives of
the company.
The development of this case is based on a number of
assumptions, which are summarised in Table I.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
21/4 (2006) 250– 261
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620610672623]
According to Fifield and Gilligan (2000), marketing planning
is a process of:
.
analysing environmental, competitive and business factors
affecting business units and forecasting future trends in
business areas of interest to the enterprise;
.
participating in setting business objectives and
formulating corporate and business unit strategy;
.
selecting target market strategies for the product-markets
in each business unit;
.
establishing marketing objectives; and
.
developing, implementing and managing program
positioning strategies for meeting target market needs.
This process is illustrated in Figure 1.
Situation analysis – environmental scanning
Situation analysis is the first and one of the most important
stages in marketing planning. This is because “a company’s
‘strategic fit’ with its environment is central to its strategy.
Further, effective strategies cannot be developed without
A teaching note is available from Dr Vrontis Demetris at:
vrontis.d@intercollege.ac.cy

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Demetris Vrontis et al. Volume 21 · Number 4 · 2006 · 250 –261

Table I Assumptions made

Environment Assumption(s)
Business segment Product lifecycle of milk will continue to grow over the short to medium term (1-5 years)
Adjacent business in the food sector will jump onto the “value added” product segment
Competitors No buy-out of the company by another dairy manufacturer with competitive/alternative packaging
Social Spending power of Cypriots will continue
Increasing awareness of health and fitness issues
Economic and trade Euro rate will remain stable against the CYP
Political Political solution to the Cyprus problem: the North will not grow at the expense of the South

Figure 1 The marketing plan process Figure 2 Situation analysis

environmental constraints, such as the structure of the

firstly analysing the environment in which the company
operates” (Vignali et al., 2003, p. 15). It is suggested that
environmental scanning of both the external and internal
environments is a necessary prerequisite stage to strategic
formulation (Vignali and Vrontis, 2004). The factors that
should be analysed in an internal and external audit are
illustrated in Figure 2.
External analysis
The external environment is made up of forces over which a
company has limited, if any, control and covers both the
macro-environment and the micro-environment. The macro-
environment consists of forces such as social, legal, economic,
political and technological (SLEPT) factors – within this are
included factors such as demographics, green issues and
larger societal forces. The micro-environment includes
market, suppliers, customers, trends of the market and
competition (Vignali et al., 2003).
The environment for companies operating in the liquid
food industry is constantly changing. Therefore, it becomes
critically important to identify opportunities and threats when
formulating strategy for the purpose of gaining competitive
advantage.
Microenvironment political, economic, social,
technological (PEST) analysis
Political factors include:
.
new laws to promote an open-market economy that
encourages competition;
.
the accession of Cyprus to the European Union in May
2004 aligned many laws with those of the EU; and
.
a possible political solution to the division of Cyprus will
enable free movement of people and goods and thus
increase trade.
As regards economic factors, Cyprus is considered an
industrialised economy with GDP growth (see Table II).

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Table II GDP growth (millions of CYP) consumption of 42 litres, compared to an average of 63

litres per capita in Greece, 96 litres per capita in Portugal, and
1999 2000 2001 2002 115 litres per capita in Spain. The country’s entry into the
GDP (at constant prices) 4,601 4,838 5,039 5,151 European Union and the changing lifestyle of Cypriots
Rate of growth (per cent) 5.0 5.2 4.1 2.2 indicate an increase in the consumption of milk drinks,
possibly to the level of other Western European nations.
Source: Hellenic Bank (2002)
Dairy industry players (customer and prospects)
Social factors include: The Cypriot dairy industry is dominated by three large
.
increasing awareness of health and fitness issues; manufacturers of dairy products. Table V shows the products
.
a change in legislation to increase child allowances (see offered by the three companies (for reasons of confidentiality,
Table III); the names of the three dairies have been withheld). As can be
. the birth rate has been falling steadily in the last 15 years; seen in Table V, the three players operating in the dairy
and industry have focused on short life products, mainly in family
.
increased awareness of environmental issues will support packaging (one-litre size). The competition in this market
the carton against less environmentally friendly packages, segment is quite fierce. In contrast, the portion pack segment
such as plastic, glass and cans. has been left with only a few product offerings (mainly
flavoured milk).
Technological factors include:
.
information technology continues to become cheaper and
has more practical applications; and Market share total revenue
.
the internet is becoming accessible to more Cypriot Table VI shows how the market share of the three dairies has
households. changed between 2002 and 2004. From Table VI, we can
assume that the market is going through significant
Market trends and dominant market segments of the competitive change despite the oligopolistic characteristics
industry of the industry. Considering that competition is fierce in the
The Cypriot consumer is turning away from less healthy family pack market, the carton is facing strong pressure from
drinks, such as beer and carbonated soft drinks, and towards the plastic bottle. Driving plastic bottle growth is its recent
drinks that are perceived to be more healthy, such as milk, launch (in 2001), its convenience of opening and its
juice and water. This trend supports the increasing health and differentiating characteristics compared to the long
fitness awareness of Cypriots identified in our PEST analysis. established carton.
The dominant market segments in the liquid food industry in
Cyprus are shown in Table IV.

The dairy market Table V Competitors in the Cypriot dairy industry (2003)
The total dairy market for liquid milk in Cyprus is Shelf life Dairy Dairy Dairy
approximately 65 million litres with a per capita
(days) 1 2 3

Table III Child allowance (effective 2003; in CYP) Fresh pasteurised white milk, full
fat 4 £ £ £
One child 200 Fresh pasteurised white milk,
Two children 400 semi-skimmed 4 £ £ £
Three children 1,200 Fresh pasteurised white milk,
Four children 1,600 skimmed 4 £ £ £
Five children 2,000 Fresh pasteurised white milk,
Note: Prior to 2003, only families with four children and more received child skimmed, enriched with calcium 4 £ £ £
allowance equal to CYP 200 per child Lactose reduced 4 £
Goat’s milk 4 £
Fresh pasteurised post-flavoured
Table IV Beverage split (million litres) milk 4
Chocholate milk 60 £ £
Description 2001 2002 2003 Banana milk 60 £
Juice/soft drinks/nectarsa 30 31 32
Milk/dairy based drinksa 61 63 65
Bottled water 42 45 49 Table VI Market share (per cent) of the three dairies
Beer 39 41 40
Soft drinks (carbonated) 56 55 54 2002 2003 2004
Coffee drinks 6 7 8 Dairy 1 27 26 23
Source: RAI Consulting Services (2003) Dairy 2 52 45 48
Note: a The company investigated in this case is active in these segments Dairy 3 20 27 27
only Others 1 2 2

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The company’s competitors of a local office have raised barriers to entry. The threat is
The battle to capture market share is between three players considered low at present.
(the names of the companies have been withheld for reasons
Industry rivalry
of confidentiality): the company under investigation (offering
Rivalry is considered medium because the overall market is
the products of its corporate parent) and Competitor 1, both
growing at a pace that means focus is on gaining new market
of which supply cartons, and Competitor 2, which supplies
share rather than taking market share from competitors.
plastic bottles. Table VII compares the global turnover and
However, when the life cycle of white milk products reaches
operating profits of the three companies over the period 2000-
the maturity stage, competition will intensify. For Dairy 1, the
2001. The company’s corporate parent is one of the biggest
customer of the company investigated in this paper, industry
companies competing in the juice and milk markets in
rivalry is fierce in the litre package size.
Cyprus.
Suppliers
Porter’s five forces The company under investigation gets its supplies from its
It is now important to identify the competitive forces for the corporate parent. The local company has no influence or
company through a structural analysis of the industry. This negotiating power on purchases as these are set centrally
can be illustrated through Porter’s (1985) five competitive irrespective of local conditions. Therefore, the strength of the
forces illustrated in Figure 3. supplier is considered high and it is anticipated that it will
remain so in the future.
Threat of new entrants
Substitutes
For the moment, the relatively small size of the milk market as
The plastic bottle is the main substitute to the carton in the
compared to other European countries and the establishment
milk beverage market. The ability to see the product and the
convenience offered has gained favour with many consumers.
Table VII 8 The company’s competitors However, with environmental issues gaining in importance
and the difficulty in recycling plastic, this threat may
2001 2000 %
deteriorate in the future.
Corporate parent: based in Sweden/Switzerland
Customers
Turnover (e, millions) 7,650 7,505 þ5
With only one customer in the dairy industry buying cartons
The company investigated in this paper is the local sales office and
from the company investigated in this paper, high switching
supplies Dairy 1 costs have created a lock-in situation. This will remain the
same over the next four to six years, until the equipment is
Competitor 1: based in Norway fully depreciated.
Turnover (e, millions) 528 505 þ5 Currently, the overall market attractiveness is rated as
Operating profit 34 2 14 medium, but it is anticipated that this trend will move towards
No sales or support office in Cyprus; supplies Dairy 2 medium/high in the future.

Competitor 2: based in France

Turnover (e, millions)
No sales and support office located in Cyprus, but there is a
representative
Figure 3 Five forces model
Internal analysis
933 1,025 29
“The internal audit examines the company’s own resources
and supplies suggestions as to the company’s strengths and
weaknesses” (Vrontis and Vignali, 1999, p. 394). Internal
considerations are mainly controllable by the company and
therefore companies should do their utmost to avoid any
problems arriving from them. It is evidently proven that
product development and strategic formation are based on the
internal organisational capabilities. Internal audit examines
the company’s own resources and supplies suggestions as to
its strengths and weaknesses.

The relationship between the company and Dairy 1

The company investigated in the paper enjoys a good
relationship with Dairy 1, trying at the same time to
maintain high satisfaction and loyalty levels. This has mainly
been achieved by the use of sales/technical people, who have
over the years aimed to build and develop a good relationship.
The company’s relationship with Dairy 1 is illustrated in
Figure 4. The aim of the company is to maintain this “apostle/
loyalist” position in the future.
In relation to McDonald et al.’s (2000) model (see
Figure 5), since 1969 the relationship has progressed from
the basic stage to the cooperative stage and today comfortably
sits in the interdependence stage. The characteristics of the
relationship at this stage are as follows:

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Figure 4 Level of customer loyalty and satisfaction Within the company, there is a tendency not to store
marketing information in any database or file. As a result, the
managing of marketing information is not shared, which can
cause frustration.

Package portfolio – portion pack size

Figure 6 illustrates the company’s main package portfolio for
portion-size packages.

Product life cycle (PLC) analysis

At this stage it is useful to examine the product life cycle
(PLC) of the company’s product portfolio. This is illustrated
in Figure 7. Although it is very difficult to predict the length
of each stage of the PLC, what is clear is that the four
products are at different stages, with one being at the stage of
decline (Product D), one at the stage of maturity (Product B),
one at the stage of growth (Product A), and one just being
introduced (Product C).

Figure 5 Collaboration and relationship
The Boston portfolio matrix (BCG): portion packs
Following our PLC analysis we can apply the BCG matrix to
examine the range of the company’s products portfolio against
segment growth, segment volume and the relative market
share of the company in the packaging material segment
(relative to the nearest competitor). The different products
and their position on the BCG matrix are shown in Figure 8.

Map to market
Figure 9 is developed to show the product route to market. At
present, the marketing activities of the company stop at the
producers.

SWOT analysis
Deriving from the internal and external environmental
.
trust from top management; scanning, the company should highly consider the
.
trust between technical and sales departments; development of the strengths, weaknesses, opportunities and
.
partnership and cooperation instead of a supplier/buyer threats (SWOT) analysis. As can be seen in Vrontis (1999),
relationship; this is vital if companies want to capitalise on their strengths,
.
mutual dependence and satisfaction; and minimise any weaknesses, exploit market opportunities as
.
a high level of information exchange. they arise and avoid, as far as possible, any threats.
Further, it is advisable to the company to utilise the SWOT
analysis to its benefit. Marketers should convert weaknesses
Marketing mix into strengths, threats into opportunities, and understand that
Given the small size of the company and the small number of
employees, little attention is paid to this function, which can
Figure 6 Portion package portfolio matrix
be considered a serious weakness. The market manager makes
all marketing decisions on an ad hoc basis. In terms of the
seven Ps, and considering that the company provides a service
to its customer(s), the following applies:
.
product – developed at corporate level, quality offered is
considered to be very high;
.
price – Set at corporate level and applies to all European
countries;
.
place – dairy producers’ plant;
.
promotion – very limited promotional techniques, high
use of brochures; and
.
people – market manager provides all the necessary
marketing information obtained through the company’s
intranet, staff are very professional and customer-centric,
regular contacts and visits with tangible evidence support
professionalism.

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 Strategic marketing planning
Demetris Vrontis et al.
Figure 7 Product lifecycle of the four products
Figure 8 Boston Consulting Group matrix: portion packs
Figure 9 The company’s route to market
strengths are only meaningful when used to capitalise upon
opportunities. This is illustrated in Figure 10.
On the balance of issues, the company’s strengths outweigh
its weaknesses and can take advantage of the opportunities in
the market whislt avoiding the threats to it. To achieve this,
the company needs to gain valuable marketing experience by
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Journal of Business & Industrial Marketing
Volume 21 · Number 4 · 2006 · 250 –261
Figure 10 SWOT analysis
working much closer with its customer in the dairy market.
Achieving this, means intergrating elements of its value chain
activities, such as marketing, with those of the customer in an
explicit process. A better understanding of down stream
activities in the value chain will allow, through its customer, to
motivate changes in the entire value chain.
To avoid increasing competition from plastic bottles and
other carton suppliers, the company needs to exploit the
environmental friendliness of the carton and link this to
consumer trends in health and fitness needs of consumers.
 Strategic marketing planning Journal of Business & Industrial Marketing
Demetris Vrontis et al. Volume 21 · Number 4 · 2006 · 250 –261

This can be done by focusing on the portion package by
offering the consumer value added products.
Although the potential increase in the birth rate will lead to an
overall increase in milk consumption, its impact on the industry
will not be felt for at least two to three years, when children start
to consume fresh milk as opposed to powdered milk.
Business objectives
The business objectives set by the company are as follows:
.
to grow packaging material by 15 per cent in two years;
and
.
to score a 4.5 in the customer satisfaction (CS)
programme in 2004 and 4.7 in 2005, where 1 is
defector/terrorist and 5 is apostle/loyal (see Figure 4).
Further information on the company’s customer satisfaction
programme for 2003 follows in the next section.
Customer Satisfaction (CS) programme
Customer Satisfaction is a programmme initiated by the
company’s corporate parent in order to determine how
satisfied customers are with the company’s products and
services. It is implemented in all European market companies.
Selected customers are chosen for the programme and
interviews with five or six top/middle managers are
undertaken by independent consultants. Each manager
interview will score from 1 to 5 (with 1 being the lowest
and 5 being the highest scores) in the business areas shown in
Table VIII.
Marketing objectives
The marketing objectives set by the company are as follows:
.
to introduce one premium portion package in 2004;
.
to increase sales of portion packages by 20 per cent over
two years; and
. to score at least 4.5 and 4.7 in the marketing support
activity on the customer satisfaction programme in 2004
and 2005, respectively.
on the markets in which the organisation will operate, the type
of products/services it will offer and the basis of the
competitive stance. Marketing strategies are the means by
which objectives will be achieved. They reflect the company’s
best opinion as to how it can most profitably apply its skills
and resources in the marketplace and they are inevitably
broad in scope.
The Ansoff matrix (see Figure 11) helps to identify the
company’s product and market growth strategy. The company
is looking to grow through “market penetration”, i.e. to
expand sales with existing packaging solutions for “value
added” liquid foods in the dairy market, thereby taking
advantage of the increasing awarness of health and social
issues identified in the PEST analysis. Market penetration
carries the lowest risk for the company, as the focus in on
current products in current markets, where knowledge and
experience is the highest. But which product portfolio is
setting the optimal option for the company?
In order to target the “value added” milk segment in
portion pakcages the company will need to offer a “premium
package” and, according to the package portfolio analysis, this
means promoting Product A’s package, which is the
company’s premium portion package. Further investment
should take place in Product C as well. Investment for both
products (A and C) should arrive from profits made by
Product B, which is currently a very profitable cash cow. It
follows from the BCG matrix examined above (see Figure 8)
that an opportunity exists to move Products A and C from the
question mark quadrant through the star in the short term
and eventually to the cash cow quadrant in the medium term.
According to Porter’s three generic strategies model (see
Figure 12), the company currently pursues a “broad
differentiating” strategy, where Product B’s packages achieve
superior value to the market as a whole. By promoting
Figure 11 Ansoff product/market matrix

Marketing strategy
Marketing strategy is the broad statement of the way in which
the organisation sets out to achieve its objectives and to drive
its tactics. Included within this would be a series of decisions

Table VIII Customer satisfaction

Business area Score in 2003 Figure 12 The three generic strategies

Customer servicea 4.3

Marketing support activitiesa 4.1
Pre-order to billing activities 4.5
Lead time 4.1
Operational efficiency 4.0
Technical support 4.6
Innovation of products 4.6
System value for money 4.0
Environment 4.0
Strategic alignmenta 3.9
Average score 4.2
Note: a Impact of marketing activities

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 Strategic marketing planning
Demetris Vrontis et al.
Product A’s package with its high perceived value by
consumers, the company will be able to pursue a “focused
differentiating” strategy allowing it to minimise its risk of
being overdependent on Product B packages.
Segmentation and the company’s segmentation model
It is discussed that a potential growth segment would be an
“enriched” milk-based product for the health and fitness
consumer. The primary objective of the segmentaiton model
shown in Figure 13 is to help the identification of the
company’s target groups. The model is divided into four
primary target groups and three basic milk types.
From the above segmentation model, consumption of milk
increases at the children stage but as children get older, their
consumption declines. One major reason for this is that there
are a wide variety of alternative drinks, such as Coca Cola,
juice, water, etc. The company investigated in this paper aims
to offer an alternative to these drinks that will be:
.
milk-based but with added juice (a new concept for
Cyprus);
.
without gas;
.
nutritional;
.
enriched; and
. convenient.
In other words, the company should aim to move the
consumption line of milk upwards to a higher level.
Market targeting
A systematic approach to evaluating the four target goups
identified in the segmentation model can be seen in Table IX.
From our analysis the most attractive target groups are:
.
young adults (most health conscious); and
Figure 13 Segmentation model
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Journal of Business & Industrial Marketing
Volume 21 · Number 4 · 2006 · 250 –261
.
teenagers/youngsters (young and dynamic and most
physically active).
These target groups are the most likely to support what is
possibly a completely new product concept for Cyprus,
designed to fit with their lifestyles and needs.
Looking at the target groups behaviour from a theoretical
point of view and according to Maslow’s hierarchy of needs
model, Cypriot consumers are looking more and more to
statisfy their social and individual needs.
Tactics
The identification of the market segment and target groups
implies that the company will need to enchance its current
relationship with Dairy 1 to the highest level of cooperation
and trust. Therefore it will need to move up from its current
“interdependent” stage on McDonald et al.’s (2000) model to
the fully “integrated” stage.
In addition to the services offered at the current stage, the
company should pay particular emphasis to the following
aspects:
.
more focus on explicit marketing as a service;
.
quick delivery of marketing plans;
.
support the customer in implementation and control; and
.
marketing training.
These additional services will help to reinforce to the
customer the high level of profesionalism and commitment
there is for their success.
The marketing mix/tactics are developed for the main
benefit of Dairy 1 and efforts have been made to improve the
marketing service. The basis for its formulation is derived
from the company’s SWOT analysis, its objectives and its
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Demetris Vrontis et al. Volume 21 · Number 4 · 2006 · 250 –261

Table IX Target group selection matrix

Rating (1 to 10) Total 5 W 3 R
Factor Weight Children Young teens Adults Elders Children Young teens Adults Elders
Health conscious 35 3 5 8 5 105 175 280 175
Dynamic/fit 25 2 9 8 3 50 225 200 75
Price sensitive 20 0 8 8 2 0 160 160 40
Convenience 15 3 8 9 3 45 120 135 45
Environmental 5 0 2 5 5 0 10 25 25
100 200 690 800 360

two-year period strategy. It is suggested that a concentrated Although Dairy 1 can use its established brand to signal
targeting strategy is followed, where one marketing mix is confidence in consumers for the launching of this product,
developed and aimed at two target groups/segments, as there is a need to position the product more clearly in the
identified in Table IX. minds of the company’s target groups. Therefore, the
recommended strategy here would be to introduce a sub-
brand with clear links to the core brand as a way of
Product profile
differentiating Dairy 1’s product portfolio. In time, all the
Below is a suggested profile for a “value added” product that
elements of the marketing mix will work together in a
could be suited to Dairy 1’s target consumers. However, this
coherent pattern to create its own brand equity and identity.
needs to be validated through consumer tests.
(1) Product description and ingredients: Promotion
.
milk and juice blend enriched with calcium and The development of a sub-brand will require individualised
vitamins; promotion to position and strengthen it. To achieve this,
.
light but pleasant flavour; Dairy 1 will need to part with the generic advertising/
.
light colour; promotion campaigns of the past and undertake to
.
good taste and after taste; and communicate the need for the product as follows:
.
not too sweet. .
healthy start to every day;
(2) Positioning: .
convenience, easy to open and quick to consume;
.
new drink generation (breaking new ground); .
understand the health benefit; and
.
new sub-brand; and .
trust the brand.
.
modern, healthy and convenient alternative.
(3) Value proposition: To be successful all elements of the communication mix will
.
trendy; need to focus on pushing buyers through the following AIDA
. rebuilds energy; stages:
.
healthy; and .
awareness;
. choice of flavours (after first season). .
interest;
(4) Consumption occasion: .
desire; and
.
during hot days (rehydration, product with 75 per . action.
cent water content); In order to achieve this, the company must concentrate on the
.
during or after sport activities; and following areas:
.
mid-morning pick-up. .
advertising – television commercials, cinema spots,
(5) Packaging: newspapers/recipies and health guides, teenager/adult
.
new modern shape; magazines, bill boards, leaflets;
.
easy opening and straw for convenience; and .
sales promotion – key supermarket sampling, point of
.
environmentally friendly. sale-material;
.
public relations – sponsoring of at least 2-3 local sports
The company’s target groups are already subconciously aware events, donations to charities; and
of milk being one of the most important sources of calcium.
.
organisations – all Dairy 1 staff to receive samples and
So, through the company adding more calcium to its promotion cards to hand out to relatives and friends.
products, consumers will be able to draw the conclusion Advertising and product sampling are considered to be very
that the new products offered are even healthier than plain effective in going through the AIDA stages.
white milk.
Regarding the other ingredients (i.e. juice and vitamins), Pricing
these are easily understood and easy to relate to for the Dairy 1’s pricing strategy will need to be consistent with its
consumer. There are no negative associations attached to product profile and value propostion. Figure 14 shows the
either, as consumers generally know that juice and vitamins price strategy recommended – a “premium price” strategy.
are “good for you”. This strategy is based on what the market can accept, rather
Overall, all the ingredients in this product are understood than on a simplistic cost-plus basis. Figure 15 indicates the
by consumers and do not need any specific educational retail price landscape of most of the products that can be
campaign, therefore reducing the risk of non-acceptance. considered as alternative choices in Cyprus. It is

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Demetris Vrontis et al. Volume 21 · Number 4 · 2006 · 250 –261

Figure 14 Price strategy To reach the target group, Dairy 1 will need to strengthen its
distribution reach to more kiosks and impulse outlets and add
the following impulse outlets:
.
sports centres; and
.
health and fitness gyms.

Implementation and control

The total investment to implement the proposed budget plan
is CYP 1,345,000. The proposed budget plan covers the two
years of the company’s marketing plan. Full details are shown
in Table X. It is also suggested that the marketing plan is run
as a project by Dairy 1, with a suggested structure as shown in
Figure 16. The steering committee would include high-level
executives who will oversee the project. It would be necessary
to have a project sponsor from the steering committee to
ensure commitment across the company, with the managing
director at Dairy 1 being a good choice. The project manager
would be the key stakeholder, and it is suggested to be the
marketing manager from Dairy 1. Finally, the project team
recommended that a selling price of CYP 0.42 (supermarket would consist of a small group of other key stakeholders that
price) is charged. would be required to implement the project.
The project manager would need to monitor the following
key success factors:
.
consistent marketing mix;
Place . good co-operation and communications between key
Dairy 1 covers the following points of sale: stakeholders;
.
100 per cent of large supermarkets; .
buy-in of key stakeholders; and
.
90 per cent of small/medium supermarkets; .
project sponsor commitment.
.
70 per cent of small village shops;
.
95 per cent of bakeries; and The success of the launch might fall short of the expected
.
55 per cent of impuse outlets, such as kiosks. results for many reasons, indicating that contingencies would

Figure 15 Various drink portion pack prices in 2003

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 Strategic marketing planning Journal of Business & Industrial Marketing
Demetris Vrontis et al. Volume 21 · Number 4 · 2006 · 250 –261

Table X Budget plan

Activity Responsibility Year 1 Year 2 Total
a
Company research pre-launch Marketing manager 10,000 3,000 13,000
Product development Quality control managera 15,000 5,000 20,000
Advertising Outside agency 250,000 150,000 400,000
Sales promotion Sales departmenta 10,000 10,000 20,000
Public relations Marketing managera 5,000 5,000 10,000
Product/ingredients Quality control managera 300,000 250,000 550,000
Consumer feed back Research company 5,000 5,000 10,000
Retail discounts Salesa 40,000 40,000 80,000
Product waste Productiona 8,000 9,000 17,000
Distribution Salesa 100,000 75,000 175,000
Extra ordinary costs Marketing managera 25,000 25,000 50,000
Total cost 768,000 577,000 1,345,000
Note: a Dairy 1 staff responsible

Figure 16 Project structure By undertaking to rectify its weak marketing function,

need to be decided. Some of these reasons, together with
possible corrective actions, are shown in Table XI.
through the delivery of a marketing plan, the company can
develop capabilities that will lead to a fully integrated
relationship with all its customers. This can lead to the
maximisation of its potential to take advantage of the
opportunites in the external environment whilst minimising
the threats it faces.
Understanding of the customer value chain and conscious
awarness of consumer trends will enable the company to:
.
have closer co-operation with customers on marketing
issues;
.
save time and costs, thus enabling the company to
motivate changes in the value chain;
.
increase the company’s service level and its customer
satisfaction score while raising barriers to entry to
competitors; and
.
turn the marketing function within the company from a
implicit to an explicit process.
The company’s marketing function would then become a
more market/consumer orientation process than before and
hereafter will contribute to bridging the gap between strategic
change and industrial complexity and instability.

Conclusion
This paper has focused on conducting a strategic review of the
marketing function for a Cypriot company operating in the
liquid food packaging industry and has shown that the
company can improve significantly on its current 23 per cent
market share by concentrating on its marketing function.
Application questions
.
Assess and evaluate the company’s strategic direction.
What are your strategic recommendations in order for the
company to achieve its objectives and be more successful
and profitable in the future?
.
Prepare a proposal illustrating how the company should
try to avoid threats in the industry and take advantage of

Table XI Possible problems affecting the new launch

Reason Corrective action
Product taste is disliked Modify product taste after research or re-enter with new flavours
Timing of communication/launch inadequate Reassess time plan and re-launch
Competitors launch before Review and possibly increase promotion activities
Product is not available Inadequate supervision of network supply during launch. Improve availability
No repeat purchase Find out why through consumer feedback research and revise product strategy
Despite corrections, sales do not improve Kill the product

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 Strategic marketing planning
Demetris Vrontis et al.
market opportunities. Your response should be given on a
tactical level (marketing mix elements).
. Design a detailed promotional approach for the company.
.
A clear strong brand positioning creates strong customer
loyalty and a clear differentiated position in the market
segment. What issues should the company consider when
developing a positioning strategy for the brand whilst
trying to grow in the market?
.
The company faces many challenges in the market
environment. Identify and discuss the marketing
concepts, tools and issues it will need to use to address
the end user segment and develop itself in the market
place.
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About the authors
Demetris Vrontis studied in the UK and obtained a BSc
(Hons) degree in Business from the Manchester Metropolitan
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University (MMU), a PGCE (HE) from MMU, a VTC from
Henley Management College, an MBA (Distinction) from the
University of Hull and a PhD in International Marketing from
MMU. From 1997 to 2003 he worked at the Manchester
Metropolitan University Business School (MMUBS) in the
UK, where he led and directed two of the University’s
postgraduate programmes. Currently, Demetris is the Head of
Marketing Department at Intercollege University in Cyprus
and Director of the Institute for Retail Studies. Demetris is a
founder member of CIRCLE – the Centre for International
Research for Consumers and Location and their
Environments (a strategic alliance made by seven
Universities from different countries). The aim of the
alliance is for its members to collaborate and cooperate in
publications and research grants, undertake research and
provide consultation to a number of national and
international companies in both consumer and trade
markets. Other activities include being an external examiner
and moderator for Nottingham Trent University (in its
cooperation with a number of Greek Business Schools in
Athens, Thessalonica and Heraklion) and a visiting professor
at a number of universities around the world. Currently he is
an associated faculty for Henley Management College, a
Visiting Professor for Vorarlberg University in Austria
(Master’s level) and a Visiting Fellow at Leeds Metropolitan
University in the UK. Demetris teaches marketing and
international marketing at both undergraduate and
postgraduate level and supervises undergraduate and
postgraduate research students, both in Cyprus and abroad.
His prime research interest is on international marketing
planning and marketing strategy, areas that he has published
widely on in refereed journal articles and presented papers to
conferences around the world. He is also the author of seven
books in international/global marketing and strategic
marketing planning and the editor of the EuroMed Journal of
Business (EMJB).
Harry Kogetsidis was a Lecturer in Business Systems at the
University of Luton in the UK between 1994 and 2002. In
2002 he joined Intercollege University in Cyprus, where he is
an Assistant Professor at the Department of Management and
MIS. His prime teaching and research interests are in
management and business forecasting. Harry has written and
delivered forecasting courses at both undergraduate and
postgraduate level, trained UK managers in forecasting
methods and taught in a number of MBA programmes in
Europe. His interests also include developing distance
learning material on forecasting. He has published a
number of papers on management and management science
in international journals and has presented his work in
conferences around the world. Harry is a member of the
International Institute of Forecasters and of the British
Operational Research Society.
Andrew Stavrou is an MBA Student at Henley
Management College, Henley-on-Thames, UK.